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Warehouse Management System (WMS) Benefits & Importance

If you think of a business like a restaurant, the warehouse is the kitchen. That’s where ingredients—just like inventory—get pulled from shelves and prepared to be shipped out to diners.

If a kitchen is poorly managed, you may find you don’t have the ingredients you need to make the dishes that customers are requesting. Otherwise, you may find that your kitchen does not work efficiently enough to make all of the meals you need to cook. When this happens, food gets delayed, and customers get angry.

In eCommerce, the solution for this kind of inefficiency is to utilize a warehouse management system (WMS). In this article, we’ll discuss what a WMS is and how it could help your business. 

What Is a Warehouse Management System (WMS)? 

A warehouse management system (WMS) refers to computer programs that businesses can use to enable, coordinate, and oversee the different kinds of activities that take place in a well-organized warehouse. 

Some of these activities include things like managing the inventory you have on hand and keeping it organized, retrieving items from your warehouse and preparing them for sale, and of course reviewing insights about your warehouse management processes, such as how efficiently your employees are working and how well your warehouse space is being used.

A WMS is a critical element of keeping an eCommerce business afloat; whether you have your own warehouse or outsource those operations. 

What Does A WMS Do?

WMS software makes any warehousing professional’s job easier by managing many of the complex and time-consuming processes that happen every day. This can include; the picking and shipping processes, the transportation of products between warehouses, and the general business of knowing what items you have on a regular basis so you’re better prepared to meet customer demand.

We’ll dive more into some of these key activities in the following few sections.

Picking and Shipping 

Is there a more important job for your warehousing crew than making sure customers get the products they order when they expect to receive them? The answer is likely no.

Warehouse management system software can help you make sure you efficiently locate the right products. Additionally, it can help you keep a record of what’s moving in and out of your warehouse; as well as get them delivered to the customers who ordered them. Trying to manage these processes at scale without technology is a recipe for confusion and disaster. 

Tracking Inventory 

Without proper inventory tracking, you won’t have a clear idea of what products you have on hand to sell; as well as when or if you need to order more of a popular product. Likewise, you may end up ordering too much of something that isn’t moving fast.

WMSs help you track the status of the items in your inventory from when they enter the warehouse to when they’re shipped to your shoppers. 

Insights and Analytics

A key value of any kind of business software is its ability to track and compile data to deliver valuable insights into the success of a process. With a WMS, you can receive these benefits when it comes to the efficiency of your warehouse. A WMS can gather data about how your warehouse is being used and how your workforce manages it.

For example, it could tell you how much of your warehouse is being put to good use; as well as how much is being left empty. Valuable insights that could help you use the space more efficiently or even relocate to a smaller and cheaper warehouse. 

Labor Management

WMS software can monitor the status of the goods in your warehouse and the efficiency and activities of the human workforce.

The software can give you insights into how well your employees perform. Moreover, it can also potentially identify areas where you could streamline your headcount to save money. When you can view labor insights down to an individual employee level, you’re much more equipped to see and fix any problems with your workforce. 

Benefits of Implementing a WMS

You now know what a WMS does, but let’s look at how it benefits your business. At a high level, a WMS can help make your warehouse practices; more efficient, less costly, less mistake-prone, and more supportive of your larger business goals.

We’ll dive into specific benefits below. 

Happier Customers

The customers are the ultimate group that you need to satisfy. Furthermore, the ultimate reason you would even put a WMS in place to begin with.

Warehouse management system software can help you increase customer satisfaction by enabling smoother stock management at the source; which can help ensure that the correct items get sent to your customers when they expect them. 

Better-Managed Inventory

A poorly managed warehouse negatively affects multiple areas of your business, from the people whose job it is to correctly stock your warehouse with products to the customers who expect to be able to order the products your business is advertising. With a WMS, you have a better chance at tracking your inventory accurately so you don’t over or understock, and customers can get the items they need. With a WMS, you’ll also have the data to enable better accountability for when a problem does occur. 

Fewer Mistakes

It’s a fact: humans make mistakes. With a WMS system, you can avoid, if not eliminate, the potential for errors such as miscounted goods, lost items, and more. With the ability to track your current performance and see where issues are happening, you’ll also be able to set goals and continuously improve processes in your warehouse. 

3 Types of WMS

Like most types of business software, there are several varieties of WMSs that fill different business needs. We’ll go over standalone WMS, supply chain modules, and ERP-integrated systems below. 

Stand-Alone WMS 

A stand-alone WMS doesn’t include any extra capabilities to handle shipment or transportation logistics, or other supply chain activities. Instead, it only deals with the management of a warehouse. 

Supply Chain Modules

Supply chain modules take the core functionality of a WMS and add features that manage other supply chain elements. 

Integrated with ERP

Some ERP systems, which usually handle a wide range of business activities from accounting to HR and beyond, include WMS integration, further streamlining your work. 

Choosing a Warehouse Management System (Summary)

Sometimes the best option for your business can be to work with a company that already has the processes, people, and programs established to efficiently and effectively manage a large-scale warehouse. A 3PL like Print Bind Ship can help you by outsourcing the difficult business of proper warehouse management. Contact us to discuss your needs and get a free quote today.