Demystifying the Warehouse Management System

In the race toward customer experience excellence, market leaders like Amazon have set an extraordinarily high bar for companies of all sizes across industries. Year after year, customers rank Amazon as their #1 brand of choice for product selection, value, customer service quality, and customer satisfaction. We often call this new standard The Amazon Effect.

Today, the Amazon Effect has catalyzed a need for businesses to rethink how they can better manage their supply chains, warehouses, and inventory to ultimately get products in the hands of customers faster and more reliably. 

Enter Warehouse Management Systems (WMS).   

Warehouse Management Systems, Explained

Effective warehouse management optimizes and integrates all facets of your warehouse operations to maximize productivity and efficiency, and to facilitate fast, accurate order fulfillment—all while keeping costs low. 

With a Warehouse Management System (WMS), businesses are able to manage products, enhance processes, and save money by streamlining inventory management, order fulfillment, shipping and logistics, and more. This includes consideration for the available physical space in your warehouses (in order to maximize square footage), as well as yard management (i.e. organizing shipments, tracking inventory, or loading and unloading yard trucks). 

With the need to better predict supply and demand on the rise, it may be unsurprising that WMS adoption is, too. Experts predict that the worldwide market value for warehouse management will rise to $7.9 billion by 2024, up from just $4 billion in 2019. We can attribute this explosion in popularity not just to the practical improvements a WMS can bring to warehouse management, but to its widespread benefits across end-to-end supply chain operations. 

Here’s what its impact looks like.

The Role of WMS in Supply Chain Management

Used most often by third-party logistics companies, B2B distributors, and manufacturing companies, a warehouse management system (WMS) makes it possible for businesses to:

• Boost labor productivity by 25%
• Reduce unnecessary warehouse space consumption by 20%
• Improve efficiency by 30% 

Plus, a WMS supports processes across the complete supply chain, thanks to its ability to seamlessly integrate with other supply chain optimization tools, like transportation management systems (TMS), Enterprise Resource Planning (ERP) systems, and logistics software, as well as bar code scanners and RFID labeling tools. Syncing effortlessly with your other business processes, this system of connected tools also enables real-time data synchronization, efficient order processing, and accurate financial reporting.

Why Invest in a WMS? 

With the rise of modern, flexible warehouse management systems (WMS), businesses can now tap into real-time data, automation, and AI to revolutionize their supply chain visibility, boost their bottom line, and earn the lasting loyalty of their customers. 

Here are a few of the advantages investing in a WMS can unlock.

1. Boost Inventory Management and Control

One of the most important responsibilities of modern supply chain professionals is maintaining and improving inventory control to balance supply and demand. 

By ensuring complete visibility (using barcoding, RFID tagging, or sensors) into your raw materials, products, and inventory—no matter where and when they move on their way to the customer—you can better forecast inventory needs, eliminate overstocking, and prevent overselling.

2. Make Labor Management More Efficient

Human error from manual process management is among the top causes of inventory fulfillment issues today. With better planning and the right tooling, it’s a thing of the past. 

Fortunately, 89% of organizations today expect that they’ll be using a WMS for labor planning and management by 2024. Doing so will allow them to forecast labor management needs, create schedules, optimize travel time within a warehouse, and automate task management.

3. Maximize Your Square Footage

Experts estimate that over 2.3 billion square feet of new warehousing space will be required by 2035. This is due, in part, to businesses’ poor warehouse management visibility causing supply and demand imbalances. 

A WMS can also help you determine the most effective use of warehouse space, including considering inventory storage placement and optimal travel paths during fulfillment. This may even include the ability to create floor plans or place equipment in the best locations to run at peak efficiency.

4. Innovate with AI 

Through WMS, Artificial Intelligence (AI) technology is being increasingly folded into warehouse operations. The goal is to modernize supply chains and embrace a demand-driven warehousing model. 

While many are using AI primarily to improve inventory management, its capabilities can go much further. Supporting demand planning, manufacturing, transportation, and fulfillment—all with real-time data and by-the-moment updates—are all possible.

Evolve Alongside the Market with a Warehouse Management System 

Investing in a WMS can mean big savings and big potential. 

Leveraging a Warehouse Management System that’s designed to cater to complex, sophisticated warehouse operations helps businesses reduce lead time, increase fulfillment and product delivery speed, and minimize distribution costs. 

Plus, last-mile delivery and other common supply chain management issues are solved flexibly and easily with the right WMS, making it simpler than ever to deliver on modern customer expectations without compromising quality or increasing logistics or labor costs. 

To go one step further and optimize every stage of the customer-to-cash cycle, check out this comprehensive guide to best practices.