What is a Warehouse Management System and Why Do You Need One?
A warehouse management system (WMS) automates and tracks day-to-day warehousing operations. Implementing a WMS allows an organization to optimize warehouse space and activities, reduce labor maintenance and operational costs, and improve overall inventory accuracy.
At its core, a WMS is capable of monitoring product quantities, cycle counting, picking, packing, shipping, and managing multiple locations. It is all the more important if you are running multiple warehouses.
Here’s how a WMS helps your eCommerce business
A WMS can help you keep track of the inward and outward movement of the inventory within the warehouse, thereby, preventing any shrinkage. The item-level barcoding ensures that you have access to all product details in case any of them get re-shipped.
QC at Receiving
A detailed Quality Control (QC) process facilitated by a WMS ensures that correct products are being taken in and the others can be sent back to the vendors.
Warehouse Space Optimization
When you prevent over and under-stocking, you can effectively optimize your warehouse space. Accurate stocking via WMS can maximize utilization of each slot by selecting a storage path that best fits the product.
Enhance Customer Satisfaction
When you ensure prompt and accurate delivery, customer complaints can be kept at bay and you can assure customer satisfaction and in turn, retention.
Increase Workforce Productivity
A WMS automates slotting, allowing staff to know the exact location of the product’s shelf. They can pick more orders in a reduced timeframe increasing efficiency in the order fulfillment process.
A WMS system helps you keep correct records of inventory, providing you with user-specified logins, and ensuring secure and safe product access.
Types of Warehouse Management Systems
Based on the functionalities, warehouse management systems can be categorized into the following 4 categories.
- Supply Chain Module
- ERP Module
- Cloud-Based System
Standalone Warehouse Management System
As the name suggests, a standalone system is used for warehouse management features in its entirety and nothing more. It excludes other supply chain functions such as accounting, distribution and customer service, making it more affordable. This type of system can be clubbed as a specialized product with an existing solution.
The idea behind a standalone WMS is to provide the best-in-class features to support end-to-end warehouse operations and inventory management. The system includes the most crucial features that assist any warehouse model. Some of the features that you can expect from a system like that include the following-
- Barcode Scanning
- Picking and Packing
- Cycle Counting
- Date Tracking
Who is it ideal for?
A standalone warehouse management system is the most basic version of a software that can be implemented to streamline your eCommerce operations. Since it does not include any other supply chain functions like finance, distribution, and customer service, this type of system is easily affordable. The features and pricing make a standalone WMS ideal for small and medium businesses that are just starting and don’t have the budget for sophisticated business software. The focus is on a best-of-breed WMS that includes selective features such as expiration date tracking, barcode scanners, putaway, picking, packing and shipping.
- Standalone is more customizable with other integrations such as ERP and inventory management software.
- The business integrity stays uncompromised with better control over company data.
- Standalone does not age well, making its future and subsequent integrations harder with the passage of time.
Having said that, a 3PL business offering value-added services or a 4PL business that requires more client visibility can also go for a standalone WMS.
WMS as a Supply Chain Module
A supply chain management software can streamline your complete eCommerce operations with the set of features it offers. It handles everything right from supplier management to risk assessment. Furthermore, a software like that automates basic to most crucial business operations including inventory management, sourcing, and product cycle management.
What separates a supply chain module and a standalone WMS is that the former provides WMS functionalities as a part of a comprehensive supply chain management software while the latter is a specialized product dedicated to warehouse management.
Who is it ideal for?
If you are willing to invest in supply chain planning while taking care of your warehousing, you should consider this system. That said, make sure that the overlaps with any existing business software are kept to a minimum. For instance, if your business is already using the services of inventory management, standalone WMS, and fleet management software, you can club them all for the holistic management of your entire supply chain.
This type of WMS is great for growing or well-established businesses that are looking to explore all the SCM benefits. They can combine this WMS with other applications for a cohesive business operating experience.
To conclude, a supply chain WMS is ideal for a business that is looking to optimize and enhance its complete supply chain.
- Includes a broader scope of supply chain and warehouse management operations.
- Cohesively meshes with other platforms.
- Provides holistic WMS management for the entire supply chain.
- Invites higher set up and maintenance costs.
- There can be a system overlap with a crossover of several features.
- Requires considerable expertise and familiarity.
WMS integrated with an ERP
An ERP system combines the functionalities of a lot of operational software, making it one of the most important tools for successfully running a business. These include supply chain planning, accounting, customer relationship management, human resources, and more. They are specialized systems that offer robust supply chain execution and scalability.
Integrated ERP systems offer warehouse management features, but it’s not their core functionality. Also, not all ERP systems offer all warehousing functionalities, so, it’s important that you pick the one that does. Netsuite, for example, provides a multitude of features along with all the warehousing features. Some of these features include automation, data analysis, tracking and visibility, accounting, financial management, marketing, and customer relationship management. You can compare the WMS features for different integrated systems to select the one that fits your warehousing as well as other ERP requirements.
Since it packs the power of almost all business software you will ever need, this type of warehouse management system comes with a heftier price tag. Because of this broad scope, ERP can replace a host of other software applications and centralize your operations into a single interface.
Who is it ideal for?
ERP is a good option for businesses looking to upgrade their software solutions on a larger scale. This is an excellent move for enterprises looking to get a competitive edge and improve their ROI. They are specialized systems that offer robust supply chain execution and scalability.
Other than your warehouse management needs, if you are looking to consolidate all your current software solutions into a single platform and payment gateway or ditch them altogether, then an ERP integrated system may be the best option.
Furthermore, ERP-based products are great for large businesses that need 3PL billing and want advanced reporting tools.
- Offers broader warehouse management capabilities compared to standalone WMS and WMS as a supply chain module.
- Runs on a unified interface that is easily integrable with other solutions such as billing and inventory.
- Higher costs due to modules diversity and uniqueness.
- Training is mandatory to grasp system functionalities.
- WMS-centric features can be fewer depending on the vendor, so extra caution should be exercised.
A cloud-based warehouse management system stores all the information on a remote server and provides you access through an active internet connection. It comes with multiple modules that can be tweaked as per the requirements of the company. Owing to the remote servers connected, enhancements to the existing system can be made far more easily, without having to physically visit the individual premises. This makes the lives of the clients as well as the vendor a lot easier.
Who is it ideal for?
The core benefit for most brands considering a cloud WMS is that it comes with a decrease in cost for installation and the infrastructure you need in your warehouse. Cloud solutions offering WMS are best suited for medium and large enterprises because of the affordable and flexible pricing. Additionally, they can be easily subjected to scaling in a controlled environment.
Since cloud solutions enable supply chain managers to pay more attention to customer servicing and weigh real-time performance while also keeping the data safe, businesses of all sizes are migrating to it.
We recommend a cloud-based WMS for any eCommerce enterprise looking to grow and scale given it improves overall business efficiency and ROI.
- Quick deployment and implementation with lower upfront costs.
- Subscription-driven model
- Added flexibility for seasonality and scalability.
- Simpler and easier maintenance with periodic upgrades and releases.
- Easier to integrate with ERP.
- Cloud-based WMS requires steady, reliable internet connectivity.
- Loss of control over data as vendor hosts The vendor hosts the solution, giving the business less control over data security.
How to choose the right WMS for your business?
Selecting the right WMS for your eCommerce business is going to play a major role in how efficiently you handle your day-to-day operations. Therefore, you need to make sure that you take your time while carefully picking a system that suits your business requirements.
We are detailing some of the features that might help you get more clarity on the subject.
Ease of Understanding
A simple user interface is one of the most important and possibly underrated features of a warehouse management system. A simple user interface makes it easy for your warehouse staff to easily access and operate the functionalities, preventing any errors.
This feature is especially important for growing businesses. Your WMS should be able to adapt and accommodate your growth and that of the entire eCommerce industry.
A simple example of scaling up would include the ability to increase the number of orders to procure, pack, process, and dispatch on a daily basis.
A WMS that can provide you with rich data reports can play a significant role in scaling your business.
Make sure that your WMS provides you with the integrations that you currently need and might require in the future as well. If you have a unique eCommerce platform, you will need a WMS that offers a well-documented open API for you to write integrations on.
A lot of WMS come with flexible pricing and you have plenty of options to choose from, Mae sure you find a system that’s value for money and helps you at your current market position and when you scale.
If you are looking for a cloud-based solution to do wonders for your business, EasyEcom is an industry-leading choice for over 2000 global brands. Apart from end-to-end omnichannel inventory management, EasyEcom’s state-of-the-art WMS offers top-notch warehousing features including the following:
- Transparency in inventory movement – Access to inventory movement across warehouses and orders fulfilled from a unified dashboard.
- Inventory Forecasting – Optimized inventory forecasting helps you timely plan inventory purchases.
- Supplier Management and Purchase Order Management – The warehouse team and finance team can effectively work on finalizing purchase orders and share them with multiple suppliers.
- GRN Management – Record product inward at your warehouse and have access to inventory details like product received, batch code, cost, etc. It also ensures that you only sell products that meet your quality standards.
- Barcoding (both at SKU level and item level)– Based on your product requirement, you can scan products either at SKU level or item level.
- FIFO Inventory Management – For non-expiry sensitive products
- Expiry Date tracking and FEFO inventory management – For expiry-sensitive products to let you sell items with long shelf life.
- Advanced Shipping Rules – Auto-allocates your customer orders to logistics partners based on the priorities and shipping rules you set in the system.
- Order Routing Between Warehouses – To ensure that your order is shipped at the earliest possible.
- Extensive System Reports – Access to real-time reports like returns reports, pending return reports, SKU performance reports, etc to help you make informed business decisions.