For any large logistics or supply chain business, optimizing, monitoring, and managing warehousing and distribution tasks is essential. This includes yard management, dock scheduling, order management, and inventory management. Notably, 87% of decision-makers in warehousing, logistics, and retail are planning or already expanding warehouses by 2024.
Manual methods like stock counts and spreadsheets complicate these processes, making inventory counting tedious and prone to human error. A Warehouse Management System (WMS) efficiently addresses these challenges.
A WMS automates and regulates warehouse processes from receiving and away to storage, picking, packing, and shipping. This can save costs and make your warehouse operations more productive and efficient.
However, choosing the right WMS for your company can be challenging. Before making a decision, it’s important to understand what the market offers and your business’s needs.
This article will help you understand the fundamentals of a WMS, its benefits, and its various types, enabling you to choose the right WMS software for your business.
Key Takeaways
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What is a WMS?
A WMS, or warehouse management system, is software designed to help businesses oversee and control their daily warehouse activities. This system manages everything from when goods and materials enter the warehouse to when they leave.
As a crucial part of supply chain management (SCM), a WMS provides real-time insight into a company’s entire inventory, both in the warehouse and during transit. Beyond inventory management, a WMS also includes tools for tasks like picking and packing, resource usage, and data analysis.
Warehouse managers primarily use a WMS, but it can also be integrated with other systems such as enterprise resource planning (ERP), customer relationship management (CRM), transportation management systems (TMS), and inventory management systems.
Benefits of a Warehouse Management Software
A robust, digital warehouse management system (WMS) is essential for businesses with inventory, offering cost savings and increased efficiency. Here are the top five WMS benefits for warehouse improvement:
1. Increased productivity
A WMS enhances the efficiency of warehouse and logistics operations by streamlining the movement of goods, which improves every step of the fulfillment process with better efficiency, consistency, and quality control.
According to a Logistics Magazine survey, the warehouse is the most commonly cited place for packing and fulfillment activities. Moreover, ResearchGate estimates that order picking costs 55% of the total cost of warehousing.
Therefore, a WMS helps increase productivity by optimizing warehouse layout, ensuring easy access to product locations, maximizing space utilization, improving workflow to prevent bottlenecks, and reducing floor traffic.
Additionally, a WMS improves efficiency by maintaining precise activity records, which assist warehouse staff in picking, packing, and dispatching merchandise. Knowing what to do next in the order process allows workers to accomplish more in less time.
2. Accurate invoice management and inventory records
A well-designed WMS integrates all warehouse functions. For example, a single order can trigger inventory movement, invoice generation, truck loading, and delivery scheduling. A robust WMS also supports inventory management, order fulfillment, and efficient control of warehouse operations.
It improves tracking and order fulfillment visibility with real-time data and offers clear, accurate information to customers. A WMS also includes integrated or third-party invoicing management tools, allowing you to track supplier transactions and make performance-based payments. Furthermore, it can connect to e-commerce platforms and process online payments.
3. Lower warehouse costs
A significant benefit of a WMS is cost reduction. It offers effective inventory protection technology to prevent lost and stolen products. You can minimize waste, theft, and costs by closely monitoring the items entering and leaving your warehouse.
A WMS also reduces energy expenditures by automatically controlling lighting, turning lights on only when needed, and saving energy costs. In fact, companies can reduce their operating expenses by up to 30% through optimized space utilization and improved inventory management.
4. Enhanced security
A reliable, efficient, and secure WMS is essential for a healthy warehouse business. In today’s environment, where supply chain disruptions, breaches, and cyberattacks are common, having a well-protected WMS is crucial.
A cloud-based WMS provides backup and security features, ensuring business continuity despite cyberattacks, system failures, or other disasters. Consequently, it can safeguard your organization from downtime, decreased productivity, reputational damage, and potential customer and revenue loss.
5. Reduce “Lost” Inventory
Dealing with expired products incurs various costs, such as labor for handling, storage expenses, electricity for climate control, and disposal costs if the items don’t sell. These hidden expenses can make lost inventory costly.
Tracking perishable inventories can be challenging, even with frequent manual counts. A WMS helps reduce waste by enforcing a first-in, first-out rule, ensuring the oldest perishable items are removed first. It provides real-time monitoring of inventory and purchases, making it easier to locate items at any stage in the order process.
This is particularly beneficial for sellers of perishable products, thanks to real-time updates, advanced analytics, and comprehensive KPIs.
Features of WMS
A Warehouse Management System (WMS) offers a range of features designed to enhance efficiency and accuracy in warehouse operations. Here are the key features of WMS software:
- Warehouse Design and Inventory Tracking: A WMS allows organizations to customize workflows and optimize inventory allocation and movement. It uses advanced tracking systems like RFID and barcode scanners to ensure goods are easily located when needed, with features like bin slotting to maximize storage space and adapt to seasonal changes.
- Receiving, Storage, and Picking: The system facilitates efficient storage, retrieval, and picking of goods using technologies such as pick-to-light or pick-to-voice. It supports various picking methods, including zone, wave, and batch picking, and optimizes tasks to improve efficiency.
- Shipping and Yard Management: Warehouse management software streamlines shipping processes by generating necessary documents, like bills of lading and packing lists, and notifying recipients of upcoming shipments. It also helps manage yard and dock operations, ensuring smooth coordination of inbound and outbound logistics.
- Labor Management and Reporting: The system monitors worker performance through key performance indicators (KPIs), helping managers identify areas of improvement. Additionally, it provides detailed reports on warehouse operations to guide decision-making and enhance overall productivity.
Types of Warehouse Management Software
There are three primary types of WMS software: standalone systems (on-premise and often custom-built legacy systems), cloud-based solutions, and WMS applications integrated into ERP or supply chain management platforms (either on-premise or cloud-hosted). Each type has its benefits and drawbacks, so the best choice will vary by business needs.
1. Standalone WMS
These systems are typically deployed on the company’s own hardware and premises, allowing for extensive customization (though often at a high cost). Organizations have tighter control over their data and software.
While the initial investment is significantly higher, ownership of the system means the company does not pay recurring subscription fees. However, the organization is responsible for updates, maintenance, and associated costs, and integrating older systems with new technologies can become challenging over time.
2. Cloud WMS
Cloud-based WMS solutions are quickly deployable and have lower upfront costs. As software-as-a-service (SaaS), they offer flexibility to accommodate seasonal and market changes and are easier to scale with business growth.
Regular updates ensure quick access to innovations, and the provider handles system maintenance and updates. SaaS vendors also invest heavily in security and disaster recovery, and these systems are often easier to integrate with other solutions.
3. Integrated ERP and SCM-based WMS
These WMS applications integrate with ERP and supply chain platforms, seamlessly connecting with accounting and business intelligence functions. They provide a comprehensive business view, enabling efficient warehousing and logistics processes and supporting fast, agile fulfillment.
Pros of Cloud-Based WMS
Implementing a cloud-based warehouse management software has several notable advantages. Here are four main benefits of adopting this software:
- Faster implementation: Traditional on-premises WMS can take months to implement, but cloud-based WMS deployments can be completed in weeks, depending on complexity. This allows organizations to achieve a faster ROI and benefit from the cloud WMS capabilities.
- Fewer upgrade hassles: With the SaaS model for cloud-based WMS, vendors manage updates and configuration changes with regular upgrades and patches. Organizations stay on the latest software version with minimal time and resources spent managing upgrades.
- Lower costs: Cloud-based warehouse system costs less as they eliminate the need for hardware, software installation, and IT administrators. Vendor-managed customizations or modifications, with client approval, further reduce expenses. Upgrading on-premises systems can be costly, often requiring software reinstallation and hardware upgrades.
- Scalability: Cloud-based WMS can be quickly scaled as organizations grow and supply chains become more complex. They offer flexibility and can be reconfigured as business requirements or market conditions change.
Are you curious about how much a cloud-based warehouse management system could save your business? Click below to discover HashMicro’s tailored pricing and take the first step towards a more efficient warehouse.
Cons of Cloud-Based WMS
While cloud-based WMS software offers significant benefits for businesses, it’s also important to consider the drawbacks, which include:
- Long-term costs: Although cloud-based WMS have lower initial costs, paying for licenses monthly or annually can be more expensive. Additional expenses may arise for adding new features or opting for premium support.
- Customization: Customizing SaaS WMS software can be costly, making it less suitable for companies that need to adjust the software to fit their specific processes or industry needs.
- Updates and patching: Cloud-based WMS are regularly updated and patched to stay current. This might require companies to adjust their processes periodically and retrain employees if the changes are significant.
Simplify Your Warehouse Workflow with HashMicro WMS
HashMicro is the best WMS in Malaysia, crafted to streamline and automate warehouse operations for businesses of all kinds. It offers many features to ensure efficient inventory tracking, order fulfillment, storage management, shipping, and reporting.
HashMicro is a leading company known for its standardized systems and dedication to delivering high-quality solutions. HashMicro’s WMS has proven its reliability and effectiveness in meeting businesses’ diverse needs.
This software covers all aspects of warehouse operations, offering comprehensive features for inventory tracking, order fulfillment, storage management, shipping, and reporting.
Moreover, HashMicro easily integrates with other business systems and applications, including manufacturing, sales, purchasing, CRM, and HRM, enhancing its flexibility and usability.
With its extensive features and adaptability, HashMicro’s WMS helps businesses increase productivity and competitiveness through effective and accurate warehouse management. Here are some of HashMicro’s features
- Warehouse Design: This allows organizations to customize workflows and picking logic, optimizing inventory allocation and movement. The WMS establishes bin slotting to maximize storage space and adapt to seasonal inventory changes.
- Inventory Tracking: Advanced tracking and automatic identification and data capture (AIDC) systems, including RFID and barcode scanners, ensure goods are easily located when needed.
- Receiving and Storage: Facilitates inventory storage and retrieval using technologies like pick-to-light or pick-to-voice, helping warehouse workers efficiently locate goods.
- Picking and Packing Goods: This stock management software supports various picking methods, such as zone, wave, and batch picking. It also includes lot zoning and task interleaving to optimize pick-and-pack tasks.
- Shipping: This feature enables the WMS to send bills of lading ahead of shipments, generate packing lists and invoices, and notify recipients of advance shipments.
- Labour Management: Helps warehouse managers monitor worker performance using key performance indicators (KPIs) to identify when workers perform above or below standards.
- Yard and Dock Management: This position assists truck drivers in finding the correct loading docks. Advanced yard and dock management supports cross-docking and other inbound and outbound logistics functions.
- Reporting: Provides managers with analysis of warehouse operations performance, helping identify areas for improvement.
Conclusion
A strong Warehouse Management System (WMS) is crucial for businesses to keep their warehouse operations smooth and competitive. A WMS boosts productivity, cuts costs, increases security, and accurately tracks inventory.
Automating key tasks and working well with other business systems makes warehouse management more efficient and reliable.
If you’re looking to elevate your warehouse operations, consider HashMicro’s WMS. HashMicro offers a comprehensive solution designed to meet businesses’ diverse needs. With features like real-time inventory tracking, efficient order fulfillment, and seamless integration with other business systems, HashMicro’s WMS can help you boost productivity and competitiveness.
Experience the boost in productivity firsthand with a free demo of HashMicro’s WMS today!
