A warehouse management system (WMS) is software that is designed to support and optimize multiple elements of warehouse operations and distribution center management. As a major component of enterprise resource management, most types of WMS are comprehensive solutions that streamline warehouses' abilities to manage, record, measure, and concatenate:
- Order volume
- Inventory reorder levels
- Shipment schedules
- Delivery status
- Shipping history
- Sales data
- Marketing reports
- and more – all in real-time
Now typically, WMS implementation is customized to the unique requirements of an ecommerce business or fulfillment center's supply chains and/or distribution channels (especially when the related workloads are too large to reliably deal with via spreadsheets or other forms of manual input). In other words, they've traditionally been utilized by very large and complex operations. According to a study from the Warehousing Education and Research Council (WERC), 35% of the fulfillment centers surveyed said they currently do not use a WMS. But like all technology, WMS’s are becoming more affordable even for small-to-medium-sized ecommerce businesses thanks to the increasing variety of, not only providers, but WMS service structures like subscription, cloud-based, and Software as a Service (SaaS) models.
So, WMS are relevant to more businesses than ever before. How can you tell if it’s worthwhile for your business to adopt a WMS? It depends on your long-term performance goals, current operational pain points, and what WMS features you'd use to address them. If your facilities are challenged by any of the following, it may be time to seek help from a WMS vendor:
Less than 99% inventory/order accuracy: More errors in your fulfillment operations equals more returns, chargebacks, and lost revenue. The accuracy and insight provided by a WMS could remedy these issues.
Inefficiencies with warehouse space utilization or picking systems: Many WMS solutions include slotting optimization features that are especially helpful for growing/evolving inventories.
Rising operational costs: WMS's streamline multiple fulfillment processes – contributing to time and cost savings.