WMS Logistics: How a Warehouse Management System Works in the Logistics Chain

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It’s impossible to imagine an effectively functioning logistics system without a warehouse management system. WMS logistics are integral when considering the strength of your supply chain. While the role of a warehouse is sometimes falsely viewed as a simple storage facility, this is far from the truth.

In reality, the supply chain only functions as quickly and efficiently as its warehouse efficiency permits. Staying competitive in the world of supply chains means implementing robust warehouse management software. Take a look at our comparison guide to get a feel for some top industry competitors.

Compare Top Warehouse Management Systems Software Leaders

Why Is Warehouse Management So Important?

Well, the short answer is that warehouse management allows you to deliver products at the right time to the right place. Accuracy and efficiency are the names of the warehousing and inventory game.

Warehouses are a place where goods can be identified, sorted, stored and finally sent out to where they need to go next. Therefore, while warehouses themselves may seem rather static, their function is anything but. Goods continuously flow in and out of a warehouse, and so managing one (or many) requires you to ensure that the items in your inventory are secure and able to be found quickly.

Once the time comes to move those items you must quickly retrieve, group, pack, check and dispatch them. The efficiency of these processes is very important; according to a research paper by Dr. N. K. Batra, a warehouse acts as a supporting function for logistics and plays a key role in a firm’s logistical supply chain system.

Basically, everything from the moment that products reach the warehouse to the time they’re shipped out falls under the umbrella of warehouse management.

Since there are so many vital stages of the product’s journey that are part of warehouse operations, warehouse management software solutions are essential. They help move inventory through the warehouse at an efficient pace, improving the order fulfillment process on multiple stages.

An effective fulfillment process means bigger profits, but an even bigger impact can come from improving customer satisfaction. Because of reduced shipping errors, on-time delivery and consistent stock numbers, customers learn to trust the company as a reliable provider of goods and services. Improving these areas not only increases customer retention but improves the brand’s reputation in the process as well.

To get the best results with a warehouse management system (WMS), it’s important to choose a software solution that fits well with your company’s needs as well as comparing solutions before making a final choice. To find that out, we must look at some of the most important features that a WMS must have in order to provide all the necessary benefits to its users.

Key Features of WMS

Warehouse management solutions come in many different types and cater to different types of organizations. Warehouse management systems are available as a standalone solution or as a part of a larger system like enterprise resource planning (ERP) and supply chain management (SCM).

Warehouse management software can also vary in complexity. Some of the simpler or free WMS solutions still rely on spreadsheets. However, the worlds of warehouse and inventory management are quickly moving away from these outdated modes. A growing number of SMBs are adopting some of the more complex systems to reap all the benefits that modern WMS solutions can offer.

Although there are a lot of features that are offered by different WMS software vendors, here are a few of the most important features you should look for. Keep in mind, not all warehouse management software is created equally. Spend some time identifying solutions that meet your operation’s requirements.

Get our Warehouse Management Software Requirements Template

Receiving and Shipping

Warehouse management is all about quickly sorting, storing and dispatching items to their next destination. As such, it should be no surprise that receiving and shipping functions will be at the forefront of any comprehensive warehouse management solution.

The software must be able to offer a quick process for identifying and sorting received inventory.  Your solution should also reconcile the shipment against the original purchase orders. All of this information should immediately be visible on the software dashboard. This way, companies don’t have to rely on manual methods for reconciliation such as pen and paper. The many processes an employee has to go through without human error are numerous.

Imagine going through each order manually by checking the purchase order, confirming that the correct inventory has been received and finally inputting it into the system. Anyone would be hard pressed to go through these processes without a few errors.

With a warehouse management system, no paper documentation is required — all of the data is instantly recorded and transferred through the ERP software to a database.

A WMS can also completely change the entire process of shipping, allowing users to accurately monitor each order to make sure that it’s shipped to its destination in a timely manner.

The efficiency of the receiving and shipping processes improves by increasing employee accountability. Warehouse management software requires employees to use their own individual accounts when entering data, which makes it possible to trace back any errors and make the necessary adjustments.

Inventory Tracking

The leading warehouse management systems that are available usually come with advanced inventory tracking systems such as AIDC or RFID. Barcode scanners are also common inclusions that allow users to quickly locate goods for dispatch.

The management software is able to track serial numbers, expiry dates and other crucial inventory information. The added visibility comes with numerous benefits that can help quickly spot any potential issues.

Many WMS solutions come with valuable inventory management functions.

With a WMS, businesses always know exactly where every single item in transit is located. This supply chain visibility not only improves dispatch times but is also very important when maintaining stable stock levels and making accurate inventory management projections.

Inventory management features can also help reduce expenses in numerous different ways. Ensuring that warehouse space is effectively in use can prevent additional expenses that come with overstocking inventory. With the help of a WMS, inventory locations in the warehouse can be optimized to make the picking and dispatching tasks more efficient. Over time, these changes can amount to considerable savings on costs, which can make day-to-day operations run smoothly.

This doesn’t just mean savings in money. According to the New England Journal of Medicine, inventory tracking that employs barcodes on medication reduced administrative errors by 41.4 percent at an academic medical center. The costs of inventory mistakes can sometimes be much bigger than any direct expenses associated with warehouse management.

Compare Top Warehouse Management Systems Software Leaders

Labor Management

Finally, any worthwhile WMS software must come with effective labor management functionality. A normal warehousing operation has to account for quite a few expenses when it comes to labor management. Larger operations with multiple warehouses suffer even more when it comes to labor management costs.

With the right labor management tools, companies can access real-time data about each warehouse employee. This type of supply chain visibility is quite valuable as it allows you to monitor the performance of the workforce. This way, potential leaders and employees that could use some help getting up to speed are identified.

This helps to manage the entire workforce better. With data in hand, warehouse managers can begin overhauling the efficiency of your workforce. As the productivity of your team or teams rises, the efficiency of your warehousing processes will increase.

With labor management functionality, other incentives to increase productivity become available. For instance, giving pay incentives to employees who work to maximize their efficiency is a positive way to stimulate a rise in productivity. With an active WMS solution, employee metrics are easy to keep track of, and these types of efficiency boosters become simple to implement.

Logistics and distribution companies often face challenges in improving performance because of the current market conditions and workforce shortages. However, warehouse labor management can be a vital tool in getting the most out of your available employees, making sure that the warehouse performs efficiently and meets its goals.

3PL Integration

Third-party logistics (3PL) is another valuable piece of the warehousing puzzle. If you run a smaller warehousing operation, you may not require the services of a third-party logistics provider, but mentioning them is important. In fact, a recent study shows that 73 percent of 3PL users and 92 percent of 3PL providers agree that 3PLs provide new and innovative ways to improve logistics effectiveness.

As a warehousing operation grows over time it becomes more complex. This isn’t exactly rocket science, but as things get more complex and the enterprise grows, it can be tough to keep up with everything. This is where 3PL providers can step in and take some of the burdens.

Achieve stellar visibility with a 3PL WMS solution.

As warehousing operations continue to grow, the inclusion of 3PL services will maintain its steady rise as well. Recently, third-party logistics providers are creating their own WMS software packages with their specific needs in mind. This is a fantastic step toward optimizing the software selection process. If you think about it, who knows what a 3PL provider needs more than a 3PL provider?

These warehouse management systems provide all the functionality you’ve come to expect but also focuses on pain points 3PL providers deal with when performing outsourced tasks.

If your warehousing operations include multiple warehouses, consider the inclusion of a 3PL provider when choosing your WMS solution. Your relationship with your 3PL provider is symbiotic in nature, making their lives easier makes your life easier.

Get our Warehouse Management Software Requirements Template

Final Thoughts

As you can see, a robust software suite is an integral part of WMS logistics. If your warehousing processes aren’t efficient, then you can assume your entire supply chain suffers for it.

Warehouse management software gives your operations the tools to optimize their efficiency, thus giving you more time to plan ahead and to figure out the logistics of your supply chain.

How has a software suite improved your WMS logistics? Let us know with a comment down below!

Hunter LoweWMS Logistics: How a Warehouse Management System Works in the Logistics Chain

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  • Nick - July 8, 2019 reply

    Nice article on wms in logistics. Found an interesting article on reducing chargebacks in retail supply chain here.

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