What is a Warehouse Management System (WMS)

What is a Warehouse Management System (WMS)

Table of Contents

Table of Contents

  • Introduction
  • What is WWS?
  • The Five Benefits of a warehouse management system
  • What does the WMS system do?
  • Key features of the warehouse management system
  • Warehouse management systems in action
  • Types of warehouse management systems
  • Smart Warehousing Technology


Warehouse Management System (WMS) is software that helps companies manage and control their day-to-day warehouse operations from the moment goods and materials enter a distribution or fulfillment center to the moment they leave. WMS software systems are a key component of supply chain management and provide real-time visibility into the entire inventory of the warehouse and the company in transit. In addition to inventory management, WMS provides tools for picking and packing processes, resource utilization, and analysis.

What is WWS?

Warehouse management systems are software that helps companies manage and control their day-to-day warehouse operations from the moment goods and materials enter a distribution or fulfillment center to the moment they leave.

The Five Benefits of a Warehouse Management System

A powerful digital warehouse management system is essential to any business with inventory and can help you save money and achieve new efficiencies in many areas.

The top five benefits of WMS systems are:

Improved Operational Efficiency: WMS systems automate and streamline warehouse processes from inbound receipt to outbound shipping, providing greater efficiency, smoother operations, and the ability to handle more volumes. Reduce product selection and delivery errors and eliminate redundant and unnecessary work. WMS also shares data with ERP and transportation management systems to provide a holistic view beyond the warehouse and help facilitate the movement of goods.

Waste and Cost Reduction: If you have limited date or inventory that is prone to corruption, WMS software can identify items that need to be peeked first or items that need to be promoted to minimize waste. It can also help you determine the most effective use of your warehouse space, from stock placement to optimal travel routes. Some systems offer advanced simulation to create floor plans and place pallets, shelves, and equipment in optimal locations to maximize efficiency and save time and money.

Real-time inventory visibility: WMS systems provide real-time insight into inventory as it moves into, around, and to the next location in a warehouse using barcodes, RFID tagging, sensors, or other location tracking methods. This visibility enables you to generate more accurate demand forecasts, execute on-time inventory strategies, and improve traceability. This is especially important in the event of a recall.

Improved labor management: WMS can help predict labor demand, create schedules, optimize travel time in the warehouse, and assign the right jobs to the right people based on skill levels, proximity, and other factors. A sound WMS system can also help increase employee morale by creating a more comfortable, organized, and safe environment in which employees feel their time is valuable and used wisely.

Better customer and supplier relationships: With WMS, customers can increase satisfaction, loyalty, and brand reputation through improved order fulfillment, faster delivery, and reduced inaccuracies. Suppliers may also experience reduced wait times at the dock and dock to improve relationships.

What does the WMS system do?

All activities in and out of the warehouse and across the extended supply chain can be improved with superior WMS, from receiving and storing to selection, packaging, and shipping.

Key features of the warehouse management system

Receiving and storage procedures

  • WMS can help companies receive, process, and store items in the most efficient way according to business rules and warehouse flows.
  • Before the warehouse management system, items were received using pens and paper and compared to purchase orders and physical receipts. Today, some smaller warehouses use this approach.
  • In fact, in the 2018 Peerless Research survey, respondents said that 87% were manually processing materials during the receiving process.
  • The WMS system uses RFID technology and supports integration with billing and other software, allowing items to be automatically received, verified, and reconciled with digital purchase orders via barcode scanning, and labels to be printed for easy storage and retrieval.

Inventory management

  • Warehouse management software provides real-time visibility into your organization’s inventory from all locations, including items in transit and items in the store. Provide tracking information using automated identification and data capture (AIDC) technologies such as bar codes or RFID.
  • Many systems also use advanced analysis and product and vendor performance insight to support cycle calculations and demand forecasting.
  • These insights enable companies to adjust inventory levels on the fly to ensure that they have enough inventory to meet customer demand, whether in-store or online.
  • Accurate inventory tracking and other practices are key to improving order rates.
    This means the order will arrive complete, on time, and undamaged, with the correct invoice.
  • You can also assign inventory based on custom workflows and picking logic to move inventory faster into and out of the warehouse.

Order picking, packing, and fulfillment

  • According to the Logistics Magazine survey, the most commonly mentioned place for packaging and fulfillment activities is a warehouse.
  • ResearchGate estimates that the costs associated with order picking account for 55% of the total warehouse cost.
  • WMS systems can help you lower these costs by guiding you through the most efficient ways to store, retrieve, and package your products.
  • It also supports picking technologies that simplify processes such as radio frequency (RF) with and without scanning verification, pick-to-light and pick-to-voice technologies, robotics, and algorithms that help optimize picking paths.
  • Some warehouse management solutions offer single-order picking, batch picking, zone picking, cross-docking, and wave picking, Use techniques such as “placing an Order” and wall-mounting systems to make it easier to fulfill orders. All of this will help simplify your order. Fulfillment.


  • Many warehouse systems integrate with transportation management and logistics software to provide countless ways to expedite the fulfillment process.
  • For example, automatically generate bills of lading, packing lists, and shipping invoices, and send automatic shipment notifications.
  • With real-time tracking, companies can determine whether packages arrive at the right destination in time.
  • This right is at a cost. Best-in-class warehouse operation ensures that most shipments are transported from dock to destination on time.

Labor management

  • Gain insight into labor-related costs and productivity to help your warehouse run more efficiently and efficiently.
  • WMS provides real-time visibility into warehouse workers, labor costs, response times, productivity gaps, and planning trends to help organizations respond accordingly.
  • In addition to providing key insights, many systems can also support job interleaving based on factors such as priority or proximity, minimizing operator total travel time and “deadheading” or wasted time.
  • You can also help with planning and scheduling, either directly or through integration with other systems.

Yard and dock management

  • The camp and dock management features allow truck operators to quickly find the right loading dock.
  • The cross-docking support is ideal for fresh food, with the immediate shipment of goods at the warehouse without any intermediate storage.
  • This software helps by verifying the incoming scan for the current sales order and then informing the recipient if the product should be placed in a cross-docking position

Warehouse metrics and analytics

  • Real-time data can be automatically collected via WMS without relying on manual data collection methods, eliminating keystroke errors and dramatically improving process speed.
  • This data can also be integrated with analytics to track critical metrics such as on-time delivery, inventory accuracy, distribution costs, order or line fill rates, and order cycle times.
  • The system can then generate visual reports that can be used to easily share and coordinate with stakeholders.

Warehouse management systems in action

What is a Warehouse Management System (WMS)

Warehouse management systems and tools are used in almost all industries but are most commonly used by large retailers, e-commerce fulfillment centers, and third-party logistics (3PL) providers and often have multiple warehouses. Pharmaceutical, medical, and refrigeration companies are also common users. Often WMS solutions integrate with transportation and logistics systems to improve transparency, efficiency, and cost savings.

See how the following companies have used warehouse management systems and the latest technologies to maximize efficiency.

Freudenberg consolidated bulk operations and increased inventory accuracy.
Bridgestone (video below) helps you keep your business running at its best with end-to-end digital warehouse management.


Types of warehouse management systems

There are three main types of WMS software: Standalone (on-premises and often self-developed legacy systems), cloud-based, ERP, or applications embedded in supply chain management platforms (hosted on-premises or in the cloud) Each type of WMS has its advantages and disadvantages, and the best type varies from business to business.

Stand-alone WMS: These systems are typically deployed on company premises using their hardware. They can generally support larger customizations (which can be costly), and organizations can maintain tighter control over data and software. The initial cost of the system is much higher than other options, but once it is owned by the company, it is owned. At the same time, updates, maintenance, and associated costs are the responsibility of the organization. As WMS obsolescence continues, it is becoming increasingly difficult to integrate with other platforms and implement new technologies.

Cloud WMS: Cloud-based WMS systems can be deployed quickly and at a low initial cost. Delivered as software-as-a-service (SaaS), it provides more flexibility to support seasonal and other changing market conditions and is easier to scale as your company grows. With regular updates, warehouse management in the cloud provides a faster path to innovation. And it puts the burden on someone else to maintain and update your system. SaaS providers also invest a lot of money and expertise in security measures and provide disaster recovery capabilities. Cloud warehouse management systems can also be more easily integrated with other solutions.

Integrated ERP and SCM-based WMS: Some warehouse management systems are built with modules or applications that integrate with ERP and supply chain platforms. Their advantage is that they can be better aligned with other solutions in areas of redundancy such as accounting and business intelligence. Provide a holistic view across the business and logistics chain to allow end-to-end transparency and coordinate and execute warehouse and logistics processes together. Ultimately, you can use these capabilities to optimize operations and deliver a fast and agile implementation experience.

Smart Warehousing Technology

To meet changing customer buying patterns, channels, and expectations, and to keep pace with evolving markets and new disruptions, companies need smart warehousing technologies—from AI and machine learning to autonomous robots.

Warehouse Automation

Automation technology has a significant impact on warehouses and distribution centers. Warehousing workflows and processes that can be streamlined through automation include data collection, barcode, scanning, picking and packing, shipping, and inventory tracking.

This automation enables you to operate much more efficiently and scale to meet changing demands. It also reduces human error, such as entering an incorrect shipping address or SKU.

Voice Picking Technology

Voice selection, also known as voice-directed warehousing and voice gender selection, allows operators to perform tasks and communicate when complete without the use of paper, hands, and eyes.

Operators typically receive voice instructions from the WMS system on when and where to select an incoming order using a voice selection device, such as a voice headset or a voice-only terminal.

Workers can send real-time updates to the warehouse system, including when the deployment is complete, using everyday language.

Mobile devices

Front-line warehouse workers rely on mobile devices to do their jobs more efficiently.
In the 2020 Warehouse DC Equipment Survey, participants were using smartphones and tablets from 73%, barcode scanners from 55%, and GPS technology from 18% (28% plan to deploy GPS within the next 12 months) WMS that can support integration with these technologies is critical.

AI and the Internet of Things (IoT) in warehouse management

Artificial intelligence and IoT are increasingly being applied to warehouse operations.
They are committed to helping companies respond dynamically to rapidly changing warehouse conditions without following pre-defined rules.

IoT sensors provide data and AI can analyze it to make advanced predictions that were never possible before.

These technologies work together to help companies move to a demand-based warehouse model.

IoT data flows into the WMS from numerous locations, including material handling equipment such as conveyors, smartphones and handheld devices, manual wireless beacons, RFID, and more.

AI systems take this data and transform it into valuable insights such as trends, predictive models, and other algorithms that help companies make critical decisions based on current conditions.

These technologies can help you dynamically manage routing and staffing, batch
orders, and slot inventory.

Warehouse Robots

In the warehouse, robots rely on AI and machine learning to make decisions based on input from the surrounding environment.

A combination of video, auditory, thermal, and tactile sensors also allows the robot to measure ambient temperature and recognize touch. If integration is supported, the WMS software will direct the activity.

A variety of robots used in today’s distribution centers and warehouses can augment some labor tasks and automate other tasks.

Augmented and virtual reality apps

Augmented Reality (AR) technology uses cameras to capture real-world environments, such as walkways in the warehouse, and then overlays instructions or information about those environments on mobile devices.

For example, AR Smart Glass allows the operator to perform tasks without using their hands. These apps can mark the path, mark the location of the trash bin, and so on. Virtual Reality (VR) technology is used in everything from training forklift drivers to making delivery routes safer.


In conclusion, a warehouse management system (WMS) is a software solution that optimizes warehouse operations by managing inventory, orders, and overall efficiency. It provides real-time visibility, automates processes, and enhances accuracy, leading to improved productivity and customer satisfaction. A WMS is a vital tool for modern supply chain management, helping businesses streamline operations and drive growth.


Q: How does a WMS work?

A: A WMS works by providing real-time visibility into inventory levels, tracking the location of items, and managing the flow of goods within a warehouse. It automates processes such as receiving, put-away, picking, packing, and shipping, while also providing tools for inventory control and reporting.

Q: What are the benefits of implementing a WMS?

A: Implementing a WMS offers numerous benefits, including improved inventory accuracy, increased efficiency in order processing, enhanced labor productivity, optimized space utilization, better customer service, and overall cost savings through streamlined operations.

Q: Can a WMS integrate with other business systems?

A: Yes, a WMS can integrate with other business systems such as Enterprise Resource Planning (ERP) software, transportation management systems (TMS), and customer relationship management (CRM) platforms. Integration allows for seamless data flow and collaboration across different departments, enhancing overall efficiency.

Q: Is a WMS suitable for all types of businesses?

A: While a WMS is beneficial for businesses of various sizes and industries, its suitability depends on the specific needs and scale of the warehouse operations. Small to large-scale warehouses, e-commerce businesses, distributors, and manufacturers can all benefit from implementing a WMS.

Q: What features should I look for in a WMS?

A: Key features to consider when evaluating a WMS include barcode scanning, real-time inventory tracking, order management, labor management, reporting and analytics capabilities, integration options, and scalability to accommodate future business growth.

Q: How can a WMS improve customer satisfaction?

A: By improving inventory accuracy, order processing speed, and on-time delivery, a WMS can enhance customer satisfaction. It enables businesses to provide accurate product availability information, faster order fulfillment, and improved order accuracy, ultimately leading to a better customer experience.

Q: Can a WMS be customized to fit specific business needs?

A: Yes, many WMS solutions offer customization options to tailor the software to the specific requirements of a business. Customization may include configuring workflows, reports, and user interfaces to align with the unique needs and processes of the warehouse operations.

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