Warehouse Management System (WMS) refers to the movement and storage of materials within a warehouse. WMS is part of the Supply Chain Management and is concerned with receiving, shipping, and picking materials. WMS uses technology tools like barcode scanners, biometrics, and RFID, to name a few, to efficiently monitor the flow of products. The company creates a seamless link between the warehouse facility, order processing, and logistics management until shipment. Warehouse Management, which can be part of Supply Chain Management (SCM), provides a competitive advantage to the business or organization when executed effectively. It is not confined to the warehouse.
Table Of Content
- What is Warehouse Management System
- What is Supply Chain Management?
- Types of Warehouse Management Systems
- Warehouse Management System Features
- Differences Between Supply Chain and Warehouse Management Systems
- Benefit of Warehouse Management Systems
- Tips for Choosing Warehouse Management Systems
What is Warehouse Management System?
Warehouse management systems (WMS) are used in manufacturing and retail to track materials and goods entering and leaving the warehouse. In basic terms, a WMS helps optimize all your warehouse processes. It follows all the materials in your warehouse and can create systems to streamline how workers pick products and pack orders. It lets you track merchandise entering the warehouse, loaded onto shelves and other places, and leaving the warehouse for order fulfillment.
When a customer sends an order, the warehouse management system can immediately check if the products are available. Instead of manually cross-referencing the order and stock, the WMS will automatically mark the order as ready for packing. This saves a great deal of time and effort. Many WMS services end up paying for themselves when used effectively.
Also read: Solving Main Problems in Supply Chain with SCM Application
What is Supply Chain Management?
SCM is the management of the flow of goods and services, including raw materials, work-in-process inventory, and finished goods. The markets these days are transcending borders, and managing the demand-supply quotient is increasingly getting complex. Production centers are set up where the raw materials and labor are cheaper. Raw materials sourcing and finished goods distribution are done globally.
Supply Chain Management refers to all business processes and activities, from sourcing raw materials to manufacturing and distributing finished goods. SCM, in short, is the art of providing the right product at the right time, place, and cost. As inferred, SCM gets much wider in scope than WMS. WMS is perhaps the last mile in the SCM system, and any hitch in its efficacy affects SCM.
Types of Warehouse Management Systems
Improved inventory visibility, increased order fulfillment, and automated data collecting are all benefits of choosing the appropriate warehouse management system. It’s crucial first to comprehend the many sorts of warehouse management systems (WMSes) to select the best ones. Warehouse management software is available in four different configurations: standalone, as a module of supply chain management (SCM) software, as an ERP system, and as a cloud-based solution. Here are the four types of it:
Integrated Vs. Standalone WMS
You may utilize two kinds of warehouse management system software to handle your incoming and existing product activities. The addition of an integrated WMS is often offered by your current Enterprise Resource Planning (ERP) supplier. The generation of invoices and accounting and inventory management are all under the control of ERP systems. The warehouse management system receives the orders, controls inventory, and oversees product receipt and shipment. It’s easier to track which orders are best to invest in when everything is in one system.
If a product sells well but has a low-profit margin, refill it with a higher profit and lower sales. If you integrate your warehouse management system, you will be able to monitor all of your financial data. A software that exclusively focuses on warehouse management and has multiple features is referred to as a standalone warehouse management system. As a result, it could only be partially usable for other facets of your company, such as bookkeeping or inventories. Since it’s designed for warehouse management, this WMS may include extensive reporting tools to help you level up your warehouse. Overall, it relies on how you handle priorities in your warehouse.
On-Premises Vs. Cloud-Based WMS
An on-premises WMS is one in which you host and manage the hardware and software. This gives you total control over uptime and security, but it’s expensive since you own all the components. In addition, you will need to ensure that your WMS receives routine maintenance. Extremely small organizations might find it manageable to use on-premises WMS, but handling all the tasks by themselves could be difficult. As another option, cloud-based WMS systems are hosted on a remote server and are usually charged on a subscription basis.
The vendor handles problem repairs and software upgrades, and you get guaranteed service uptime. It would help if you considered the most efficient technique to take all items as your online retail firm expands. The warehouse must eliminate confusion since customers have high expectations for shipment and even order packing. Saving all the time and resources needed for on-premises systems may be an excellent approach.
Also read: How to Improve Order Picking Productivity in Your Warehouse
Warehouse Management System Features
- Storage strategy setting: Businesses may make the most of putting freshly arrived products in storage before they reach the warehouse. Additionally, it keeps an eye on warehouse capacity, quickens pick-and-pack, keeps track of item locations, and reduces dead stock.
- Warehouse shelf arrangement: Businesses may control stock placement according to product type, which works with horizontal and vertical warehouse shelving systems.
- Track stock movement: Keep precise and real-time track of each stock movement from the incoming to outgoing process (goods going in and out).
- Warehouse management software report: Comprehensive analytical reports in different forms are available to businesses, allowing them to see how effective warehouse management is.
- Maximize warehouse capacity effectively: With the help of this technology, the warehouse can keep goods efficiently and quickly monitor them as required.
- Checking the capacity of goods: To simplify the process of measuring and documenting the volume of products before storing them in the warehouse
- Item dimension management: Automate the measurements of each area in the warehouse so that arriving items may be easily adjusted. Companies may monitor each item’s height, breadth, and weight in the warehouse for optimal placement on shelves/locations.
- Barcode scanner integration: With a barcode scanner, businesses can increase the accuracy of selecting and packaging consumer orders.
- Monitor item availability: In a single, centralized system, keep track of the quantity and location of every item in several places simultaneously.
Also read: Manage Your Warehouses at Different Locations with Warehouse Software
Differences Between Supply Chain and Warehouse Management Systems
One of the most crucial components of supply chain management is storage. Supply chain management streamlines your company’s supply chain. It aims to ensure a continuous flow of products from the procurement of raw materials to the manufacturing and distribution of the finished product. Your supply chain has many moving pieces, but do you have the appropriate warehousing in place?
It would be best if you took additional caution in choosing the correct warehouse since too many variables might disrupt your supply chain and postpone final delivery. Your supply chain’s effectiveness may be raised if you make the most of all that storage offers. This may result in a delay in the delivery of goods and problems with customer support. On the other hand, delays are less probable if your supply chain includes the appropriate warehouse.
Benefit of Warehouse Management System
The use of warehouse management systems (WMS) has transformed the manner in which companies handle their inventory and warehouse activities. This section will explore the benefits of WMS and how they can aid companies in accomplishing their operational and strategic goals.
- Improved inventory accuracy: WMS uses barcoding, scanning, and RFID technologies to track inventory levels in real-time. This reduces the risk of stock-outs, overstocking, and misplacement of inventory.
- Increased productivity: A WMS streamlines warehouse operations, reducing the time and effort required for tasks such as picking, packing, and shipping. This frees up staff to focus on higher-value tasks, such as optimizing processes and improving customer service.
- Optimized warehouse space: WMS software can help businesses make better use of their warehouse space by optimizing the layout and location of products. This can lead to more efficient storage and picking processes, as well as reduced transportation costs.
- Better customer service: With WMS, businesses can fulfill orders faster and with greater accuracy. This leads to improved customer satisfaction and loyalty.
- Better supply chain management: WMS software provides greater visibility into the supply chain, enabling businesses to track inventory levels, monitor supplier performance, and identify areas for improvement. This can help businesses reduce costs, improve efficiency, and respond more quickly to changes in demand.
Tips for Choosing Warehouse Management Systems
1. Identify your needs
Make a list of the features and functionalities that you need from a WMS. Determine your business requirements and prioritize them. Choose a WMS that can scale with your business. Look for a solution that can handle increasing order volumes, expanding product lines, and growing sales channels. This ensures that the WMS can continue to meet your needs as your business grows.
2. Evaluate different systems
Research different WMS solutions in the market and compare them against your business requirements. Look for WMS solutions that have a proven track record and a solid reputation in the industry. It is crucial to take into account the vendor’s maintenance and support services because you will require continuous assistance to guarantee the optimal performance of your WMS
3. Consider integration
If you are already using other software systems in your warehouse, such as an inventory management system, look for a WMS that can integrate with your existing systems. is ensures that the WMS can work seamlessly with your existing workflows and data.
4. Ease of Use
Choose a WMS that is user-friendly and easy to use. The system should be intuitive and require minimal training. This ensures that your team can quickly learn how to use the WMS and increase productivity.
5. Look for Flexibility and Customization
Look for a WMS that is flexible and can adapt to your unique business processes. The system should allow for customization and configuration to fit your specific requirements. This ensures that the WMS can work seamlessly with your existing workflows and can be tailored to your business processes.
6. Look for support
Choose a vendor that offers good customer support and training. The vendor should be available to provide assistance when needed.
7. Consider cost
The cost of a WMS varies widely, so make sure you understand the pricing structure and any additional costs associated with implementation and training.
The primary aim of supply chain administration is to match supply with demand. For this to work, the supply chain should be free from bottlenecks such as errant supplies, difficulty in sourcing, and others. Until recently, people seemed significantly confused about the phrases SCM and WMS, and they frequently used them interchangeably. However, the logistics industry has generally accepted that warehouse management refers to the storing, stocking, and movement of goods within a warehouse. The term Supply Chain has a much broader focus involving suppliers, manufacturers, and retailers.
By providing customer-centric operations in warehousing, companies gain a competitive advantage. SCM tools help manage the supplies effectively, keeping inventory at optimum levels. The efficiency of SCM relies largely upon the efficiency of WMS. The SCM’s primary concern is to find out the best storage levels, which the WMS attempts to address. Therefore, it is seen that the SCM & WMS are only complementary and not competing. The Warehouse Management system also complements the Sales Management System by shortening the sales cycle through quick data access and quality service delivery.