A warehouse management system (WMS) is defined as software designed to manage the movement of inventory in order to know where the final products and goods are at any given time to fulfill your orders. These operations take place from the time your goods or materials arrive at the warehouse to the time the authorization to move is given. With this software, you can control and manage this entire warehouse management process, inventory management, inspection and picking processes.
WMS platforms help you optimize your business’s storage spaces, track and locate inventory quickly. It also allows you to stay on top of inventory replenishment and eliminate the need for manual inventory counts to avoid common problems such as inventory discrepancies.
How Does a Warehouse Management System Work?
A warehouse management system has its own unique and specialized way of working and differs greatly from traditional warehouse operations. Let’s take a detailed look at how a warehouse management system works and what it includes.
Receiving and Shipping
A warehouse is largely defined as a place where goods are stored. Your primary action under a warehouse management system will be to control and track the goods coming into the warehouse. Each received good needs to be updated in the system and tracked with its arrival time and destination. The sub-part of this action involves tracking goods going out for shipment. The number of goods received and the number of goods distributed for shipment need to be tracked down to the finest detail, measured and recorded in the system.
Inventory tracking
A WMS enables you to keep a table of all the stock in your warehouse. This is important because it allows the warehouse management team to know when there is enough stock in the warehouse and when to place an order to avoid stock shortages. This saves space as it prevents overstocking. It also ensures that your resources are well distributed to ensure smooth warehouse management.
Routing and Scheduling Tasks (Workforce Management)
Labor management is another important area for warehouses. Most companies have part-time, contract and full-time staff, so they need to be able to schedule tasks such as order picking within the hours each person is available. Streamlining and integrating this process can be a huge benefit for warehousing companies, as it ensures the right number of staff are scheduled for each shift.
Packaging and Labeling
Warehouses often deal with a variety of goods, from food and beverages to non-food items such as toiletries and toys. This diversity means that packaging requirements can differ significantly between such goods and labeling is also highly important for traceability reasons. Ensuring that your staff follow the correct procedures when packing or labeling will help you ensure high quality control and traceability in your warehouse.
What Are the Main Types of Warehouse Management Systems?
There are different types of warehouse management system software and ways to implement them. There are different reasons why companies choose a WMS type and implementation, so it is important to know the different types and which one is best for your business based on your needs, budget and infrastructure.
Standalone
This type of system is designed only for managing your warehouse. It is the most basic of systems and only includes functions related to the movement of items inside your warehouse.
Supply chain module
This system manages all aspects of the supply chain. It helps you with vendor relationships, business processes, risk assessment and warehousing capabilities.
In-house
On-premises warehouse management systems require more internal resources to support and maintain. They are installed on your company’s local hardware and network. Many companies prefer this method because it gives them more control.
Cloud-based
A cloud-based system does not require synchronization with server hardware or networks because it is web-based. They are faster to implement, easier to upgrade, simpler to use and scalable to your business.
Integrated with ERP
This type of system will be your strongest choice and will provide a more complete business management solution that integrates accounting and finance, customer relationship management, inventory management and more. You will better connect with all aspects of your business and can streamline end-to-end processes.
Warehouse Management System Benefits
Although implementing a WMS may seem complex and expensive, you gain numerous benefits that can justify the inefficiencies and costs.
Having a warehouse management system in your business reduces your labor costs, product picking and shipping errors, while helping you increase flexibility, responsiveness and customer service satisfaction. Ultimately, all these benefits show that WMS systems are much more than just warehouse management.
