What’s the Difference Between Inventory and Warehouse Management?

There seems to be a lot of confusion between the terms inventory and warehouse management

As it appear to refer to the same type of materials management, but in reality there are subtle differences between the two. It is important for companies to understand the differences between inventory and warehouse management, because the type of materials management system you use to catalogue your inventory depends upon various factors that can affect the efficiency of your business.

What is Warehouse Management?

Warehouse management refers to the various processes related to maintaining and controlling a business’ warehouse. It goes through every step of the process, from beginning to end, and is usually overseen by warehouse managers. Starting from incoming freight and moving on to asset tracking and logistics, warehouse management encompasses everything that happens in a warehouse. Whether they own one warehouse or several, businesses can control the entirety of their warehousing operations. A Warehouse System (WMS) can help perform all these tasks.

What is Inventory Management?

Inventory management involves keeping track of a company’s stocked goods. It monitors their weight, dimensions, amounts and location. This helps business owners know when it’s time to replenish products, or buy more materials to manufacture them.

Effective inventory management is essential for ensuring a business has enough stock on hand to meet customer demand. If inventory management is not handled properly it can result in a business either losing money on potential sales that can’t be filled or wasting money by stocking too much inventory. An inventory management system (IMS) can help prevent these mistakes.

So what are the main differences between the two?

Complexity / Features

One of the primary differences between inventory and warehouse management is in the complexity of each type of inventory system. Inventory management systems are somewhat simpler, in that an inventory management system can give you an indication of the total amount of stock that you have for one specific storage location. Warehouse management systems, on the other hand, allow a company the ability to manage entire storage systems within a structure like a warehouse. So, if a warehouse has multiple storage bins of the same product, warehouse management systems can help you manage all of these, whereas an inventory management system will only tell you how many of the specific product you have.

Control and Storage

The difference in simplicity and complexity spills over into the control and storage of inventory, as well. In an inventory management system, you can really only know that you have the specific product on hand and how much of it is available. The management of the inventory within the warehouse depends upon the use of warehouse management, which allows you to find specific locations to place the inventory or even to retrieve it later. In short, warehouse management gives you the specifics of inventory control, whereas inventory management simply gives you the quantity.


Another key difference between inventory and warehouse management is the extent to which one system can be integrated into the overall logistics of a company’s management of its supplies and inventory. SAP indicates that inventory management is generally the first step in the other processes that take place in warehouse management. However, warehouse management is closely connected to other aspects of company management, such as production supply, sales and distribution and quality management. In other words, warehouse management is integral to ongoing operations in other departments whereas inventory management is not.

Software Solutions

When it comes to inventory management software versus warehouse management software, warehouse management software tends to offer a business the opportunity to analyse and alter its inventory and storage as needed, whereas inventory management software generally does not do this. Various communications devices used in warehouse management generally make it possible to analyse and make changes as necessary, resulting in a more streamlined and efficient operation.

Software Solutions Key Differences

In a nutshell, the basic difference between a warehouse management system (WMS) and an inventory management system (IMS) is that one involves tracking counts of individual products or SKUs and the other involves tracking units of space, including compartments and bins.

Inventory management software

Inventory management software is a computer-based system for tracking inventory levels, orders, sales, and deliveries. It can also be used in the manufacturing industry to create a work order, bill of materials, and other production-related documents. This software works well for business who are looking for an inventory software that is less complex and is focused on the handling of the physical product itself.

Inventory management software is ideal for small to midsize businesses that do not have a wide range of products. Although this software’s features are limited to inventory, that is actually its greatest benefit. For a business that has no need for the fancy bells and whistles of a more complex management system, inventory management software is ideal.

Warehouse management software

Warehouse management software, like inventory management software, is capable of monitoring product quantities, cycle counting, picking, packing, shipping, and managing multiple locations. However, warehouse management software provides more details and capabilities catered to product shipping, channel listing, and many other features. In fact, warehouse management software has so many features that it would be impossible to try to describe them all in one post.

Overall, the features of warehouse management software provide users information on products and warehouses processes that can be used to make assessments about warehouse efficiency. Another notable advantage of this software is its ability to monitor online inventory across multiple channels.

At its core, warehouse management software is designed to optimise warehouse operations. However, this software has another other primary function. Track and control of inventory across multiple e-commerce sites. This software tracks online inventory and sales while also running real time quantity syncs across multiple marketplaces. So if you sale an item on one site the sale will be taken off the products quantity on all marketplaces.

In Summary

When deciding whether to use inventory management software or warehouse management software, buyers have to decide which one works best for their business model. While these softwares are similar in name there are important distinctions to make between them. Both inventory management software and warehouse management software have been designed to minimise human error and increase efficiency, but do so in very different ways.

About us:

Speak to one of our team to understand how Clarus’ WMS system can cost effectively support best practice warehouse management processes, better customer service and highly efficient working for a range of warehouse operations with pay per month options and no IT infrastructure needed.

Our platform can scale from a one user, small depot system to a 100’s of user distribution centre operation. The ClarusWMS platform will cost effectively scale with your business based on demand.

ClarusWMS is a UK based supplier of warehouse management solutions with a wealth of industry experience in third party logistics, wholesale / retail distribution, online fulfillment and manufacturing warehousing.