Warehouse Management Systems: All You Need to Know

Warehouse management systems defined

Let’s start off with the basics. A warehouse management system (WMS) is software that provides real-time control and visibility of warehouse operations – from managing inventory and handling suppliers, to packaging items and tracking orders.

It is designed to help ecommerce businesses enhance warehouse efficiency and accuracy by streamlining and automating tasks like pallet and carton handling, counting and tracking stock, creating pick lists and determining optimal storage layouts.

Providing real-time updates and insights into warehouse operations, warehouse management software gives businesses a centralised platform for managing day-to-day tasks. It can benefit warehouses both large and small, but is most effective for those with complex needs and over 20,000 square feet in size.

With online sales growing at a rapid rate, more and more businesses are investing in warehouse management software to meet the increasing demands and expectations of customers. Its time-saving capabilities and productivity benefits are almost indispensable in the current market, providing a competitive edge for warehouses, 3PLs and online retailers.

Warehouse management software: Its role in the supply chain

Given that warehouse management covers the receiving, storage and delivery of goods, it plays a pivotal role in ensuring supply chains run smoothly. If your business does not have an effective way to track and manage inventory, or if your warehouse staff are burdened by time-consuming manual processes, this can potentially halt the movement of goods and therefore create a bottleneck in the supply chain.

That is why so many ecommerce businesses are turning to cloud-based software to ensure their warehouse or distribution centre runs as efficiently as possible. The automation capabilities and visibility warehouse management systems provide are some of the most powerful tools your business can avail to ensure accurate and timely delivery of goods.

A WMS can help your staff save time by providing a faster and more consistent way to receive goods and process orders. They also make it simpler to track and control your inventory, with real-time updates and advanced reporting capabilities.

Often, a warehouse management system works in tandem with other software like an order management solution or ERP (enterprise resource planning) system, which handles anything from accounting and billing, to the management of orders and stock. The best warehouse management software solutions offer integration with such systems, allowing you to consolidate all your critical business data in one place.

Integration allows a warehouse management solution to automatically import data from an order management system or ERP, helping you avoid any manual data entry. And when your WMS receives product data from barcode readers or RFID tags, this will automatically update in your ERP so that all your inventory data is in sync.

Warehouse management systems also offer integration with transport management solutions (TMS), which helps simplify logistics tasks and ensures goods are delivered as quickly and accurately as possible. You can easily import customer details like their name and address from your WMS into your TMS, without resorting to manual data entry. Your TMS will then transfer shipping details like tracking information and cost to your ERP so that it can process its accounting and order management functions.

The 4 types of WMS

With countless warehouse management systems on the market, it is often hard to decide which is the best fit for your business. Here we outline the four types of systems and what they involve:

Standalone WMS

This is a form of on-premises software that is best suited for smaller warehouses with less complex needs. It generally provides the functionality needed to manage the most fundamental parts of your warehouse, namely your day-to-day operations and inventory management.

The core features of a standalone warehouse management system will allow you to track inventory, manage the picking and packing of goods, as well as handle shipping requirements and returns. They may also offer features covering FIFO or LIFO data management, cycle counts, barcode scanning, auditing and shipping, and expiration date checking.

Standalone systems are typically very simple to set up and start using, however because they do not offer functionality beyond warehouse management, you may quickly outgrow the system as your business scales.

Pros: Easy to set up and provides the essential warehouse management and inventory management capabilities needed to improve efficiency and simplify day-to-day tasks.

Cons: Standalone systems are generally limited to warehouse management features, making them suitable for smaller warehouses. They also offer limited integration with other solutions like order management systems and ERPs.

Cloud-based WMS

Cloud-based warehouse management systems are increasingly becoming the preferred choice for many ecommerce businesses due to their many benefits over on-premises solutions. Not only are they simpler to implement and do not require any costly server hardware, they are also far more flexible, scalable and secure.

Cloud solutions offer seamless integration with other common business platforms like order management systems and ERPs. They also allow for more customisation, providing the ability to tailor a solution to your business needs as they change. Plus, you can access them from anywhere at any time via a web browser, and you do not have to install anything.

Pros: There is no need to purchase and maintain any local server hardware, nor constantly install software updates. Cloud solutions provide more intuitive user-interfaces and can grow with your business, offering advanced functionality and seamless integrations with third-party platforms.

Cons: Choosing a cloud-based system means that you will be handing a degree of control over to your software vendor, who will manage all improvements to the system.

Supply chain management software

This provides additional features beyond those offered by warehouse management software. While a WMS enables you to manage inventory as well as core warehouse operations, supply chain management software offers features like customer service management, vendor management, risk analysis, manufacturing and raw material handling, and transportation management.

Pros: Provides a comprehensive feature-set to manage supply chain needs, which is especially important for growing businesses with increasingly complex operations.

Cons: The features offered by supply chain management software may be more than your business requires. If you simply need to manage your warehouse operations, your best bet is a WMS.

Enterprise Resource Planning system

An Enterprise Resource Planning System or ERP provides advanced capabilities typically covering accounting and finance, human resources, marketing and supply chain management. It is suitable for larger ecommerce businesses with more complex operations that span not only warehouse management but also the supply chain.

Pros: An ERP can integrate with a WMS system so that you can manage stock levels, deliveries and more together with other key business functions, all in one place.

Cons: An ERP implementation can take a long time and carry a significant cost. The ongoing subscription to use the software can also be expensive, so it is vital to truly consider if an ERP is necessary for your business.

Comparing a standalone vs integrated WMS

You should now have a good idea of the four main types of warehouse management systems, so the next step is to consider which one will best suit your needs.

You generally have two options when choosing warehouse management software; a standalone system that can be integrated with your other critical business solutions, or a WMS that is part of a single solution that also provides order management, inventory and accounting functionality.

Standalone WMS

A standalone WMS is a software solution designed to help ecommerce businesses monitor and control warehouse operations. It provides the sophisticated reporting capabilities needed to spot key trends and opportunities as well as advanced warehouse management features like picking options, cycle counting and cross-docking.

Another benefit of a standalone system is that it can easily be integrated with other software used to manage fulfilment like order inventory management, order management or transport management solutions. It can also integrate with other business-critical systems like accounting or ERP solutions.

In terms of its downsides, a standalone system’s integration with other platforms will generally still require you and your team to sign into each separately to perform certain processes. Data updates across systems may also not happen in sync, which means that some in your business may be working with outdated data for as much as a day.

Another downside of a standalone WMS is that it requires you to set up and maintain several fulfilment solutions, which can quickly become expensive.

Integrated WMS

An integrated WMS offers the advantage of advanced integration with other critical business software. It generally forms part of your existing ERP solution or is offered as an add-on to your ERP. Given that your WMS is fully integrated with your ERP, all your order, inventory, shipping, financial and Customer Relationship Management (CRM) data is centralised, allowing you to easily run reports and gain accurate real-time insights into all areas of your business.

This level of integration also simplifies processes across the entire fulfilment cycle, making it seamless and eliminating the need to log into multiple platforms. Plus, it helps you reduce costs as a fully integrated WMS is far more cost-efficient than implementing and maintaining several different software solutions.

The downside of an integrated system is that it will generally offer less warehouse management features than a standalone system. When assessing potential warehouse management solutions, it is critical to factor in the range of costs involved. This includes those incurred to set up and maintain IT infrastructure, hardware and the WMS software itself, any licensing fees, costs incurred to customise and enhance the system, as well as any IT labour costs.

What types of businesses can benefit from a WMS?

A warehouse management system offers the functionality to help a range of businesses improve efficiency, not only warehouses. It can enhance inventory and distribution management for 3PLs, while also assist online retailers and wholesalers to take control of their stock levels, monitor incoming and outgoing goods and keep a close eye on business performance via advanced reporting capabilities.

Your business could have several warehouses and provide goods to other businesses, or you could be serving individual customers via marketplaces like Amazon or eBay. The versatility of warehouse management software means that whatever type of business you are, it can help you save time and deliver faster, more accurate fulfilment services.

Top 5 advantages of a Warehouse Management System

A WMS is an essential tool for ecommerce businesses looking to gain a competitive edge and stay ahead of the increasing expectations of today’s customers. From helping you deliver more accurate and consistent customer service and eliminate manual tasks, to making it easy to track your inventory and minimise costs, there are countless benefits that the right software can offer. A warehouse management system can help you:

1. Minimise inventory management costs

Inventory costs can include those incurred to order and store stock, the cost of managing the paperwork surrounding those processes, as well as those incurred due to damage, lost items, as well as expired or aged products. Minimising these costs means having an effective way to accurately forecast demand and understand customer behaviour, so that you do not order too much stock.

A warehouse management system provides the visibility and data insights you need to spot customer trends and anticipate demand. It can seamlessly integrate with your other business systems like a CRM solution, allowing real-time data to flow between the two. This means that via your WMS you can identify customer trends, potential issues or opportunities. For instance, you can identify that you may experience a long delay from a particular supplier, or surging demand from a specific customer cohort.

2. Enhance order accuracy

Given the high expectations of today’s customers, even one instance of delivering the wrong item can cost you their loyalty, not to mention burden you with the cost of organising a return. A WMS can allow your warehouse staff to use barcode verified picking using a barcode scanner, which greatly increases picking and packing accuracy.

3. Improve customer loyalty

A warehouse management system not only ensures you can ensure accurate and timely delivery, but also personalise customer service experiences. Because all customer records are contained within the system, you can tailor experiences based on their needs and preferences, thereby adding that personal touch that greatly improves loyalty.

4. Process orders faster

With today’s customers now expecting next-day or even same-day delivery, ecommerce businesses need new ways to speed order processing. WMS-enabled technology like barcode scanning via a mobile device is just one of the powerful new tools that help warehouse staff pick and pack orders faster. While features like automated shipping label creation ensure they can dispatch orders quickly.

5. Save time managing labour and customers

Many ecommerce businesses spend significant time manually allocating tasks to warehouse staff. A WMS can do this automatically while also batching orders together to help accelerate the picking and packing process. It can also help reduce customer issues by providing them with regular updates about the status of their order, which means warehouse managers can spend less time managing customer complaints and more on optimising fulfilment.

5 benefits of a cloud-based warehouse management system

When assessing the many warehouse management solutions on the market, you not only need to decide whether a standalone or integrated system best suits your needs, but also whether an on-premises or cloud-based solution makes most sense.

More and more ecommerce businesses are turning to cloud-based systems for the greater flexibility, scalability and security they offer over on-premises solutions. They can help your business:

1. Make faster, more informed decisions

The real-time updates, customisable dashboards and advanced reporting capabilities of cloud-based software ensure you have the latest, most relevant fulfilment data at your fingertips. With a WMS, you can quickly gain insights into warehouse and staff productivity, track key business KPIs and revenue metrics, identify customer trends and spot potential issues.

2. Reduce capital costs

The downside of on-premises software is that it requires purchasing and setting up costly server hardware, as well as paying for IT professionals to maintain your hardware. With a cloud-based WMS, everything is managed by your vendor in the cloud. Instead of a significant up-front cost, you pay a comparatively more affordable monthly or annual subscription fee.

3. Benefit from the latest software advancements

In addition to its cost benefits over on-premises software, a cloud-based WMS is continually updated by your vendor to enhance the system’s capabilities and security. These updates take place automatically in the cloud, so you do not have to download or apply anything yourself. If you choose an on-premises solution, you simply will not benefit from the same improvements that you can with cloud software.

4. Consolidate your systems

Cloud-based warehouse management systems make it simple to integrate other business-critical software like your accounting, ERP or CRM solution, in addition to those systems used by your suppliers or distributors. For instance, by integrating your WMS with your accounting solution, changes to your inventory are made to both systems instantly without needing to perform any manual data entry.

5. Ensure a quick implementation

It takes far less time and effort to start using a cloud-based WMS. Your vendor will take care of setting up and implementing the system, which can take only weeks rather than the months usually required for an on-premises implementation.

4 critical considerations when choosing a WMS

By now, you should have a good idea of the different types of warehouse management systems available on the market, and the pros and cons of each. The right WMS for your business will ultimately come down to the size of your warehouse and its unique needs, both now and as your business grows. Here, we outline four key considerations when selecting a system.

1. Price

The price of a cloud-based warehouse solution’s monthly subscription is of course favourable to the upfront license fee of an on-premises system. However, you need to consider that over a period of five to ten years, this ongoing subscription fee will add up. Essentially, you are paying a premium price for the many benefits that cloud-based software offers over an on-premises solution. These benefits, however, will translate into time and cost-efficiencies for your business that will also add up over time. Check out Mintsoft's pricing.

2. Connectivity and vendor management

Unlike an on-premises solution, most cloud-based warehouse management systems cannot be used without an internet connection. While some offer an offline mode, this often only allows you to use certain features.

While a cloud-based solution eliminates the need to apply feature and security updates, you need to be aware that any changes to your system or performance issues that you experience can only be handled by your software vendor. If you want to add a certain feature, you will not be able to view or update the software’s code. If you want to update any features or fix issues, you will need to make a support ticket or feature request with your vendor.

That is why it is important to choose a cloud-based solution that is backed by dedicated customer support. Access Mintsoft, for instance, ensures you always have the most advanced warehouse and inventory management features via regular software updates. You do not need to seek out external IT professionals to update and configure your system, as everything is updated in the cloud.

3. Choosing between a cloud-based WMS or supply chain module

A cloud-based warehouse management system eliminates the need for local software installations, as the solution is accessible in the cloud. Your staff can gain access from anywhere at any time using a PC, laptop or mobile device, and you do not need to pay for any costly IT infrastructure or maintenance services.

However, if yours is a large business with operations across the entire supply chain, a supply chain module may be preferable. A standard cloud-based WMS generally will not offer the features you need to manage operations across the supply chain.

4. Choosing between a WMS vs an ERP

The decision between a standalone WMS system and integration with an Enterprise Resource Planning (ERP) solution hinges on your existing software tools and operational needs. A standalone WMS might be more suitable if your current tools are well-embedded into your processes. This type of system generally provides more specific warehouse management features that may be particularly useful to you.

However, you need to understand that with a standalone system, you may not be able to integrate with other business solutions as seamlessly as you can with an ERP. For instance, there may still be separate logins and processes across different systems, which forces staff to create shortcuts that can lead to inefficiencies, blind spots and errors.

If you want to upgrade your warehouse management tools, an ERP solution is likely the better choice. It offers more seamless and comprehensive integration with other business systems. It centralises data from multiple systems so you can manage accounting, listings and courier relationships in one place. It also makes finding data far simpler, which means that blind spots are minimised and mistakes can be readily identified.

5 key features of a warehouse management system

You may currently be using several software solutions to manage a broad spectrum of warehouse processes – from staff recruitment and training to insurance and layout planning. It is important to understand that a WMS offers specialised features designed purely to enhance the fundamental functions of your warehouse. Here, we outline five of the most critical features it can provide.

1. Stock control

Having an effective warehouse stock control system in place is essential to ensure you always have the right amount of inventory on hand to fulfil orders. The best warehouse management systems keep track of your inventory levels and can automatically order more stock when levels fall below a certain threshold.

When the new stock arrives, warehouse staff can scan the stock using a barcode scanner, which updates your inventory levels in your WMS. The system can even suggest optimal storage locations for the new stock based on your warehouse layout.

2. Data-driven visibility

Via advanced reporting capabilities and intuitive dashboards, a WMS gives you the real-time data insights you need to monitor, control and improve your warehouse operations. For example, pre-defined reports allow you to easily identify trends like which products are in most demand from customers or view the performance of your delivery partners. You can also generate SKU reports to view key financial metrics.

3. Optimised picking

Picking seems like a straightforward process, but it can be complicated when dealing with several shipping methods and order priorities. A WMS can help consolidate data from numerous sources, which simplifies these workflows and therefore makes life easier for pickers. The system can prioritise orders and let them know which items to pick.

With Access Mintsoft, pickers can scan item barcodes using a mobile device featuring the solution’s app. Via a Bluetooth connection, data from the app transfers to Access Mintsoft, which notifies the picker if they picked the right item or not. All this makes the picking process far more accurate and efficient.

4. Enhanced packing

When orders are packaged incorrectly or the wrong labels are applied, it can seriously damage customer loyalty. Warehouse management solutions like Access Mintsoft ensure such mistakes are avoided by automatically generating correct labels including the delivery address, barcodes for couriers, as well as others like battery warning or fragile content labels.

It also makes it easy to create personalised flyers with discount codes or thank you notes based on customer preferences. Ultimately, a WMS significantly enhances packing accuracy, reduces inventory mistakes and prevents customer dissatisfaction.

5. Simplified delivery

Once an order has been packed, a WMS will streamline the process of delivering it to the customer with courier management. It will automatically select the courier offering the most cost-efficient and quickest delivery. When the courier arrives for pickup and scans the package, this will be relayed to the warehouse management system, so you and your customer are aware that the order is on its way.

At various points of the delivery process, the customer will receive updates on its progress, including the expected time it will arrive. With full visibility of where their order is, your customer’s confidence in your business will only grow. However, it is important not to overwhelm them with too many updates. Best practice dictates that they should only receive updates for when you receive their purchase order, when their package has been sent from your warehouse and when it has been picked up by the courier for delivery.

In essence, a WMS takes the complexity out of shipping logistics, handling choices related to courier selection based on factors like price, size, weight, timeliness and more. It automates many manual tasks that would have been taking up your time, and ensures orders are delivered to customers without any issues.

How to get the most out of a WMS

A WMS will enable countless time and cost efficiencies for your business. However, if you really want to leverage its full potential, there are certain ways to use it. Here, we share four features that you should prioritise learning about so you can get your warehouse operating as efficiently as it can.

1. Automation

Leveraging the powerful automation features of a WMS is one of the most effective ways to streamline operations, reduce costs and expedite processing times. For instance, it can eliminate the need for warehouse staff to manually check orders and mark them as allocated, fulfilled and ready for delivery. With this time saved, they can focus their efforts on optimising other areas of your fulfilment operations.

2. Barcode scanning

Mobile barcode scanning provides one of the easiest ways to dramatically enhance picking and packing accuracy while also accelerating the fulfilment process. It can also be used to more accurately count stock and ensure your inventory levels are always up to date.

3. Integrations

Particularly in the case of a cloud-based warehouse management system, the integrations it offers with your other business-critical solutions will save you and your team countless time.
For instance, integrating your WMS with your inventory system ensures staff can easily scan goods in and out of the warehouse, update inventory levels, prioritise packing lists, utilise various order picking techniques, and conduct real-time inventory counts. Or you could integrate your WMS with your accounting solution, so that you do not need to perform any manual data entry.

4. Reporting

Regularly evaluating your practices through your system’s comprehensive reports is another critical step in ensuring efficiency. This feature allows you to monitor your warehouse’s stocking, pulling and inventory management processes by analysing a number of metrics, including:

• Variance reports: To analyse discrepancies between expected and actual inventory levels.Processing cost per order KPI: To a
• ssess the cost efficiency of order processing.
• Time to ship KPI: To measure the speed of order fulfillment and dispatch.
• Reasons for return: To understand and address factors contributing to product returns.
• Supplier reports and history by supplier: To evaluate supplier performance and maintain a historical record.
• Empty bin report: To identify and address areas of the warehouse with low or depleted stock.
• Expense controls: To monitor and control overall warehouse expenditures.

6 tips for multi-location warehouse management

A carefully considered strategy is needed if you are managing several warehouses and or stores. Here we provide six essential components of a multi-location warehouse management strategy that will ensure your operations remain efficient as you grow.

1. Choose between standard or concurrent warehousing

Decide whether to employ standard warehousing, where each product has a designated location, or concurrent warehousing, allowing inventory to be shared among several warehouses. You will need to ensure that your technology is sufficiently flexible to facilitate either of these options.

2. Minimise risks to in-demand products

You can minimise the risks to your most in-demand or valuable products by distributing them across your multiple warehouses.

3. Optimise product allocation

Implement automated warehouse routing so you can better service those areas where customer demand is the greatest. It is also a good idea to store slow-moving inventory together and ensure in-demand items are stored in all your warehouse locations so that orders can be processed fast.

4. Get product-specific visibility

To prevent storing too much or too little stock in your warehouses, ensure that your inventory management systems provide visibility of stock levels across all your warehouses, in addition to detailed information about products stored in specific locations.

5. Create a process for moving stock between warehouses

Establish a documented process for warehouse staff so that they can efficiently move stock between your warehouses. This process should encompass moving stock from the original warehouse and receiving them at the new one.

6. Avoid stockouts with inventory forecasting

To minimise the risk of running out of a particular product at a specific warehouse, make sure to utilise inventory forecasting so you can ensure you are holding the right amount of stock.

The importance of warehouse management systems

Hopefully this guide has provided you with a solid understanding of the different types of technology you can use to optimise warehouse management, and how to get the most out of them. All the strategies, tips and software solutions we have discussed have the same aim; to ensure your warehouse has the right product available, at the right place and time, to fulfil a customer order with the greatest efficiency.

Modern technology is certainly the key to helping warehouses keep up with the growing demands of today’s customers. With a WMS, you can save time, reduce costs and ensure faster, more accurate orders via advanced automation and real-time visibility of all your warehouse operations.

By offering benefits like the ability to customise picking batches to meet specific needs, use barcode scanning to eliminate errors, or easily create packaging labels, the right warehouse management system will enhance your operations in manifold ways, helping your business to serve a growing number of customers.

Access Mintsoft is a cloud-based warehouse management solution gives you all the tools you need to eliminate countless manual tasks, boost order fulfilment accuracy and consistency, and gain real-time visibility of your operations.

Watch Video: Top 4 ways Mintsoft can help automate your order and warehouse processes