Complete Guide To Warehouse Management Systems (WMS)

Wouldn’t it be a dream if you could manage inventory, track sales, manage orders, and automate warehouse processes - all in one place?

An introduction to warehouse management systems

Warehouse management systems have taken off in significance of late. Not only has online shopping increased along with mobile phone and internet usage, but the pandemic accelerated the need for efficient and automated solutions for companies that sell online. 

With such demands being placed on businesses to deliver goods in a timely and accurate manner, along with the complexities of multi-channel listing and courier management, the new breed of warehouse management systems are practically now a necessity for warehouses, 3PLs and ecommerce retailers to compete.

In this guide, we will run you through all the details so you can feel confident in selecting the best solution for your needs. We’ll include:

  • What is Warehouse Management? 
  • What is a Warehouse Management System (WMS)?
  • What does a WMS do?
  • Who are WMS Systems for?
  • What are the benefits of a WMS solution?
  • The 4 types of warehouse management systems
  • How to choose the best WMS
  • The core features of a warehouse management system
  • Frequently asked questions
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What is warehouse management?

A critical part of the supply chain, warehouse management is responsible for the storage and movement of materials that are essential to the operation of businesses. It includes the receiving, storing, and shipping of goods, as well as the management of inventory levels and stock locations.

Without effective warehouse management, the flow of materials would be disrupted, and businesses would be unable to function.

Warehouse Management System Dashboard

What is a Warehouse Management System (WMS)?

A Warehouse Management System (WMS) is an application that helps warehouse operators and 3PLs control and track inventory levels, orders, and deliveries in a warehouse. By automating many of the tasks associated with managing a warehouse, such as tracking inventory levels, calculating the most efficient storage layouts, and generating pick lists, a warehouse management system can help businesses improve their overall efficiency and productivity. 

WMS can be used for both small and large warehouses but comes into its own with floors of over 20,000 square feet and the demands placed upon start to get complex. At this level and above it is sometimes referred to as an ERP system or enterprise resource planning.

Who are WMS Systems For?

It is important to note that warehouse inventory management systems are not just for warehouses. With a WMS system, any company can manage its inventory and distribution processes more effectively - not just 3PL warehouse managers. For example, retailers and wholesalers alike can use a WMS system to better manage their stock levels, track inventory movements, and generate reports on product performance. 

To consider a warehousing management system, you could be a B2B warehouse operator with multiple warehouses, or you could be a B2C ecommerce brand with listings on multiple marketplaces such as eBay, Amazon, and Etsy. Either way, a warehouse inventory management software can help you speed up your business processes as well as reduce errors and management time spent.

What are the benefits of a WMS system?

Why do you even need a warehouse management system? Well, a WMS system has many benefits, including: improved inventory accuracy, improved customer service levels, reduced inventory costs, increased supply chain management visibility, reduced labour, and admin costs, increased speed of service, sales forecasting insight, and more. As a warehouse manager (or a brand that needs to employ one) this will be music to your ears! Especially if you are often away, or working from the head office. Let's look at each of these benefits in more detail below:

 

1. Improved inventory system picking accuracy

 

An effective warehouse inventory management software is a crucial part of business success. Inaccurate inventory buying and picking can lead to low customer satisfaction, high product returns, and ultimately loss of revenue for the company that could be avoided with proper inventory control procedures in place.

2. Improved customer service

 

Customer service is key to building customer loyalty. With the help of a WMS warehouse management system tied to a user's record, customers are seeing companies create more personalised customer service experiences based on their needs and preferences. This leads to customers feeling appreciated and valued, which could lead to increased customer loyalty. With fewer errors and a faster, more streamlined process that touches fewer people from order to delivery, customer satisfaction only improves.

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3. Reduced stock inventory costs

 

With UK warehouse inventory management costs running in the billions, retailers are doing anything they can to cut down on their stocks. Some of the most effective ways of reducing inventory costs are setting up accurate forecasts, monitoring customer behaviour, and ordering products only when necessary. Inventory costs are generally made up of:

  • Capital Costs: - (The opportunity cost of money that could be better deployed elsewhere if it were not tied-up in the form of inventory)
  • Inventory Costs: - Insuring the stock; Staff costs including clerical management and handling of the stock
  • Storage Costs: - The cost of the warehouse or shelf space (especially during peak times)
  • Risk Premium: - Spoilage, Obsolescence, Damage, Lost items
  • Increased supply chain visibility: The ability of products to be tracked from raw material to the final destination.

Increased supply chain visibility in warehouse management processes helps companies around the world save money. A lack of transparency in supply chains can create inefficiencies and drive up costs. With real-time data that is fully integrated with other systems such as a Customer Relationship Management (CRM) program, insight can be gathered to inform the user of trends, problems, and opportunities. For example, seeing long delays from one manufacturer, or increased seasonal demand from one group of customers. Knowing this and acting accordingly helps ensure you can meet - and oftentimes exceed - customer demands.

4. Reduce Time Spent Managing

Labour management is a time-consuming task for companies to manage manually. A reliable WMS system can reduce this time consumption and help scale a business. As orders come in, the system can automatically allocate them - no manual approval at every stage is required. 

Warehouse automation can be further increased by batching orders together for order pickers to save the amount of time it takes them to pick and pack the goods. By using barcodes for tracking a package in transit, regular updates can be provided to customers to set their expectations and avoid unnecessary customer service complaints handling -a real-time saver at every stage.

5. Increase Speed of Orders

 

Next-day delivery is now the benchmark, and warehouse giants such as Amazon and Argos already offer same-day delivery on numerous items. As the competition (and customer expectations) increase, technology such as mobile barcode scanners can be used to increase the speed at which orders can be transmitted from the buyer, through the system, and straight to the picker/packer. With automated shipping label creation too, each stage of the order fulfilment can take place with the least amount of touchpoints and bottlenecks.

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The 4 types of Warehouse Management Systems

In order to choose your warehouse management system, it’s critical to understand the different types of WMS that are available. There are four types of warehouse management systems, including:

  • Standalone system 
  • Cloud-based system
  • Integrated with ERP
  • Supply chain modules

Let’s take a look into what each different type of WMS system does and how they operate.    

Standalone system

 

A standalone system is a type of on-site software usually placed directly on your business’s local hardware. It provides the necessary essential features required that enable efficient running of day-to-day warehouse operations and inventory management. Standalone WMS systems vary from provider to provider, however will always provide the core functions such as:

  • Inventory tracking
  • Picking and packing 
  • Shipping 
  • Returns    

Unfortunately a standalone system doesn’t always allow for broader functionalities, and is therefore often better suited to small warehouse operations with smaller budgets and with less dependencies such as an abundance of integrations. If your business is planning on growing exponentially in the near future, it may be worth investing in a more powerful warehousing management system.   

Warehouse Management System Dashboard
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Cloud-based system 

 

In days gone by, all WMS software was bought and delivered in physical format, perhaps as a set of disks or CDs. Nowadays cloud-based warehouse management systems are increasingly common as they offer simple and fast implementation, greater scalability, increased security and flexible features that can be tailored to your business. 

This is because a cloud based WMS system is a web-based approach that’s hosted on external servers, with an external IT team to support too. Not only does it not require on-site installation, it doesn’t require integration with all of your current warehouse management systems, and is therefore the perfect pick for most businesses. However if you’re managing a 3PL warehouse, we’d certainly recommend a cloud based WMS system such as Mintsoft as a first choice. 

Supply chain modules

 

Warehouse management is just a small part of the entire supply chain. Whilst warehouse management solutions help fulfilment businesses with actions such as picking, shipping, and receiving, a supply chain management software provides features that service the entire supply chain on top of that. A supply chain module WMS can accommodate for many things, including but not limited to:

  • Risk analysis
  • Current market activities
  • Vendor partnerships
  • Customer service 
  • Transportation management 
  • Manufacturing and raw material handling 
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Warehouse Management System Dashboard

ERP module

 

ERP or enterprise resource planning is a form of warehouse management system (although not always associated with a WMS) that's ideal for an expanding business looking to improve the overall efficiency of their supply chain operations. ERP systems go above and beyond the regular features, and service core applications such as HR, accounting, marketing and general solutions for supply chain management. 

A WMS system is often a complementary part of the ERP software, allowing your business to manage inventory, shipping and more alongside other operations. It’s excellent for amalgamating all of a business’s operations into one, so would be highly beneficial to those with a large supply chain.   

How to choose the best WMS

As you can see from the above, there are many types of WMS types, and it really does depend on your business size and requirements as to which one you choose. There are certain things you need to consider before choosing your WMS system, but it’s certainly worth thinking about the flexibility you need, the efficiency you require and the growth your business plans to see in the next five years.

Consider price

Although monthly costs for cloud-based warehouse systems are reasonable, if you add them up over the course of 5 or 10 years, there will be a premium that is paid for the cloud service rather than the on-site one. Consider WMS system pricing similar to car or van leasing - if you need a reliable, fully maintained transport service then the monthly costs are justified but there is no denying that over the course of many years it would be cheaper to pay upfront for a vehicle you owned. It’s the same for choosing your warehousing management system.

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Consider connectivity and support

With a cloud-based warehouse system, you are reliant on your internet connection and without it, many SaaS (software as a service) WMS systems will not work whatsoever unless they have an offline mode, which doesn’t always allow full functionality. In the same way, you are also reliant on them as a vendor to manage speed, security, compatibility, and all IT-related issues. You will not be able to make changes to the code or even view it to understand it, and will instead need to submit a support ticket or feature request, and trust that the provider will get around to your issue quickly and solve it satisfactorily.

Mintsoft, for example, is at the cutting edge of warehouse management and as such offers a fully managed and integrated cloud based warehouse inventory management software This means a customer is free to upgrade and downgrade their package as their business needs change. A real boon in the digital age because one new traffic source or seasonal promotion can put a lot of demands on your warehousing! As a managed service it means you don’t need to employ a technical team to manage IT or software errors - we take care of it all behind the scenes. You’ll never even know we are there, your warehouse management system will work effortlessly and reliably, leaving you free to enjoy the benefits, freeing up your time and thought-cycles to concentrate on what you do best.

Consider standalone WMS system vs ERP

If you have existing warehouse management software tools that handle all your needs and are well embedded into your processes, a standalone warehouse management system may be more suitable for you. Typically standalone warehouse management solutions are more focused in their features and tools, and so can offer very niche features which may be useful to you if your distribution is already at an advanced level. Usually, they can integrate with other systems, but sometimes there could be discrepancies. Separate logins and processes sometimes prompt users to make their own shortcuts which can be insecure or separate from other users, and may cause confusion, data blind spots, or errors.

If you are looking to upgrade multiple parts of your order management system at the same time, an integrated ERP module approach straight out of the gate would make the most sense for larger operations. With a centralised point of record and global database, integrations with accounting systems, listings, and courier services can be more readily relied on. When trying to find data, it should now all be accessible and understandable, with blind spots reduced and mistakes easier to pinpoint. With this ease and reliability come the added benefits of insight and reduced costs. Choosing an integrated ERP or standalone warehouse management system is important but not the only consideration.

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Cloud-based WMS or supply chain module

As with most online services nowadays, you don’t need to download the software to use it - the server has all the data and the client just accesses it. The same principle applies to cloud based warehouse management. The server can be very powerful and the user can access it with a relatively low-powered, simple device - all the hard work is done in the cloud. This means high IT infrastructure costs can be a thing of the past.

When it’s time to upgrade software or hardware, the WMS vendor takes care of it so you don’t have to. Meaning you won’t encounter any downtime as you make the necessary changes as you would have to with an ‘on-site’ solution. With a centralised point of data storage, there is no longer the risk of different people having different versions of files and confusion reigning. Cloud based (SaaS) warehouse management systems are the latest trend with many benefits, however they are not as broad as supply chain management software.

Although a cloud-based WMS such as Mintsoft offers almost unlimited scalability and flexibility, a supply chain module may be the better option if you’re a large, growing business that operates across an entire supply chain. The supply chain management system covers every activity from the sourcing of raw materials to final customer delivery, including transportation and vendor partnerships. With it, your business will have better quality control, more effective communications and will be able to mitigate risks easily due to the internality of the software.

The core features of a warehouse management system that will help your business

Managing a warehouse requires a lot of time-consuming tasks, such as hiring staff, training, insurance, rotas, HR policy, layout and so on. You might well already have a warehouse management solutions in place to help with those tasks, however a WMS system focuses on helping with the core function of the warehouse - the material handling of order throughput. Warehouse order management primarily comprises four core features: incoming inventory, picking, packing, and shipping.

Incoming Inventory

Many WMS systems are aware of your current stock levels and when they reach a certain level, an order for replenishment can automatically be sent to your supplier. As the new stock arrives it is scanned with a barcode scanner. This barcode scanning data is sent to the WMS to adjust stock levels (inventory count) accordingly. More advanced applications of warehouse management software will know where in the warehouse the stock is held and will be able to advise on warehouse layout by suggesting the best place to store certain items. Your warehousing operation will also be able to improve its order processing by the WMS system deciding upon the best way to batch orders, which will save time for the warehouse staff members doing the item picking.

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Picking

A picker is a term given to a warehouse operative that gets the orders from the shelves and moves them to the packing area. Armed with a mobile app, the WMS system will tell them what items to pick. In Mintsoft’s case, the app is available as an Android App and easily installed on most current Android devices. You then mount the phone into a handheld barcode scanner which talks to the phone via Bluetooth wireless radio. As the picker scans the item in question, the warehouse inventory management software will check it’s the right one. If it’s not, then the picker will be alerted and a potential mistake will be avoided. By improving your pick rate to near 100%, customer satisfaction is improved, costly return postage, labour, and administrative costs are reduced and human errors are avoided.

Picking sounds simple but if you are part of a busy warehouse operation you will be familiar with the challenges that come with multiple shipping methods, order priorities, and the seemingly impossible task of managing the workflow in the most efficient way possible. Given enough data to work with, a WMS system will simplify and improve your workflow to increase warehouse efficiency, reduce time wasted and reduce time spent overall. This can translate to faster order picking, more rest time for staff on the warehouse team and, increased productivity.

Packing

With the items in the hand of the picker, the barcode scanned and data inputted into the WMS system, the next stop for the product is at the packing desk. To improve efficiency at this station, some warehouses make use of special packaging materials and packaging machines. For example, if a product needs to be wrapped in cellophane or a protective layer such as bubble wrap, machines can do this at a higher speed and with greater precision than a manual operative. Where Mintsoft and other warehouse management solutions contribute here is by automatically creating the correct labels and notes for the inside and outside of the package.


Outside of the package the delivery address and the barcode(s) for the appropriate courier(s) will be affixed along with any other labelling, such as a battery warning label or a fragile contents label. Inside the package, it is becoming more commonplace to include a flyer with a discount code, review incentive, or thank you note. These can be personalised and printed by the warehouse management system depending on the time of year, the number of purchases, items that particular customers may be interested in, and so on. A personalised warehouse system here can save a lot of time, even if the parcel has not left the building.

Warehouse Packing
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Shipping

When utilising a warehousing management system for shipping, the ideal courier will have been auto-selected and the labels printed. Now attached to the correct package, the item will be moved to an edge of the warehouse on an outgoing collection palette, ready for the courier to pick up. Scanned again, the warehouse management software knows the package has left the building and is with the courier. At every scan stage, the WMS system can be set to update the customer as to the progress of the order and the expected delivery date and time. Giving them full visibility of their parcel, and in turn giving them more confidence in your business.

Customers don’t want to be bombarded with information but just kept up to date, so it is usual to set the automations to fire when:

  • The purchase order is received, 
  • Its dispatched from the warehouse, 
  • And when it’s with the local courier

The customer never needs to know the complicated choices the warehouse system has made routing the package through the fastest courier available for the price, given size, weight, timeliness, border considerations, and availability. As a retailer, warehouse, or 3PL manager, it’s not something you need to worry about anymore either. Instead, you can have the confidence that your WMS system is handling your shipping.

Reporting

Warehouse inventory management software also allows you an appreciation and understanding of the warehouse processes that are in play through data-led reporting. All the data points in your warehouse system are readily available and can be put together in ways that illuminate opportunities and threats. For example, with monthly predefined reports, you can quickly see which products are in most demand, which couriers are working well or are not performing up to their Service Level Agreements (SLAs). You can also see gross profit, as well as profit per SKU reports, which can help establish where marketing budgets could be allocated or extra resources invested. Tracking errors can be highlighted and business processes improved.

As you can see we are just touching on the possibilities afforded by the Mintsoft warehouse management solutions UK, and the other warehouse management system packages available to you as a retailer, warehouse, or third-party logistics provider. To get your business’s specific warehouse system questions answered, there is no substitute for an informative call with an experienced professional who can give you all the answers you need. If you think a WMS system might be beneficial but are not sure just yet, your next step is to get in touch with us - no strings, just help. Call us now, send a quick email or book a 1-1 demo and take the first step towards transforming your warehouse management solutions.

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In summary

The main goal of warehouse management is to make sure the right product is at the right place at the right time, with the least amount of friction. Usually this means the goods going to the customer, as opposed to the management of inputs which would be more a supply chain solution.

A warehouse management system is an increasingly must-have tool for modern businesses with a high throughput of inventory. Warehouse inventory management software allows you to track inventory levels, increase pick and pack speed and accuracy, as well as monitor shipments. It also lets you create WMS reports that inform you of further ways to improve. You stand to save an inordinate amount of time and money by automating many tasks. Book a demonstration with us today to see with your own eyes exactly how the Mintsoft warehouse management system can transform your warehouse or online retail business. We sincerely look forward to speaking with you.

WMS System Frequently Asked Questions

A warehouse management system works by giving a warehousing business management and visibility of their inventory, so goods can be tracked from manufacturer, to shelf, to customer. This is done through a provider implementing a specialist WMS computer software, providing mobile scanners, label printers, and shipping management. A WMS is successful by increasing efficiency, reducing costs and improving customer satisfaction levels.

Choosing your own WMS system needs to be thoughtfully researched and planned so it can most benefit you. There are however some key features you need to look for in a WMS system, including: maximum functionality, ease of use, flexibility, reporting features, value for ROI and integrations.

In the modern day, warehousing businesses around the world need to operate perfectly to achieve maximum productivity to both retain customers and put themselves above the competition. A warehouse management system such as Mintsoft offers an all-in-one solution for recording inventory, order management, shipping processes and much more. Whether a large or small e-commerce business, a WMS system is certainly a good investment, and the outlined benefits of each type in the above guide highlights this. 

If your day-to-day warehouse operations are giving you endless problems and loss of revenue, it’s time to consider a warehouse management system. Many issues can arise within a warehousing business, including misplacement of inventory, customer complaints, and the overworking of staff. If these are commonplace in your business and you’re lacking in efficiency, you should certainly consider investing in a WMS system. Your size and the complexity of your operations should factor into your choice, however it is certainly worth it in the long run.