Understanding Warehouse Management Systems

Do you ever wonder how a massive warehouse full of products being received, picked, packed, and shipped is able to keep everything organized? How can they possibly know where everything is stored and be able to get it shipped out on time? This is where a Warehouse Management System steps in, creating organized and strategic chaos. 

What is a Warehouse Management System?

A WMS (warehouse management system) is a software that is designed to optimize warehouse or distribution center management. A WMS provides you with warehouse operations such as inventory tracking, order fulfillment, storage of goods, printing labels, and managing workflows. A strong WMS provides you with real-time insights through data analysis and reporting that lead to better decision making. 

How does a WMS work on a basic level?

Let’s say that you run a 3PL, with multiple clients and a wide variety of products. When a customer of one of your clients places an order, the WMS is able to immediately check if the product they ordered is available. The WMS then allocates the inventory to the order, and optimizes the picking route so that the warehouse employee can efficiently pick numerous orders. Then the WMS guides the product to a packing station, helping with proper packaging and labeling. Next, the software ensures the shipment is scheduled to go out with the appropriate carrier. The WMS updates the order status, the inventory levels in the warehouse, and begins with tracking and reporting information. Finally, the WMS determines if a stock replenishment is necessary. 

Why is a WMS important?

Having a robust WMS is game-changing for providers who are looking to strategically optimize their business operations. A WMS can keep track of a high quantity of information that it would be impossible for even the most impressive human to monitor. They collect data to determine when to reorder products and how many workers are needed in each department daily. This software can make or break operations, which is why 80% of organizations in warehousing, logistics, and retail are planning to invest in new technologies to stay competitive.

Key Features of a Good WMS 

Inventory Visibility

A powerful WMS will offer comprehensive inventory management that is crucial for 3PLs or any fulfillment business. It is the most efficient way to manage goods from a variety of clients that can range from regular items to hazmat or cold storage. High inventory visibility in a WMS allows for easy product tracking, whether you are dealing with goods such as clothing or products that have an expiration date and need to follow the FEFO (First Expired, First Out) method.

Efficient Order Management

A WMS should integrate seamlessly with marketplaces to encourage omnichannel order fulfillment. There should be a streamlined returns process, the ability to handle multiple orders at the same time, and real-time updates on orders. Efficient order management improves customer service and overall satisfaction with timely and accurate order fulfillment. 

Real-Time Data and Transparency 

Data allows logistics providers to refine processes and ensure maximum operational efficiency. A WMS allows managers to see what is going on in different departments, and even in different warehouses all at the same time. A WMS with real-time data helps warehouse operators prioritize and plan inventory, staffing, orders, and returns effectively. These valuable insights lead to better decision-making that benefits all parties involved. 

Scalability and Customization

Every warehouse has unique needs and requirements. A WMS can help connect multiple warehouses, with multiple products, in different parts of the country depending on a  business's needs. They track and analyze data, managing orders efficiently whether for a few products or an entire warehouse. Your WMS should scale with your needs whether you are a 3PL, a company managing warehouses, or a brand self-fulfilling orders. Customization options ensure the software aligns with operational processes and business dynamics. 

Implementing a comprehensive WMS guarantees seamless operations with minimal effort. You can optimize backend operations to save costs and provide real-time information to eCommerce platforms, clients, and employees. A good WMS ensures you move goods and materials through your warehouse efficiently and cost-effectively. 

Other than a strong WMS, check out these key factors to consider when choosing a 3PL.