Warehouse management systems (WMS) is described as the advanced technology and operating processes which optimize all warehousing functionalities. These functions begin from receipts from suppliers and ending with shipments to the customers, also including all inventory movements as well as information flows in between. Warehouse management systems are mainly associated with large and complex distribution operations. However even smaller and middle size companies are identifying the importance of WMS in today’s scenario of integrated logistics, just-in-time delivery and e- commerce fulfillment.
In practical situation, Warehouse Management System is used mainly in integrating computer hardware, software and peripheral equipment along with good operating practices so as to manage inventory, space, labour, and capital equipment in ware houses and distribution centres. Implementing of WMS serves the company by increasing its competitive advantage in matters of labour cost, improval of customer service, increasing inventory accuracy, and improving of flexibility and responsiveness. A WMS also helps the company in management of inventory in real time along with information regarding the latest order, shipment along with any movement in between.
Benefits of Warehouse Management System
- Faster inventory turns. A WMS reduces lead times by limiting inventory movement and increasing inventory records thus implementing JIT environment. Thus the need of safety stock gets reduced thereby increasing inventory turnover along with working capital utilization.
- More efficient use of available warehouse space. A WMs along with recuing safety stock requirements also increases available warehouse spacing by efficiently locating items with relation to receiving, assembly, packing and shipping points. Thus it also improves productivity and lower inventory holding costs.
- Reduction in inventory paperwork. Implementing of WMs reduces paperwork as well as ensure timely and accurate flow of inventory and information. Electronic maintenance of receiving of tickets, move tickets, packing lsits etc can be done with the help of WMS.
- Improved cycle counting. WMS can also be used in capturing relevant data in terms of frequency of movement, specific locations etc for systematic scheduling of personnel for cycle counts. Such cycle counts helps in improving accuracy of inventory records for planning purposes but as well as help in eliminating costly physical inventories.
- Reduced dependency on warehouse personnel. WMS implementation helps in standardization of inventory movements, picking methods and inventory locations. Thus helping in minimizing reliance on informal practices, which in turn reduces the training costs and lowering of error rates.
- Enhanced customer service. By streamlining processes from order to delivery, companies can more accurately determine product availability and realistic delivery dates. WMS automatically identifies and releases back to order inventory and also can reduce returns due to increased shipment accuracy.
- Improved labor productivity. A WMS helps in optimizing material flow by incorporating several inventory picks into one or by “cross docking”. Cross docking is a process that routes incoming shipments to the location closest to the outbound shipping dock, thereby reducing warehouse handling.
Advantages for Warehouse Management System (WMS) Users
For Management: Warehouse Management System can help management in getting an instant picture of (1) inventory existing in the warehouse, (2) orders that are currently being shipped, (3) knowing the stage of processing of pending orders, (4) staff productivity details, (5) any period of time the quantity of goods shipped by ware house. The warehouse management can thus determine how much inventory is existing in the various stages of processing unlike the non-warehouse management. Sales people can determine how much inventory is available and can relate better to the warehouse staff thus bettering their Customer Relationship levels. Customer Managers can reserve inventory for a customer thereby ensuring that it will not be shipped to anyone else. Inventory Managers can track transactions at a very fine detail to diagnose unexpected sudden changes in inventory. For example, suppose if thousands pieces of some SKU are missing, if it was shipped to some other customer or if it got shifted to some other warehouse or did it get lost etc. The reports generated during checking processes enables policy decision for reliability of suppliers. WMS is designed to be flexible i.e., the process flow of the DC/Warehouse can now be modified easily as business needs change.
For Warehouse Supervisors: Productivity reports for each operator can now be generated and used to implement productivity based remuneration schemes or to fire unproductive employees. For those warehouses that have to cope up with Union problems these reports can help the company tremendously. Efficient tracking of warehouses activities are possible with WMS as it provides a comprehensive set of web-enabled reports detailing all the activities happening in the warehouse and their effect on the inventory management. WMS also helps to detect bottlenecks in operations, which can increase the overall throughput of the warehouse.
For Warehouse Operators: Warehouse Management System provides graphical user interfaces (GUIs) wherein most of the time the operator has to just scans the barcodes. Default navigation of cursor on the screen mimics the standard business rule. Thus WMS eases the operator’s task and makes the data input process fast, thereby increasing the overall efficiency of the operator. Some programs like Locating and Pulling are especially designed to run on hand-held radio frequency terminals. These terminals make the task of pickers and locators easy, as these are easy to carry. Modern WMS programs have been coded with extra emphasis on scanner based data input to minimize the need for keyboard or mouse input.