Warehouse Management Software (WMS) – ERP

Warehouse Management Software ERP
Warehouse Management Software ERP

What is Warehouse Management?

Warehouse Management covers the tools and techniques to handle the plan, administer, execute, track and report the activities conducted in one or more warehouses that belong to an Organization. Warehouse management covers the ‘Flow’ of material in an Organization. A traditional warehouse handles the following activities.

  • Material planning
  • Material receipt and quality inspection
  • Putaway of materials received to specified locators
  • Move materials to the production floor
  • Pick and release the materials to dispatch staging area
  • Physical inventory count and adjustments
  • Cycle count and adjustment
  • Obsolescence

What are Warehouse Management Challenges?

Three aspects make Warehouse Management complex. A large number of items, a large number of transactions, and the manual effort required to maintain warehouse discipline. Depending on the industry, the number of items may be anywhere from a few thousand for the manufacturing industry to hundreds of thousands for wholesale distributors and retail industry or a third-party logistic (3PL) service provider.

In some cases, the correct definition of items may be important, like in the manufacturing & wholesale distribution industry, while Item definition is incidental in a 3PL service provider.


A large number of transactions characterizes a typical warehouse. There will be thousands of items to be located on a single day, picked, grouped into pallets, and then loaded onto the trucks. It is almost impossible to track and perform error-free transactions on such a scale manually.

The final aspect is the manual effort required to maintain warehouse discipline. Each item or a group of items has to be tagged to a specific location in the warehouse. On receipt of items, they have to be placed (put away) in the correct location. They have to be picked from the same location to meet the demand for the items.

Usually, most businesses prefer to pick past items ahead of newly received ones. But they need the options to follow either FIFO (First In First Out) or LIFO (Last In First Out) depending upon the type of product, market needs, and unit cost. To avoid stock out, the system needs to generate timely Internal warehouse requisitions. Finally, warehouse items should be continuously monitored for shelf life and obsolescence.

What is Warehouse Management System (WMS)? What are the types of WMS systems?

A Warehouse Management System / Software, WMS in short, is software that supports warehouse activities’ efficient performance. A good WMS Software should be industry-specific and handle the processes typical of that industry. In general, there are three types of WMS Systems.

Standalone WMS Systems:

These independent WMS systems do not integrate with any other Organization applications. This will be good for companies in the MSME (Micro, Small and Medium Enterprises) with less process complexity. The company may have to create both inbound and outbound integrations to tie the WMS to the receiving and dispatch processes.

WMS Systems integrated with the Supply Chain Management (SCM) Application:

Here WMS system is integrated with the company’s SCM processes. WMS integrates with Procurement applications on the inbound side and with Order Fulfilment applications on the outbound side. This may be useful for companies with complex Supply Chain operations.

WMS System as a part of an ERP (Enterprise Resources Planning) Application:

WMS is integrated with SCM Applications that integrate with an ERP Application. In this case, you have a seamless integration between all the business processes in the Organization. This may be suitable for large companies with multiple, geographically separated Warehouses and complex supply chains.

What are the Essential Features of a Warehouse Management System (WMS)?

Irrespective of its type, a good Warehouse Management System should support most of the features listed below:

  • Item definitions
  • Material receipt and putaway
  • Material Pick
  • Pick Wave
  • Material Returns
  • Min-max planning
  • Barcode
  • Easy integration with SCM
  • QR Code
  • RFID
  • Cycle Count
  • Physical Inventory Count
  • Voice support
  • Visual guidance
  • Stock Locators
  • Cross-docking

What is ERP for Warehouse Management?

An ERP for Warehouse Management System is an ERP with WMS integrated into the application. The main advantage is the single source of truth. The items have to be defined once in the inventory management application and used in the WMS system. Besides, modern Cloud ERPs support ADC (Automated Data Capture) Devices like Barcode and QR Code Scanners, essential for the WMS user.

Another benefit of integrating WMS with ERP is that with ERPs moving to the cloud (Cloud ERP) for software and hardware infrastructure management, WMS shifts to the cloud (Cloud WMS system), reducing the Organization’s overall costs. Also, the Organization can enjoy the other benefits of the Cloud like scalability and advanced security.

There could be a disadvantage that the integration may not support the unique WMS requirements of the industry. Process changes could be difficult.

best warehouse management software erp
Warehouse Management Software ERP

How to Choose a Warehouse Management System (WMS) integrated with ERP?

  • WMS Warehouse Management System should meet the industry requirements: Each industry group and industry has its own unique requirements from WMS. Cross-docking, Barcode integration, QR Code Integration, RFID Tagging, advanced material planning, including reorder point planning, and Economic Order Quantity (EOQ) could be typical and unique requirements. It is important that the ERP Application selected should meet the industry requirements.
  • Long-term Scalability: WMS complexity increases exponentially with business growth. So any ERP for WMS should be able to handle this complexity as the company grows.
  • Peak Load Handling: Any ERP System should be able to handle the sudden surge in load on the Warehouse.
  • Seasonal Load Handling: The customer should be able to adjust WMS load based on seasonal demand.
  • ADC Integration: The ERP System should support barcoding at a minimum.
  • Data security: WMS systems handle sensitive data, and data security is an important criterion when selecting an ERP for WMS.
  • Adaptable to new technology: advanced technologies will drive the supply chain of the future. A supply chain ERP vendor should provide the best technology currently available and help adapt to any new technology that will mature soon.
  • Modular: The organization should procure WMS systems separately and later progressively and seamlessly integrate the same with the ERP Application.
  • Easy to use: The system should be intuitive and logical. A user who is not technologically savvy should be able to use the application and perform transactions.
  • Value for money: The application must meet the critical business requirements at the company’s lowest cost.

What are the Benefits of an ERP for Warehouse Management?

  • Improved Inventory Accuracy
  • Reduction in order fulfillment lead-time
  • Better warehouse space utilization
  • Improvement in warehouse productivity
  • Reduction in different costs, including shipping costs, labor costs, scrap costs, cost of obsolescence, etc.

What is Top Warehouse Management Systems ERP?

  • Ximple WMS integrated Cloud ERP is the ideal choice if you are in the wholesale distribution business. The solution is ideally architected to support the wholesale distribution business niche. It serves the WMS needs of electrical distributors, plumbing distributors, industrial distributors, pharmaceutical distributors, and HVAC distributors.
  • Manhattan WMS | Oracle WMS | Pyramid WMS | Sage WMS | SAP WMS | IRMS WMS | PKMS WMS | Fishbowl WMS

If you are looking for a low-cost WMS with limited support for your small business, many other free and open-source warehouse management systems are on the market. It is only suitable if you have competent, skilled, and dedicated team members to make it work in your business. One should NOT understand the challenge to make open source and free WMS work for your business.


Warehouse Management Software of the Future (2021 -2025)

Recent advances in technology have implications for Warehouse Management too. Advanced GIS systems can lead to intelligent and optimal pick paths. Warehouse systems integrated with Voice technology (Alexa, Siri, and Google Assistant) can guide the picker to the warehouse’s right stock location. Paperless picking using ADC devices is now more of a norm rather than an exception.

Advanced technologies automatically recommend stock locations for material put away leading to better inventory optimization. IIOT devices integrated with WMS systems can direct the user to stock with the lowest shelf life so that low shelf life products are aggressively pushed through sales promotions. IIOT can deliver early warnings of an impending stock-out situation.

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