What is a warehouse management system or WMS?

The aim of WMS is to ensure that goods and materials move through warehouses in the most efficient and cost-effective way. To this end, it performs many functions that enable these movements, such as inventory tracking, order picking, receiving and stock entry.

It also provides visibility of an organisation's inventory at any time and place, whether in an installation or in transit.

Supply chain

Warehouse management systems therefore play a key role in supply chain management, as they are responsible for managing order compliance processes, from raw materials to final products.

In any production process, it is necessary to control the raw materials needed to manufacture a product. If these are not received correctly or if any other incident occurs, such as parts going astray in a warehouse, the rest of the chain may slow down or even be interrupted. To ensure that all these processes run as efficiently and smoothly as possible, warehouse management systems are in place to track inventory and ensure that goods are stored and sorted correctly, as well as shipped and tracked accurately.

Therefore, this type of application is usually used and even integrated with other business management applications, especially ERP or even transport management systems (TMS) and inventory management systems.

Types of WMS

In fact, at this point we can say that there are several types of warehouse management systems.

Some of them are integrated into the ERP suites themselves, but others may operate independently, although related. Similarly, depending on the size and industry of each company, WMS may be of one type or another.

Some options are specifically designed for the size of the organisation. Depending on the vendor, several versions of the same WMS are available on the market but can be adapted to different sizes of organisations.

Another option is to design it, from scratch or almost from scratch, according to the specific requirements of a company, since it is not the same to be the manufacturer, wholesaler or retailer of the same product. Since having a warehouse for screws is not the same as having a warehouse for TVs, these WMS can also be designed or configured specifically for each type of product.

It should be noted that these WMS are available both on-premise and in the cloud, although the latter option is becoming more popular due to the possibilities that cloud computing allows.

Some benefits

Using a warehouse management system can have several benefits, as we have seen. Some of the most important programmes are:

• Visibility in real time. Knowing the current state of the warehouses allows us to know where we stand and to be able to make better decisions regarding the availability of products.
• Reduce costs. By being able to better control the use of space and labour requirements, we can adjust and control the operating cost of our warehouses.
• Supply chain flexibility. By having data on product demand and supply, we can be more flexible and control the delivery processes of our productions.
• Eliminate errors. Warehouse management will prevent us from having too much and too little product, ordering when it is not necessary or committing to delivery dates that we cannot meet.