A warehouse management system (WMS) is a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, putaway and picking. The systems also direct and optimize stock putaway based on real-time information about the status of inventory utilization. A WMS monitors the progress of products through the warehouse. It involves the physical warehouse infrastructure, tracking systems, and communication between product stations.
More precisely, warehouse management involves the receipt, storage and movement of goods, (normally finished goods), to intermediate storage locations or to a final customer. There may be multiple levels of warehouses. This includes a central warehouse, regional warehouses (serviced by the central warehouse) and potentially retail warehouses (serviced by the regional warehouses).
Warehouse management systems often utilize automatic identification and data capture technology, such as barcode scanners, mobile computers, wireless LANs and potentially radio-frequency identification (RFID) to efficiently monitor the flow of products. Once data has been collected, there is either a batch synchronization with, or a real-time wireless transmission to a central database. The database can then provide useful reports about the status of goods in the warehouse.
Warehouse design and process design within the warehouse (e.g. wave picking) is also part of warehouse management. Warehouse management is an aspect of logistics and supply chain management.
The objective of a warehouse management system is to provide a set of computerized procedures for management of warehouse inventory with the goal of minimizing cost and fulfillment times. This includes:
A standard receiving process to properly handle a shipment when it arrives. This process can be individualized to each warehouse or product type.
The receipt of stock and returns into a warehouse facility. An efficient warehouse management system helps companies cut expenses by minimizing the amount of unnecessary parts and products in storage. It also helps companies keep lost sales to a minimum by having enough stock on hand to meet demand.
Modeling and managing the logical representation of the physical storage facilities (e.g. racking, etc.). For example, if certain products are often sold together or are more popular than others, those products can be grouped together or placed near the delivery area to speed up the process of picking, packing and shipping to customers.
Enabling a seamless link to order processing and logistics management in order to pick, pack, and ship product out of the facility.
Tracking where products are stocked, which suppliers they come from, and the length of time they are stored. By analysing such data, companies can control inventory levels and maximize the use of warehouse space. Furthermore, firms are more prepared for the demands and supplies of the market, especially during special circumstances such as a peak season on a particular month. Through the reports generated by the inventory management software, firms are also able to gather important data that may be put in a model for it to be analyzed.
Alone warehouse management cannot automate the process. It also involves the combination of business process to be followed along with system to achieve 100% productivity and accuracy.
Warehouse management systems can be standalone systems, or modules of an ERP system or supply chain execution suite. Depending on the size and sophistication of the organization, the system can be as simple as a handwritten list that are updated when required, spreadsheets using software such as Microsoft Excel or Access or purpose-built software programs.
In its simplest form, the WMS can data track products during the production process and act as an interpreter and message buffer between existing ERP and WMS systems.