Warehouse Management System Benefits - DataScienceCentral.com (2023)

The supply chain management software market is divided into several branches by types of industries, products and regions it serves for. It is segmented into consumer goods, healthcare and pharmaceuticals, retail, manufacturing, food and beverages, transportation and logistics, and others.

Logistics is a wide branch of the supply chain where each operation plays an important role and influences the quality of customer service. It is very closely related to transportation, warehousing, and inventory management. Under logistics we understand Inbound and Outbound logistics. The first is all about sourcing and receiving materials that are coming into a business from suppliers. The second is transporting, warehousing, packaging goods going out of a business, a manufacturer who produces and provides end-clients with certain products.

Warehouse management system definition

Warehouse management interconnects several terms as it is a chain of actions to move goods from warehouse to end customer on-time. It is closely interrelated with transportation management, intra-facility logistics which is warehouse design, equipment control, and application of technology tools. To understand what WMS is and what functions of warehouse management system are, let’s go deeper into some of the key warehouse management tasks.

  • Receiving is used to mean the physical receipt of goods, during which quantity and quality of goods are identified, and the receiving reports together with compliance to order are compiled.
  • Putaway – removing the material from the location of receipt (the dock), transporting the material to a storage area, and then moving it to an identified location, tracking the movement and time when the material has been placed.
  • Picking is preparing an order, so pulling products from storage areas to complete a customer order.
  • Packing deals with the protection of goods by packaging them and preparing a container for shipment.
  • Replenishment is moving inventory from secondary storage areas into fixed storage locations.
  • Shipping involves the tasks of packaging, marking, weighing, and loading goods for shipment.

From the manufacturer, raw materials travel to the enterprise warehouse, where they are documented, received, and placed. Once the product is done, it remains in the warehouse of a firm that produced it. Items may reach thousands in numbers, so they are to have a barcode or RFID tags that can be scanned. As workers receive orders from retailers, orders have to be accepted, information gathered, and indicated within WMS. Order is fulfilled when it is found among thousands of boxes and packages, then picking and packing, shipment, and recording delivery. All these operations are followed with electronic documents, barcode scanning, using a desktop to update inventory status in the warehouse, etc.

What does WMS mean? Nowadays warehouse management systems perform not only basic functions of organizing and managing operations above but accomplish a lot of more functions that help business executives conduct processes transparently and effectively. Also, WMS is often needed to establish better security and privacy in supply chain management as they deal with filling documents and data share and storage.

WMS software is critical to manage and conduct operations automatically from one place where workers can easily track product movements and be aware of what’s in the stock and what’s out, know customer details, etc. So, the core functions of a warehouse management system lie in three directions:

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Inventory control

  • Planning and managing inventory space
  • Tracking and allocating inventory
  • Planning and monitoring product moves
  • Managing and scheduling receipt and putaway activities

Inventory management is a beneficial function and the principal with which the first WMS started. It helps to organize operations effectively and have accurate information when and which products were received, shipped, packed, picked, and delivered.

Controlling the execution of operations:

  • Allocating personnel to areas and managing labour
  • Tasks tracking and assignment and providing a necessary toolkit to monitor and track the state of receiving, picking, packing, putting away, reallocating
  • Scheduling of operations
  • Yard management

Analytics and reporting:

  • Analytics on the amount of stored products, in stock/ out of stock information
  • Accurate reporting of receipt and delivered goods
  • Tracking equipment
  • Reporting on order status

Within technology development, warehouse management has gained new functions to help organizations track their products, status of orders, equipment – firstly, to reach higher speed in delivery goods and operations and secondly, reach better customer satisfaction and be competitive on the market.

Warehouse management system benefits

Warehouse management software has seen a lot of advancements since the application of AI, Internet of Things and robotics, new integrations, and automatized processes. The key benefit WMS offers to warehouse managers and technicians nowadays are:

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  • Integration with TMS

Transportation and warehouse management systems often remain separate due to the different functions they perform. However, there are several reasons to integrate both into cutting-edge solutions. Transportation management system benefits are valuable and they certainly can scale up existing WMS solutions:

  • effective and on-time route planning
  • tracking and reduction of costs spent on fuel and equipment
  • improving fleet and freight management
  • increased efficiency of supply chain

Benefits of transportation management system double effectiveness of delivery of goods, tracking delivery in real-time, avoiding shortages of transport means, predict risks in transporting goods and thus, warn other departments of possible delays or barriers.

  • Warehouse automation

The first warehouse management systems of the late 1990s and early 2000s were designed to keep track of stocks and there was a lot of paperwork to do. With technology, warehouse automation has gone through a myriad of transformations. Nowadays we have extended Warehouse Management – a modern automated warehouse management system. Defined by Wikipedia it is an Extended Warehouse Management product is an integrated software platform for flexible, automated support for processing goods movements and for managing inventory in the warehouse.

Manual paperwork, the last century history, is now substituted with electronic data interchange (EDI). Information on goods and vendors is now backed-up and can be easily accessed in real-time, altered, and edited. It ensures safety in documents and protects against mistakes. Warehouse management systems also automatically generate Advanced Shipping Notice which is a special document about the delivery of goods that includes physical characteristics about shipment, package, details about transportation, carriers, and dates.

  • Warehouse analytics

The system can calculate and define an accurate strategy when and which products are the first to be received and which one is to be sold. Accurate forecasts allow sales to increase and avoid loss of money basing inventory on current sales and trends. The objective of smart WMS is to reduce the risk of a shortage of goods that are in demand.

Then, WMS helps track FIFO, a method which stands for first-in, first-out order that is a principle to distribute firstly the oldest items in the stock and LIFO method, which is last-in, a first-out strategy that says that the most recent products to come are the first to leave. WMS also has a function to integrate data with ERP that contributes to acknowledging and updating inventory data and distributing it across enterprise departments to make better decisions on sales.

  • Voice analytics technology

NLP and AI are now used to record personnel verbal speech and transform it into instructions, send delivery confirmation and automate much manual work of warehouse personnel. Though these advances only begin to appear on the WMS software development market, they offer excellent hands and eyes -free technologies that boost working capacity per unit time.

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  • Streamlining order management

Updated information on orders, vendors, customers, and returns, order processing records is a must-have in warehouse management. Data on orders should be transferred smoothly and transparently. For this, there is a machine to machine technology that enables the sharing of data between computers and WMS.

Big data and analytics help to define trends and replenish stocks with items, accurately predicting orders. During an emergency, the stock will be prepared to satisfy the necessary level of delivery of certain items and will fulfill all the orders customers on time. Mobile scanning devices and WMS with intuitive interfaces help a lot to accept an order, notify customers on delivery. Machine learning is also useful to define how long the processes can take, what the temperature is in the storage, what is the location of items, and how to manage warehouse space wisely.

  • Transparency in inventory, delivery, and increased customer trust

Omnichannel supply chain management deals with partnerships with different channels. Workers can easily track which orders are placed, processed, shipped, and what orders are en route. There is a need to take into account every square meter and effectively manage the placement of specific goods that can be easily harmed or need to be delivered quickly. That’s why WMS should conduct Cycle Counting or Inventory Audits indicating the number of items within a warehouse. WMS also contains and receives Proof of Delivery (POD) Information by the carrier containing the name of the person who signed for the shipment, the time and date of delivery, and other shipments delivery-related information.

  • Increased productivity and efficiency

The use of Advanced Warehouse management systems leads to a reduction in labour costs up to 30% as automation increases labour productivity. Modern warehouse management systems have very intuitive interfaces, automatic fill-in of information, warning and push notifications, integration with other systems. Automated processes at warehouses can improve safety at the workplace by offering a real-time view over inventory, and boosting accuracy in orders and reducing human mistakes.

Types of warehouse management systems

Generally, there are 3 key types of warehouse management systems:

  • Standalone systems are mostly used by 3d party logistics, offer warehouse management functions, and are bought to conduct operations easily. Standalone systems have to be flexible and easy to use, so compatible with scanners and terminals, support different time zones, geographical areas, languages, and groups of employees. They are great for managing LTL/TL rating which is less-than-truckload shipping or less than load and means the transportation of relatively small freight.
  • Integrated with ERP. If your enterprise needs advanced WMS with renewed functionality, barcode scanning integrations, possibility to reduce expenditures and make solutions suit different types of industries, then it is better to develop customizable inventory solutions. Such systems allow not only to conduct inventory audits but transmit secure and protected data into ERP databases, that increases clarity across all supply chain processes. Integrated warehouse systems are more elaborate and can also deal with Customer Relationship Management and human resources allocation to different tasks. This variant of WMS is a perfect investment for those who are aimed at scalability and want to centralize all operations and processes into one software solution.
  • Supply chain management models. Such systems help to manage everything from vendor collaboration to evaluating business processes at the same time automating inventory audits, product operations, and material delivery.

Growth of needs

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The COVID-19 pandemic blocks transportation and logistics, however, after the quarantine, the companies will certainly accelerate and rethink the way they organize their work. Competition for speed and customer attention will be more severe, and cross-docking transportation can increase, fulfilling direct delivery to consumers.

Automation is a WMS trend that creates a step by step guide of what a worker has to do with an order. Following directions of a system a worker can also ask to show empty locations or print license plates, so-called LP number, that is later scanned, backed-up in the system. Then, the next steps are easier for drivers of vehicles who can easily find the items via scanned numbers among rows of shelves and aisles, see necessary information and be aware of defined areas for these in the warehouse.

Materials managers can easily conduct inventory part of work in WMS. Salespeople go into the system to create an order on thousands of items, allocate them properly, and schedule processes, allowing other sales representatives to see and monitor the current state with these or those products.

RF scanning is the greatest benefit most warehouses depend on. Scanning helps to allocate items to a bin and cross-check when a single customer ordered several items. If anything goes wrong, the inventory and accounting departments receive a notification, thus billing should change or mistakes should be corrected.

All in all, warehouse management systems anticipate automated processes, application of analytics, AI to accelerate the speed of delivery, and reach maximum customer satisfaction.

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What are the 8 features of WMS? ›

Top 8 Features Of Warehouse Management System (WMS)
  • Receiving. To begin, a WMS must include an option for receiving goods. ...
  • Inventory Management. ...
  • Picking & Packing. ...
  • Order Management. ...
  • Analytics. ...
  • Labour Management. ...
  • Financial Management. ...
  • Risk Management.

What is the purpose of warehouse management system? ›

A warehouse management system (WMS) is a software solution that offers visibility into a business' entire inventory and manages supply chain fulfillment operations from the distribution center to the store shelf.

What are the 5 benefits of inventory management? ›

What are the advantages of inventory management?
  • Improves Accuracy. Real-time inventory tracking helps you improve inventory management and ensures that you have optimal stock available to fulfill orders. ...
  • Reduces costs. ...
  • Saves Time. ...
  • Improves Business Planning. ...
  • Improves Customer Service.
21 Jan 2022

What are four 4 benefits of a warehouse management system? ›

A WMS system can mean benefiting from an increased efficiency within your warehouse by standardising inventory movements, picking methods and inventory locations, whilst lowering error rates and reducing training costs. It can also help to optimise stock flow via an automated replenishment system.

What is WMS What are the benefits of WMS? ›

A warehouse management system optimizes a warehouse's internal operation which can then extend to the broader supply chain. Within the warehouse, a WMS streamlines the entire warehouse process from inbound receipts to outbound deliveries improving operational efficiencies and reducing costs.

What are the 4 basic functions in a warehouse? ›

Regardless of the product, every warehouse moves things, stores them, keeps track of them, and sends them out. Those four functions result in our four essential categories of equipment: storage, material handling, packing and shipping, and barcode equipment.

What are the 5 essential warehouse management processes? ›

5 essential warehouse management processes
  • Inventory tracking. ...
  • Picking and packing. ...
  • Receiving and stowing. ...
  • Shipping. ...
  • Reporting.
15 May 2019

What are the six basic principles of warehouse management? ›

Warehouse management is commonly associated with six basic tenets: accuracy, cost control, efficiency, cleanliness, safety and security, but the underlying processes are complex and dynamic, presenting major problems for warehouse managers across industries.

What is the most important thing in warehouse management? ›

The 5 most important principles for warehouse management – What really matters in an efficient warehouse
  1. Highest transparency through warehouse innovations. ...
  2. Safety and validity of your warehouse data. ...
  3. The right process optimisation. ...
  4. Trained and professional storage personnel. ...
  5. The right equipment in the warehouse.
8 Apr 2021

Who needs WMS? ›

Anytime a warehouse worker physically moves inventory on the warehouse floor, a Warehouse Management System is updating SAP Business One and Macola in real-time. By doing this, a WMS can help you organize your inventory in the warehouse and accurately keep track of it.

What is inventory management and its benefits? ›

Inventory management helps companies identify which and how much stock to order at what time. It tracks inventory from purchase to the sale of goods. The practice identifies and responds to trends to ensure there's always enough stock to fulfill customer orders and proper warning of a shortage.

What are the benefits of keeping inventory? ›

Proper inventory management helps you figure out exactly how much inventory you need to have on-hand. This will help prevent product shortages and allow you to keep just enough inventory without having too much in the warehouse. A good inventory management strategy leads to a more organized warehouse.

What are the seven 7 functions of warehousing? ›

  • Storage. The primary function of a warehouse is to provide storage space for equipment, inventory or other items. ...
  • Safeguarding of Goods. ...
  • Movement of Goods. ...
  • Financing. ...
  • Value-added Services. ...
  • Price Stabilisation. ...
  • Information Management. ...
  • Other Functions.

What are the features of WMS? ›

8 Features of Warehouse Management System
  • Warehouse Design. Warehouses are not always organized well, wasting space and lengthening the pick-and-pack process. ...
  • Inventory Tracking. ...
  • Picking and Packing. ...
  • Receiving and Put-away. ...
  • Shipping. ...
  • Labor Management. ...
  • Yard and Dock Management. ...
  • Reporting.

What is warehousing management in 100 words? ›

Warehouse management encompasses the principles and processes involved in running the day-to-day operations of a warehouse. At a high level, this includes receiving and organizing warehouse space, scheduling labor, managing inventory and fulfilling orders.

How many types of WMS are there? ›

There are four main types of warehouse management systems: standalone, as a module in supply chain management (SCM) software, as a module within an ERP system, and delivered as a cloud-based system.

What technology is used in the WMS? ›

Automated Guided Vehicles (AGVs) are portable machines that navigate themselves through floor stickers, radio waves, vision cameras, wires, magnets, or lasers. This technology is most often used to transport raw materials, work-in-progress, and finished goods around the warehouse.

What is the most important part of warehouse organization? ›

The most important thing to keep in mind after organizing your warehouse is to review your processes and procedures regularly.

What is WMS and examples? ›

A warehouse management system is used to manage the warehouse operations such as in and outgoing inventory, picking/packing/shipping, and organizing inventory replenishment. WMS software brings better visibility and organization to the entire warehouse operations.

What are the best practices in warehouse management? ›

Warehouse Management Best Practices
  • Don't rely on manual input.
  • Plan picking procedures.
  • Reduce touch points.
  • Make popular products easy to reach.
  • Dedicated information sharing.
  • One item, one SKU.
  • Track your warehouse KPIs.
  • Prioritize warehouse safety.

What are the 3 most important things about working in a warehouse? ›

The 3 Skills Every Warehouse Worker Should Have
  • #1 Dependable. Every employer in every job type would probably list the ability to rely on their employees as their number one request. ...
  • #2 Flexible. The warehouse world isn't just about being able to lift boxes or drive a forklift. ...
  • #3 Organized.

What is warehouse strategy? ›

Reduce handling and touches

The fewer touches of product, the less cost of shipping an order. An effective warehouse cost reduction strategy is to streamline the operation and apply industry best practices in order to reduce the handling and cost of fulfilling an order.

How is warehouse management system implemented? ›

Step by Step Warehouse Management System Implementation Guide
  1. Create your implementation team. ...
  2. Change management plans and new practices. ...
  3. Forecast your costs and budget. ...
  4. Data backups and migration. ...
  5. Train your staff. ...
  6. Plan your go-live steps. ...
  7. Time to go live. ...
  8. Review your WMS implementation for success.
24 Apr 2018

What are the 3 benefits of automation? ›

The benefits of automation include improved accuracy, reliability, productivity as well as improved employee morale.

What are the 2 benefits of automation? ›

Advantages commonly attributed to automation include higher production rates and increased productivity, more efficient use of materials, better product quality, improved safety, shorter workweeks for labour, and reduced factory lead times.

What systems are used in a warehouse? ›

Warehouse Management System (WMS)

The warehouse management system (WMS) is responsible for the flow of inventory within the warehouse or distribution center. This typically includes everything from receipt of product to putaway, replenishment, and shipping.

What are the four importance of inventory management? ›

Regular supply at reasonable prices builds customer confidence. Inventory holding results in effective utilisation of human and equipment. Effective inventory control enhances market share. Inventory control improves product quality.

Why is inventory warehouse important? ›

Warehouse inventory systems can show you what you exactly have in stock at any given time. This ensures that your company will always be able to fulfil orders on time and accurately. It also allows you to get data on what sells quickly, what stays on the shelves too long, and what items tend to sell together.

What is a good inventory management? ›

Good inventory management software should:

Keep track of your inventory in real time. Help you forecast demand. Prevent product and production shortages. Prevent excess stock and too many raw materials.

What is the goal of inventory management? ›

The goal of inventory management is to have the right products in the right place at the right time. This requires inventory visibility — knowing when to order, how much to order and where to store stock.

What is inventory management plan? ›

An Inventory Management Plan (IMP) describes an organization's process for completing a high-quality, corporate-wide greenhouse gas (GHG) inventory. Organizations use an IMP to institutionalize a process for collecting, calculating, and maintaining GHG data.

What benefits does warehouse bring to business? ›

Here are eleven benefits of warehousing that can help your business run more smoothly.
  • Easy distribution. ...
  • Accessibility. ...
  • Managing inventory better. ...
  • Storage space for excess inventory and seasonal products. ...
  • Consolidation. ...
  • Efficiency/Productivity. ...
  • Faster inventory turnover. ...
  • Higher customer satisfaction.
15 Feb 2022

What do you gain from working in a warehouse? ›

You can develop and hone these skills from past warehouse roles or other work experience.
What are some examples of warehouse skills?
  • Organisation. ...
  • Literacy. ...
  • Computer proficiency. ...
  • Dexterity. ...
  • Speed and accuracy. ...
  • Self-motivation. ...
  • Problem-solving. ...
  • Teamwork.
19 Jul 2021

What value adding benefits the warehouses can provide? ›

When it comes to logistics and supply chain management, warehouse value-added services are a vital part of the process. These services can provide many benefits to businesses, including improving quality and efficiency, taking care of storage needs, and providing more time to focus on business expansion.

What is the most important thing in a warehouse? ›

Storage Space

This point needs to be carefully considered. In order for you to run a successful warehouse, it's essential that you have enough space inside the building to keep all of your goods in proper order without clutter. Not only will this improve organization, but will promote the effective movement of goods.

What are the two important warehouse activities? ›

Typical warehouse activities include putting items away, moving items inside or between warehouses, and picking items for assembly, production, or shipment. Assembling items for sale or inventory may also be considered warehouse activities, but these are covered elsewhere.

What is effective warehousing? ›

An efficient warehouse maximizes its space, streamlines its operations and promotes productivity among its workers. When a warehouse runs efficiently, customers get their shipments on time and the company's bottom line stays safe.

What are the basic principles of warehouse management? ›

The 5 most important principles for warehouse management – What really matters in an efficient warehouse
  • Highest transparency through warehouse innovations. ...
  • Safety and validity of your warehouse data. ...
  • The right process optimisation. ...
  • Trained and professional storage personnel. ...
  • The right equipment in the warehouse.
8 Apr 2021

What are the needs of warehouse management? ›

One of the main functions of a Warehouse Management System is to improve all stock control and tracking. You will be able to assist clients with goods and products. In which they want and keep up to date with relevant stock information. This should in the long run improve all customer satisfaction levels.


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