What is a Warehouse Management System (WMS)?

A WMS is the combination of hardware computing devices, mobile and desktop software and peripheral interfaces for use in managing all aspects of a warehouse and stockyard. At its core, a warehouse management system is able to locate inventory, provide configurable management for specific warehouse tasks and coordinate inventory as it enters and exits the warehouse. Of course, the complexity of a WMS is directly related to the complexity of the warehouse that it will serve.

For small warehouse operations, little more than an inventory locator, inventory counting module, and a basic shipping-receiving package may be needed. In some circumstances, a WMS may not be required at all. Because the WMS generally requires the expertise of information technology (IT) professionals, it only makes sense to implement a WMS if the cost reduction benefits of owning such a system can offset the costs associated with the IT outlay regardless of whether those resources are outsourced or staffed.

However, when it comes to large warehouse operations, which include multiple buildings, stockyards or product-critical issues such as expiration dating, a comprehensive WMS solution offering a broad range of functionality is necessary. Increased accuracy, increased productivity and a reduction in costs can provide a quick return on investment (ROI) when implementing a WMS. A WMS can reduce overall inventory quantities and costs associated with labor when used in conjunction with data collection systems, automated picking systems and other external peripherals.

Warehouse management systems implementing automatic data capture and identification technology, such as mobile computers, barcode scanners and RFID, can efficiently supervise product flow throughout the warehouse. Once data has been collected for various warehouse tasks or inventory control processes, the data is warehoused in a relational database system allowing managers visibility into the real-time status of goods in the warehouse.

Additionally, warehouse management systems can be integrated into Enterprise Resource Planning (ERP) systems. While the function of the WMS is to provide status and analysis of inventory for a given warehouse, integration of the WMS data with the ERP allows cross-functional visibility into warehouse operations for business planning and forecasting.