What is a warehouse management system or WMS?

The aim of the WMS is to ensure that goods and materials move through warehouses in the most efficient and cost-effective way. It does this by performing many functions that enable these movements, such as inventory tracking, order picking, receiving and putaway.

It also provides visibility of an organisation's inventory anytime, anywhere, whether in a facility or in transit.

Supply Chain

Warehouse management systems therefore play a key role in supply chain management, as they are responsible for managing order fulfilment processes, from the receipt of raw materials to the shipment of finished products.

In any production process, it is necessary to have control over the raw materials needed to manufacture a product. If these are not received correctly or if any other incident occurs, such as parts going astray in a warehouse, the rest of the chain can be slowed down or even interrupted. To ensure that all these processes run as efficiently and smoothly as possible are warehouse management systems, which track inventory and ensure that goods are stored and sorted correctly, as well as shipped and tracked accurately.

Therefore, these types of applications are often used and even integrated with other business management applications, especially ERP or even transport management systems (TMS) and inventory management systems.

WMS types

In fact, at this point we can say that there are several types of warehouse management systems.

Some of them are integrated into the ERP suites themselves, but others may operate independently, although related. Similarly, depending on the size and industry of each company, WMSs may be of one type or another.

Some options are designed specifically for the size of the organisation. Depending on the vendor, several versions of the same WMS are available on the market but can be adapted to different sizes of organisation.

Another option is to design it, from scratch or almost from scratch, according to the specific requirements of a company, since it is not the same to be the manufacturer, wholesaler or retailer of the same product. Since it is also not the same to have a warehouse for screws as for TVs, these WMS can also be designed or configured specifically for each type of product.

It should be noted that these WMS are available both on-premise and in the cloud, although the latter option is the one that is gaining the most points due to the possibilities that cloud computing allows.

A few benefits

Using a warehouse management system can have several benefits, as we have seen. Some of the most outstanding ones are:

• Real-time visibility. Knowing the current state of the warehouses allows us to know where we are and to be able to make better decisions related to product availability.
• Reduced costs. By being able to better control the use of space and labour requirements, we can adjust and control the operational cost of our warehouses.
• Supply chain flexibility. By having product demand and supply data, we can be more flexible and control our production delivery processes.
• Eliminate errors. Warehouse management will prevent us from having too many and too few products, avoiding ordering when it is not necessary or committing to delivery dates that we cannot meet.