Inventory. Do you know the exact quantity, location, and expiration date?
A warehouse is a space where it is important to have an overview of goods and their movements. It is bounded by the receipt of goods on one side and their release on the other. In between, it is necessary to store, group, reorganize, and fulfill orders efficiently with regard to expiration and obsolescence.
Warehouse Management System (WMS)
A Warehouse Management System, or WMS for short, is specialized software used to manage warehouse operations and processes. This software allows you to manage inventory, track goods movement, and optimize storage and distribution. Some of the general functions grouped under WMS include:
Inventory management and accurate record-keeping
WMS allows for accurate tracking of goods in stock, available items, items issued, and items returned, including quantities. This includes receipt of goods, movement of goods within the warehouse, and the actual issuance of goods. By easily monitoring the quantity of individual items, WMS facilitates inventory management, which can also be automated. This reduces the risk of shortages and potential losses.
Planning and organization
WMS allows for the planning and organization of warehouse operations, such as receipt of goods, storage, issuance, movement of goods, and inventory.
Optimization of storage
WMS allows for the optimization of goods storage through efficient placement, reducing storage and distribution costs while keeping track of the location of individual items.
WMS, through LMS, allows for the planning and management of warehouse staff, performance monitoring, and reduction of errors in the warehousing process.
Analysis and reporting
WMS allows for information gathering on warehouse operations, how individual items are utilized in stock, how they move, and more.
Integration with other systems
WMS can be integrated with other systems, such as ERP, CRM, and others, to ensure complete automation of warehousing processes and minimize manual labor.
- Monitoring of regulatory compliance for warehousing spaces (health and safety regulations, etc.)
Overall, a properly integrated and used WMS helps to improve the efficiency of warehouse operations, minimize errors and losses, and reduce storage costs.
The efficiency of the deployed WMS depends on the proper setup of warehouse processes. During storage, many events occur that can be measured directly or indirectly at any stage. It is necessary to consider when a particular operation is necessary and when it is not. Which operations can be simplified, replaced, or automated. It is also not suitable to bend the functioning of the warehouse to the functions of WMS - the technology should be adapted, not the people. Therefore, please take the following example of functionality with a grain of salt - the functions and integration of WMS may differ for each warehouse.
Example of functionality
Let's imagine that we have a large warehouse with thousands of fast-moving goods items. We distribute these goods in small pieces to a large number of customers.
Now, for simplification, imagine that each item in the warehouse is represented by a token (What is a token? A digital abstract visualization of the item and its flow through the warehouse - see the green circle in the tomato video from Flexsim). This token is created when a physical item enters the warehouse and is deleted when it exits. Meanwhile, the item is handled differently (change of location, status, etc.), and all of these changes are held within the information assigned to that token. The number of tokens equals the number of items in the warehouse. Together, they give us a digital twin of the warehouse. While many things can be complicated in the physical space, only changes in properties recorded for the token occur in the digital image. Time (duration) can also be assigned to this. Although it may seem too simple, it perfectly fulfills its function. And WMS works similarly. It aggregates item data and uses smart functions on top of them.
The point of efficient use of WMS is to keep the state between physical items in the warehouse and the tokens that represent them in the digital image of the warehouse synchronized - ideally without the need for additional tasks by employees.
Input and output from the warehouse management system (WMS), and subsequently the warehouse.
The most basic output from the WMS is information on the quantity of items in stock. This quantity is determined by the difference between the amount received and the amount issued, possibly reduced by write-offs.
Many warehouses rely on information from suppliers and the flawless work of their employees (performing manual counting checks) during receipt and issuance. In these cases, it is only a matter of time before the item counts in the WMS and on the warehouse floor no longer match. To prevent this, it is advisable to include at least simple automated control mechanisms, such as weighing or checking the quantity of items, in the input and output of warehouse items.
Receipt of goods and their storage
The receipt of goods is controlled by delivery notes. The task of employees during receipt is to check the goods, take them over, determine their storage location in the warehouse, and transport and place them there.
By receiving the goods, they enter the warehouse inventory. If we want to manage them reasonably, we need to keep information at least on specific quantities and the location of specific goods, as well as free capacities of warehouse locations (slots). In other words, we need to apply a tracking mechanism.
Each type of item in the warehouse is (or can be) easily identifiable through a barcode (GTIN) placed on its packaging. These codes are unique to each type of product (different packaging sizes, colors, etc. require different codes). If you are a reseller, the issue of barcodes has already been solved by the manufacturer of the product and all you need to do is receive and upload the barcodes of each product into your WMS. If you are a manufacturer distributing further, unique barcodes can be purchased and registered with information about your product in the international barcode database. Barcodes and QR codes can be created for internal purposes. Information related to a particular product can be retrieved from WMS and updated through the scanned code.
Handheld barcode scanners are an integral part of most warehouses. In addition to specialised devices (terminals), it can also be an app on your phone. However, they are not always welcome during the actual processes. Manual scanning of the barcode and inputting the action is a relatively quick procedure, but it is still an additional step that does not solve errors made by workers (entering the wrong quantity, etc.). It is always good to consider whether there are better ways to work with specific products other than using scanners. Often, there are. Scanners are mainly used for verifying the products being picked, inventory, and other warehouse-related tasks, rather than being a mandatory step in processing orders. Especially when order processing is under the control of WMS and its connected systems.
In larger warehouses, individual items are usually stored using transportation containers, such as pallets. Using WMS, specific types of products contained in each pallet can be assigned to that pallet. The location of individual items in the warehouse can be worked out using a multi-level structure, where the position of the item is linked to the position of the pallet, and the position of the pallet is linked to a specific place in the warehouse.
A chip scanner is used to easily redefine items associated with a particular pallet.
Product placement within the warehouse
Tracking the current location is beneficial if we use a dynamic slotting system or FIFO item processing method, which is necessary for items with expiration dates. For example, when using bin shelving systems, we always keep items with the closest expiration dates on the most accessible shelf and when a particular slot is emptied, we remove the pallet from the higher shelf to this one. Assigning warehouse slots to specific items can be fully controlled by WMS from the beginning.
If we change not only the shelf but also the location within the bin shelving system, tracking pallets may be useful as mentioned earlier. This can be achieved through extending common pallets, for example, with an RFID chip (and a reader for the shelves) or another technology, through which pallets automatically inform WMS of their location in the warehouse and the worker does not have to manually enter these changes into the system. If the WMS or other system automatically calculates the optimal placement of products in the warehouse (for example, based on predicted demand), the RFID chip can authorize the movements and placements through the readers automatically, without requiring confirmation from workers.
Once a request for product picking arrives, the system should already have verified that the product is in stock. Additionally, WMS should inform the worker of the product's location and how to best pick and prepare it for shipment.
Warehouse management system (WMS) can also help manage workers in the warehouse through its own or expanding LMS modules. For example, it can record the time spent by a worker during product picking and use this information to plan workforce and optimize work procedures.
Thanks to WMS, there is an overview of which products are in the warehouse, where they are located, and how they are stored. Furthermore, it allows tracking the movement of products and facilitates planning of warehouse operations.
How much does a warehouse management system cost?
The price of a Warehouse Management System (WMS) can vary significantly depending on many factors such as the scope of functions, number of users, warehouse size, operational complexity, used technologies and more.
The cost itself consists of expenses for software and then integration and other technologies that are necessary for the most efficient operation of WMS. However, you don't have to worry, there are also entry solutions such as our WMS for starting warehouses, e-shops, shops, and businesses. You only need a mobile phone for it, nothing else. In such a case, your phone serves both as a barcode reader and a computer for an overview and management of warehouse stocks. If you want to participate in the initial operation, let us know!
Acquiring a WMS can be a relatively high investment, but if implemented and used correctly, it can lead to significant cost savings in storage costs and increased efficiency of warehouse operations. Therefore, the selection of a WMS should be considered a strategic decision and thorough cost-benefit analyses and assessments should be conducted.
How to choose the right WMS?
Choosing the right Warehouse Management System (WMS) is crucial at the beginning of warehouse solution implementation. As the warehouse and inventory grow, the WMS gradually integrates with other systems and technologies, and with each additional connection, changing the WMS becomes a more complicated and costly matter.
Here are a few steps that need to be taken when selecting a WMS:
Define your requirements
Consider what functions you need from the WMS to meet the needs of your company, not just now but also in the future, taking into account your business plans. For example, what functions do you require, what types of goods do you need to store, how often does inventory move, and what level of process automation is suitable for you?
Research integration options and their availability.
What is the provider of the WMS open to? What does connecting to the API entail? How much will it cost, and what data will you have access to in this way? You need API integration anytime you want to use data from the WMS outside of the WMS system, such as informing the number of goods in stock on an e-shop.
Access to data from the outside gives you the ability to work with data in any way beyond the capabilities available in the WMS itself. Another important question is who has control over the data in the WMS, who owns it, and how can it be transferred to another WMS if necessary?
Set a budget
Decide how much you are willing to invest in the WMS. Prices may vary depending on the range of functions and number of users.
Explore the market
Explore different WMS on the market and compare their functions, prices, and reviews from other users. You can also seek recommendations from other businesses in your industry.
Request a demo
If you have selected several WMS, request a demo version to see how the system works in practice. This will allow you to better understand which system suits you best.
Consider integration with your ERP
If you already use an Enterprise Resource Planning (ERP) system, consider the possibilities of integration with the WMS. Integration can help facilitate the flow of data and processes between systems and enable more efficient management of warehouse operations.
Consider support and service
Check what support and service the WMS provider offers, including the level of support, availability of technical personnel, and how they handle issues.
Considering these factors and investing time into selecting the right WMS can help improve the efficiency of your company and reduce costs associated with warehouse and logistics management.
There are a large number of Warehouse Management Systems (WMS) available in the market. The purpose of this article is not to promote or mention any of them. At Vrealmatic, we approach WMS differently - we do not provide software, but simplicity and peace of mind. We are more of an integrator and guide. Regardless of the chosen software, we always strive to minimize the tasks that need to be performed within warehouse management.
We use and develop smart solutionsthat we integrate into the layer between the physical items in the warehouse and any WMS systems. Always with cost in mind - we deliver smart and simple solutions that enable automatic and ideally flawless data fulfillment of WMS systems. Similarly, we are able to connect to WMS systems from the other side and use data from WMS for performing dynamic calculations, simulations, and functions that are not available in those WMS. These features are accessible through VStation web interface.
In the case of specific requirements, we are able to deliver custom solutions.