What is Warehouse Management System (WMS)

What is a Warehouse Management System (WMS)?

A Warehouse Management System is software used to manage the warehouse operations cycle from receiving to dispatching items. The software helps companies manage stock, personnel, shipping operations, and more. 

Warehouse Management System (WMS): Technical Definition

ClickPost defines a Warehouse Management System as an application that enables companies to manage and automate their warehousing operations including collection, storage, packaging, and dispatch.

The application enables the management of materials and goods from arrival to shipping, and the handling of inventory within the warehouse facility. 

What is the purpose of a Warehouse Management System (WMS)?

The purpose of a WMS is to ensure that the materials and goods of a company are stored and moved within the warehouse in an efficient manner to improve accessibility and visibility. Further, the system helps businesses keep accurate records and move goods in and out of the facility accurately.

What are the functions of a Warehouse Management System (WMS)?

There are 3 primary functions of a Warehouse Management System (WMS). 

1. Collection

One of the most basic functions of a warehouse is the storage of goods. Therefore, one of WMS’ primary is to manage the collection and aggregation of goods in the facility, and ensure that information on goods that are received by a warehouse is duly recorded and updated.  

2. Putaway

Putaway is the process of storing and moving goods within the warehouse to ensure optimum use of storage space and maximum accessibility and visibility of products. A WMS enables companies to manage putaway by recording and presenting information on the location, quantity, dimensions, and weight of the product. 

3. Dispatch

A WMS enables companies to manage the dispatch of products by assigning orders to shipping partners as orders are received. Further, it also enables companies to manage the movement of products between multiple warehouses, and even back to sellers in case of returns. 

What are the components of a Warehouse Management System (WMS)?

There are 4 primary components of a Warehouse Management System.

1. Receipt

A WMS generally includes a component responsible for managing the receipt of items into the warehouse. It allows the system to generate a receipt of orders, generate labels for incoming products, and assign a specific location for the items to be stored. 

2. Storage

A WMS enables companies to manage the storage of products within the facility. It allows companies to track the location of an item in the facility, get information on quantities, and strategically store products for optimum utilization of space. 

3. Shipping

A WMS generally includes a shipping managing component that allows companies to generate invoices for outgoing products and print labels to be placed on packages for shipping. 

4. Fulfillment

Finally, a WMS includes the fulfillment component which allows companies to plan their supply depending on demand forecasts. Further, the system generally enables companies to streamline the picking and packing of products, manage returns, and more. 

Why is a Warehouse Management System (WMS) important?

Since a warehouse is continuously fed with several packages of different types, companies can find it difficult to keep track of products and accurately discover where they are stored.

Further, the nature of operations makes accuracy a big challenge. Through a WMS, companies can improve visibility for their products, accessibility for quicker dispatch, and accuracy in the shipping of products. 

What is the difference between a Warehouse Management System (WMS) and Inventory Management System (IMS)?

A WMS is used to manage the operations of a warehouse, keeping a record of receipt and disposal of products, and managing putaway within the facility. Whereas, an IMS is used to procure material and goods, organize them, and forecast demand for a product. 

Is ERP a Warehouse Management System?

An ERP (Enterprise Resource Planning) system is a comprehensive solution used throughout an organization for cooperation between and management of operations of different departments.

Whereas a WMS is a standalone solution used to manage operations related to a warehouse facility that receives and depends on information received from other systems.