What Is Warehouse Management?
Warehouse management encompasses the principles and processes involved in running the day-to-day operations of a warehouse. At a high level, this includes receiving and organizing warehouse space, scheduling labour, managing inventory and fulfilling orders.
Zoom in closer and you’ll see that effective warehouse management involves optimizing and integrating each of those processes to ensure all aspects of a warehouse operation work together to increase productivity and keep costs low.
What Is Warehouse Management System?
A warehouse management system (WMS) is a software solution that aims to simplify the complexity of managing a warehouse. Often provided as part of an integrated enterprise resource planning (ERP) suite of business applications, a WMS can support and help optimize every aspect of warehouse management. For example, a WMS can:
- Leverage data and automation to conduct demand analyses, forecast sales and create efficient daily operating plans.
- Provide real-time insight into inventory location and quantity.
- Share data with other ERP modules or standalone software products, such as accounting software and transportation management solutions, to increase the efficiency of business operations.
- Monitor and report productivity to offer a deeper understanding of how efficiently your warehouse is operating and where you can make improvements to warehouse geography and optimize space.
- Create step by step directions to guide users through daily processes—such as receiving, picking and packing orders—using predefined rules.
Warehouse Management Processes
Warehouse management includes six core processes. Each process influences the efficiency of the next, so every step must be optimized for the warehouse operation to run like a well-oiled machine:
- Receiving: Check in and log incoming items. Verify that you’re receiving the right quantity, in the right condition, at the right time.
- Put-away: Move items from the receiving dock to their correct storage locations.
- Storage: Safely store and logically arrange inventory to enable fast and accurate picking.
- Picking: Collect the items needed to fulfill sales orders.
- Packing: Prepare the picked items for shipment. They must be safely packed into the correct packaging with an accurate packing slip.
- Shipping: Send out the finalized sales orders, ensuring that they are on the right vehicle, at the right time, with the correct documentation, so customers receive their orders on time.
Warehouse Management Fulfillment Strategies:
Selecting fulfilment strategies that match the business’s size and the volume and type of orders it receives can help the organization ship products faster, minimize waste and improve customer satisfaction. Applying strategies that match the type of orders that you receive can help maintain the most effective workflow. For example:
- Batch picking is a technique that can help you quickly fulfill multiple orders for the same product without wasting time by continually revisiting the same inventory location.
- Zone picking assigns pickers to different zones of SKUs. For each order, pickers are resonpsible for picking all SKUs from their designated zone.
- First expired, first out (FEFO) picking ensures perishable products and items make it to customers before specified expiration or sell-by dates. With FEFO, the products set to expire first are shipped first.
- First in, first out (FIFO) picking ensures the first products to come into the warehouse are the first to be distributed, which can help make sure older items are shipped before they can become obsolete.
Technology is also an important part of any warehouse management fulfilment strategy. Handheld mobile devices that display packing lists with item locations, serial numbers and lot numbers can help increase picking speed and accuracy. The software can recommend safe and cost-effective packing based on product dimensions to ensure each item gets shipped securely, with as little waste—and wasted space—as possible.
Choosing a Warehouse Management System (WMS)
Choosing the right WMS will depend on the specifics of your warehousing operation and what you want to achieve. Above all, the right WMS should help your organization achieve greater efficiency and fulfil orders more accurately so you can do more at a lower cost. Since a primary goal is to save money, ROI is key.
Additionally, a WMS should act as a guide to help all warehouse staff become more efficient in the workplace. To do so, the right WMS will provide real-time actionable insights into each aspect of your warehousing operation to help staff be more efficient and programmatic, including receiving, shipping, inventory, order fulfilment, and labour—while providing easy-to-understand statistics and reports that managers and workers can easily understand and then use to improve daily and long-term processes. A WMS should also be scalable so it can help your business grow and adapt to changing market conditions.
The right WMS can take your warehouse operations to a higher level of efficiency, speed and order accuracy, helping to improve your company’s competitiveness and increase customer satisfaction while keeping operating costs down.
8 Key Functions Of Warehouse Management System (WMS)
1. Tracking Inventory
One of the key responsibilities of warehouse management systems is to keep track of the inventory inflows in the warehouse. It provides warehouse managers with unparalleled visibility into stock availability and replenishment requirements. A WMS enables warehouse operators to monitor the demand and supply of their commodities to procure the products in the appropriate amount and at the proper time. Additionally, it is critical for warehouse space optimization. A WMS ensures that inventories are allocated evenly to guarantee efficient warehouse management.
2. Layout Planning
A warehouse must maintain a well-organized layout design. A warehouse management system assists you in perfectly designing the layout of your warehouse. A logical framework incorporated into its system allows effective placement of your inventory within the specified warehouse. Accessibility, demand, and weight are the variables that influence the development of this systematic pattern design
3. Labour Management
Having real-time data on each employee’s efficiency and performance is critical for monitoring and ensuring that warehouse operations are adequately processed. A WMS can examine and monitor numerous performance indicators displayed by warehouse staff. This could be a crucial performance measure, and its implementation could be beneficial for labour management. Additionally, warehouse management adds to staff management by assisting logistics companies in developing incentive systems that emphasize employee productivity and effectively minimize workforce burnout.
4. Order Processing
Another critical function of WMS is to oversee the order processing inside the warehouse. A WMS helps fulfilling products accurately and ensure timely delivery of products. There is a minimal expense associated with incorrect stocking of orders and shipment to mismatched clients, hence reducing the overall cost of warehousing.
5. Analytics
A business’s strategic decision-making process is based on data-driven and executable insights. A WMS provides extensive and accurate insights into warehouse activities and assists in efficiently tracking inventory in and out, and the warehouse management team can plan their future course of action successfully. Warehouse managers gain the leverage to significantly enhance the business by using the information obtained in real-time from the WMS.
6. Paperless Documentation
A WMS provides a centralized view of the complete warehouse processes. With its anytime accessibility, WMS provide warehouse workers with the necessary data and information to perform their jobs efficiently. Automated warehouse management solutions eliminate the need for paper-based paperwork.
7. Reliable Customer Service
Businesses’ primary focus has always been customer satisfaction. As a result, organizations strive to optimize their processes to provide seamless, customized, and personalized experiences to their customers. A warehouse management system enables the delivery of authentic products to the correct consumers at the right time. WMS is essential in guaranteeing customer satisfaction for existing customers and acquiring and converting new prospects.
8. Increases Productivity
A good WMS maintains an audit trail that connects transactions to specific employees. This increases accountability and creates an opportunity for coaching based on individual performance goals. A WMS establishes a logical structure that is simple to follow and significantly improves the working lives of your team. It establishes explicit KPIs and performance requirements for the warehouse team, which promotes efficiency and accuracy.
Conclusion
Warehouse management has long been a pillar of the logistics industry, and businesses have always placed a high premium on the efficient operation of this business unit. The logistics industry has reaped tremendous benefits from WMS systems and significantly reduced warehousing costs with new technology and platforms.
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