Warehouse Management System (WMS) in eCommerce

Overview

With each passing day, the eCommerce industry is becoming a more competitive space than it was earlier. To keep up with the increasing sales and trends in such a cut-throat environment, efficient warehousing is required. Although the concept of warehousing dates back to almost the second century BC in Rome, the current perception of the operation in the eCommerce industry is quite different. 

Each time your eCommerce enterprise hits another inflection point, warehousing gets more complex, especially during the peak stages of growth. Your business is most likely to outgrow its first storage space or have too much safety stock.

You will then be required to lease a bigger warehouse and invest in infrastructures like staff, technology, shipping supplies, and other necessary equipment. It may seem overwhelming at first, but that’s why we’re here.

There’s no one right solution to go about solving this issue because for each, the variables involved in every business differ. And your business requires a solution that won’t need to be replaced for the next few years.

To ensure this happens, you’ll have to find the most suitable eCommerce warehousing practices to optimize your supply chain. In this article, we’ll explore what exactly a Warehouse Management System is, and we’ll also help you find the most suitable warehousing practices for your business. 

What is a Warehouse Management System?

Warehouse Management System (WMS) is a software application that specializes in supporting the daily operations of a business warehouse.

The software enables you to have a centralized tech-enabled environment where different chores of the warehouse can be managed through an interface available on a mobile, tablet, or laptop.

This in turn makes it easy and efficient to run the warehouse and keep the losses to a minimum, in case there are any.  

The major gain of a WMS is a significant improvement in customer service, because with the help of this system, you can know exactly where each product is, when to re-order, and how much to produce. This can mean that the customer gets their package faster, without any errors or backorders. 

There are several other benefits from using a WMS, let’s take a look at them below. 

What are the Key Benefits of a Cloud-based Warehouse Management System (WMS)?

Technology has transformed the way customers make purchases, changed preference patterns, and added complexities to the supply chain. Fulfillment operations are now required to meet their own needs with a digitally connected solution of their own.

With a cloud-based WMS, a more connected fulfillment solution that offers time visibility, scalability and market reactivity is provided. 

1) Rapid implementation of the fulfillment process 

To keep up with the changing customers and new trends, you need to be able to adapt quickly. With a cloud-based system, you can make changes to your supply chain quickly. Powerful logistics are available in weeks unlike the usual months of integration.

A cloud-based WMS system integrates with multiple systems to support multichannel and complex fulfillment processes. This technology eliminates the need to pay for hardware, software, and specialists to maintain the system. 

2) No upgrade required 

With a cloud-based WMS, your business is always on the latest software version. A SaaS method of pricing includes regularly scheduled updates with no infrastructure costs. The updates are similar to apps available on mobile phones, which means that you as a customer will always have the latest codebase. 

3) Lower upfront costs

Cloud-based solutions have an immediate return on investment and a lower cost of ownership. With this cloud-based software, there’s no need for any IT specialist, hardware, or software. All of it comes ready to be integrated with multiple systems to connect the logistics process from every end.

With an on-premise WMS system, when looking for an update, it’s a complete reinstallation and configuration. On the other hand, with a cloud-based WMS solution, there are no charges for upgrade and maintenance fees.

Earlier what used to be a major expenditure is now a more affordable and predictable operating cost, thereby increasing your profit margins. 

4) Increased scalability and flexibility of supply chain 

To keep up with the competition in the eCommerce sector, having speed is a must. With a cloud-based WMS, you can easily scale up and expand your supply operations to meet current market conditions.

As new opportunities come along, you will be ready to take them on. This agility for your business can be acquired without paying a price and it allows you to invest in scarce resources. 

5) Seamless integration  

The concept of a cloud-based WMS was specifically built for integration which can be supported with ERP (Enterprise Resource Planning), MMS (merchandising), and SCM (supply chain solutions).

With such a system in place, the data collected can be easily sent and received, making it easier to build other automation for the warehouse. 

Relationship between Warehouse Management and Supply Chain Management

Warehouse management plays an important role in the supply chain, for it efficiently manages the storage of raw materials, finished product, and other inventory.

A WMS that prioritizes efficient services without losing the quality will benefit the entire supply chain and help build a good relationship with all stakeholders in the long run. 

However, there’s a flip side too. Any glitch from the warehousing’s end can negatively affect the entire supply chain. For instance, if a crew member incorrectly stores a sensitive component, the employees are likely to find a damaged product when they’re rushing an order.

Then the team would have to reorder the item, which in turn will be delivered late to the customer. This could cost the business time, money, and a potentially loyal customer. 

Relationship between Warehouse Management and Inventory Management?

While warehouse management organizes the stock in a particular warehouse, inventory management manages the stock and trends for several warehouses or the entire company. 

Warehouse management is mainly focused on the management of goods within one warehouse, such as raw materials, materials in the process of becoming finished products, and finished products.

The process includes ordering, handling, storing, and picking inventory, either to make new products or to fulfill existing orders. 

Inventory management on the other hand is focused on optimizing material and product levels to save space and money. Inventory management is a step in warehouse management, along with other tasks such as warehouse organization, design, monitoring, reporting, task optimization, labor management, and resource scheduling. 

What does a Warehouse Management System do?

A WMS can provide insights into any aspect of warehouse operations like real-time location and the number of employees on the packing floor. The software helps manage and optimize processes such as workforce scheduling, picking items, and shipping orders in the warehouse.

With the help of the software, all these steps can be done more efficiently, which further helps save time and money. 

How do you use a Warehouse Management System?

A WMS can be used to manage and optimize the following operations in the warehouse:

1) Organization 

A WMS can generate a warehouse diagram that can help the business better optimize its inventory storage and make the best use of the available space. All you need to do is input details like warehouse size and inventory information such as pallet size, object size, and product use. 

2) Daily scheduling

By taking into account the current order and available warehouse workers, a WMS can create a plan that is scheduled to the right number of laborers and estimated labor costs.

The software can also connect your third party logistics companies and schedule the locations, shipping, and receiving timings. This ensures that the drivers arrive at the right place at the right time and the staff is ready to attend to them as per the customer demand. 

3) Managing inventory 

A WMS can collect information from mobile devices and machinery to record the movement of inventory throughout the warehouse.

An employee can scan the items once they have been received and again after they're stored, packed, and shipped. The software can adjust inventory levels in real-time which can help minimize waste and avoid stockouts. 

4) Order fulfillment 

A WMS can speed up and simplify accurate order fulfillment. To fill in the orders, the picking team can use a detailed packing list that is available on a mobile; this will then show what they require and where exactly they can find it. 

5) Monitoring and reporting 

A WMS can document the standard operating procedures and ensure that employees are following them at all times. The software can motor other warehouse operations and detect problems if any.

You can then analyze the collected data and assess the warehouse performance, track progress, create goals and find areas of improvement. 

Types of Warehouse Management Systems

There are three primary types of WMS:

1) Standalone On-premises WMS

This type of WMS offers core warehouse management features like inventory management, shipping, and order fulfillment.

This software generally requires an IT team to troubleshoot problems, maintain, and upgrade the system.

In comparison with other software, premises WMS takes longer to implement because it requires custom integration with the already existing business system. 

2) Cloud WMS

This is a web-based SaaS (Software as a service) solution that provides warehouse layout access to the users via the Internet.

The main benefit from this software is that it has got a lighter footprint as compared to an on-premise solution, and there’s not much requirement from on-site hardware and IT specialists.

This software is generally faster to implement and is highly configurable, allowing businesses to get the software customized specifically for their needs and processes. A cloud-based solution can easily be integrated with mobile devices, sorting machines, and conveyors. 

3) WMS ERP modules 

ERP is generally integrated with a unified ERP solution which includes modules for accounting, CRM (customer relationship management) inventory, order management, and human resources. Everyone in the organization has access to the same updated information all the time. 

Benefits of a Warehouse Management System

Using the right WMS can help boost operations and ensure customers are receiving the right products on time. A couple of additional benefits include:

1) Reduced waste

It will help with better inventory, space, and labor management that can help minimize waste and reduce losses 

2) Optimized warehouse processes

It uses data analytics to pinpoint any bottleneck and inefficient processes. This can help you track progress and make informed decisions. 

3) Reduced human error 

With a WMS, simple and efficient practices can be put into place that can increase order accuracy and decrease the time spent walking around the warehouse. 

4) Track material in real-time 

Inventory can be tracked and every product can be seen at each stage of its journey throughout the supply chain. 

5) Improved customer and supplier relationships 

Such a system facilitates communication with suppliers for the smooth and efficient functioning of inbound and outbound operations, which helps in efficient shipping to customers. 

6) Increased flexibility 

Such a system can adapt to changes in order volume or assist the business to respond to unexpected disruptions like shipping delays etc. 

Common WMS (Warehouse Management System) Integrations (ERP, CRM, API, TMS)

A WMS can often be integrated with numerous business software like ERP, CRM and TMS. It can also be integrated with equipment like auto machinery and robotics.

These integrations assist the system in tracking inventory, order fulfillment, and further optimizing warehouse processes. The integration between ERP and WMS helps businesses in achieving broader improvements in the supply chain. 

Warehouse Management System Use Cases

Every business has unique needs and uses WMS in different ways. For instance, a business that is struggling with inventory management will use WMS for automated inventory tracking.

On the other hand, a business trying to cope with increased demand will use WMS to detect the inefficiencies in the organization and set up a different layout that enables the workers to move more efficiently and save time.

A larger company might also use a WMS to consolidate its warehouse operations on one platform for real-time insights to expand the business. 

How to implement Warehouse Management Software in the right manner?

It is crucial to have a planned implementation of WMS to achieve maximum efficiency. To help you with the task, here’s a list of some of the best practices:

1) Clear plan for Warehouse Operations

Have a clear objective about what exactly you are trying to gain out of implementing the system. Go about creating a structured plan and decide who is going to be in charge of key roles such as project management, training, and data migration. 

2) Effective change management

Ensure all the teams in the organization understand the steps of implementation and how this change will affect their workflow. 

3) Data migration

Data should be transferred carefully to the new WMS, otherwise, important information could get lost or corrupted. 

4) Thorough training

A well-trained employee who can understand how to use WMS will contribute to the company. Vendors of WMS provide on-site training, online courses, and other training materials. 

5) Adequate testing

It’s best to test every possible scenario using real data to check if the software works as expected and then compare the results with the results of your previous methods, just to ensure your business is not missing anything. 

Top 10 Best Warehouse Management Systems in eCommerce

1) 3PL Warehouse Manager

This is entirely a cloud-based system that works on the SaaS model. The main focus of this tool is the handling and management of third-party logistics.

The main features of this tool include multiple customer management, real-time data integration, and billing. 

2) Fishbowl Warehouse

This is a WMS specially designed for small and medium-sized businesses. Along with an inventory management system, the key features of this tool are multi-location warehouse tracking and easy integration with third-party apps. 

3) Oracle Netsuite 

This tool is ideal for businesses that deal with perishable goods. The key features it offers include integrated shelf life and expiration tracking, which ensures that the picked products reach the customers while they’re fresh. 

4) Oracle Warehouse Management Cloud 

This has the largest tools for labor management and is great for labor-intensive firms. The key features include tracking efficiency on workgroups, area levels, and even process types. It’s a simple solution for the efficient completion of warehouse tasks. 

5) Manhattan WMS 

The software is known for its flexibility and powerful 3PL WMS that come with multiple fulfillment methods. The solution performs as both an inventory management system and a WMS.

6) Aptean Catalyst WMS

This system was specially designed to control and manage every aspect of warehouse management. Right from receiving goods to replenishment, the tool provides solutions for complete order fulfillment.

Key features include modular design, fast integration with existing applications, and fast scalability.

7) Cin7 WMS 

This is a complete cloud-based WMS solution. The key features include retail management, EDI software that gives a much-needed competitive edge, and other third-party logistics.

The software is best suited for eCommerce stores and brick and mortar retail outlets that require solutions to common warehouse and inventory problems.

8) SAP WMS 

SAP is already a well-known and established name in the planning industry and has connections with several major companies in the U.S. The software is modern, extremely flexible and it is specifically designed to simplify complex warehouse processes. 

9) SkuVault 

This is an inventory management software that can also be used to efficiently manage warehouse operations. The tool is best suited for small and medium-sized companies and is completely cloud-based. 

10) Finale Inventory 

This is a cloud-based software that is easy to use and caters to fast-growing business demands. This tool helps businesses handle stock movements right from the point of purchase to the point of sale. 

How to choose the best WMS?

Choosing the right WMS for your business could either make or break you. If you implement the wrong one, it could cost your business a large amount of money on a system that can’t meet your requirements.

That being said, picking the right WMS for your business isn’t an easy task, for you will have to decide which aspects of the software are imperative for your purpose. 

Although price is a key factor while considering a WMS, there’s no guarantee that costlier software will meet the needs of your business. Thus, while choosing the software, here are some key traits to keep an eye out for from the start. 

1) Accuracy 

Having software that can collect data accurately is essential. One wrong number can create a huge glitch in the entire network for that item. This is why you need an accurate WMS that will record your inventory transitions appropriately.

By looking out for accuracy in the software, you can save yourself from harm control in the future. 

2) Training 

Ensure that the selected WMS comes inbuilt with training modules to help your workers adjust to the system. This is essential especially when peaks are hit and temporary workers have to be brought in.

Likewise, the WMS software should be user-friendly, easy to navigate, and simple enough for all team members to adapt to without any stress or error. 

3) Scalability 

eCommerce is a constantly growing industry. It is a big pond with plenty of room for you to grow. And if you’re planning to become a competition for any of the bigger companies, the ability to scale up is crucial.

Selecting a WMS that can expand with you, especially in the dynamic eCommerce world, is important. You must consider longevity, commitment, the attitude towards technology, and upgrades that your WMS partner is offering.

4) Data

Most companies fall under either one of the categories - either they don’t have enough data, or they have tons of data and don’t know what to do with it. For accurate planning and forecasting, data integrity is crucial. With the right WMS, you can get several data-rich reports that will help you make informed decisions. 

5) Return on Investment 

While selecting a new WMS for your eCommerce business, you must know your figures thoroughly. If you opt for the wrong system, it could cost your business a significant amount of money, sometimes, even more than your returns.

Beware of the hidden cost of a supposedly cheaper WMS software, like customizations, updates, integrations, maintenance, and other additional fixed licenses. 

How does a WMS fit into your eCommerce supply chain?

With a fully integrated solution, the raw materials will be received into your WMS, which will then be consumed by the Material Requirement Planning System, and the final finished goods will be returned to WMS.

The WMS facilitates the tracking of the product via moves and cycle counts in the warehouse and then is sent over to your shipping system to route your trucks.

Throughout this entire process, your Enterprise Resource Planning system will track the values, sales, orders, and invoices with all systems. 

Key features of WMS

As mentioned above, WMS is software used to control and track the storage of products in the warehouse. This system involves several processes which are the key to efficient shipping, receiving, storing, and further integrating it with the remaining systems of the supply chain.

Listed below in detail are the key functions of a WMS: 

1) Receiving goods

This software provides a simple process that is required to be followed while dealing with a shipment once it has arrived at the warehouse. The process can be customized in ways that best suit your requirements.

However, the core purpose of this process is to make sure that all shipments are handled properly and with care, which further helps minimize losses and save time.

2) Tracking Inventory 

A WMS enables the user to keep a track of all the stock present in the warehouse. This is essential because, through this, the warehouse management team can see when there is enough stock and when to order for more to avoid shortage.

Additionally, this prevents overstocking and ensures that all the existing resources are being well distributed for the smooth running of the warehouse. 

3) Slotting for Efficiency 

A WMS provides an opportunity for business owners to model an efficient way of storing their products depending on factors like demand and weight. This makes sure that the products in the warehouse are arranged in an efficient way, making it easier to process orders. 

4) Labor visibility 

The WMS removes the requirement of extra labor required to undertake the functions that can be managed centrally. Taking full inventory counts, monthly or even weekly, is a major cost and involves quite a bit of labor.

However, this can be eliminated with a WMS, for the system allows you to conduct periodic cycle counts without disturbing daily operations. Furthermore, this is a major reduction in expenditure because this system is not at all labor intensive. 

5) Document preparation

Most processes are automated under a WMS, and this eliminates the need for printed documents which eat into a large chunk of money. By giving the right visibility to the appropriate people, everyone can easily access the data they require to do their job. 

6) Picking and Shipping 

A WMS ensures the right products are being picked and packed the right way to the right people at the right time. This system improves efficiency and avoids mistakes that could happen during transport. 

7) Customer Service

A WMS assists in processing the products efficiently and delivering them to the customers on time, all while maintaining the quality. This improves customer service, enabling business owners to increase loyalty amongst existing customers and attract new customers. 

8) Tracking and Visibility 

A WMS keeps track of information such as expiry dates, UPC, and serial numbers. Although each point of data adds to the cost of maintaining the software, it comes with high returns wherever high visibility is required. With this system, issues of recall and warranty are easily resolved by a simple traceback instead of a payout to the customer. 

9) Reporting

The hidden advantage of having a WMS on a database like Microsoft SQL is that the system can present the data in new and exciting ways.

The data could provide you with answers to questions like “What percentage of your warehouse is being utilized”, “Should you expand”, “How many transactions are being done by each employee per hour/day”, and more.

Future of WMS

Cloud-based software presents a whole new dimension to robust warehouse solutions that are available at an affordable price.

This new supply chain management provides mobile solutions via a user-friendly interface. The current fulfillment market has no room for a tedious system, expensive upgrades, and complex integrations.

Right now, a single 360-degree view of warehouse operations is needed, and this can only be achieved by making the fulfillment platform more efficient.

A cloud-based WMS has an easy-to-use interface, innovative features, and mobile solutions. It’s the perfect combination of speed and savings, allowing your business to reach its maximum capabilities. 

Considering its utility in the eCommerce space, the usage of the cloud-based inventory control software is only bound to increase in the near future. 

FAQs

1) How do I choose an appropriate WMS? 

Generally, businesses start by figuring out what features they need and how much they wish to spend on transportation management systems.

After this, they request detailed information from a provider about the customizations that can be provided to run efficiently.

With all the data accumulated, insightful information is derived so that an appropriate decision can be taken with respect to the ideal WMS.

2) What are the key warehouse management activities?

Most warehouse-related activities revolve around order fulfillment, and Warehouse management software tracks all the activities in the process, making it easier and more efficient to work with.