What is a Warehouse Management System (WMS)?

Warehouse Management Systems are among the most mature of the supply chain applications, dating all the way back to the mid-1970s.

A WMS, as the term suggests, is designed to manage and control the activities of a warehouse or distribution center, from receipt through shipment. It is designed to manage inventory, locations, people, equipment, and the related information flow. A WMS generally does so based on an extensive use of barcode scanning and/or radio frequency identification (RFID) data capture, using mobile wireless terminals for real-time information processing, and through which warehouse associates receive work assignments.
 
A WMS is primarily an execution system, though some will include what could be called “execution planning” capabilities in areas such as labor assignment, how/when orders will be released across a shift and more.

About a decade or so ago, the term “extended WMS” (and others like it) started to gain traction and captured the trend that vendors were increasingly surrounding their WMS solutions with a set of other capabilities, such as Labor Management, Slotting Optimization, Yard Management, Assembly and Kitting, and Transportation Management.

Key WMS Capabilities

There are dozens of Warehouse Management Systems available on the market, from very basic systems to highly advanced packages that can manage and optimize the most complex and automated distribution centers.

Here we have a representation of common WMS capabilities available in more advanced WMS solutions:

• Management of end-to-end distribution center processes, including receiving, putaway, cycle counting, order planning, order picking, replenishment, outbound shipping/truck planning, and truck loading.
• Zone Management – the ability to group locations into different zone types (putaway zones, work zones, etc.) to allow more precision in operations and rules definition.
• Real-time inventory management, including detailed visibility into what quantities of inventory are in which locations, and management of key attributes such as unit of measure, lot/batch, expiration dates, serial numbers and more.
• Comprehensive audit trails – “who did what and when” can be used to resolve questions/issues and provide data for operational metrics.
• Task Management – the ability to create work assignments (e.g., putaway, cycle count, order pick, etc.) and assign them to specific workers through mobile devices based on attributes such as permission, equipment type, priority and proximity to the work. Includes the ability to combine tasks for a given worker, such as pallet putaway with a pallet pick, to drive efficiencies through what is called “task interleaving.”
• Ability to receive product against a purchase order or advanced ship notice, or non-PO receiving. This can also include Returns Management.
• Inbound quality assurance functions, such as receipt audits/inspections.
• Directed putaway – an operator is instructed via wireless terminal where to store received inventory, usually to a specific location in a defined sequence of zone preferences (e.g., fast mover zone is first preference).
• Cycle counting – the ability to verify and adjust SKU/count/location data as needed, using configurable rules to direct the cycle count plan and frequency.
• Order picking planning – generally the ability to group all orders into smaller buckets for execution, often using “wave planning” to select orders to process for a given period of time based on priority, carrier, or other order attributes. Can include the ability to adjust orders in a wave to balance work across different areas, such as case versus piece picking.
• Cartonization – the ability to follow a set of rules, at the customer level as needed, for which products may be packed together in a shipping carton, then identifying the most efficient shipping carton size/type. Cartonization should also consider picking efficiencies.
• Order picking execution – the release or order picking work to specific associates for execution. Can involve splitting the work to complete an order across pallet, case and eaches picking for a given order. Should also make available more advanced picking techniques such as zone picking/pick and pass, batch picking, and cluster picking.
• Replenishment of picking locations from reserved storage based on configurable rules such as min/max, actual orders (demand-based replenishment), “top off,” etc.
• Value-added service support, ranging from price ticketing to kitting.
• Full work order processing, including multi-level bill of materials functionality, work order management, inventory backflushing and more.
• Truck planning - which pallets will go on each truck trailer and in what sequence…
• Selection of the appropriate staging lane for each shipment and directing all relevant pallets/cartons to that lane.
• Packing support, such as placing items from a tote to a shipping container, with support for scanning items into the container as needed.
• Parcel shipping management, including integration with leading parcel carriers.
• Outbound quality assurance, including flexible auditing and sampling protocols.
• Stop sequence-directed trailer loading
• Support for vendor compliance requirements, including customer-specific labels and shipping documentation.
• Support for product recall processes 

This is a substantial, but far from fully comprehensive list of advanced WMS capabilities. Other areas include increasingly sophisticated metric and reporting systems, the ability to ingrate with enterprise/ERP systems and material handling equipment systems, and much more. 

An advanced WMS is almost essential for distribution centers of medium to high operational complexity, but can also drive significant value in less complex facilities with more manual operations.

As with many supply chain software applications, Warehouse Management Systems are increasingly being deployed in the Cloud.

A WMS should also be a platform for change, enabling companies to quickly react to new requirements and opportunities and to drive continuous improvement.