What is a warehouse management system: An overview
A warehouse management system (WMS) is a software programme that aids a company’s day-to-day warehouse operations. A warehouse management system (WMS) provides a wide range of advantages for organisations, including the ability to regulate and monitor warehouse activities such as when products arrive and depart. Inventory management (receiving, put-away, restocking, slotting), picking and packing procedures, auditing, and delivering orders are among the other operations.
By reducing labour and space waste, a WMS may assist a company in lowering operational expenses. Inventory control is a major factor in achieving this. Employees can see where an item of inventory is at any given moment and place thanks to a good warehouse management system. Serial numbers, barcoding, and RFID tags are used to improve inventory tracking. These inventory tracking tools help you create a well-organized inventory. Advanced inventory tracking capability can fully optimise internal and external inventory movement.
There are several ways to bring into practice, a warehousing system. It may be used as a stand-alone tool or in conjunction with other tools, or it can be integrated into an enterprise resource planning (ERP) system. A WMS is also frequently linked to an inventory management system or a transportation management system. A warehouse management system has various types. Let us understand them and see which one can be the best fit for your business as per the requirements.
Types of Warehouse Management Systems
You might be losing money if your company doesn’t have a good structure in place to handle warehouse operations. So that you don’t fall behind on inventory control, picking, and shipping orders, figure out which warehouse management system is right for you. You may select from a variety of warehouse management systems to fit your business needs. The following are the most typical categories used by logistics companies:
- Standalone Systems: A standalone WMS is an on-premises system that runs on the company’s internal hardware and network and uses standard software. Many WMS programmes are third-party packages that must be connected with the rest of the management software in the firm (such as the ERP system). It’s ideal for small businesses with limited software costs.
Greatest-of-breed is similar to selective breeding in that it only incorporates the best and most significant aspects of all possible warehouse management system modules. Inventory management and warehouse activities are frequently included in WMS. Expiration date tracking, barcode scanning, cycle counting, slotting, putaway, receiving, picking, packing, and shipping are all features that standalone WMS users may anticipate. Businesses can utilise standalone WMSs as stand-alone software, inventory management systems, or as part of a larger system integration.
- Supply Chain Modules: You may think of WMS systems as a subclass of supply chain management when evaluating them (SCM). Although there are several types of warehouses used in supply chain management, we will concentrate on those that provide value to products and services. Supply chain management software covers a wide range of topics, from vendor relationships to corporate procedures to risk assessment. It concentrates on inventory management, material procurement, and product cycles automation.
Investing in supply chain planning programmes that also include warehousing features is required when choosing this sort of warehouse management system. It’s a popular path since it allows 3PL companies to learn about the various benefits of SCM. Combining WMS with other apps is an excellent method to guarantee that different portions of the organisation are well-connected. It enables complete supply chain management, whereas standalone solutions are limited to storage.
If you choose this path, you’ll want to make sure there are no overlaps with your existing software. You might, for example, combine fleet management, inventory management, and warehouse management software into a single SCM platform if you already use them. Another strategy to prevent overlap is to choose an SCM solution that connects with other corporate software, such as payroll and ERP systems, which leads us to the following alternative.
- ERP Modules: Enterprise Resource Planning, or ERP, is software that keeps track of a company’s or organization’s resources. Some ERP programme improvements include a WMS software or SCM module built into their ERP system, in addition to basic applications like human resources software systems, sales and marketing, finance and accounting, and CRM solutions. It’s a wonderful match for companies of all sizes with a diverse set of customer needs.
Although certain warehouse functionalities are included in integrated ERP systems, they are not a key function. When looking for ERP software, keep this in mind. Check ahead of time to see if the system you chose has warehouse management features. Because of its unique components, integrating a WMS with ERP might cost you twice as much – think of it as a software jack of all trades.
This system performs a variety of tasks and combines them into a single interface. Consider ERP as your best match if you’re unsatisfied with alternative software solutions you’re using or if you want a consolidated warehouse management system.
- Cloud-Based Systems: In terms of maintenance and installation, on-premise solutions are frequently unreliable. It’s possible that you’ll wind up spending a lot of money for installation and infrastructure. Using a cloud-based WMS has a number of significant benefits. You may significantly reduce implementation and installation expenses because they are managed and hosted by a provider. Because of their cheap entry cost and subscription-based payment options, these scalable solutions are especially appealing to startups and small enterprises.
Inventory reporting, workflow automation, data input time reduction, and other warehouse processes are all improved by cloud-based management solutions. They also guarantee that product upgrades are delivered on schedule and that data is accessible in real-time. Using a cloud-based WMS allows you to control different system functions from a single location.
These solutions, as appealing as they may appear, are not without flaws. Because the solution is hosted by your vendor, you have less control over data security, and internet connectivity difficulties might cause service interruptions. Before deciding on a platform, think about your pain areas and must-have criteria. Deployment, integration, and easily accessible sales channels all contribute to a successful implementation.
Key Features of Warehouse Management System
Inventory Management Systems: The terms warehouse management and inventory management are frequently used interchangeably. However, they are two distinct systems, and it is critical to comprehend the distinctions. An inventory management system is a simplified form of a warehouse management system that focuses on stock counts and automated order fulfilment.
Inventory management isn’t as complex or sophisticated as WMS, but it does have some of the same functions. Warehouse management, SCM, or ERP is likely to be required if you’re running a relatively complicated operation within a mid-sized or corporate firm.
3PL: Now that we’ve learned the key differences between different types of WMS systems, the next question is: which option is best for your company? An examination of the specialized functionalities that 3PL companies get from their warehouse management systems is required to find an answer. Once you’ve determined what you require, you can look for the most appropriate version.
We recommend that you start by identifying your requirements and then narrow down your options based on which platforms can best perform those functions. It’s also crucial to think about the vendor’s reputation by reading reviews.
Value-Added Services: It’s a good idea to invest in software that tracks progress and payments for businesses that offer value-added services (kitting, light assembly, etc.). A standalone WMS designed specifically for third-party logistics is the best option in this case. The standalone system’s simplicity allows you to focus on what you need – without a large inventory supply or the complexities of other SCM activities, keeping things simple can make life much easier.
Multiple Client/Owner Architectures: The majority of 3PL firms require a WMS that can handle multiple clients’ inventory and buy order processing. If you’re only managing items for one client, this isn’t an issue. However, warehouses (especially larger ones) are used to dealing with a broad number of clients at the same time. If this is the situation for your company, a more powerful warehouse management module from an SCM or ERP system may be the best option.
The definition of “multi-client” is one area where some firms get caught up. When working with cloud-based software, it’s vital to remember that this phrase can also apply to several firms using a single cloud server. Make sure the WMS provider supports a multi-client architecture rather than simply a shared server when looking for one.
Third-Party Logistics Billing: Inventory tracking and service contract processing are two features that your WMS must provide. They’re critical for 3PL firms since they ensure that invoices are never misplaced or overlooked. 3PL billing is the most efficient approach to automate putaway, receiving, storage, and shipment, ensuring that charges are precise and timely.
Most standalone WMS include 3PL billing capabilities. They’re also frequent in supply chain solutions, especially when they’re created with logistics in mind. These functionalities are available in ERP systems, although they’re not very prevalent. It’s possible that you’ll have to look a bit harder to discover them.
Multi-Channel Fulfillment Services: Without multi-channel fulfilment services, it might be challenging to maintain inventory while handling orders and suppliers across several facilities. More than simply packaging and shipping should be included in the WMS software you purchase. Some shipping and logistics companies provide a wide range of services, while others specialise in specialised sectors.
The distinction is whether your shipments are intended for business-to-business (B2B) or business-to-consumer (B2C) customers. Small businesses would benefit from B2B services, whilst B2C can readily combine with different web platforms. With large orders, you’ll need a system that can handle all of your requirements in one place.
Benefits of a warehouse management system
- Optimized Space and Lower Operating Expenses: Warehouse management software improves warehouse flow by determining the most efficient use of floor space based on job and material characteristics. The usage of space and floor plan analysis in WMS installations is used to identify how space should be best utilised and gives chances for waste reduction – waste of premium floor space and waste of time spent seeking items.
Excessive material movement, time-consuming placement, and retrieval will all be reduced as a result of this. A warehouse may reduce its operating costs by assessing the optimum locations to store items, supplies, and equipment.
- Inventory Visibility: Using a warehouse management system will also provide you real-time visibility into your inventory levels. This allows a business to better accurately forecast supplies and minimise backorders, resulting in happier consumers. Warehouse management solutions operate in tandem with corporate ERP and planning functions to offer demand to forecasting processes by providing detailed data on how specific items are doing.
As things are transacted and information is conveyed, product demand and seasonality are represented. As a result of this data, planners may make informed judgments about which goods to change for the organisation in order to boost revenue or reduce losses.
- Effective Labor: A warehouse management system may better allocate the correct task to the right person at the right time by taking into account workers’ skill levels, proximity in the warehouse, equipment, and available warehouse tasks. One of the most significant benefits that the WMS may bring to enhanced labour utilisation is the reduction of trip time inside the warehouse.
The WMS can direct workers to the tasks that have the most impact while also identifying the best labourer for the job. The system may distribute work on a daily basis and efficiently construct schedules using manpower predictions. Scanning things at the point of entrance into a warehouse, as well as during their travels, can reduce the need for double-checking, saving time and expediting the recording process.
Scanning increases pick accuracy and decreases mispicks, resulting in improved customer service. KPIs may also be used to assess personnel, which is significant because one of the most expensive aspects of warehouse operations is labour. Appropriate task assignment improves labour efficiency, equipment efficiency, and space efficiency.
- Traceable Materials: Using lot, batch, and serial numbers, warehouse management systems can simply track inventory supplies. The serial number identifies a single item, whereas the lot/batch number specifies the group in which materials were manufactured. As previously mentioned, WMS inventory management enables for full traceability by matching precise lot/batch or serial numbers with incoming receipts and leaving shipments.
This capacity to track materials reduces redundancy, allows for precise inventory planning and allocation, and gives current retrievable data for future traceability, service maintenance, or recall circumstances.
- Optimized Supply Chain: A warehouse management system improves the internal operations of a warehouse, which may subsequently be extended to the rest of the supply chain. A warehouse management system (WMS) automates the whole warehouse process, from inbound receipts to outgoing deliveries, increasing operating efficiency and lowering costs.
By lowering or eliminating redundant or non-productive activities, warehouse personnel may accomplish rapid and precise shipments. These time and cost savings, as well as enhanced procedures and data, may be passed on to internal and external partners, allowing them to improve their own operations.
- Internal Automation Benefit: Within a warehouse, warehouse management systems enable the application of further automation technologies. Internal work assignments can be automated, and mobile devices can help with the shift from paper to electronic work and activity recording. This streamlines operations, allowing them to grow more easily and ensuring data veracity. Because access may be offered through portable mobile devices, mobile pairing with the WMS system can allow the input process to be increased.
Through enhanced techniques, automation aids in the continuous development of current processes. There are several levels of automation available, including automated picking and packing, robots, analytics-driven motions, and artificial intelligence (AI). These tactics are aided by warehouse management systems, which provide the core pieces for capturing, recording, and communicating activities.
- Effective Shipment Management providing better Customer Service: With a warehouse system that can alter inventory and equipment movements, inbound and outbound planning may be efficiently controlled. When inventory is due to arrive, the exact day and time may be determined by taking into account available manpower and storage equipment.
Warehouse management systems may also help managers select and pack items more efficiently by allowing them to choose between zone, batch, or wave picking, reducing any delays or challenges caused by traffic or poor personnel positions.
These choosing efficiency choices reduce the time it takes for customers to receive their orders and so improve customer relations. Customers can also obtain early warning of shipments and how the supplies are arriving thanks to inventory tracking and packing choices.
- Ongoing Improvement: Warehouse management systems are meant to enable ongoing improvements as a useful technical tool. The system may be installed in stages to allow for regular upgrades with newly created capabilities, allowing warehouses to be productive while keeping up with current improvements.
This also allows the warehouse to adapt to new procedures and technologies as they emerge. Furthermore, if the warehouse management system is cloud-based, it may update in real time, reducing the need for big, expensive IT teams. Warehouse management may assist businesses in increasing profits and reducing errors.