News & Views

May 20, 2009 from SupplyChainDigest – “Warehouse Management System (WMS) software applications have been around for more than two decades, really getting a market foothold in the 1990s, as the traditional concept of “warehouse” gave way to high velocity distribution center and need for much greater capabilities. Since then, the market has seen many changes, with the WMS vendor landscape changing dramatically, especially with a raft of mergers and acquisitions since 2001, and continuous expansion of overall WMS capabilities…”

180 View (written by Lawrence Young) – This article talks about Warehouse Management Systems, and the increasing role that they play today in managing a company’s inventory and related logistic processes.

A Warehouse Management System, or WMS, consists of software and hardware designed to increase the accuracy of the perpetual inventory counts reported by an ERP system, and to increase the efficiency of the handling of inventory items from receipt to shipping. A WMS is used for inventory planning and management, and can usually have a material effect on the dollars a company has invested in its inventory i.e. a better inventory mix of Stock Keeping Units (SKUs), better minimum and maximum targets for each SKU, etc.

WMS software deals with the receipt of stock and returns into a warehouse and the management of stock within the warehouse, including the putaway, picking, packing and shipping functions. Manufacturers will typically deploy a WMS to manage all SKUs, including raw material, work-in-process (WIP) and finished product, whereas distributors typically manage only finished product (unless they do some light manufacturing such as kitting, in which case the WMS would also manage raw materials and components).

Warehouse management systems often utilize Auto ID Data Capture (AIDC) technology, such as barcode scanners, mobile computers, wireless LANs and potentially Radio-frequency identification (RFID) to efficiently monitor the flow of products. Once data has been collected, there is either batch synchronization with, or a real-time wireless transmission to, the ERP system’s central database. The database can then provide useful information about the status of every SKU located in each warehouse and, for manufacturers, each factory.

WMS software can be deployed as a stand-alone module, but most times maximum benefits are realized by integrating the WMS to the ERP system. For example, the WMS module can be integrated to the Purchasing and Order Processing modules, and in some cases can electronically interface with external supply chain applications of some of your trading partners i.e. suppliers and customers.

If your company is a manufacturer or wholesale distributor, a WMS might be a good investment. The first step to take would be to do a cost-benefit analysis to see if there is a sufficient business case for deploying a WMS in your company. Sometimes a WMS makes good sense, but at times it can be overkill. Depending on your ERP system (or old legacy back-office system as the case may be), making some custom software changes to your currently installed Inventory Management module may be the best way to go.