Warehouse Management System: What It Is and How It Works

By Miakayla Leaverson

Are you a business owner looking for ways to optimize your warehouse operations? Look no further! In this blog post, we will delve into the world of warehouse management systems (WMS) – the secret weapon that many successful businesses employ to streamline their inventory, automate processes, and boost overall productivity.

Whether you are a small start-up or an established enterprise, understanding what a WMS is and how it works can revolutionize your warehouse operations, ultimately leading to improved customer satisfaction and increased profit margins. Let’s dive in and unravel the mysteries behind this essential business tool!

What Is a Warehouse Management System (WMS)?

A warehouse management system (WMS) refers to computer programs that businesses can use to enable, coordinate, and oversee the different kinds of activities that take place in a well-organized warehouse.

Some of these activities include things like managing the inventory you have on hand and keeping it organized, retrieving items from your warehouse and preparing them for sale, and of course reviewing insights about your warehouse management processes, such as how efficiently your employees are working and how well your warehouse space is being used.

Considering all the benefits a WMS has to offer, it’s no wonder the global market for WMS was valued at $3.4 billion in 2022 and is expected to continue its remarkable growth with a projected CAGR of 19.0% between 2023 and 2030.

What Does a Warehouse Management System Do?

WMS software makes any warehousing professional’s job easier by managing many of the complex and time-consuming processes that happen every day. This can include; the picking and shipping processes, the transportation of products between warehouses, and the general business of knowing what items you have on a regular basis so you’re better prepared to meet customer demand.

Picking and Shipping

Is there a more important job for your warehousing crew than making sure customers get the products they order when they expect to receive them? The answer is a likely no.

Warehouse management software can ensure you efficiently locate the right products. Additionally, it can help you keep a record of what’s moving in and out of your warehouse; as well as get them delivered to the customers who ordered them. Trying to manage these processes at scale without technology is a recipe for confusion and disaster.

Tracking Inventory

Without proper inventory tracking, you won’t have a clear idea of what products you have on hand to sell; as well as when or if you need to order more of a popular product. Likewise, you may end up ordering too much of something that isn’t moving fast.

WMSs help track the status of the items in your inventory from when they enter the warehouse to when they’re shipped to your shoppers.

Insights and Analytics

A key value of any kind of business software is its ability to track and compile data to deliver valuable insights into the success of a process. With a WMS, you can receive these benefits when it comes to the efficiency of your warehouse. A WMS can gather data about how your warehouse is being used and how your workforce manages it.

For example, it could tell you how much of your warehouse is being put to good use; as well as how much is being left empty. Valuable insights that could help you use the space efficiently or even relocate to a smaller and cheaper warehouse.

Labor Management

WMS software can monitor the status of the goods in your warehouse and the efficiency and activities of the human workforce. The software can give you insights into how well your employees perform. Moreover, it can potentially identify areas where you could streamline your headcount to save money. 

When you can view labor insights down to an individual employee level, you’re much more equipped to see and fix any problems with your workforce.

Benefits of Implementing a Warehouse Management System

You now know what a WMS does, but let’s look at how it benefits your business. At a high level, a WMS can help make your warehouse practices more efficient, less costly, less mistake-prone, and more supportive of your larger business goals. Let’s dive into the specific benefits below:

Potential for Cost-Saving

By streamlining and automating various processes within the warehouse, WMS enables businesses to reduce labor costs significantly. With the help of advanced technologies like barcode scanning and automated picking systems, the need for manual labor decreases. Instead, warehouse managers have better tools on hand and less of a need to rely on additional staff.

This in turn can lead to reduced staffing requirements and lower payroll expenses. Moreover, by optimizing workflows and minimizing inefficient processes, WMS improves overall operational efficiency, which further contributes to cost reduction.

Enhance Customer Satisfaction

The customers are the ultimate group that you need to satisfy. Furthermore, the ultimate reason you would even put a WMS in place to begin with.

Warehouse management system software can help you increase customer satisfaction by enabling smoother stock management at the source; which can help ensure that the correct items get sent to your customers when they expect them.

Improved Inventory Management

WMS systems employ real-time tracking and monitoring capabilities, ensuring that inventory levels are always up-to-date and accurate. This eliminates the need for manual inventory counts and minimizes the chances of human error.

Accurate inventory data is crucial for effective demand planning, accurate order fulfillment, and precise forecasting. By achieving higher inventory accuracy, your business could avoid unnecessary stockouts or overstocks, ultimately cutting down financial losses.

WMS systems may also enable you to optimize storage space, ensuring that all products are stored in the most efficient manner, which further enhances inventory management and accuracy.

Fewer Mistakes

It’s a fact: humans make mistakes. With a WMS system, you can avoid, if not eliminate, the potential for errors such as miscounted goods, lost items, and more. With the ability to track your current performance and see where issues are happening, you’ll also be able to set goals and continuously improve processes in your warehouse.

3 Types of Warehouse Management Systems

Like most types of business software, there are several varieties of WMSs that fill different business needs. We’ll go over standalone WMS, supply chain modules, and ERP-integrated systems below.

Stand-Alone WMS

A stand-alone WMS doesn’t include any extra capabilities to handle shipment or transportation logistics, or other supply chain activities. Instead, it only deals with the management of a warehouse.

Supply Chain Modules

Supply chain modules take the core functionality of a WMS and add features that manage other supply chain elements.

Integrated with ERP

Some ERP systems, which usually handle a wide range of business activities from accounting to HR and beyond, include WMS integration, further streamlining your work.

Choosing the Right WMS for Your Business

Choosing the right Warehouse Management System (WMS) for your business is a crucial decision that can greatly impact your overall supply chain management. With numerous vendors offering a wide range of software solutions, you’ll want to evaluate different options.

Step 1: Assess Scalability

Your business needs may change and expand over time, so it is essential to choose a system that can accommodate your growing requirements. Look for a vendor that offers flexible and scalable solutions, allowing you to easily add functionalities or increase capacity as your business evolves.

Step 2: Consider Customization Options

Every business has unique needs and processes, so it’s important to choose a WMS that can be tailored to suit your specific requirements. Assess the vendor’s ability to customize the software to meet your business’s unique workflows and integrate with your existing systems, such as ERP or inventory management software.

Step 3: Look Into Vendor Support

Implementing a new system can be complex, and it is crucial to have reliable support from the vendor throughout the implementation and post-implementation phases. Look for vendors with a proven track record of providing excellent customer support. Additionally, consider their training and ongoing support offerings to ensure that your team is equipped with the knowledge and resources to maximize the benefits of the WMS.

Partnering With Print Bind Ship for Inventory Management

From receiving and managing inventory to order fulfillment and shipping, there are numerous tasks involved in running a large-scale warehouse. In such cases, it may be in your best interest to work with a company that already has the processes, people, and programs established to efficiently and effectively manage a large-scale warehouse.

By partnering with a third-party logistics (3PL) provider like Print Bind Ship (PBS), you can outsource the complex and time-consuming task of warehouse management. With its established processes, experienced personnel, and specialized programs, we can ensure that your inventory is properly received, stored, and accounted for. This allows you to focus on other areas of your business while relying on our expertise to handle the day-to-day operations of your warehouse.

Working with a 3PL, like Print Bind Ship, eliminates the need to invest in infrastructure such as warehouse space, equipment, and technology. Potentially saving you both time and money. Contact us to discuss your needs and get a free quote today!

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