What Is a Warehousing Management System?

warehousing management system

Did you know that 45% of businesses fail during their first 5 years of being in business? If you want to stay out of this statistic and are considering ways to be more efficient when it comes to managing your inventory and customer service, you’re in the right place. In our guide below we will go over what a warehousing management system is and it’s top benefits.

Read on to learn more.

What Is a Warehousing Management System?

warehousing management system or WMS is a type of software that is used in retail and manufacturing industries because it helps with tracking all the goods and materials while they come in and out of the warehouse.

The simplest definition is that a warehouse management system helps optimize all the processes involved with your warehouse. Not only is it important because it tracks all the products inside your warehouse, but it gives you the ability to track merchandise that is entering.

Whenever a customer sends in an order, the management system checks if the product is available. This eliminates the need of having an employee manually check the order and the stock in the warehouse. The time and effort saved is huge, especially when you have hundreds of orders coming in.

Warehousing Management System Benefits

Having the best warehousing management system in place will help your business save money. It will also help you become more efficient in many areas of your business. On top of these two benefits there are a few other benefits that are great to be aware of.

Reduced Costs and Waste

For those that keep perishable stock or date-restricted products in their warehouse, having a warehouse management system in place helps you identify when it might be time to do a sale to help push that product out. It will also help you with picking the items that are expiring sooner.

There are some systems that also offer advanced simulations that create floor plans so that you can see where the best placement is for shelving, pallets, and equipment to run as efficiently as possible.

Improved Operational Efficiency

With the right system in place you will automate things such as streamlining inbound receipts and outbound deliveries. This automation leads to smoother operations, improved efficiency, while giving you the ability to handle higher volumes of orders.

A WMS will also help reduce errors when it comes to shipping and picking goods. You will also get rid of accidentally duplicating a fulfillment and losing inventory. The system will also help expedite the movement of goods and will share data with your transportation management systems.

Improved Labor Management

A warehouse management system will come in handy when it comes to forecasting what your labor needs are. It will also help you create efficient schedules for your employees, assign the right tasks to the right people based on their skill level, and optimize travel time within the warehouse.

When you enlist the help of a good WMS you will also boost the morale within your team of employees. This system is going to create a safer environment, more organized place to work and a more relaxed office. Your workers will feel that their time is being used wisely and that it’s valued.

Real-Time Inventory Visibility

When you have tracking methods such as sensors, barcoding, or RFID tagging, you will have complete insight into your inventory whether it just comes into your warehouse, is moved around, or leaves your warehouse.

Having this type of visibility on your inventory is going to create more accurate forecasts on future demands.

Better Supplier and Customer Relationships

Your customers are going to enjoy faster deliveries and fewer inaccuracies with their orders. This is going to lead to higher satisfaction and more loyalty. The happier your customers are the better your brand reputation will be and the more referrals you will receive.

Not only will customers be happy, suppliers will also appreciate reduced waiting time when they arrive at your docks and loading bays.

Types of Warehouse Management Systems

The three main types of WMD software include standalone, cloud-based and applications built into supply chain management platforms.

Standalone Systems

Using this type of system, the company’s own hardware is used to deploy the system. With a standalone option, you can maintain tighter control over your own software and your own data.

Standalone systems will also support greater customization, but keep in mind that customization will come with a higher price tag.


These systems can be up and running with much lower upfront costs than the other systems. There are options for regular updates thanks to the cloud which will offer a faster path to innovation.

Cloud-based systems can be integrated with other solutions a lot easier than the other two WMS options.

Integrated ERP

These systems are built as modules or applications that integrate with supply chain platforms and ERP. The pro of integrated ERP WMS is that they can play better with other solutions in areas like business intelligence and accounting.

You will also have a holistic view across the logistics chain that allows for end to end transparency.

Feeling Like a Warehousing Management System Pro?

Now that we answered the question what is a warehousing management system?” we hope you are feeling knowledgeable enough to make an informed decision on whether you need this system or not.

Did this article help you out? Please make sure you keep browsing our business section for our latest guides.

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