WMS stands
for Warehouse Management System and is a software application that aims to
simplify the warehousing and logistics operations of a company. The WMS allows
you to see what items are in the warehouse, their quantity, and where they are
located. You can also see and create orders for which items are to be picked,
packed, and shipped to the customer. In this way, warehouse workers can log in
to the software and know which items to pick, when to pick them and where to send
them. A WMS is often integrated with related systems like ecommerce platforms (the
software for online retailers) ERP (Enterprise Resource Planning software for
business processes such as accounting, management, etc), and transport systems,
all of which simplify and automate the warehouse processes. Overall, a WMS can
be said to increase traceability, minimize errors, and increase efficiency in a
warehouse.
Who needs a WMS?
The businesses most in need of a WMS are those with logistics-intensive operations. For logistics companies such as third-party logistic providers (3PL) who mostly provide warehouse outsourcing, take care of order picking, shipping, and more for their customers, the WMS has a business-critical role in the operation. For ecommerce and some other logistics-intensive businesses, a WMS is also crucial for operational efficiency. Initially, it is possible to manage warehouse operations manually without a WMS. But as the business becomes more complex and the warehouse grows, a WMS can be a gamechanger.
What types of WMSs are there?
Small-sized companies with minimal warehouse operation can manage their stock balances in an Excel sheet or similar. Other companies with smaller warehouse operations often manage their warehouse in the ERP’s WMS module, which tends to have the most basic functions. Some companies specialize solely in WMS which have considerably more functionality in comparison to an ERP. Most commonly, the WMS is cloud-based, which is a great advantage as it can be easily accessed at any location via any web browser.
Depending on the needs of the company, different solutions are chosen for its warehouse. An important thing to consider is whether you have unique needs and need a tailor-made solution or whether a standard solution is enough. When a standard solution is applied, the customer uses the existing features of the WMS which for most companies, does the job. A customized solution, on the other hand, allows customers to adopt the WMS to their unique requirements. However, a customized WMS might be very resource and time-intensive as the customer needs to finance tailored features of the WMS to their specific needs.
In summary, the easiest thing to do for most companies is to find a WMS that is standardized and cloud-based. This is because it is very quick to get up and running and no large investment is needed.
What should you expect from a full-scale WMS?
In addition to a WMS being cloud-based, many providers use the Software as a Service (SaaS) model, which comes with a lot of benefits. For example the customer pays a monthly fee to use the system. This means it is cheaper and you do not have to invest heavily to get started.
Depending on the warehousing business, different features are important. For example, for a 3PL logistics provider, it is important to be able to manage several different goods owners (the owners of the goods in the third-party operated warehouse) in the software, while an ecommerce business may have a greater focus on picking goods quickly and efficiently. A common way to pick efficiently is to use barcode scanning which the WMS should support.
It is also important that the WMS provider has a well-developed API (an Application Programming Interface enabling different software to communicate with each other), which makes it easy for other parties to integrate with the software. If the WMS provider has a modern API, a third party can easily integrate with it, whereas if there is no API or a poor one, a lot of extra time and effort is required. What it means to integrate a WMS is further explained in the following section.
What does it mean to use an integrated WMS?
Perhaps the most important thing about a WMS is that it has integrations with other systems such as ecommerce platforms, ERP systems, transport systems, and automation solutions such as robotic storage, conveyor belts, and storage lifts. Having integrated systems means a seamless exchange of information that removes a lot of manual work.
A good way to find a WMS can be to visit for example your ecommerce platform/transport- and ERP system's website to see which WMSs they are integrated with.
Summary
A WMS increases traceability, minimizes errors, and increases efficiency in a warehouse. The most important characteristics of a WMS are that it is web-based, SaaS, and has modern APIs and a wide range of integrations to related systems.
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