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A warehouse management system is software designed to support all of the operational processes going into and out of a warehouse or distribution center, and also maintain those operations transpiring within warehouses and DCs themselves. These processes usually begin with the receipt of goods from suppliers into the warehouse or DC and end with shipments to customers.
Warehouse management is a vital link in the supply chain, and that's true now more than ever. Increasingly, organizations are using warehouse management system (WMS) software to manage warehouse space, labor, equipment, customer service and inventory. Speed of order fulfillment and reduction of inventory and operating costs are both critical components in warehouses and DCs today, due to the fierce competition in commerce and customers' growing expectations for just-in-time delivery of orders.
Between receipts and shipments, there are numerous inventory and information movements that support warehouse operations on a daily basis and that WMS software must provide functionality for. There are increasing levels of automation in warehouses and DCs today, so a WMS must also be able to support this automation in addition to the informational support that it gives warehouse workers and managers.
The functions of WMS software
Most WMS software products have a range of functions that help organizations better manage inventory by placing inventory items in locations that are easier for warehouse employees to pick stock from, since the items are located closer to assembly, packing and shipping locations.
Another common function of WMS software is that it helps improve the accuracy of inventory records so inventory is only stocked to match the demand for it, then that stock is replenished only when stock levels show when it is time to order more. Implementation of WMS software can help reduce paperwork by its use of electronic inventory receipts, pick tickets, move tickets and packing lists. It incorporates automated -- and in many cases -- hands-free technology such as voice-based communications that enable workers to move easily between shelves for items and to use both hands (which is an added safety measure).
In many companies, WMSes are also integrated into corporate ERP systems. This enables the WMS to manage all activities in the warehouse and also exchange information in real time with other order-critical functions in the company, such as sales and manufacturing.
A second warehouse-related system that the WMS integrates with is the warehouse control system (WCS). A WCS controls material handling and most of the movement of inventory items within the warehouse, in addition to controlling automated machines such as conveyor systems, robots, driverless forklifts and internet of things (IoT) technologies. The WMS and WCS work hand in hand, with WMS software being handled by warehouse managers and WCS software handled by supervisors on the warehouse floor. The WMS contains all of the order, inventory and location information. The WCS works with the WMS by providing the actual move logic (and control of automation) that facilitates the moving of inventory items from location to location in the process of fulfilling orders.
Key features in WMS software
A warehouse management system is best suited for a warehouse that requires more granular cataloguing of inventory, which may need to be tracked to multiple bin locations within the same warehouse. WMS software comes with analytics, real-time tracking and automation integration features. The added analytics, tracking and man-machine communications enable warehouse managers to respond to changing conditions in the warehouse quickly and to make the necessary adjustments for improved efficiencies.
These warehouse management systems can also include very sophisticated optimization features that recommend improvements in workflows, warehouse space and manpower utilization, and even in the placement of goods within the warehouse itself. Finally, because warehouse management systems were built specifically so they could easily integrate with production, logistics, sales and distribution systems, they can readily exchange information with these systems. This helps keep everyone throughout the company on the same page.
How companies use WMS software
Many companies adopt WMS software as their warehouse and distribution demands grow because they recognize that more traditional inventory management systems can't deliver the range of workflows and functions needed to support today's e-commerce, omnichannel retail and wholesale demands. Businesses use WMS to expand their capabilities in inventory management and logistics and to better integrate their operations with equipment and robotics.
WMS software has never been more important as IoT technology proliferates and pervades the warehouse. WMS integrates with those IoT technologies such as sensors, smartphones, radio frequency ID devices, hand-held terminals, barcodes and hands-free telephony.
In part because of its ability to work with such technologies, businesses that adopt WMS software generally see improvements in order fulfillment accuracy and timeliness because a WMS delivers better order planning than older inventory management and legacy systems. Businesses gain real-time visibility into inventory, employee and equipment performance. And the visibility goes beyond the warehouse, because of open-system interfaces that enable WMS software to easily connect with other corporate systems, such as ERP and WCS. All that visibility is supplemented with analytics that enable warehouse and distribution center managers to analyze all aspects of warehouse and DC operations for purposes of troubleshooting, fine-tuning and reporting.
In short, a WMS expands the traditional inventory management discipline into new functions that span the entirety of warehouse and DC operations, including receiving, returns, order fulfillment, transportation, yard management and shipping. With all of these functions under one WMS umbrella, organizations no longer have to piece together fragmented legacy systems to address all of the operational elements of a warehouse or a distribution center.
Organizations may require all or just some of these WMS functions, depending on the business. The important thing to know about all WMS systems is that they offer a range of capabilities that go beyond the traditional boundaries of inventory management, so there is greater opportunity to address a broader spectrum of supply chain issues such as automation, transportation, logistics and so on. Also, these systems can be configured into exactly what an organization needs.
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