Warehouse management system
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A warehouse management system (WMS) is a software application designed to support and optimize warehouse functionality and distribution center management. These systems facilitate management in their daily planning, organizing, staffing, directing, and controlling the utilization of available resources, to move and store materials into, within, and out of a warehouse, while supporting staff in the performance of material movement and storage in and around a warehouse.
Warehouse management solutions are primarily tactical tools, purchased and used by businesses to satisfy the unique customer demand requirements of their supply chain(s) and distribution channel(s), when the inventory and workload is larger than what can be handled manually, with spreadsheets. Motivation to purchase generally comes from a need to support sales growth or improve performance, and occasionally both.
A WMS uses a database configured to support warehouse operations, containing detail describing a variety of standard warehouse elements including:
- Individual stock keeping units (SKUs) that are handled and stored, e.g., weight, dimensions, case pack, automatic ID labels (bar codes, etc.), and inventory by location with manufacture date, lot code, etc. SKUs may include basic materials, fabricated parts, assemblies, and industrial and consumer finished goods, etc.;
- Warehouse storage locations, e.g., individual location number, picking sequence, type of use (picking, reserve storage, etc.), type of storage (each, case, pallet), location size or capacity, storage restriction (flammable, hazardous, high value materials, outdoor, etc.), etc.;
- Dock doors, e.g., individual number, etc.; and
- Expected labor productivity rates by function or activity, e.g., cases picked per man-hour, etc.
Daily management functions include
- Planning - finalizing the daily plan for receiving dock activity, selecting the workload/orders to be processed in the day or shift, (this may also be done by the business system), and calculating an estimate of the labor and vehicles required to pick and ship the orders to ensure the staffing is appropriate, and to notify carriers regarding to load and depart to meet customer requirements.
- Organizing - sequencing the orders to be picked. Organizing orders for picking can be accomplished in many ways, meeting the needs of the user. The primary objective is to be intentional, and not to pick the orders in the sequence in which they were received unless the company wants to pay a carrier make sense for transportation and delivery. The initial way of organizing was called Wave Planning or Wave Picking, with two objectives, a. to minimize need for dock staging space, by having orders arrive at the shipping dock in trailer load sequence, and b. to create an order of flow that will support monitoring the progress through the day and eliminate/reduce last minute requests for overtime or delay of carrier departure, etc.
- Staffing - assign staff to work functions and areas, by Wave, to minimize staging.
- Directing - ensuring the documented processes and procedures are embedded in the WMS and are consistently applied, used and appropriate for the nature of the work and service level intentions of the company (e.g., International Standards Organization 9000 (www.iso.org)). This function may also be used to divide individual orders into logical work units and the ability to assign them to separate individuals potentially for simultaneous performance, consistent throughput requirements and physical layout, e.g., separating individual case picking from each unit picking, and individual pallet load picking, to improve productivity and support Control.
- Controlling - providing milestones for management to monitor progress through the day, providing the opportunity to respond to problems in a timely way, and report data for performance analysis.
Warehouse management systems support warehouse staff in performing the processes required to handle all of the major and many minor warehouse tasks such as receiving, inspection and acceptance, put-away, internal replenishment to picking positions, picking, packing, value added services, order assembly on the shipping dock, documentation, and shipping (loading onto carrier vehicles). A warehouse management system also helps in directing and validating each step, capturing and recording all inventory movement, and status changes to the data file.
A warehouse management system usually represents the central unit in the software structure of a warehouse. The WMS receives orders from the overlying host system, mostly an ERP system, manages these in a database and, after appropriate optimization, supplies them to the connected conveyor control systems.
This becomes clear when you look at the processes necessary for e-commerce: as soon as a customer places an order on a website the information is passed along via the business host computer (mostly an ERP system) to the WMS. All necessary steps to manage this order, pick the ordered items, etc., are then processed within the WMS. Afterward, information is sent back to the business host computer to support financial transactions, advance shipping notifications to customers, inventory management, etc.
A modern WMS will connect to a variety of communication technologies (radio frequency), automatic ID technologies (barcode, RFID, etc.), mobile computers, and occasionally automated material handling (conveyors and sortation) and storage equipment (carousels, automatic storage and retrieval, etc.).
Warehouse management systems can be standalone systems, part of supply chain execution suites, or modules of an enterprise resource planning (ERP) system. Depending on the size and sophistication of the organization, warehouse management can be as simple as handwritten lists or spreadsheets using software such as Microsoft Excel or Access, as well as specialty WMS software systems.