June 3, 2022

Warehouse Management System: What every seller should know

In the competitive world of ecommerce, good warehouse inventory management is key to a successful ecommerce business. This article will walk you through the best warehouse management systems.
Warehouse Management System: What every seller should know
Warehouse Management System: What every seller should know

In the competitive world of ecommerce, good warehouse inventory management is key to a successful ecommerce business. 

To stay connected to your customers through various channels, meet high expectations and organize your entire warehouse process, you need to incorporate a good warehouse management system. 

Read on as we explore the following: 

  • What is a Warehouse Management System and how does it work? 
  • Types of warehouse management systems
  • Why your business needs a warehouse management system
  • How to pick the best warehouse management system

What is a warehouse management system? 

Warehouse management involves organizing everything within a warehouse to make sure all operations run optimally. Warehouse management includes logistics and inventory management, picking and packing orders, maintaining equipment, and tracking performance.

A warehouse management system (WMS) is a technological software solution that helps businesses to facilitate their supply chain and warehouse management activities. 

With warehouse management systems, brands can get better insight into their inventory levels. It also helps businesses use their physical space to coordinate the usage and flow of resources. 

How does a warehouse management system work? 

A warehouse management system incorporates all the processes that efficiently move products from the warehouse to customers. Here are the processes involved: 

 

Order fulfillment and shipping

A warehouse management system majorly tracks all products going in and out of the warehouse. Every product is updated in the system and is tracked. Once a product is picked up from the warehouse to the next destination, the WMS sends an ecommerce tracking information to customers which they can use to monitor shipping progress. 

Inventory management 

The WMS manages inventory by organizing and monitoring a company’s products. The system uses functions like barcoding or tracking products. The WMS divides several warehouses into compartments to provide real-time inventory data. So if you have multiple warehouses, WMS can give you an adequate view of all warehouses  

Warehouse labor management 

A good warehouse management system allows business owners to track each employee in the warehouse. Thanks to the data provided, business owners can know which orders employees are handling at any time. It can also help business owners track employee performance for better productivity, improved profit margins, and reduced costs. 

Picking orders 

One of the main functions of a warehouse is picking orders. With a warehouse management system, you can get a picking list of orders to ensure they are retrieved efficiently. The software will arrange the best sequence for picking inventory to ensure speed and accuracy. 

Reporting 

Reports are essential to making good business decisions. This includes warehouse management. With warehouse management systems, you can get detailed reports on logistics and inventory management. You can gain insights into the accuracy of orders fulfilled, the number of orders fulfilled in an hour, and orders shipped on time, among other metrics that can help you measure and improve warehouse efficiency. 

Types of warehouse management systems

For many businesses, especially businesses that deal with third-party logistics, good warehouse management is a vital part of its operations. Here are some types of warehouse management systems you can choose from: 

  • Standalone Warehouse Management System (WMS)
  • Integrated Warehouse Management System (WMS)
  • Cloud-Based Warehouse Management System (WMS) 

Standalone Warehouse Management System (WMS)

The Standalone warehouse management system is software specifically tailored for warehouse management. It is the most basic type of WMS and although it may be able to integrate with other operational solutions like inventory management software, it focuses mainly on warehouse management. 

The Standalone WMS offers a wide range of warehouse functions including inventory counting, receiving, picking, packing, and shipping orders, barcode scanning, and warehouse reports, among other warehouse management features. This type of WMS may not be suitable for multichannel operations as it may not provide complete inventory tracking information. 

Integrated Warehouse Management System (WMS)

The Integrated warehouse management system provides a more centralized system for your order fulfillment. What this means is your inventory and shipping information will work in perfect sync at all times. This type of WMS comes with a more comprehensive report for more accurate forecasts and business decisions. It also saves you time and money as you only have to work with one centralized system. 

Cloud-Based Warehouse Management System (WMS)

Cloud-based WMS is hosted on a remote server. This software is delivered in a software-as-a-service(Saas) model. This means that costs are on a subscription basis. To make updates or deal with bugs, you need to contact the WMS provider. All information generated for logistics and inventory management is stored in the cloud. 

Using the cloud-based warehouse management system gives companies some competitive advantage. It optimizes costs and is flexible enough to adapt to business growth and variations that may happen over time. 

Amazon warehouse management system (WMS) is an example of a cloud-based WMS that helps sellers selling on Amazon FBA to manage their inventory effectively. 

Why your business needs a warehouse management system

WMS can help businesses speed up order fulfillment and monitor products sold. Data from this software can also help you optimize and organize your warehouse. 

Here are a few more reasons why your business needs a WMS: 

Faster order fulfillment 

In today’s ecommerce world, customers require fast and reliable delivery. Customers want to get their orders as fast as possible. Delivering efficiently will spur positive reviews and repeat purchases for your business. No matter the size of your ecommerce business, incorporating a WMS will minimize human errors and speed up the fulfillment process to meet customer expectations. 

Efficiency and reduced costs 

With WMS, you can find out the best way to maximize your warehouse and even your staff. Thanks to its premium features, you can spot equipment and materials that you should keep using or discard. This means you can configure your warehouse to run at its best. This will help prevent misuse of materials and equipment and reduce maintenance costs. 

Management of multiple warehouses 

With a WMS, you don’t need to worry about monitoring multiple warehouses when your business expands. A good warehouse management system will combine data from all your warehouse locations and provide one source of data for every location. 

Better planning 

To ensure you run your business efficiently, you need to plan. With WMS, you can get data on incoming and outgoing orders to inform inventory forecasting. In simpler terms, you can ensure you meet the required number of units for future demand and ensure order fulfillment runs efficiently. 

Reliable security 

Using a warehouse management system will require employees to create an individual user account. This will make it easier to track performance and changes. It will also confer a measure of responsibility on each employee and allow you to control the level of access your employees have. 

How to pick the best warehouse management system 

So how do you pick which type of warehouse management system is right for your business? Let’s consider a few factors:

Evaluate your business needs

To choose the best warehouse management system for your business, you need to first look inward. Keep in mind that your WMS should fit into your business model, capacity and culture. 

You need to pick a WMS that provides the functions that will support your business’s current stage and future growth. You need to consider how large your business will become and how many users you will have in the near future. 

You may also want to consider how other solutions like an inventory management system can integrate into your WMS. 

Evaluating your business needs will ensure you pick the right WMS for your business. 

Examine different WMS providers 

Just like with any business investment, you will need to compare different options to choose which is just right for your business. To pick the right WMS, compare a wide range of WMS providers and pay attention to their pricing structures, functionalities, payment plans, and user reviews. Compare these providers with your business needs and choose the provider that you can best work with. Doing this will ensure you don’t incur unnecessary costs or run into complications in the long run. 

Integration with existing platforms

When choosing a WMS, you want to make sure it integrates with the existing platforms you are working with. For example, your WMS should integrate with your inventory management system to ensure you track sales and movement of products through different channels. A WMS that integrates with your existing platforms will ensure operations run without any complications. 

Ease of use 

You want to make sure that your WMS is easy to use and understand both for your warehouse team and pickers. The software should have an easy-to-use interface that your staff can easily pick up without much training. This will reduce training time and costs. 

You also want to check if your provider offers support if any issues arise. 

Conclusion 

In today’s world, companies need to automate their business operations to ensure efficiency and continuity. A warehouse management system allows businesses to automate the complex task of logistics and warehouse management. With the right WMS, you can ensure your warehouse works at its best. 

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