What is a warehouse management system?

A warehouse management system (WMS) is a software platform that gives businesses a real-time view into their entire inventory fulfillment operations from click to order delivery. Warehouse employees can easily see what inventory is available and where it is at all times – along with the fastest, cheapest way to pick, pack, and ship. 

These systems guide teams to best picking and packing strategies – such as batch, bulk, case/pallet, each, and cartonization. Easily prioritize orders, and even individual items as part of the order, with the ideal collection routes and all the necessary products in a fraction of the time.

Warehouse management solutions use intelligent order routing and inventory allocation, configured to your specific processes, to get more profits per square inch on the floor. With real-time data being fed into scanners, it’s very easy for staff to get orders out the door fast – and very hard to make a mistake.

Who needs a warehouse management system?

A modern cloud-based warehouse management system is designed for companies that need to improve the use of labor, space, time, and operating capital in serving today’s high-volume, competitive omnichannel space. 

Global supply chains, including retail, ecommerce, manufacturing, consumer goods, and third-party logistics (3PL) businesses, know that their customers want fast delivery on orders exactly as promised. No matter where they buy, receive, or return products. 

As these businesses continue facing widespread labor shortages, soaring costs, and unwieldy volumes, the growing pains leave them no other choice than to work and collaborate in an intelligent, cloud-based WMS solution that can respond to ever-changing supply chains. 

Deposco’s industry-leading warehouse management system helps businesses align inventory fulfillment with modern buying preferences and expectations, in one adaptive platform. Our Bright Warehouse cloud-based WMS prepares your company to get a handle on current growth when It’s Grow Time™, while building on a technology foundation that can grow how your business needs to. 

Related Article: How to buy the best warehouse management system for your business

WMS, OMS and DOM defined

A WMS (warehouse management system) helps you manage the operations of a warehouse or distribution center—from receiving and inventory management to order picking and shipping.

An OMS (order management system) centralizes orders from multiple sales channels and makes it easy to handle orders, inventory, fulfillment, and returns.

You may also hear the term DOM (distributed order management). Here’s an in-depth explanation on what is the difference between an OMS and DOM.

Inventory fulfillment in ERP vs. WMS benefits and differences

There is much confusion around inventory fulfillment in ERP vs. when to buy a WMS. One of the biggest benefits of a WMS is that it does not have to replace existing investments in legacy systems, or become a huge IT project. 

Flexible WMS solutions like Deposco can be used as either a standalone or can connect seamlessly to the systems you already use, including your financial (ERP) or CRM. 

The key difference is that, whereas ERP inventory fulfillment modules simply “account for” growth, a dedicated warehouse management system directs it. The modern cloud architecture of a WMS incorporates the benefits of real-time data, analytics, and time-saving automation into one consolidated source of the truth. With one codebase that makes technology upgrades fast and painless, at a predictable cost, when a change is needed.

Benefits of a warehouse management system

A dedicated warehouse management system brings superior benefits and functionality in the areas of: real-time visibility and decision-making; supply chain analytics; automation; intelligent order routing and fulfillment; returns management; technology flexibility; and control over customer experience. 

Real-time visibility, system-directed decisions, NO lag

A consolidated, real-time picture benefits warehouse management teams who need to:

  • Improve efficiency in fulfillment
  • Handle high volumes and peak season without increasing labor 
  • Lower transportation and shipping costs
  • Reduce human errors and late, missed, or incorrect deliveries 
  • Get people in multiple locations on the same page 
  • See inventory and tracking information that’s reliable enough to share with customers and external supply chain partners

At any time, staff can log into one cloud WMS for a comprehensive, easy-to-understand view into all daily tasks, as well as system directives that simply aren’t there in a financial system (ERP), spreadsheets, or homegrown/legacy WMS.

erp-vs-wms-when-to-buy-a-wms

Your most important supply chain analytics, together

What is a warehouse management system without the ability to analyze what your staff is doing against customer needs on a rolling basis? A WMS gives your business vigilance into how it can improve and adapt to stay ahead of trends. 

Intuitive supply chain data analytics and reporting dashboards aggregate your warehouse management KPIs and make recommendations to improve the whole picture of profitability factors like:

  • Individual metrics on picking and packing, order count, cycle count, order by channel.
  • Compliance with customer-specific packaging and labeling requirements.
  • Product performance and buying trends, improving stock levels.
  • Factors impacting shipping costs (average delivery distance, box sizes, weight, etc.).
  • Profitability by item, channel, location(s), and customer.
  • Ideal inventory locations and smart order routing.

Best WMS partners can help you set up your analytics dashboards with the most meaningful data to your business. Unlike rigid product suites that pigeonhole your team into specific out-of-the-box reports, a dedicated warehouse management system directs cost-saving optimizations to keep the business growing.

Labor-friendly automation

WMS solutions with an automation component reduce labor costs, overtime, and wasted time – while protecting against customer-facing disruptions. No more adding headcount to handle physical inventory counts and quality checks. No need to dig through spreadsheets or dozens of emails to get inventory information or details on an order. 

Automated workflows reduce confusion and give staff speed, confidence, and control in their decisions. In many cases, we’ve seen a warehouse management system eliminate overtime and even full shifts. That’s operating capital that can be funneled into into higher-value tasks:

  • Find the right product locations, retrieve items, shop shipping rates, and look up detailed order information without the manual overhead
  • Get automatic suggestions for custom requirements and instructions for cartonization, kitting, and SSCC label generation. No more looking up addresses, pick lists, or paper-based tracking numbers that can easily get lost.
  • Integrate backend systems with supporting technologies such as material handling equipment (MHE) and robotics, inventory sorting systems, and more.
  • Fulfill orders with virtually zero human error, which is the #1 cause of fulfillment problems, according to these WMS software industry trends.

Intelligent order routing and fulfillment

According to recent industry trends in warehouse management, logistics challenges brought an additional $223 billion in additional costs from freight, manufacturing, and labor between 2020-2021. Complications in peak season alone brought $163 billion in added costs, and companies spent 10X more to transport products from one point to another.

These growing pains have elevated the need for companies to draw on efficiency-pumping WMS capabilities like intelligent order routing, which streamline pick-pack-ship to both reduce operational costs and bring fulfillment times up to speed with the rigid expectations of consumers. 

A warehouse management system with intelligent order routing and fulfillment allows your teams to:

  • Establish wave strategies based on priority or order size.
  • Segment inventory across marketplaces and customer groups.
  • Rate shop to find the best shipping price on every order.
  • Directly integrate with shipping carriers, EDIs, and third-party systems to improve fulfillment speeds.
  • Tap into bin-level barcode scanning and validation to maximize efficiency, quality, and warehouse utilization with fewer human touches. 
  • Strategically map out the warehouse and optimize trips, eliminating physical fatigue (which also improves labor retention).

Leaner returns management

The rise of Buy Online Return in Store (BORIS) is putting pressure on warehouses to manage returns efficiently:

  • The ecommerce product return rate is now up to 30% 
  • 92% of consumers will buy again if the product return process is easy
  • 79% want free return shipping

The time, paperwork, and costs to get returns back on shelves and updated in your systems are carving away at the bottom line. A warehouse management system puts operating cash back into something more valuable, while making it possible to meet return preferences with less safety stock.

A lean, paperless system lets you trace a return every step of the way, making items available for resale or transfer faster, with less overhead in receiving and shipping:

  • Track and instantly sync returned goods, even those in-transit.
  • Easily process receipts and advise on where best to send returned goods.
  • Keep staff up to date on returned items to speed the refund cycle for customers.
  • Save time in restocking and cross-checking piles of paper to get counts back into the system, ready to sell.
  • Eliminate clutter and free up warehouse space. 

Technology driven by market needs vs. IT limitations

For many businesses, the technology decisions are dictated by IT or business limitations, rather than by true market need. An advanced warehouse management system like Deposco offers 120+ WMS software integrations that get existing and future tools all in one place – with a path to deploy them quickly when they are needed

Not limited by the rigid architecture of financial (ERP) or legacy systems, you can roll out new capabilities in just 90 days and continuously update your platform with very minimal IT resources. Having the industry’s largest library of pre-built supply chain integrations ensures that your fulfillment capabilities stay relevant and responsive to current market needs, while allowing IT to use their vacation time:

  • Integrate your ERP or preferred legacy system into one codebase; no customization or IT consultants.
  • Add external applications you will need later, like marketplaces, retailer EDI networks, MHE fulfillment robotics, shipping carriers, POS systems, and much more.
  • Configure the intuitive interface to work best for your warehouse management process. Hone in on what users need to see, and onboard people in a matter of minutes.
  • Add third-party supply chain applications and customer-facing systems securely.
  • Connect order management system (OMS) capabilities that streamline multichannel fulfillment, physical store inventory fulfillment, and other systems when you are ready.

See how this works: WMS software integrations

Superior control over customer experience

Flawless, same-day delivery, product offerings, and predictability are table stakes when competing with industry leaders. A warehouse management system removes the administrative burden from your team by delivering rich insights that allow you to prioritize your customers’ needs optimally.

Collect organized data to address new preferences and a personalized touch, such as custom kitting and labeling. Staff can also prioritize orders based on physical considerations – like size and weight, distance of delivery, and other factors – to shape customer loyalty alongside cost reduction. 

  • Identify the root cause of delivery problems and stop them. 
  • Update customers on order status at any given time.
  • Spend time rolling out new services instead of managing logistics.
  • Increase marketshare and customer loyalty.
  • Gain insights about past purchases to predict/drive new ones.
  • Understand which activities make you the most profitable. 

A WMS directly leads to faster fulfillment speeds, cost control, order tracking, and inventory accuracy. So businesses can take on more orders without growing pains, high costs, and technology barriers. 

Now that you understand what is a warehouse management system and its benefits, let’s see how that translates into value and growth. 

Related Article:  What is the best WMS and what benefits drive ROI the most?

How to calculate the ROI of a WMS

What is a warehouse management system’s ROI and how do you calculate it?

When calculating the ROI of a WMS, it’s important to define what WMS capabilities are most important to your unique business goals. You can use this free WMS Software Savings Calculator to estimate what a warehouse management system can save your business. Play with the variables and see instant dollar savings based on your inputs.

But what a WMS can save is only part of the ROI story. 

A warehouse management system enables revenue growth without overspending. Support the broad scaling of suppliers, products, distributed channels, and services with:

  • One source of the truth for inventory everywhere.
  • Reliable information without paper that can get lost.
  • Superior efficiency and control over customer experience.
  • Modern, nimble functionality with a lower lifetime cost and onboarding in minutes.
  • Continuous improvement and labor savings.

Which warehouse management system is best?

Flexibility is the future of warehouse management. Businesses that invest in the right warehouse management software for their business will be able to make better decisions all around, free up staff from manual tasks, and always spot the next opportunity to improve things operationally and for their customers. 

Choosing the best warehouse management system for your business is more than a matter of working your way down an industry top 10 WMS short list. First, you must weed out all the misleading sales pitches, stakeholder politics, and functional unknowns of your investment.

Warehouse management strategies and system comparison tools

Start by evaluating the WMS solutions in terms of how each one benefits your unique goals (or doesn’t). To make this easier on you, we’ve compiled the best warehouse management system strategies and comparison tools on the planet, right here:

About Deposco’s warehouse management system

Deposco Bright Warehouse is the WMS that companies trust when It’s Grow Time™

  • $10 billion in total customer sales revenue supported by Deposco 
  • 3,000 of the world’s fastest-growing businesses rely on the Deposco platform
  • 43 million customer orders processed on the Deposco platform in 2021

Experience enterprise-grade warehouse management benefits such as company-wide visibility, extensive flexibility, and real-time data generation. Regardless of your existing size and infrastructure. 

EXPLORE THE BEST WMS ON THE PLANET

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