When J.C. Penney created the first-ever real-time warehouse management system (WMS) in 1975, it changed the game of how a business keeps track of the inventory. By reducing the time spent looking for a product, this technology brought ways to help businesses:
- compute inventory reports in seconds
- set up shipping labels for deliveries
- automate customer billing hours
However, warehouse management dates back to railroads and telegraphs. In long-distance trades, businesses used to send telegraphs to the factories when the stock ran low, introducing the first-ever traditional inventory management system.
Today, that need for communication has evolved into an integrated, automated process. Managing inventory now seamlessly connects all parts of the supply chain. Every detail stored in a centralized cloud system is now accessible in real-time, eliminating delays and manual errors.
Hence, your business needs to build the best warehouse management system that allows you to track, sort, and prepare the stored products to ship them for delivery to customers.
Let’s explore this concept further in this blog and understand how these systems save thousands of dollars and hours by simplifying warehouse operations.
What is a Warehouse Management System?
Implementing a warehouse management system (WMS) with real-time analytics allows each item to be tracked accurately. It automatically scans, logs, and tracks each item of inventory in a warehouse to tell you where they are stored and predict what’s in stock and what isn’t, taking the guesswork out.
Hence, storage needs to align with what is in stock, where it is placed, and how quickly it can be shipped. However, in today’s world, managing a warehouse isn’t as simple as stacking shelves with items.
Whether it is home appliances in aisle 4, rack B1, or cleaning products in aisle 7, rack C4, every product that arrives or goes out needs to be tracked. Why? In today’s world, finding the right products at the right time is essential for quicker deliveries and fewer customer complaints.
Suppliers and customers form a busy marketplace where products are brought in and sold to customers every day. If all these products are stored in small rented storage spaces, it can create chaos since the spaces are scattered and items are unsorted.
Products will be lost, damaged, or delivered late. Shipping product orders on time will also suffer, leading to decreased sales and missed opportunities. Your business will also find it difficult to stock up on products on time and lose them to their competition.
Here’s how warehouse management software addresses these concerns:
- If a popular item is out of stock, customers are told to reorder in advance to reduce costs, errors, and returns.
- It directs staff where to pick up an item, generates shipping labels, and provides packing instructions.
- It notifies the customer about their package updates with tracking information.
85% of the reasons for failure are deficiencies in the systems and process rather than the employee. The role of management is to change the process rather than badgering individuals to do better.
Types of Warehouse Management System
Before the world’s first real-time warehouse management software, NASA had already used IBM’s computerized information system to handle order entries in 1967.
In 1974, UPC barcodes were introduced to store all the product-related information, making it easier to track and count each inventory item. In 1988, Walmart added a dock scheduling system to its distribution center to reduce distribution costs.
Hence, each WMS has played a pivotal role in aligning all supply chain management tools. Similarly, the modern WMS is divided into different types. Some offer real-time tracking, while others filter data to track performance indicators and even help prevent overstocking and wastage. Let’s understand them in detail:
Standalone Systems
Standalone WM systems are independent software specifically designed for all the functions related to a warehouse. Hence, they are quite budget-friendly, which makes them beneficial for small and medium-sized enterprises. They don’t need extensive integrations or additional software since they focus only on tracking, picking, packing, and shipping inventory orders.
Things to Consider:
- Standalone WM systems fit perfectly in the range of USD 4,000 to USD 10,000.
- They offer tailored features like inventory, order, and labor management.
- They have limited integration and scalability.
Top Standalone WMS Examples: Fishbowl Inventory, Netsuite WMS, SkuVault, ShipHero
Cloud-based Systems
Cloud-based WM systems are highly flexible, scalable, and accessible, offering unmatched optimization compared to on-premises systems. They can be accessed from anywhere and from any device.
Hence, if your business operates in multiple locations and expects to keep growing, the best warehouse management system is a cloud-based system. You also don’t need heavy IT infrastructure, helping you reduce deployment costs and scale your resources as needed.
Things to Consider:
- They are highly secure, providing encryption, access control, and regular audits.
- They have high resilience when facing connectivity issues and can function even if you lose Internet connectivity.
- They can help your organization save up to 46% of costs.
Top Cloud-based WMS Examples: Blue Yonder, Korber, Oracle, Manhattan Associates
Integrated ERP Systems
Integrated ERP (Enterprise Resource Planning) systems are warehouse management software systems that can be easily combined with other software, such as Human Resources (HR), Customer Relationship (CRM), and finance.
ERP systems enable your business to share data across multiple departments and automate tasks. It is ideal for large organizations, where you can get a unified platform to manage supply chain management tools.
Things to Consider:
- ERP systems are feature-rich but might lack warehouse-specific features.
- They can help your organization improve the efficiency of up to 95% of tasks.
- They have a highly complex implementation process with high maintenance costs.
Top Integrated ERP WMS Examples: Oracle NetSuite, SAP Business ByDesign, Microsoft Dynamics 365 Business Central, Odoo.
Open Source Systems
Open-source warehouse management software systems are known for offering high customization. Since your business has access to the source code, you can tailor their features to your exact requirements. They also don’t have any licensing fees, making you pay less upfront costs.
Things to Consider:
- These are ideal for businesses that need a high level of customization.
- Businesses with in-house technical expertise will find it flexible enough to add and modify the features according to their preferences.
- They allow you to focus more on spending your business resources on implementation.
Top Open Source WMS Examples: OpenBoxes, myWMS, Dolibarr, OpenWMS.
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Key Features of Best Warehouse Management Software
A WMS carries out all the operations related to sending and receiving, picking and packing, and shipping and storing. However, the entire process of managing the supply chain management tools is even more complex because you have to deploy numerous features.
Depending on the type of retailing and logistics processes, you can make your inventory management smoother and faster. Let’s understand some of the key features offered by the best warehouse management system:
Inventory Management
Compared to traditional inventory management systems like spreadsheets, which have an accuracy rate of 63%, WMS systems driven by automation help you achieve 99% accuracy. This makes building a WMS with an inventory management feature crucial for tracking and monitoring assets in real-time.
Why Build It: Whether an item is in transit or sitting on a shelf, you can track it using automatic identification and data capture (AIDC) technology. The most common use of AIDC is RFID tags or barcodes to count product cycles and get insights into vendor performance.
Order Fulfillment
Barcodes have increasingly become one of the fastest-growing technologies, with 67% of warehouses using them to make operations easier. Hence, it’s crucial to keep close tabs on which inventory item orders are going out and coming into warehouses.
Why Build It: Building the order fulfillment feature signals a pivotal role for efficient product scanning, flow, and cartonization. It also prevents your business from losing customers due to errors that lead to overselling and stock outages.
Reporting and Analytics
Warehouses need to run at optimum levels to ensure high turnover rates and stay ahead of fierce competition. To achieve this, automating how you create your warehouse reports is essential. The complete log of inventory items tells you a lot about a product’s availability, weights, sizes, bundles, assigned personnel, quantity, costs, and duration, among other things.
Why Build It: Labor costs account for almost 65% of total warehouse costs, and many businesses use pallets and forklifts. For businesses with hundreds and thousands of daily orders, creating warehouse reports like picklists, empty bin reports, and on-hand inventory needs automation for accurate shipping information.
Scalability and Customization
Warehouses grow as businesses grow, and you would need to scale your labor team, bring in more trucks for deliveries, and even add robots to automate daily tasks. Hence, your warehouse management software should be scalable and customizable to track performance, schedule and optimize shifts, manage the flow of goods, and fulfill orders faster.
Why Build It: By 2024, almost 30% of warehouses have adopted robotic automation, which will increase productivity by 15% till 2025. Adding custom features to link online stores is essential for accurate and faster order fulfillment and seasonal growth.
Mobile Devices Integration
Mobile devices can boost warehouse workers’ productivity by allowing them to access real-time information on the go. This minimizes paperwork and increases workflow speed, making it easier to access reports, statistics, notifications, and in-transit items.
Why Build It: Resource allocation is crucial for warehouse managers to gain real-time insights into operations, and integrating digital devices can increase customer communication by 42%. Mobile devices offer enhanced visibility by keeping them informed at all times about stock levels, order pickups, deliveries, and entire order processing.
Voice-picking Technology
Once the batches are completed, warehouse workers can send voice-initiated commands to tell when and where to pick up and deliver packages. These are called voice-picking devices and are usually headsets or voice terminals capable of receiving voice instructions from a WMS.
Why Build It: Pick-to-voice technologies are said to reduce order-picking errors by up to 67%. Since manual picking orders account for more than 50% of the time spent picking orders, this feature is highly useful.
What are the Benefits of the WMS?
Running a warehouse isn’t easy for businesses that have many essential tasks to focus on—they have to process orders quickly, keep customers happy, and maintain quick turnaround times.
The best warehouse management system makes sure that whenever items go out or come in, all the processes are in perfect sync and accounted for so that nothing gets chaotic. Let’s understand how:
Faster Inventory Turnover
Many inventory items are perishable or have date restrictions. A WMS effectively does this by identifying which items should be sold first and suggesting appropriate item placement, optimal travel path, floor plans, and the right place for equipment.
For example, Siemens Energy utilized SAP WMS to centralize and automate their customer outage reports by developing 200+ smart forms, which led them to plan 110+ outages.
Effective Labor
Warehouses need effective labor management to ensure each employee’s schedule is created and managed in a timely manner. A WMS facilitates this by creating schedules based on skill levels and proximity to create safe and organized environments.
For example, a Bolivian top pharmaceutical retail company, FarmaCorp, implemented Oracle’s WMS Cloud to streamline in-store inventory management for a high-volume store. It helped them minimize internal resources, and their staff could effectively manage the store’s products.
Optimized Supply Chain
Mismanaged supply chain management tools and processes can soon turn warehouses into places of misplaced items, incorrect stock levels, and increased labor costs, leading to delayed deliveries. A WMS optimizes them in a timely manner and suggests the optimal travel path so that your warehouses don’t suffer space issues and improve workflow.
For example, Amway, the world’s largest direct-selling brand, utilizes Blue Yonder WMS to manage its supply chains across 3,88,000 SKUs, helping it recognize demand shifts early.
Increased Speed of Orders
Receipts and deliveries are an everyday operation in warehouses, which can often create duplicate orders and increase unnecessary costs. Warehouse management software streamlines these operations by automating the process of handling large order volumes. It also shares data with ERPs and transport management systems to reduce errors and increase order speed.
For example, Walmart invested $520 million in partnership with AI robotics firm Symbiotic to develop and enhance online pickup and delivery systems.
Enhanced Customer Service
Better customer relations are directly linked to vendor relations when managing warehouses. With a WMS, your business can enhance customer service by managing your fleet with accurate order fulfillment, faster deliveries, and fewer inaccuracies. It also helps you build brand loyalty and reputation by reducing wait times for suppliers at docks and bays.
For example, Lineage Logistics utilized automation and data-driven efficiencies in their cold-storage warehouses to enhance customer service.
The 8 Best Warehouse Management Systems
Depending on your budget, WM systems range from cloud software to fully customizable. While cloud-based software is accessible from anywhere through web browsers, fully personalized WMS usually involves building interfaces and handling more work.
Below, we have listed out the top 8 best warehouse management systems to help you make your choice easier when choosing one:
SkuVault
SkuVault provides a feature-rich warehouse management software with inventory management. It is ideal for retail and wholesale businesses looking to take advantage of product quality control and picking modules. For multiple warehouses, your business can integrate it with e-commerce and customer billing platforms.
Key Features:
- Workforce and load management
- Barcode scanning and tracking
- Shipping management
- Wireless connectivity
- Real-time analytics
Cin7
Cin7 is a wholesome solution for managing warehouse inventory and optimizing operations of any scale. It offers Cin7 Core for small businesses to handle warehouse processes across multiple channels. Another module, Cin7 Omni, is for large businesses that want to upgrade their inventory management.
Key Features:
- Third-party logistics integrations
- Electronic Data Interchange (EDI)
- Back-end warehousing and shipping
- Stock reordering
- Product recall management
Brightpearl
Brightpearl is a highly intuitive cloud warehouse management software that streamlines both traditional and online retail sales. It is designed for fast-growing businesses and integrates seamlessly with other supply chain management tools.
Key Features:
- Stock level tracking
- Barcode scanning
- Batch and expiry tracking
- Automated returns management
- Order routing and shipping labeling
Fishbowl Warehouse
Fishbowl is a highly efficient cloud-based platform that offers robust order management tools for different operations. Whether your business has a physical warehouse, mobile inventory, third-party logistics, or drop shipping – the Fishbowl Drive feature offers seamless management of sales orders, return orders, and credit returns.
Key Features:
- Advanced automated purchasing
- Reorder management
- Shipping management
- Vendor management
- Purchasing and approval management
Blue Yonder
Blue Yonder is an intelligent warehouse management software that offers solutions for supply chain management and omnichannel order fulfillment. With this WMS, your business can seamlessly integrate, anticipate, modify, and complete all shipment processes from production to the end user.
Key Features:
- Equipment and personnel management
- Dock door control
- Labor tracking
- Real-time workflow management
- Travel path optimization
Blue Link ERP
Blue Link ERP is comprehensive software tailored to plan enterprise resources. Its management features can improve customer services and inventory operations for wholesale and distribution businesses.
Key Features:
- Real-time inventory tracking
- Drop shipping and back orders
- Sale order quote generation
- Accounts receivable and payable
- Remote access operation management
Aptean
Aptean is a global provider of supply chain and warehouse management. Manufacturers and distributors can tailor its features to meet their unique needs, and it supports multiple warehouse locations with complex networks.
Key Features:
- Advanced barcode scanning
- RFID tracking
- Finance and production modules
- Demand forecasting
- 360-degree customer data view
ShipStation
ShipStation is popularly known for its integration features with multiple shipping platforms. As a leading shipping software, ShipStation simplifies shipping processes while providing integration with various sales channels. By speeding up order completion, it enables businesses to achieve the highest order accuracy.
Key Features:
- Seamless integration with Shopify, Amazon, and WooCommerce
- Integration of carriers FedEx, UPS, DHL
- Batch printing and labels
- Dropshipping and 3PL
- Order management mobile application
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Build a smart WMS equipped with AI, IoT, and robotics to enhance the precision with which you manage your inventory.
What are the Costs Involved in Implementing a WMS?
Implementing warehouse management software depends primarily on your business’s requirements. A cloud-based solution is a good starting point because it has low monthly rates and no maintenance and upgrade costs, which is a great benefit for small businesses and startups. However, large companies can expect to spend up to thousands of euros.
Let’s understand some of the major costs associated with its implementation:
Licensing and Implementation Costs
On-premise software can cost USD 2,000 to USD 2,00,000 with a one-time upfront payment for its license. However, a cloud-based WMS has a subscription fee model based on monthly usage per user and storage needs. It can cost USD 500 to USD 10,000.
Customization and Integration Costs
If you want a fully customizable solution, expect to spend around USD 5,000 to USD 40,000. Additionally, if you plan to integrate it with third-party software like ERP and e-commerce platforms, connecting it with them can add up to USD 10,000 to USD 75,000.
Training and Support Costs
Installing a WMS will include setting up servers and devices, which will cost approximately USD 30,000. Once installed, employees need to be trained for proper operations, which can cost another USD 5,000 to USD 10,000, depending on the number of users.
Maintenance and Upgrades
Many WMS require data transfer from legacy systems for proper maintenance, which can cost up to approximately USD 20,000. Further, annual maintenance requires spending at least 15% to 25% of license costs, with support fees ranging from approximately USD 15,000 to USD 25,000.
Additional Hardware Cost
Hardware costs for a WMS include a lot of additional equipment, such as label printers, barcode scanners, RFID devices, servers, and workstations. Adding up, all these costs will range from approximately USD 500 to USD 2,000 per device. Routers and switches will add an extra USD 8,000 to USD 10,000.
Future Trends in Warehouse Management Systems
With the advancements in warehouse management software over the years, automation is said to increase the demand for more efficient and accurate operations. Automated order processing is expected to offer a 25% gain in productivity and 30% efficiency in stock management.
Let’s understand some of the future trends:
AI and Machine Learning Integration
AI and ML will spearhead predictive analytics, helping warehouses anticipate demand better. By optimizing inventory levels and reducing overstock or stockouts they are the best alternatives for smarter resource allocation.
IoT-enabled Warehousing
IoT devices have taken the world of connected systems in warehouses to another level. Smart sensors and RFID tags provide real-time data on inventory location, temperature sensitivity, and movement across the supply chain to improve asset tracking even more.
Automation and Robotics
Autonomous mobile robots (AMRs) walking like humans in warehouses increase the speed of operations while reducing human errors. With robotic picking arms and automated guided vehicles (AGVs), they strike the perfect balance in tasks like picking, packing, and inventory replenishment.
Cloud-based Solutions
Cloud-based warehouse management software is the trendiest technology and continues to dominate due to its scalability, flexibility, and ability to support remote access. Businesses can scale operations easily and integrate with other systems while improving their cost efficiency and data accessibility.
Blockchain Technology
Blockchain technology offers the most accurate and transparent data tracking across all supply chain management tools. With a secure traceability system, businesses can build trusted relationships and a network of stakeholders, particularly for tracking high-value assets.
Integration with Autonomous Vehicles
The integration of self-driving vehicles and drones with modern warehouse management software streamlines the movement of goods across warehouses and distribution centers. This helps in better strategic planning and improves deliveries with reduced transportation costs.
Enhance Your Warehouse Management System with Moon Technolabs
Build a WMS that is fast as light, integrates seamlessly, and has the most accurate updates of your entire supply chain:
- Need to check stock levels and update items? It’s done in seconds.
- Want to automate shipping labels and pull tracking numbers? It’s just a click away.
- Need to generate customer bills for warehouse vendors? Automation handles it instantly.
Moon Technolabs is a leading enterprise warehouse management software development company that understands the challenges warehouses face in balancing speed, accuracy, and customer expectations.
Our expertise in developing custom WMS solutions ensures your business leverages cloud computing, AI, and IoT to ensure real-time visibility, accuracy, and agility.
Whether you want to build real-time logistics software with an integrated supply chain or deploy cloud-based systems for scalability, we design solutions that resolve inefficiencies and future-proof your operations.
Get in touch with our experts today!
Final Thoughts
Managing warehouses and inventory was once tedious and error-prone, relying on manual labor, disconnected systems, and outdated tools. Tracking inventory, updating stock levels, generating reports, and fulfilling customer orders required substantial time and effort, often leading to inefficiencies and inaccuracies.
However, today’s warehouse management systems (WMS) have completely redefined how warehouses operate. They can transform your warehouse into a hub of speed and precision, optimize workflows, and boost efficiency.
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