Warehouse Management System: Features, Success Factors, Costs, Benefits
ScienceSoft leverages 33-year experience in custom software development to help businesses optimize their warehouse operations with tailored software.
Warehouse Management System in Brief
A warehouse management system (WMS) includes functionality for automation of inventory receiving and putaway, order picking and packing, shipping management, inventory tracking, warehouse navigation for workers, warehouse labor planning, and more.
WMS integrates with ERP, order management software, product information management software, shipping carriers’, and other systems.
WMS can help manage warehouse operations of any scale, from a single to multiple warehouses spread across the country or worldwide. Below, ScienceSoft outlines the fundamental WMS functionality that accommodates the majority of real-life use cases.
Inventory receiving and putaway
- Item identification and verification against purchase orders with barcode or RFID technology.
- Flagging of items that require inspection by QA specialists.
- Automated generation of identification labels (for goods, pallets, etc.).
- Goods storage recommendations (based on factors relevant to particular items, e.g., size, fragility, expiration date, demand forecasts).
- Support of the cross-docking practice (the system notifies workers when goods have to be taken from a receiving zone directly to a shipping zone).
Order picking and packing
- Order prioritization, grouping and scheduling for fulfillment (e.g., wave planning).
- Setup of picking rules to guide pickers.
- Automated pick and packing list generation.
- Batch order picking (calculating routes to pick multiple orders in a single go).
- Packing recommendations (the system suggests the type and amount of packaging needed for each order).
- Order splitting in several packages (in case its size and weight are too large).
- Automated creation of time-optimized routes (for inventory putaway, picking, etc.).
- Voice and/or visual navigation guidance around a warehouse.
Inventory control and tracking
- Real-time monitoring of inventory levels with barcode or RFID technology.
- Setup of stock rotation rules (e.g., FIFO or FEFO).
- Lot and serial number tracking.
- Expiration dates and shelf life monitoring.
- Inventory transfer requesting and tracking.
- Cycle count planning, scheduling and assignment to personnel.
- Inventory location identification (e.g., to find inventory for carrying out cycle counts or collecting orders).
- Shipments scheduling.
- Shipping time and rates calculation (via integration with shipping carriers’ systems).
- Orders merging into a single shipment (for the same-address shipments).
- Shipments history.
Reverse logistics processing
- Automated inventory return routing (to a fitting warehouse).
- Return order tracking.
- Flagging of returned inventory for further processing (e.g., for a QA check).
- Labor planning (calculating resource requirements for order fulfillment at a certain time interval and allocating them accordingly).
- Dynamic task assignment (automated suggestions on the next available task for warehouse workers based on a procurement and shipping schedule).
- Task interleaving.
- Labor performance monitoring against pre-defined KPIs, such as the number of products picked, picking time, etc.
Analytics and reporting
- Configurable dashboards with an overview of warehouse operations for warehouse managers and supervisors.
- Automated report generation for warehouse managers and specialists (inventory on hand reports, labor resource utilization reports, inventory return reports, etc.).
- Inventory demand forecasting.
- Multi-echelon inventory optimization.
- Labor demand forecasting (how many resources will be required for particular dates, warehouse zones and work tasks, based on a procurement and shipping schedule).
Enterprise resource planning software
To provide visibility into warehouse operations for all departments involved (accounting, procurement, manufacturing, etc.); for WMS users to be updated on incoming purchase orders issued in ERP and request invoice generation.
Order management software
To keep customers and sales agents up-to-date on available items (e.g., to minimize the chances of out-of-stock items being ordered).
*Alternatively, WMS can be integrated directly with sales channels (a company’s website, marketplaces, etc.).
Product information management software
For warehouse personnel to access item details to identify the items easily and carry out quality checks (e.g., at inventory receipt).
Yard management software
To coordinate yard and warehouse operations, e.g., to load shipments faster, simplify items’ cross-docking between facilities.
Shipping carriers’ systems
To track shipments and manage shipping costs.
(Barcode or RFID readers, robotic shelf loaders or forklifts, etc.)
To increase labor performance and task execution accuracy and reduce associated labor costs.
Data-driven workflow optimization (automated warehouse routing, task interleaving, recommendations on inventory storage, etc.) to increase warehouse staff productivity and minimize human errors, such as poor warehouse slotting.
Thought-out UX and UI, including for a mobile version, to reduce user training efforts and ensure smooth software adoption at all levels, from warehouse workers to supervisors and managers, to leverage WMS benefits to the fullest.
WMS flexibility and robust performance (high throughput, low latency) to accommodate the growing scale and complexity of warehouse operations over time and efficiently handle seasonal rises in customer demand (cloud-based systems are often prioritized for their on-demand scalability).
The cost of custom WMS varies greatly from case to case depending on:
- The number of warehouses that should be connected to the system.
- The number and complexity of functional modules required to cover warehouse needs.
- The number and complexity of integrations (e.g., integration with legacy ERP).
- Complexity of data migration procedures.
Ballpark cost estimate of a full-scale custom WMS ranges between $200,000 and $400,000, with key ROI factors of WMS implementation including:
5-40% savings on inventory loss and 50-99+% savings on inventory shrinkage due to advanced inventory tracking.
10-35% increase in warehouse labor utilization thanks to labor demand forecasting and labor management features (such as task interleaving).
99+% order fulfillment accuracy due to analytics-based guidance on order picking, packing and shipping to warehouse workers.
What Makes Custom WMS a Feasible Choice
ScienceSoft suggests opting for a custom WMS in the following cases:
- You need WMS to reflect the specifics of your warehouse operations. Custom WMS is built around your niche requirements, whereas ready-made products may require adjustment of warehouse processes or implementation of effortful customizations.
- You need WMS for cost-efficient high-volume order processing (e.g., more than 50,000 order lines per day and a large team to handle them), as enterprise-grade licensing for WMS products incurs extensive perpetual payments.
- You have complex warehouse operations (multiple picking types, varying demand, diverse SKU portfolio) and need advanced functionality to increase warehouse performance that is unavailable with WMS products (e.g., AI-driven inventory and labor demand forecasting).
ScienceSoft's WMS Services
ScienceSoft relies on 33-year experience in software development to create best-in-class WMS that ensures stock and order accuracy and reduces warehouse labor costs. We offer consulting and development services to support you at any stage of your WMS initiative.
- Analyzing your warehouse and order fulfillment processes.
- Interviewing key stakeholders to define short-term and long-term WMS needs.
- Defining an optimal set of WMS features and required integrations.
- Estimating development project costs and time budget, calculating the solution’s expected ROI.
- Outlining a risk management plan.
- Eliciting business requirements for WMS and outlining a software specification.
- Designing a secure and scalable WMS architecture.
- Developing the front end and the back end of WMS.
- Integrating WMS with other systems (ERP, OMS, etc.).
- Testing the system end-to-end (functioning, usability, integrations).
- Providing after-launch support and WMS maintenance and evolution (if required).
ScienceSoft is an international IT consulting and software development company headquartered in McKinney, Texas. We render WMS consulting and development services to help businesses increase warehouse efficiency and reduce related costs via automation and data-driven optimization of inventory handling and visibility into warehouse operations. Feel free to reach out to us to discuss your WMS needs.