Author: Matt Rickerby Nov 09, 2020 4 Min READ

What Is A WMS? (Warehouse Management System)

4 Min READ
What Is A WMS? (Warehouse Management System)


If you’re new to the warehouse industry, you might be asking yourself “what is a WMS?”

All experienced warehouse workers know that a WMS, or Warehouse Management System, is a software tool that helps manage daily warehouse operations. Finding the right one for your business needs can be a daunting task, but knowing your options and knowing the difference between different types of WMS software can be a major deciding factor. We’re here to help define warehouse management software and how to choose the best one.

What Is A WMS And What Does It Do?

A warehouse management system is used to manage the warehouse operations such as in and outgoing inventory, picking/packing/shipping, and organizing inventory replenishment. WMS software brings better visibility and organization to the entire warehouse operations.

young woman in warehouse using inventory tracking system; what is a wms

From the truck to the distribution center to inventory on the shelf—a WMS is highly critical for any business to run its warehouse efficiently. Most importantly, a WMS ties together all aspects of the supply chain and depending on which method of WMS you use, you can completely streamline your entire process and consolidate it to one platform.

4 Types of Warehouse Management Systems

The most commonly used types of WMS are a Standalone System, ERP Module, Cloud-Based, and Supply Chain Module. They all have unique benefits for different warehouse needs. You should consider many factors before deciding which WMS is going to work best for you.

You will need to think about the size of your supply chain currently, and how much you anticipate to grow. You will want to decide if you need mobile and cloud capabilities, which means new technology, and a bit of a learning curve. Do you want a system that will work with your existing technologies and tools like barcode scanners? No matter what it is you’re looking for, weighing the pros and cons of each type of WMS can be a valuable method for determining the system.

Warehouse management systems; what is a wms

1. Standalone System

A standalone system comes with very limited features and may be best suited for smaller warehouse operations, or those looking to use it alongside their other supply chain operations, but not integrate a new system. They are likely the most affordable because they come with just warehouse management features. However, it comes with the two most important warehouse management systems—warehouse operations and inventory management.

A warehouse cannot function without these two things, thus making standalone systems great for those who just need to improve those facets of their supply chain. When a business decides to utilize a standalone WMS, they benefit from the simplicity of it, and can quickly begin using it without waiting for full integration. Some warehouses are small enough where they can manage many things manually, and via spreadsheets, so a standalone can fit perfectly within those existing systems.

Some of the things a business can manage using a standalone system include:

  • Picking
  • Packing
  • Shipping
  • Receiving
  • Returns
  • FIFO or LIFO data management
  • Cycle counts
  • Barcode scanning
  • Inventory tracking

Businesses should keep in mind, that standalone warehouse management systems may not integrate well with some WMS. If they are looking toward the future and see themselves growing exponentially and expect to need more technology down the road, they may want to invest in a more robust system.

manager tracking orders for order fulfillment; what is a wms

2. ERP Module

An ERP or Enterprise Resource Planning Module is considered one of the best options for warehouses or businesses looking to expand and improve their supply chain operations. For 3PL businesses who want to grow their operations, an ERP Module could be their best bet as the features included can help them organize their supply chain, accounting, HR, and even customer relationship platforms.

Although warehouse management is not the essential piece of an ERP module, it acts as a great complementary component to warehouse management systems. It also is great for consolidating operations into one platform, which can be highly beneficial to large supply chains.

Enterprise resource planning refers to organizations using special software to manage daily business operations on the admin side of things. ERP software can offer solutions for supply chain operations, accounting, customer service, project management, risk management, and purchasing. For highly robust organizations, an ERP Module may be the right fit.

Warehouse worker and manager taking warehouse management course; what is a wms

3. Cloud-Based Platform

For fast integration, and added convenience, a cloud-based platform is going to be the best option. Cloud technology in the warehouse brings a load of benefits such as increased security, less IT maintenance, and a lower cost. Because cloud-based systems run on a server and system outside of their organization, the integration and management of the WMS become much easier and cheaper.

On-premise systems require far more work than cloud-based systems when it comes to implementing the platform within existing technology and supply chain steps. Businesses would also save money on having an outside IT team manage their systems, rather than in-house or bringing in an outside team.

Other critical features of a cloud-based platform include:

Cloud-based platforms will often be chosen and used by third-party logistics, as they already outsource much of their warehouse operations. The cloud can help tie together all aspects of their business in one easy-to-use format. So, if you are a 3PL Warehouse Manager, look into these types of WMS.

cloud based inventory management; what is a wms

4. Supply Chain Module

WMS software helps fulfillment services to manage their basic warehouse operations like picking, shipping, and receiving, as we’ve discussed. But, those are only a small piece of the puzzle that makes up the supply chain. This is where a Supply Chain Module comes in.

On top of providing management of common warehouse management tasks, a supply chain module can also feature customer service capabilities, vendor management, transportation management, material handling, inventory control, improved user interface, and customer relationship management. 3PLs will often utilize this supply chain management system in addition to other warehouse management systems to check off their best practices checkboxes.

warehouse low quantity alerts

What is the Best WMS System?

As you can see, it truly depends on many factors to choose the best WMS system for you and your business. Small operations wanting something simple to help them organize their warehouse may find a standalone system to be their best option. Larger 3PL companies who want to grow their warehouse into a bigger enterprise may find the ERP Module to be the best for them.

We believe that as the world becomes more and more efficient in utilizing technology, shifting to a cloud-based platform could be huge to continue to adapt and thrive in the ever-changing market. Expectations for turnaround times and fast results are higher than ever, especially in the days of Amazon Prime and 2-hour delivery windows. A cloud-based integration like Extensiv's warehouse management solution can give results and updates in real-time. Being able to do that can increase production, shipping times, and boost customer experience.

Not to mention, finding a WMS that has capabilities to utilize multiple mobile devices can enhance your warehouse by increasing production workflow and making things easier overall. When choosing the best WMS system, a business should look for the following attributes:

  • Logistics management
  • Value-added services such as custom labeling
  • Cycle counting
  • Multi-channel fulfillment services
  • Real-time analytics
  • Warehouse automation
  • Inventory management

Contact Our Team For A FREE Demo Of Extensiv's warehouse management tools!

For a valuable software solution to streamline your warehouse operations, do your research, and make sure you are getting the best-suited software that can integrate within your business. We recommend Extensiv's warehouse management solution for a robust series of applications to streamline your warehouse operations. You can contact us to get a FREE DEMO, here. 

Written By:
Matt Rickerby

Matthew Rickerby is the Director of Digital Marketing at Extensiv, the leading solution for multichannel, multi-warehouse D2C brands. For the past ten years, he’s covered ecommerce topics ranging from conversion rate optimization to supply chain management.


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