Warehousing & Fulfillment

What is a Warehouse Management System?

Warehousing & Fulfillment
March 11, 2024
15 min read

What is a warehouse management system? Learn to streamline warehouse operations, enhance efficiency, and improve supply chain agility.

What is a warehouse management system (WMS?) Among warehousing and logistics providers, 83% report using one. WMS is sometimes running in the background, and it’s time to learn more about how they work and what to look for.

A warehouse management system (WMS) streamlines inventory control and order fulfillment to enhance your overall supply chain efficiency. 

By embracing such a system, you can unlock the potential for improved accuracy, reduce operational costs, and quickly adapt to the market needs. It turns your logistics hurdles into growth opportunities, ensuring your business stays ahead of the competition.

In this article, take a look into the essentials of Warehouse Management Systems (WMS) and explore some of Ware2Go’s unique features. By the end, you’ll understand how to use a WMS to make your supply chain more efficient.

Table of Contents

What Is a Warehouse Management System (WMS)?

What Is Warehouse Management?

Basic Features of Warehousing Management Systems

Where a WMS Fits in the Supply Chain

Types of Warehousing Management Systems

Frequently Asked Questions About Warehouse Management Systems

Ware2Go’s Warehouse Management System Features

What Is a Warehouse Management System (WMS)?

A Warehouse Management System (WMS) is a software solution (ideally cloud-based) that provides visibility into fulfillment operations. A WMS tracks inventory from when it arrives at the warehouse to when it leaves on a last mile delivery vehicle.

Ware2Go’s warehouse management system covers everything from high-end supply chain management functions to processing inbounds and picking and packing.

Warehouses use a WMS to ensure that the movement of goods through the warehouse is as efficient as possible to avoid inventory shrinkage and dedicate labor costs to the WMS functions that matter most for on-time fulfillment: picking, packing, and shipping.

What Is Warehouse Management?

Warehouse management is the process by which sellers and warehouses work together to improve efficiency and decrease operating costs of storage and fulfillment. Warehouse management encompasses digital warehouse processes, including WMS reports like inventory reporting and manual ones like slotting SOPs that drive greater efficiency.

Basic Features of Warehousing Management Systems

A WMS should automate as many warehousing and fulfillment processes as possible via direct shopping cart integrations, marketplace integrations (ie., Walmart Marketplace and Amazon), and electronic real-time data interchange (EDI) connectors. As selling becomes increasingly complicated due to multichannel fulfillment, the WMS provides visibility into day-to-day operations, logistics, and delivery statuses.

A WMS that seamlessly integrates with a merchant’s eCommerce shopping cart and marketplace listings eliminates the need for multiple spreadsheets and manual order uploads. You can also cut down on customer service requests by sending customers regular updates on their fulfillment status and real-time delivery tracking.

Parts of a WMS

A fully integrated WMS will help automate four major processes:

  • Order Management: New orders are automatically routed to the warehouse for fulfillment, so there’s no lag time in fulfillment and no manual upload process.
  • Inventory Management: See inventory levels across all fulfillment centers and reallocate inventory based on demand through a single platform. This real-time visibility prevents stockouts, frustrating customer experiences, and missed sales opportunities.
  • Delivery Tracking: Tracking numbers will sync automatically with sales orders and send shipping confirmations to customers. Partnering with a trusted last-mile carrier ensures that tracking information is up to date and reliable.
  • Reporting: Having all of this information integrated through a single platform allows for advanced WMS reports around demand forecasting and inventory balancing to enable proactive supply chain planning.

This level of integration allows us to forecast future demand and anticipate supply chain activities to take the guesswork out of inventory reordering and inventory distribution. Eventually, quickly growing merchants may even be able to sell products without ever having physical possession of merchandise.

Ultimately, a powerful WMS as part of a digital warehousing strategy allows you to focus more on resources on product development, marketing, and customer service.

Where a WMS Fits in the Supply Chain

A powerful WMS streamlines operations within the warehouse and feeds efficiency upstream within the overall supply chain. The right WMS will offer inventory insights and demand forecasting tools that help determine:

  • Profitability at the SKU level will determine which SKUs they should prioritize for reordering and which may be extraneous to their SKU profile.
  • SKU velocity to determine the ideal reorder quantities that balance bulk supplier discounts with healthy inventory turns.
  • Customer distribution and average Time in Transit (TNT). Suppose a merchant discovers that most of their customers are concentrated on the East Coast but have been importing into a West Coast port. In that case, they may consider re-routing shipments to a secondary port closer to their end customers.

Using a WMS boosts efficiency, cuts costs, and speeds up deliveries, making it easier to meet customer needs and manage inventory.

Optimizing eCommerce Operations With a Warehouse Management System

eCommerce sales channels have evolved rapidly to help scale sales operations. Because eCommerce sales are all managed digitally, you’re able to handle growth seamlessly and inexpensively. However, many merchants face the challenge of scaling their fulfillment operations at the same pace to meet growing demand from their sales channels. This is where our powerful WMS can stand in the gap and help to digitize warehousing and fulfillment.

Children’s furniture and toy retailer ECR4Kids found that when they relied on technology for their eCommerce fulfillment, they had the confidence to scale up quickly with spikes in demand.

Integrating all sales channels through a single WMS platform makes inventory, sales, and shipping data much more actionable. For instance, the WMS lets sellers determine real-time stock levels, forecast inventory accuracy, and set reorder points in advance to mitigate shortages. It also enables highly accurate inventory cycle counts to reduce inventory shrinkage or obsolescence.

What’s more, this data can also be used to improve delivery speed and control bottom-line costs. A smart WMS functions with machine learning to recognize patterns in sales and shipping data to help eCommerce merchants understand where their best customers are located and their average price per shipment. With this data, you can choose warehouse placement that gets your inventory closer to your end customers, enabling 1 to 2-day ground shipping no matter where your customers are located. The benefits of a smarter distributed warehouse network are 2-fold:

  1. Meet Customer Expectations for Delivery Speed: Data shows consumer expectations for fast shipping continually increase. Distributing inventory closer to end customers enables the fast shipping that eCommerce shoppers expect.
  2. Control Fulfillment and Delivery Costs: Merchants fulfilling orders from a single warehouse are likely sending long-zone shipments to reach many customers. These long-zone shipments increase Time in Transit (TNT) and cost. Distributed warehousing ensures that most shipments will be delivered via ground in 1 to 2 days, keeping costs down while meeting eCommerce shipping expectations.

See your average TNT with our free network analysis tool.

Types of Warehousing Management Systems

Choosing the right type of Warehouse Management System (WMS) is crucial for optimizing logistics and supply chain operations, whether you’re a small business or a rapidly expanding enterprise.

In this section, delve into the distinctions between standalone and integrated systems and cloud-based versus on-premises solutions, helping you to meet your business goals more easily.

Standalone vs Integrated WMS

Standalone WMS systems focus solely on warehouse activities such as inventory tracking and order fulfillment and are often used by smaller or regional operations. They typically run on warehouse servers, supporting essential WMS functions like receiving, storage, and shipping. Ideal for small businesses with a single warehouse, these systems may rely on manual inputs but effectively manage basic needs.

When businesses are ready to expand their warehouse distribution footprint to offer nationwide 1- 2 day ground shipping, they may add more regional third-party logistics (3PL) to their network. However, each regional 3PL operates on its own Standalone WMS. In that case, merchants will be stuck in the middle, switching between WMS platforms to monitor inventory levels and fulfillment statuses at each 3PL.

As businesses grow and seek broader distribution, the limitations of standalone systems become apparent. These include constraints and limited flexibility when scaling your business, limited features, and a higher cost for ongoing maintenance.

Transitioning to an integrated WMS provides a unified platform, merging accounting, supply chain planning, and customer relationship management with warehouse operations. This is crucial for businesses aiming for scalability and efficiency.

Cloud-Based vs On-Premises WMS

Cloud-based WMS solutions are a smart choice for businesses looking to grow and easily manage warehouses in different physical locations

They allow you to better manage your business with real-time inventory and order fulfillment tracking across all locations while using data for quicker decision-making.

Key Advantages of Cloud-Based WMS

Since cloud-based WMS is managed remotely by a third-party vendor, your staff doesn’t need to worry about system maintenance. A cloud-based WMS is also more affordable and makes your organization’s growth easier. 

Cloud-based WMS are more suited for businesses prioritizing:

  • Flexibility
  • Scalability

A cloud-based WMS enhances security and allows seamless integration with other business tools, offering customization and global accessibility to streamline operations and support remote workforces efficiently.

Key Considerations for On-Premises WMS

On-premises WMS are installed directly on a company’s servers and managed by their in-house IT team.

An on-premises WMS might be better if you have:

  • Specific security needs or desire to keep data in-house
  • Existing systems or specific business processes you want to integrate

However, on-premises WMS requires a larger initial investment in hardware and software and specialized staff to handle updates, troubleshooting, and system enhancements.

Both types of WMS have pros and cons, and it’s worth careful consideration before deciding on one.

Which Warehouse Management System Is Right for Your Business?

To gain more visibility into scaling fulfillment, use an integrated enterprise resource planning (ERP) system or a cloud-based warehouse management system to guide you. An Integrated ERP will enable you to integrate accounting, supply chain planning, and CRM functions into a WMS. 

Meanwhile, a Cloud-based WMS connects all fulfillment centers across a network to give a high-level view of inventory levels and order and fulfillment statuses.

Frequently Asked Questions About Warehouse Management Systems

Q: What Are the Benefits of Using a WMS for Supplier and Customer Relationships?

A: A WMS enhances transparency and communication with suppliers and customers by providing real-time inventory and order status updates. This leads to improved trust, reduced errors, and better collaboration.

Q: Can Warehousing Management Systems Integrate With Other Business Systems?

A: Yes, most modern warehouse management software can integrate with other systems like ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), and accounting systems. This integration helps all our departments work together efficiently, ensuring that information is consistent across the business.

Q: What Training Is Required to Use a Warehouse Management System Effectively?

A: Training typically includes system navigation, process workflows, data entry, and reporting. Ongoing support and updates are crucial for maximizing the system’s effectiveness.

Q: What Is a Warehouse Management System’s Typical Timeline to Implement?

A:  Implementation of a new WMS can vary from a few weeks to several months, depending on the system’s complexity, customization level, and the organization’s size.

Ware2Go’s Warehouse Management System Features

Our WMS, FulfillmentVu features an open API andintegrating over 250 plug and play eCommerce and retail integrationstechnologies. It is a single connection between full sales channels and full-service fulfillment capabilities. Our distributed network is flexible and adaptable to scale quickly with demand or channel requirements shifts. FulfillmentVu’s key features include:

  • Connected Channels – The merchant portal can be fully customized for easy access to link order fulfillment to virtually any sales channel, eCommerce provider, marketplace, or EDI.
  • Warehouse Management – The portal’s warehouse management capabilities include retail compliance, third-party billing, lot and expiry tracking, as well as management of big and bulky items and serialization.
  • Transport Flexibility – The technology is supported by Ware2Go’s flexible fulfillment network, which manages transportation options including small parcel, less than load (LTL), full truckload (FTL), international shipping, UPS SurePost, and UPS Mail Innovations. All transport modes and fulfillment types can be handled through a single network and dashboard.

FulfillmentVu has advanced fulfillment capabilities that connect with our nationwide 1 – 2 day delivery network. It’s supported by our rigorous service level agreements (SLAs), which guarantee 99% accurate and on-time fulfillment, a 48-hour dock-to-stock time, and same-day fulfillment for all orders received before 3:00 PM. 

Ware2Go also supports merchants with our dedicated client support team and data analysts who help identify cost savings and revenue growth opportunities with regular reporting and analysis.

Our WMS, FulfillmentVu, gives a seamless and scalable approach to managing your fulfillment needs. You’ll gain a strategic advantage across all your sales channels by leveraging it.

Let Ware2Go Assist With Your Warehouse Management System

In this article, you explored the basic features of warehouse management systems and where they fit in the supply chain. You also learned the types of WMS, including standalone, integrated, cloud-based, and on-premises.

Could a WMS help in your business? To learn more about Ware2Go’s best-in-class WMS, reach out to one of our fulfillment experts.

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