What is a Warehouse Management System, and How Does it Benefit Supply Chain Management?
A warehouse management system (WMS) is a powerful tool that can help businesses maximise their warehouse efficiency and productivity. By leveraging the latest technology, a WMS enables companies to automate many warehouse processes, reduce costs, and improve customer experience. In this blog, we’ll explore all you need to know about warehouse management systems, from the benefits of having one to how to choose the best WMS software for your business.
For example, a WMS can provide visibility into an organisation’s inventory at any time and location, whether in a facility or transit. It can also manage supply chain operations from the manufacturer or wholesaler to the warehouse, then to a retailer or distribution centre. A WMS is often used alongside or integrated with a transportation management system (TMS) or an inventory management system.
Benefits of a Warehouse Management System
A warehouse management system offers numerous benefits for businesses of all sizes. The primary benefit of a WMS is its ability to streamline warehouse operations and improve efficiency. A WMS can automate and optimise workflows, reducing manual processing time and cost. This can lead to faster order fulfilment, which results in improved customer satisfaction. Additionally, a WMS can help reduce inventory costs by eliminating the need for manual inventory processes, such as manual counting and cycle counting. Finally, a WMS can provide real-time visibility into the warehouse, allowing businesses to manage their inventory and track orders better.
The benefits of a warehouse management system can be seen in the numbers. For example, a study by the Aberdeen Group found that companies using a WMS experienced a 32% reduction in labour costs and a 26% reduction in inventory costs. Another study by the National Retail Federation found that businesses with a WMS could reduce their inventory carrying costs by as much as 20%. These numbers show that a WMS can offer businesses significant financial savings.
Challenges of a WMS
Although a WMS can offer many benefits, some challenges are associated. One of the biggest challenges is the cost of implementation and integration. A WMS can be complex and require significant resources to implement and maintain. Additionally, a WMS can be challenging to learn and use, and it can take time for employees to become familiar with it. Finally, integrating a WMS with other systems, such as accounting and inventory, can be challenging.
Types of Warehouse Management Systems
Warehouse management systems come in various types and implementation methods, and the type typically depends on the size and nature of the organisation. They can be stand-alone systems or modules in a more considerable enterprise resource planning (ERP) system or supply chain execution suite as well as cloud solutions.
As technology improves business operations, moving applications to the cloud has followed suit. A warehouse management system works in real-time, informing pickers of orders and allowing them to do their job more accurately. A cloud-based warehouse management system works in this real-time environment and is accessible from any device.
They can also vary widely in complexity. Some small organisations may use a simple series of hard-copy documents or spreadsheet files. Still, most larger organisations use complex WMS software, from small to medium-sized businesses (SMBs) to enterprise companies. Some WMS setups are explicitly designed for the organisation’s size, and many vendors have versions of WMS products that can scale to different organisational sizes. Some organisations build their own WMS from scratch, but it’s more common to implement a WMS from an established vendor.
What are the Four Types of Warehouse Management Systems?
While a universally agreed-upon classification isn’t established, we can broadly categorise WMS based on their deployment models and functionalities:
Standalone WMS: This encompasses traditional WMS software that operates independently and is installed on-site. It’s particularly suited for larger warehouses with intricate requirements.
Cloud-Native/Cloud-Based WMS: These WMS solutions are hosted in the cloud, offering enhanced scalability and accessibility. They prove advantageous for businesses seeking flexibility and reduced IT maintenance.
Integrated WMS: This variant of WMS is seamlessly integrated with other enterprise systems, such as Enterprise Resource Planning (ERP) software. It facilitates the smooth flow of data across various business functions.
Open-Source WMS: Open-source WMS software is customisable and adaptable to meet specific business needs. It’s often a cost-effective choice for businesses with distinctive requirements.
What Sets SAP and WMS Apart?
While related, SAP (Systems, Applications, and Products) and WMS stand as distinct concepts:
SAP: SAP signifies a company delivering enterprise software solutions for diverse business functions like finance, sales, HR, and supply chain management. It introduces modules such as SAP ERP (Enterprise Resource Planning) and SAP SCM (Supply Chain Management), which can encompass WMS capabilities. SAP encompasses a comprehensive suite beyond warehouse management, encompassing a broader spectrum of business processes.
WMS: As previously discussed, a Warehouse Management System is software laser-focused on optimising warehouse operations. It takes charge of warehouse inventory, orders, and associated processes, heightening efficiency and precision.
Warehouse management systems (WMS) fit into the overall supply chain.
A WMS can also be designed or configured for the organisation’s specific requirements; for example, an e-commerce vendor might use a WMS with different functions than a brick-and-mortar retailer. A WMS may also be designed or configured specifically for the types of goods the organisation sells; for example, a sporting goods retailer would have different requirements than a grocery chain.
Features of Warehouse Management Systems
A warehouse management system (WMS) is a software application that helps businesses streamline operations and improve efficiency. Many features are common to WMS products. Take a look:
- Warehouse design enables organisations to customise workflow and picking logic to ensure that the warehouse is designed for optimised inventory allocation. The WMS establishes bin slotting that maximises storage space and accounts for variances in seasonal inventory.
- Inventory tracking enables advanced tracking systems, including radio-frequency identification (RFID), automatic identification and data capture (AIDC) and barcode scanners to ensure that goods can be found easily when needed to move.
- Receiving and putaway allow inventory putaway and retrieval, often with pick-to-light or pick-to-voice technology to help warehouse workers locate goods.
- Picking and packing goods, including zone, wave, and batch picking. Warehouse workers can also use lot zoning and interleaving functions to guide the pick-and-pack tasks efficiently.
- Shipping enables the WMS to send bills-of-lading (B/L) ahead of the shipment, generates packing lists and invoices, and send advance shipment notifications to recipients.
- Labour management helps warehouse managers monitor workers’ performance by using key performance indicators (KPIs) that indicate workers who perform above or below standards.
- Yard and dock management assist truck drivers coming into a warehouse to find the proper loading docks. A more complex use of yard and dock management enables cross-docking.
- Reporting helps managers analyse the performance of warehouse operations and find areas to improve.
How to Choose the Right Warehouse Management System
When choosing a WMS software solution, consider the features and capabilities you need to meet your business goals. It would be best if you also considered the cost of the solution and the ease of implementation and integration. Additionally, consider the solution’s scalability and if it can grow with your business. Finally, consider the vendor’s support services and the product’s reliability.
A warehouse management system can offer numerous benefits for businesses of all sizes. From streamlining workflows and reducing costs to improving customer satisfaction and visibility, a WMS can help businesses maximize their efficiency and productivity. When choosing a WMS software solution, it’s essential to consider the features and capabilities you need to meet your goals and the cost of the solution. Additionally, it would be best to consider the solution’s scalability and ease of implementation and integration. With the right WMS software, businesses can unlock the potential of their warehouse and achieve their goals.
If you’re looking for a modern cloud-based WMS, consider Clarus WMS. Clarus WMS offers features to help your businesses maximise warehouse efficiency and productivity. With Clarus WMS, you can use real-time visibility, automated workflows, and advanced analytics. Contact us today to learn how Clarus WMS can help your business.