What Is a Warehouse Management System (WMS): Features, Essence, and Examples

What is WMS system? It stands for the warehouse management system and is software to cope with issues for ordered goods that are becoming more complex. As the scale grows, it can turn into a challenging task. So, it is crucial to organize the storage and distribution of goods properly, keep records, and systematize their flows. All this is included in the concept of warehouse management, and digital systems help to solve this problem by automating operations.

Reading this article allows you to learn what a warehouse management system is, what benefits it has, what features include advanced solutions, and how to select the best WMS for your company.

A warehouse management system (WMS) is an operation optimizing software. It tracks supplies and commodities in a storehouse as they arrive and are shipped. Thus, warehouse management systems can perform many functions, such as material tracking, order packing optimization, warehouse navigation, automatically matching orders and stock, sending notifications for new orders, and many more. But to understand the purpose of WMS systems, it is essential to learn what warehouse management is.

Warehouse management is the process of determining the location of goods and maintaining the storehouses' work. For example, it covers operations performed by warehouse workers, processing and storing data on suppliers and goods throughout the supply chain.

To clearly understand warehouse management, we can represent in the form of six processes, namely:

• Receiving: an operation that includes ordering products, unloading, and controlling the delivery of the accurate amount of suitable goods to your storage.
• Putaway: goods' delivery to a suitable location in the storehouse. It regards the specifics of the supplies, storage conditions, dimensions, etc.
• Picking: the procedure of compiling goods according to the customer's order. It demands the most time and money and has the highest probability of errors.
• Packing: grouping products according to orders into suitable packaging, inspecting the completeness and quality.
• Delivery or dispatch: transferring an order from storage further up the supply chain.
• Returns: an undesirable but still influential part of the supply chain. Therefore, the control of returns and repayments also needs exceptional attention.

Now, let's look at strategies employed to supervise the overhead processes and how warehouse management system capabilities deal with them.

WMS systems offer various opportunities for different businesses, starting from startups to enterprises. Understanding the main benefits of a warehouse management gives you a clear imagination why you need such software. Let’s take a closer look at some of the advantages a warehouse management system can give you:

The warehouse management system optimizes processes from receiving to delivery. It will enhance performance and streamline operations. Also, WMSs reduce errors and remove unnecessary tasks. Integrating with ERP and transportation systems helps WMS provide a comprehensive view of the warehouse, which accelerates the flow of goods.

For date-sensitive or perishable stock, WMS software identifies items that require priority picking or a sales boost to reduce waste. It determines the most efficient use of warehouse space, which optimizes inventory placement and travel paths. Some WMS systems include advanced simulations to design floor plans and position pallets, shelves, and equipment for efficiency, saving time and money.

Warehouse management systems use barcoding, RFID tagging, sensors, and technologies to provide real-time visibility into your inventory as it enters your warehouse, moves within a warehouse, and transitions to its next destination. Such enhanced visibility supports a just-in-time inventory strategy and improves traceability, which is crucial in cases such as product recalls.

A WMS system helps you predict labor requirements, design efficient schedules, minimize travel time within the warehouse, and assign tasks to employees based on their skills, location, and other criteria. Besides, it improves the quality of employee work by fostering a well-organized, safe, and supportive environment where workers feel their time is respected and effectively utilized.

WMS software enhances customer relationship management because it enables better order fulfillment, faster deliveries, and greater accuracy, improving your brand reputation. For suppliers, it reduces wait times at loading bays and docks, which fosters stronger relationships and creates a more efficient supply chain that benefits all parties involved.

Warehouse management features highly depend on the type of WMS. Consequently, there are several classes of such software. Each has its advantages and disadvantages, which we discuss below:

Standalone WMS is a type of software designed specifically to manage warehouse operations independently of other business systems. It ensures local software is deployed on a single device within the enterprise network. The initial price of on-premises WMS is significantly higher than that of other types, but it doesn't require much investment after system development is done. However, this option is most suitable for small and medium-sized companies that need only the functionality of a single system to fulfill all their business tasks.

A cloud-based Warehouse Management System (WMS) operates as a Software as a Service (SaaS) model using enterprise cloud technology, also known as an online warehouse management system. Compared to traditional WMS solutions, cloud-based systems are more flexible and secure. Updates for such solutions are automatic, eliminating the need for manual intervention. Vendors invest significantly in security measures and disaster recovery capabilities, such as data backup. Moreover, Cloud WMS can seamlessly integrate with transportation management systems, offering the specific warehouse management features your business requires.

An Integrated WMS is a warehouse management system seamlessly incorporated into an Enterprise Resource Planning (ERP) platform. This software offers built-in features such as Electronic Data Interchange (EDI), accounting, sales order management, Material Requirements Planning (MRP), and shipping management. The primary advantage of these solutions is their seamless integration with other logistical and operational systems, including accounting and business intelligence tools. By implementing barcode technology within an integrated WMS, businesses can transition from paper-based processes to a fully digital system, reducing data re-entry and human error while enabling real-time control over operations.

The warehouse management system offers various features to help you organize, manage, and optimize warehouse. Let’s talk about the key functionality of WMS:

WMS systems get you access to features such as tracking delivered goods already at the stage of receiving supplies. Moreover, it allows automatic replenishment of commodities by scanning barcodes during unloading, which provides accurate inventory records from the start and reduces errors in manual data entry. Also, WMS eases the put-away process using optimal storage locations based on the type of goods, maximizing warehouse efficiency.

Another benefit of the warehouse management software system is the capability to track goods movements. Thanks to progressive WMS, you can fully manage the quantity of inventory, storage conditions, warehouse staff, etc. Warehouse inventory management software also includes real-time updates on stock levels, helping prevent overstocking or stockouts. With detailed insights into inventory turnover rates and demand patterns, WMS lets you make data-driven decisions, which enhances operational efficiency and reduces costs.

With many orders, the WMS functionality checklist must include functions for quickly obtaining all order data. Businesses often use CRM systems for successful order transportation management, which can improve order processing. This integration also enhances the accuracy of order fulfillment thanks to WMS automatically prioritizing and allocating stock based on customer requirements. It will provide timely deliveries and reduce errors in the order management system.

To streamline warehouses, it is necessary to track the order's status from when it is received to delivery to the client. The WMS system provides real-time tracking of goods through the warehouse layout, which ensures the visibility of each step, from picking to packing and shipping. This visibility level allows businesses to quickly address potential delays or issues, improving customer satisfaction by ensuring timely and accurate deliveries. Also, a warehouse management system can help optimize shipping routes and methods, which helps reduce transportation and improve performance.

WMS functionality checklist must contain automation items for each process to reduce errors and costs. Labor management in WMS solution helps optimize workforce allocation by automating task assignments based on real-time warehouse data. It guarantees that employees do the most critical tasks at the right time, which improves productivity and reduces time tasks to do. Also, WMS can track employee performance, and it provides valuable insights for training, efficiency improvements, and better workforce planning.

For successful business evolution, it is crucial to analyze data in dynamics constantly. Hence, management warehouse system software features should quickly form understandable reports based on available data. These reports allow businesses to track key performance indicators (KPIs), such as inventory levels and order accuracy, which enables better decision-making. Analytic report from your WMS helps you identify inefficiencies and areas for improvement, which enhances overall warehouse operations and profitability and streamlines enterprise resource planning.

Dock and yard management within a WMS system ensures efficient warehouse operations within a warehouse and transportation areas. It lets you manage dock assignments, schedule truck arrivals, and track the movement of vehicles within the yard of the warehouse or distribution center management. WMS also can manage loading docks based on real-time data, which reduces wait times and prevents congestion. It also provides visibility into the availability of trailers and containers, allowing warehouses to better plan and coordinate shipments.

To help you see the functionality of the WMS system, our team has developed a demo version of it. The solution demo will allow you to see firsthand how the solution operates.

One of the primary benefits of a properly designed warehouse management system is that it constantly evolves and updates. Let's look at the latest trends in warehouse system management.

Experts view IoT as the future of WMS. The optimization provided by the IoT includes:

• Real-time inventory tracking. WMS system with IoT hardware supplies real-time information on the goods' location and details about transportation, packaging, and routes. It guarantees the safety of the commodities.
• RFID technology. RFID significantly simplifies the inventory process since it does not require direct eye contact, unlike barcodes. With its help, WMS (warehouse management system) decreases the time and cost of tracking each specific item.
• Smart inventory management. Systems can also automatically generate alerts when a commodity is out of stock or storing conditions are not met. Furthermore, inventory software development with integration with IoT devices makes it more effortless to manage returns.

The IoT system generally allows significant downsizing of the risks related to transporting and storing goods and simplifying personnel work.

EDI supplies a paperless exchange of documentation and information between partner companies. Allows all different types of warehouse management solutions in transportation management systems and supply chain management to deliver quality and transparent customer services, significantly contributing to loyalty.

Here’s how businesses benefit from using EDI:

• Process optimization helps to meet EDI service standards, evade fines due to SLA violations
• Automation significantly lowers order processing time
• No necessity for manual data entry substantially decreases the probability of errors

EDI solutions are developed to reduce costs, enhance security, and minimize risks.

Today, most WMS warehouse management systems are connected to cloud storage. We need to figure out its features and benefits to comprehend the WMS system with the cloud.

Firstly, cloud capabilities allow integration with the ERP system and automatic equipment. Also, with the help of the cloud, synchronization of the online catalog of your e-commerce site with stocks in the warehouse is automated for the correct display of information, which saves a large amount of time.

The continuous interaction of the WMS warehouse system with other programs using the cloud is vital in optimizing the supply chain.

As an AWS Select Tier Partner, we at Cleveroad specialize in building cloud-based warehouse management systems on a reliable and secure infrastructure. Our AWS-certified experts develop WMS solutions that are flexible, scalable, and tailored to your unique business needs.

So, to implement a WMS system, you need to concentrate on a few points:

When your business expands, and you realize that the number of orders has become large enough, you start thinking about switching to paperless WMS. To ensure this decision is correct, consider how much time is spent manually entering orders, allocating and managing inventory, and booking deliveries.

Automating these processes will significantly reduce your time costs and increase efficiency. In addition, calculate how much time and money is wasted due to data entry and order picking errors that can be avoided with the help of automation.

When developing your own WMS, ask yourself what a warehouse management system does. By answering this question, you can define the functions you need specifically for your business. You can start by implementing a few features, such as stock tracking and delivery control or order receiving and packaging. Later, the system can be extended, and new operations can be added.

To avoid confusion about all the warehouse management system features, you can contact a logistics software development company like Cleveroad that will help you make decisions.

When selecting a developer for your software, you can choose from in-house development, IT staff augmentation, and dedicated team development options. Choosing an in-house team gives you full control over the process, but this cooperation model is associated with increased rental and benefit costs. Therefore, to make WMS implementation more cost-effective, you can consider one of the outsourcing models: expand development capabilities with IT staff augmentation services or hire a dedicated development team to handle a thorough WMS implementation process.

So, let’s discuss the key points to consider when selecting an outsourced IT partner:

• Technical experience. The IT partner you choose should have experience in creating warehouse management systems using a modern technology stack and integrating the hardware you use.
• Industry-specific expertise. The outsourced company must have experience in the logistics domain and knowledge of logistics-specific software development practices.
• Portfolio. Check WMS development vendor’s portfolio to see if they’ve delivered successful projects in the logistics domain, specifically solutions with similar functionality and technologies as you need.
• Client reviews. Pay attention to the company’s client reviews, as they can show the main vendor’s advantages and disadvantages.

Investing time in training your staff is important. Provide workshops, create manuals, and ongoing support for any questions or issues. The better your team understands the WMS, the better the implementation will be. Help employees face the changes and describe how automation will simplify their daily tasks and improve efficiency. Regular feedback sessions during the first phases can also help identify potential challenges for optimal results.

Encourage a culture of continuous learning. Offer refresher courses and updates when you add new features to the system. It will help to increase your team’s readiness for changes in the quickly-growing market and customer demands.

After you implement the WMS system, make sure it's ready to grow with your business. Choose a system that can handle increasing amounts of orders, inventory, and data as your operations expand. Regularly check your processes to identify areas for optimization and try to add new features such as advanced analytics. Maintain a flexible approach to adapt to market changes and customer needs. A scalable WMS will help you stay competitive and manage growth.

Collaborate with your WMS provider to update the system regularly with the latest technology and features. Using this approach, you can prepare your business for the future and maintain efficiency during periods of quick growth.

Cleveroad, as a logistic software development vendor, is ready to be your reliable WMS development partner. We are a proficient software development company with over 12 years of experience headquartered in Northern Europe, Estonia.

Cleveroad provides logistics software with real-time information and reporting for decision-making, improved efficiency throughout the entire supply chain process, cost savings, and identifying points of profitability rise. Also, we integrate smart solutions within warehouse management systems, such as automated picking tools, asset management systems, warehouse management systems, IoT integration, etc.

Choosing the Cleveroad for WMS implementation, you will get:

• Expert warehouse management development services: custom WMS development, warehouse software modernization, integration with 3-rd party services, and warehouse automation.
• Free Solution Workshop stage to connect your warehouse business needs with technical implementation. Our logistics domain experts will know your challenges and processes and tailor IT offerings to align with your WMS goals.
• Partnership with an ISO-certified company that implements ISO 9001 quality management systems and ISO 27001 security standards.
• The pool of 250+ qualified IT experts is ready for new requirements and changes and integrates them into existing workflows.
• Flexible cooperation options to match your WMS implementation needs: IT Staff Augmentation, Dedicated Development Team, and Project-Based Collaboration.
• Signing NDA per your request to protect your Warehouse Management Software idea and internal company data.

We at Cleveroad are ready to provide assistance in needs identification, development, and integration of WMS. Look at our portfolio to check our projects and at the Clutch page to see our client's reviews.