What is a Warehouse Management System?

English: Amazon warehouse Storage and distribu...
English: Amazon warehouse Storage and distribution point for on-line purchases.

A warehouse management system is a computer software that is designed for warehouses to manage the storage and movement of materials. Generally the warehouse management system functionality is broken down into 3 operations. These operations are Putaway, Replenishment and Picking. The logic used to direct the 3 operations to specific warehouse locations using a criteria defined by the user is the main key to these systems. Often, warehouse management systems are set up to integrate directly with a data-collection system.

The warehouse management system software solution is evolving beyond materials within a warehouse. It has expanded to also include transportation management, light manufacturing, complete accounting systems and order management. The expansion has caused an overlap in functions between warehouse management systems and other essential company systems which will ultimately cause unneeded confusion among companies searching for operation software solutions.

The core functions of the warehouse management system remains the same even though it continues to gain added functionality. These core functions are directed picking, directed replenishment and directed putaway. There are significant setup and process differences between the software vendors. The basic logic of warehouse management system will still use a combination of the item, quantity, location, unit of measure and information about each order that will determine where to pick, where to stock and the sequence these operations are performed.

Having a warehouse does not mean that you necessarily need to implement a warehouse management system. All warehouses would benefit from the functionality but companies need to make sure that the benefits justify the total cost associated with a warehouse management system. These systems are large, data intensive, complex and full of applications. There is a lot of setup needed initially, systems resources to run and ongoing data management needed to maintain the system. Large operations will likely set up a IS department that is solely responsible for managing the warehouse management system.

Implementing a warehouse management system with a data collection system will most likely increase accuracy, reduce labor costs and allow better services to customers with reduced cycle times over the long term. It is less likely that the new system will reduce inventory or increase storage capacity. Inventory levels are controlled by lead times, lot sizing and demand variability all of which are not significantly impacted by the use of a warehouse management system.

In addition to increasing the efficiency of your labor, a major determining factor is associated with increasing support for the customers where your current system lacks.


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