Warehouse Management System (WMS) is a software application that helps in controlling and managing the day-to-day operations of a warehouse. The WMS software directs inventory receiving and put-away, optimizes the picking and shipping of orders and advises on stock replenishment. WMS can be a standalone application or part of an Enterprise Resource Planning system (ERP).
What Can a Warehouse Management System Do?
At first, warehouse inventory management systems can only provide simple functionality, mostly just information about the storage location. Nowadays, the breadth of WMS functionality can vary greatly, from basic best practices in pick, packing and shipping functions to complex programs that coordinating advanced interactions with material handling and yard management.
Warehouse management system can reduce the possibility of errors that can occur when shipping the product. The system can also help the company fulfill orders more quickly and track ordered products in real time within the warehouse.
Ultimately, the overall goal of the warehouse management system software is to achieve a paperless environment that automatically directs your employees to the optimal picking, warehousing, and shipping of your products.
Warehouse Management Software
The WMS software directs stock receipt and warehousing, optimizes the picking and shipping of orders and advises on inventory replenishment.
The breadth of inventory management software functionality can vary widely, from basic best practices in picking, packing and shipping functions to complex programs that coordinates advanced interactions with material handling and yard management.
Types of Warehouse Management Systems
There are several types of warehouse management systems, and each has its own advantages and disadvantages. Here are the most common types:
- standalone system
- Enterprise Resource Planning (ERP) modules
- Cloud Based
Standalone warehouse management system
Your standalone warehouse management system is your typical on-premises system that is deployed on the company’s native hardware and network.
Most WMS systems are third-party standalone packages that must integrated with the rest of your business management software (like ERP). While external program integration can work, the process is often fraught with challenges such as redundant data entry, information delays and silos, interface issues and customization expenses.
These systems are often the least expensive option in the long run, but it lacks the benefits of the more integrated WMS option.
Enterprise Resource Planning (ERP) modules
Some ERP vendors, such as IQMS, offer a warehouse management system built into their ERP solution. This type of solution provides embedded EDI, Accounting, Sales Orders, Enterprise Resource Planning (MRP) Management without the messy non-real-time interfaces.
Advantages of integrated WMS and ERP system
The benefits of an integrated WMS & ERP solution are extensive.
With native WMS program, you get business-level traceability, employee accountability, speed, and real-time responsiveness.
By scanning guns and barcodes, you can move from pen and paper to a digital WMS environment that eliminates data re-keying and the inevitable human input error that comes with it.
There are several differences that fully define the ERP hosting model and should be considered before deciding which deployment option is best for your business.
The advantages of a comprehensive warehouse management system include:
- Reducing execution time
- Increase inventory accuracy
- Improving customer service
- Greater utilization of space
- Increasing warehouse productivity
- Reducing labor cost
You need to ask these following question:
- Can your installed WMS software automatically alert you to order changes from incoming EDI documents, displaying on-hand inventory quantities and their locations?
- Can it keep you updated in real time how many parts are left for the manufacturer before the order is filled and ready to ship?
If you answered “no” to any of these questions, you may want to consider implementing an integrated WMS/ERP solution.
WMS Software Tiers
When deciding to implement a WMS program (or upgrade to a more powerful program), how do you determine which system is best for your facility? Each tier of warehouse management, from basic to advanced, provides a higher level of control.
Here is an overview of the three most popular WMS levels, with a particular focus on shipping, receiving, warehousing, and inventory replenishment:
Tier 3 – Basic
At the entry level, a tier three WMS data collection tools will help you automate your inventory. By assigning grid numbers to locations and bins in your warehouse, your computer can record where each item is located. But that is the maximum level of complexity your system can handle.
Tier 2 – Intermediate
WMS programs at this tier provide directed pick and put away logic to allow you to optimize warehouse space and staff time. For example, rather than just checking where to put materials, the second tier warehouse inventory software will use interval optimization to evaluate a combination of items, location, quantity, unit of measure, and order details to tell you where inventory should be stored. Due to its greater depth of functionality, second-tier WMS programs are typically implemented by medium to large organizations.
WMS packages at this tier provide oriented-task monitoring to help you decide where to store materials, where to choose and even the sequence in which you choose something. When inventory is received, a Level 2 WMS offers a remote guide mode based on the speed of inventory movement to help eliminate of expired items.
Tier 1 – Advanced
Only the largest and most complex execution centers or warehouses (think Amazon) benefit from Level 1 WMS software. Unlike the previous two tiers, which are designed more for “captive” warehouses that the on-site manufacturer distributes only for themselves, Tier 1 WMS software is for wholesale distributors and warehouses that stock and ship products from multiple companies.
How to Choose the Right Warehouse Management System?
Your company needs to be empowered to choose from a list of options in order to improve deployment and support your company’s growth and business goals.
Your comparison has to take an in-depth look at:
- Fit and functionality of the program – above all!
- Purchase Agreement (perpetual license or subscription license)
- Implementation and Training
- Backup and Replication
- Customization
- Your philosophy in the field of information technology footprint
- Software update control
- Data access and ownership
- Total Cost of Ownership
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