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Warehouse Management Definition & FAQs

Nobody has ever accused warehouse management of being easy. In fact, it’s one of the most broad and complicated processes in the business world. Dealing with tasks ranging from equipment maintenance to inventory control and distribution optimization, warehouse management is a key part of any warehousing business. With this in mind, do you know the answers to the most common questions regarding warehouse management?

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What is Warehouse Management?

Warehouse management refers to the various processes related to maintaining and controlling a business’ warehouse. It goes through every step of the process, from beginning to end, and is usually overseen by warehouse managers. Starting from incoming freight and moving on to asset tracking and logistics, warehouse management encompasses everything that happens in a warehouse. Whether they own one warehouse or several, businesses can control the entirety of their warehousing operations.

What are the Basic Warehouse Operations?

Warehouse operations have a tendency to take a lot of time and effort. This is especially true for the fundamental, overly time-consuming processes. These are the “necessary evil” day-to-day operations — the ones that have to be done, but also take a lot of time to do. The basic warehouse operations that need to be done regularly include receiving, moving inventory, shipping and ensuring safe working conditions.

What is a Warehouse Management System?

A warehouse management system (WMS) is a piece of software that controls, records and automates various warehouse operations. The goal is to increase the overall productivity and efficiency of a business’ warehousing operations. These solutions are commonly found as individual, standalone systems. That said, many enterprise resource planning (ERP) and supply chain management (SCM) systems come with WMS modules that include the same features found in a standalone system.

What are the Main Features of a WMS?

Speaking of warehouse management features, there’s no shortage of features available in a WMS. It all starts with incoming freight, where barcode scanning and radio frequency ID tagging help with data input, tracking what, when and how many products are received, as well as where they’re stored. Order and fulfillment management features are also common, including reorder tools that provide accurate information related to when orders are shipped and received.

Important in any modern WMS solution is real-time tracking capabilities. These include tracking assets and orders as mentioned above, as well as the projects and schedules of your warehouse employees. Analysis and business intelligence functionality takes all this data and provides insights into KPIs, process inefficiencies and can even help assign tasks to your employees.

Dashboard features are also a critical aspect of a WMS. Dashboards allow users to view the data in an easy-to-understand manner, so they can get an overview on incoming/outgoing shipments and employee workloads, as well as where stock is and how much is in the warehouse. Not to mention, easy-to-use dashboards decrease the learning curve of the software, allowing less tech-savvy employees to adopt the system quickly.

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Who Uses a WMS?

As we touched on earlier, warehouse managers oversee the warehouse management process. Therefore, it shouldn’t come as a surprise that they’re the primary users of a warehouse management system. That said, however, they’re by no means the only ones who benefit from using it. Thanks to the labor management features found in most warehouse management systems, warehouse employees benefit from using WMS solutions as well. They can use it to view the orders that need to be processed and, more importantly, they can also view their schedule so they know what tasks they have to complete each day.

What are the Biggest Benefits of Using a WMS?

There’s a reason that WMS has gained popularity over the last several years. That’s all due to how many benefits WMS solutions provide warehousing businesses. Probably the biggest benefits of using a WMS include reduced operating expenses, continuous process optimization, enhanced security and improved customer and supplier relationships.

Other benefits that companies commonly gain from using a WMS include maximizing their labor resources, simplifying just-in-time inventory, enhancing demand planning and increasing transparency to both employees and suppliers.

How Does Warehouse Management Affect Supply Chain Management?

Warehouse management is the central link in supply chain management. It’s the all-important bridge between producing a product and delivering it to customers. Warehouse management helps organize products to make sure that they’re shipped to the right customer at the right time. This is the most important effect on the supply chain.

If your warehouse management processes become inefficient and inaccurate, it can mess up your entire operation, sending products to the wrong location, or sending the right products late. When your customers get what they want when they want it, they’re happy. But if they don’t, chances are good that they’ll stop giving you business, and start looking elsewhere.

What Does Logistics Mean in Warehouse Management?

You’ve certainly heard the word “logistics” before, but what does it mean when it comes to warehouse management? In short, logistics is an umbrella term for various tasks related to transportation, warehousing, inventory, information management and more. These include the various processes in the supply chain that happen before, during and after warehousing.

It’s important that the different functions of logistics work in tandem, so that your supply chain is as efficient as possible. This means that the initial transportation of goods is scheduled so that they arrive at the warehouse when there’s room for the inventory. Additionally, it means that those goods leave the warehouse on time, so they arrive at their destination exactly when they need to be there.

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What is the Meaning of Inbound and Outbound Logistics?

Inbound and outbound logistics are, as the names suggest, the opposite of each other. As we explained above, logistics involves the processes directly related to warehousing before, during and after. Inbound logistics, therefore, are the processes involved with incoming goods. Outbound logistics, on the other hand, deal with distributing goods.

Inbound logistics deal mostly with receiving and storing goods when they arrive at the warehouse. Everything from a shipment arriving by truck (or other transportation) to the storage of the goods is a part of inbound logistics. A crucial component of inbound logistics is recording information related to storing the goods, so they can be found easily when it’s time to move them out of the warehouse.

Outbound logistics involves all of the processes that ship goods out of the warehouse, including order fulfillment. This includes collecting various goods together, loading them onto a truck (or other transportation) and sending them to their destination (most likely the customer).

What is the Difference Between Warehouse Management and Inventory Management?

There’s a good amount of crossover between WMS solutions and inventory management systems. This has created some confusion on what the differences actually are between the two (other than the names, of course). WMS solutions are more robust, handling all of the warehousing features, in addition to inventory. Inventory management systems are generally cheaper than WMS, coinciding with being more “lightweight” systems. For example, inventory management systems require more manual data entry, as they’re not capable of automatically inputting as much data.

When it comes down to inventory features, there are even more noticeable differences. Inventory management systems can only handle a limited number of products (in part because of the manual data entry that’s required), whereas WMS solutions are built to process a high volume and wide variety of products. So a warehouse that works with fewer products may be just fine using an inventory management system, but one that works with a diverse set of products would need a WMS.

Can You Use a WMS for Inventory Control?

Thanks to its powerful inventory management features, a WMS is a great tool for inventory control. One of the capabilities that makes it so useful is the ability to differentiate between pack sizes. By pack sizes, we’re referring to pallets, cases and individual items. A WMS identifies whether each unit is a pallet, a case or an item, based on each unit’s identifying barcode/SKU/serial number. This makes planning for inventory storage much easier. For example, you’ll never be caught off guard thinking that you’ll place a unit of 100 items in a corner, when in fact that unit turns out to be 100 cases.

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What is Putaway?

Putaway (or put-away, depending on who you ask) is probably the most self-explanatory process in warehouse management. It refers to literally putting away all of your incoming stock. The putaway process is a part of inbound logistics that covers the tasks related to receiving inventory, through to stocking it. A WMS is immensely useful for effective putaway. Many WMS solutions help with planning where to store stock, and can assign locations for storing it.

How Does Warehouse Management Help with Transportation Management?

The main benefit that warehouse management provides transportation management is organization. As you know, inventory gets organized within a warehouse so that all of the products that leave together are stocked together. In turn, this helps plan for what kind of transportation is needed, as well as how frequently it’s needed, to deliver products on time.

First and foremost, warehouse management helps track how much stock is stored in each warehouse. With this information in hand, you have a good picture of how many trucks you need to allocate to each warehouse. For example, let’s say that Warehouse A has 100 pallets of a certain product, while Warehouse B has only 80 cases of it. In this case, you know that you need to allocate four 53” trailers to Warehouse A, while you only need to send a small truck to deliver the products from Warehouse B (if it’s not part of a bigger order).

In addition, knowing how much labor you have available at each warehouse helps schedule more efficient shipments. If you have a day where most of your labor is tied up in delivering several small shipments, it’s probably not a good day to receive a large shipment the same day. In this case, you can organize your shipment dates to make the most of your available labor. For example, you can alternate shipment dates so that you manage several small shipments on some days, and a few larger ones on the other days.

What are the Most Common WMS Integrations?

In order to make the most out of your WMS, integration is important. We touched on a couple common integrations in our earlier answers. As we mentioned towards the beginning, there are three types of warehouse management systems: standalone, ERP modules and SCM modules. These reveal two of the most common integrations: ERP and SCM.

ERP integration centralizes all of your systems, so that you can work with all of your data in one location. This creates less manual data entry, as well as more data security. SCM integration does much of the same, except that instead of centralizing all of your software, it does so for all of your supply chain-related systems.

Transportation management system (TMS) integration is also common. TMS integration allows for easier and automated organization of your distribution. Like we went over in our previous answer, the two work together to create a cohesive, fluid distribution system that ensures accurate and prompt product delivery.

Finally, we come to an integration that’s not obvious at first, but nonetheless useful: CRM. CRM integration gives you more data with which to create a 360-degree view of your customer and their experiences. Rather than merely viewing their interactions with your marketing and sales materials, you can track their orders as well. And not just what they ordered, but what happened with those orders.

For example, you can view if a customer has been receiving orders on time, or if they’ve been receiving them late. If their volume of orders has slowed, the lack of punctuality could be one reason. Thanks to integration, you can identify it. You can even use the information gathered from CRM integration to predict the times that customers are most likely to order, so you can market to them more effectively.

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What are the Top Warehouse Management Systems?

As we emphasize in most of our blog posts, each company has its own unique needs, so you’ll never find any “one-size-fits-all” solutions. That said, it’s always a good idea to look at the most popular vendors to gauge what to look for. Not to mention, there’s a reason these systems are the most popular; you just might find that picking one of them is the best solution for your company. So if you find yourself in the market for a new (or, potentially, your first) WMS, take a look at these top systems, taken directly from our Warehouse Management Leaderboard:

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Join the conversation
  • Abby maxwell - May 12, 2018 reply

    Proper management of the warehouse could ensure better workflow which is helpful to generate better revenue. By using warehouse management system, we could control, record and automate different warehouse process get better result. Apart from this, there are a lot of factor affects warehouse productivity and suitable steps needs to be taken to reduce the negative factors which affects the productivity of the warehouse.

  • John - December 5, 2018 reply

    I totally agree with you Abby. Having a proper warehouse management would really improve workflow of the warehouse to increase its productivity, accuracy which in turn increases revenue.

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