If you’re interested in learning more about the basics of warehouse management systems (WMS), you’ve come to the right place.
In this article, we will cover fundamental WMS questions, such as:
- What is a warehouse management system?
- What types of warehouse management systems can you buy?
- Which type of system is a WMS usually connected to?
- What are the benefits of a WMS?
- Four quick & easy warehouse layout tips for effective barcode implementation
But if you’re after different information about warehouse management systems, we also have you covered. Just take a look through the blogs, guides and videos we have on WMS.
What is a warehouse management system?
A warehouse management system (WMS) is software that is designed and built to optimize the warehouse, distribution, supply chain and fulfillment departments and processes within a business.
Typically, a WMS will provide functionality to help streamline and improve these warehouse processes, right from when goods first enter the warehouse, until they leave (and if they are returned!)
Warehouse management systems can also be connected and integrated with other types of software so that the processes across the business are all interconnected, smooth and streamlined.
But not all warehouse management systems are built equal.
Types of warehouse management systems
Some WMS systems will be able to seamlessly integrate with an ERP or back-office solution, or be included as modules of a large ERP or supply chain system.
These integrated solutions are often also able to integrate with third party logistics (3PLs) or shipping providers via powerful open source API technology, which usually makes integrated solutions the best type of warehouse management system your money can buy.
There are other types of warehouse management system out there, which are typically referred to as “standalone software”. These systems are generally on-premise, legacy programs rather than cloud-based and integrable systems. Standalone software requires more manual work in order to update other related systems, and often come with many hidden costs you may not have thought of.
When considering buying any new software, especially warehouse management systems, remember to look into all the types of cost that may occur, including (but not limited to):
- Licensing fees
- IT labor
Vendors selling cloud-based, SaaS and integrable WMS solutions will often handle a lot of these costs themselves, and thus, your main responsibility will be for software, licensing and one-off implementation costs.
What are the benefits of a WMS?
There are many benefits that a WMS implementation will bring to your business, from providing you with the ability to make data-driven decisions quickly and easily, to reducing your order fulfillment latency and processing costs.
Let’s take a deep-dive into the top five WMS benefits:
1. More informed data-driven decisions
As the most powerful warehouse management systems will be connected to your inventory availability and sales channels, they should operate in real-time.
This means you can quickly identify issues with high risk or high value items, such as in the event of warehouse theft or when goods are routinely damaged in-transit are a couple of examples.
You can also report on the productivity of your warehouse team faster than without a WMS, ensuring you know what their time is spent the most on, and thus, which parts of the process need to be improved as a priority.
2. Reduced order fulfillment latency
Simply put, your order fulfillment latency is the time it takes from when an order is placed by your customer, to when the order has been marked as dispatched and is on the way to them.
In the current highly competitive retail environment and with same and next-day delivery becoming the norm, you’ll need to find tools and process improvements to help reduce this time. This is where an efficient warehouse management system comes in.
With a WMS working alongside barcode scanners, your warehouse team will be much faster at picking and packing orders, and thus, your order fulfillment latency and processing times will be reduced.
3. Reduced processing costs
If it takes less time to pick and pack orders, and to complete other warehouse processes such as the receiving of deliveries, it’s inevitable that your processing costs are also going to be drastically reduced.
It makes sense to calculate your current processing cost per order now, and then you can see just how much return on investment you receive when implementing a WMS. Use this blog to work out how much it’s currently costing you to get goods out of the door.