Warehouse Management System:
Functions and Benefits

  • By Navya Deepika Battu

Warehouse Management System: Functions and Benefits.

It is needless to say how technology has taken over every aspect of our lives. When it comes to handling a business, technology has become an indispensable tool for entrepreneurs. From selling products to managing warehouses to distributing products to customer assistance, tech is making things easy.

One such tool is a warehouse management system (WMS). It helps streamline several processes in the supply chain. In this article, we give a rundown of what exactly a WMS is, what it does, and why your business needs one?

If you think of standardization as the best that you know today, but which is to be improved tomorrow; you get somewhere.

- Henry Ford, founder Ford Motor Company

What Is a WMS?

A warehouse management system is a piece of software built to help you control, track, and automate the processes in your warehouse. It plays a crucial role in taking a product from the manufacturer to the customer’s doorstep.

The Key Functions of a WMS

There are different types of warehouse management systems based on complexity, from basic WMS that tracks products to highly complex ones that handle every action in a warehouse. These are the core functions of a complex WMS:

1. Receiving Products and Location Management

A WMS helps you record when and how many units of a product enter and leave your warehouse. After receiving the stock and a diligent quality check, you store the products in their allotted location on the warehouse shelves.

WMS picks the locations of the products strategically to make it easier to find them during dispatch. For instance, you store the products often bought together in one location and store the ones that sell quickly in an easy-access one.

2. Analyzing and Reporting Stock Capacity

As WMS constantly tracks every action in the warehouse, the stock levels are regularly updated. So, when a customer places an order for a particular commodity, its availability status is automatically sent across.

Analyzing the data from the inventory and the frequency of orders, WMS predicts when you need to restock a specific product. On top of that, it allows you to automatically generate a purchase order (PO) for a particular product.

This way, you can avoid overstocking or understocking and efficiently manage your inventory.

3. Pulling Customer Order Details

Many advanced warehouse management software offer seamless integrations with many third-party systems. This feature is crucial to managing orders and accessing their information.

To put this in perspective, when a customer places an order on a third-party e-com website, WMS accesses the order details such as product specifications, quantity, customer address, contact details, etc.

Later, you use this information for picking the products from the inventory and for shipping.

4. Order Picking and Packing

Picking out products based on a customer’s order and shipping them might seem like an easy task. But when you’re dealing with thousands of orders in a day, everything can quickly go haywire. This is when a WMS becomes a necessity.

WMS processes all orders and creates lists of the products you need to pick. These lists are curated based on the warehouse layout; making the entire process efficient and less time-consuming. Later on, you can ship these orders yourself or by 3PL services.

5. Tracking Time and Labor Spent

On top of the above functions, a WMS also tracks the time spent on picking and shipping orders. You can also manage your labor, track their performance using key indicators, and formulate plans to improve productivity.

6. Designing Warehouse

Apart from the obvious functions, you can use WMS to plan the layout of your warehouse. This can help you strategically design the aisles to increase workflow efficiency. You can also use WMS to design aisles and storage units to make most of the floor space.

Why Should You Get a WMS for Your Business?

The answer to whether to invest in a WMS is always a yes. No matter the size of your company, if you deal with inventory, investing in one can benefit you in multiple ways. That said, you can opt for a basic or a complex one based on your enterprise size. Here are a few reasons why you should get a WMS:

1. Streamlined Processes

A WMS helps you simplify all the processes in your warehouse, from receiving to shelving to picking to shipping. This will reduce human error and increase labor efficiency as the instructions are easy to follow without much ambiguity.

2. Overall Cost Reduction

With a warehouse management system, you are always making the most out of your resources. For instance, a product picking practice like First in First Out (FIFO) or First Expire First Out (FEFO) helps avoid stock wastage.

Another example is timely restocking; if you restock too soon, you lose storage space & if you restock too late, you lose orders. In either of these cases, the consequence is income loss, but if you have a WMS, you can avoid these.

3. Fewer Supply Chain Delays

When all your processes are streamlined and automated, you can avoid delays in the warehouse. A reduced implementation time will allow you to do more in the same amount of time. This will benefit the entire supply chain timeline.

4. Increase in Overall Productivity

A WMS helps you track every move in your warehouse and generates a detailed report of the entire process. You can use this data to find bottlenecks and strategize a plan to improve them. This way, you constantly enhance the overall productivity in the warehouse.

5. Improved Warehouse Visibility

Even a basic WMS gives you complete control and visibility over your inventory, meaning you can, at any time, see what's in your inventory, when it got in and out of the warehouse, and more. When you have this information available, you can make better business decisions.

6. Enhanced Customer Experience

Increased visibility of the warehouse, streamlined processes, minimal delays, and on-fingertips data will automatically convert into a great customer experience. For instance, when you are aware of every product in your warehouse, you will be able to inform whether a product is in stock or not, whether the product is shipped or not, when the product is delivered, and when an out-of-stock product will be available, etc.

7. Better Data Security

As WMS stores all your data, you have complete control over who has access to it. You can monitor how data is used, which data is available to which users, and more.

8. Hassle-Free Billing and Documentation

When you invest in a warehouse management system, you don't need to worry about billing, delivery & handover documentation, and other paperwork, as you can automate these procedures. You just have to set it up once by adding the billing rates and other essential details to automate the processes.

Increase Your Business Profitability With a WMS

Gone are the days when you manually count the products that go in and out of your warehouse. It’s time-consuming and in no way efficient or accurate. Invest in a warehouse management system to automate, streamline, and cut-down upfront costs of managing your warehouse. If you are still unsure and need further help in choosing a WMS, feel free to reach out to us.