To answer this, first let’s answer the question: “What is warehouse management?”. It’s not a trick question, and the first part of the answer is straightforward: warehouse management is simply a catch-all term for all the activities, processes and requirements necessary to run a warehouse.
When we think a little harder, however, the astonishing variety and breadth of these activities, process and requirements quickly become apparent: a warehouse manager must think not just in terms of receiving, storing and dispatching inventory, but in terms of transportation, of the physical layout of the warehouse, and of managing the human (or, increasingly, non-human) resources to execute activities. And, all the while, remembering that the warehouse exists, ultimately, in service of fulfilling customer orders, or other customer requirements such as returns.
The speed, complexity and even the regulations associated with modern supply chains and commerce – and e-commerce supply chains in particular – all make it impossible for humans to perform the function of warehouse management. It’s far from surprising, therefore, that warehouse management system (WMS) solutions exist to enable human warehouse managers.
Working at digital, rather than human, speeds, a WMS intelligently manages your supply chain operations. It tracks and optimises warehouse operations (such as storing, reporting and auditing) and inventory management, including supply chain management. Frequently, a WMS works in tandem with an Order Management System (OMS) or an ERP system that sends orders and receives dispatch confirmation and other data from the WMS.
Warehouse management and inventory management are not the same thing
No, but they are related – in fact, complementary. A key difference is that a warehouse management system manages the inventory in a warehouse, while inventory management is a higher-level concept and considers and manages stock for an entire company. This may involve knowing about the inventory in many warehouses (and other locations in which stock may be at any given moment). One of the key roles of inventory management is to ensure that sufficient stock exists (or is on its way, in a timely manner) in the right places to meet demand and, therefore, delight customers.
The complexity of inventory management increases for (for example) seasonal, wasting or fashion goods. The aim for such products is to have supplied exactly the right amount of products, to the right locations, to satisfy every customer order, without being left with excess stock that must be disposed of at a discount, perhaps even at a loss.
Warehouse Management Systems provide analysis and insight
What a warehouse management system (WMS) does, that humans no longer can, is provide real-time snapshots of – and analysis of/insights into – any and all aspects of warehouse operations. At one end of the scale, your WMS can locate any item in the warehouse; at the other end of the scale, it might help to manage future worker shifts based on what the system ‘knows’ about goods movements in, goods movements out, customer orders, etc.
At every stage, a good WMS increases automation and efficiency – or provides its human operators with insights to help them increase efficiency – and, by doing so, reduces warehouse-related costs. A WMS also reduces the opportunity for human error to impact operations, by detecting inefficiencies, bottlenecks or unnecessary processes – and by documenting and enforcing the correct processes or procedures.
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Direct inventory management of all three types of inventory: general, rotating and point-in-time. Staff may be equipped with handheld devices; individual pallets or products may be equipped with RFID. All data is logged and processed by the WMS in real-time. This both ensures that every item is tracked at all times - from arrival to storage to picking to packing to onward shipping – and enables instant restocking decisions.
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The design and implementation of a full and efficient returns process. Not every item dispatched from the warehouse will stay dispatched, because returns are a fact of e-commerce life. How returns are dealt with often determines whether a customer will stick with you and buy again.
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Efficient order preparation, defined by warehouse area or product type. Staff may use mobile devices to aid them with picking and packing, to deliver the fastest possible turnaround time.
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Management of different inbound flows irrespective of supplier or logistics platform.
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Stock and location management, taking into account all the attributes of each warehouse. A WMS-generated warehouse diagram can help a business make the best use of available space to optimise inventory storage location, such as size, structure or zones.
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Processes for every possible put-away scenario, including the allocation of the right area in your warehouse.
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Management of outbound delivery processes, such as ordering containers and then monitoring and subsequently tracking them.
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Planning and optimizing staffing and other resources, on a daily or weekly basis, to balance capacity and demand. With access to a logistics platform, a WMS can schedule inbound deliveries and outbound dispatch, ensuring loading bay availability and staff presence to perform the unloading/loading.
In the end, precisely what a WMS does should be up to the organisation operating it: a WMS must be flexible because a one-size-fits-all approach is insufficient and every organisation is different. Flexibility and integration with other systems is key.