How to Drive Profitability with a Warehouse Management System

Warehouse management systems make use of software that enables businesses to manage their warehouse daily in a more effective manner. Instead of having to manually visit the warehouse and maintain the data and accounts for the shipments coming into and leaving the warehouse and, a comprehensive warehouse management system automatically analyses all data pertaining to the warehouse and provides real-time solutions to management as well as employees.

Warehouse management systems, also known as WMS, cannot be used independently from other business management systems. Most WMSs are integrated with other systems such as a Material Requirement Planning System and Transportation Management System.


What is WMS?

Warehouse Management Systems are processes that help a warehouse function more efficiently and allow businesses to improve their customer service operations. There are different kinds of WMS available, and the size and scale of a business is the primary factor that determines what kind of WMS they will use.

Standalone warehouse management systems are used by smaller or local businesses, and they run on the business’ own network. The long-term cost associated with using a standalone WMS is significantly lower than many other integrated WMS; however, the user will have to face certain issues such as entering duplicate data, additional expenses if they want to customize their WMS, as well as issues with the interface.

That is why most medium to large businesses opt for a more integrated warehouse management system. WMS can be built in-house or bought from third-party vendors. Most businesses opt for buying a WMS package. These can be customized according to the needs of specific businesses and can be altered later as the business scales and grows. An e-commerce website would have different warehouse management needs than a chain of restaurants. The digital environment built around managing warehouses for different businesses is built to suit the organizational and operational needs of that business.

Cloud-based warehouse management systems and ERP package WMS are the preferred choices in WMS for many businesses. Cloud-based WMS software makes use of the internet to build software as a service (SaaS) that makes use of interconnected devices to provide real-time data anytime and anywhere. Cloud-based WMS also provides ease of accessibility to every stakeholder in the supply chain and improves traceability, accountability and productivity in warehouse management operations.

Some Enterprise Resource Planning (ERP) vendors offer an integrated WMS with their ERP as a package. These can be very useful as your warehouse management system will come with functionalities such as accounting, tracking sales and order, shipment and shipping management and more.

Cloud-based WMS, as well as ERP- integrated WMS packages, are both expensive when compared to starting and operating a standalone WMS. However, the flexibility and scalability offered by the more expensive warehouse management systems more than make sense when thinking of the necessary functions and operations they come with.


Warehouse Management System benefits


There are a plethora of benefits associated with investing in a warehouse management system. The initial investment a business puts into implementing a WMS brings in long term profit when it comes to increased productivity and cutting labour costs. The intermediary tasks associated with managing a warehouse are conducted by the WMS, and this leaves the warehouse employees both with guidance from the software on the best practices they can engage in to better improve their warehouse management operations, as well as increase employee accountability by utilizing key performance indicators.

Here are the various benefits associated with using a Warehouse Management System:


  1. Customized warehouse operations: Businesses can develop WMS that suits the needs of their warehouse operations. This WMS provides centralized operations, consistency and transparency regarding warehouse logistics to both the management and the employees working in the warehouse.


  1. Inventory Management: WMS make use of modern technology such as scanners, bar codes and software to not only track inventory, but also putaway, where it can tell employees how they can slot goods best for increased efficiency in moving them around the warehouse. The WMS also tracks all data regarding the goods, such as the number in stock guide the picking and packing process and more.


  1. Reduce errors while shipping: From generating invoices to providing real-time updates on the status of the shipped goods, WMS removes the need for a paper trail when it comes to shipping management, and enhances the customer experience at the same time.


  1. Yard and Dock Management: WMS can help transporters by telling them exactly where to unload their goods, where to park, and more information about putaway and shipping of goods.


  1. Improve labour efficiency: WMS can keep track of how employees are performing at work by using their key performance indicators. This helps management better track employee performance and productivity.


  1. Reporting: WMS can be used to find existing chinks in warehouse management operations, as well as find solutions for those same problems.



Warehouse management systems improve business operations by giving management and employees access to real-time data that can be used to improve warehouse operations on a day to day basis. Businesses can increase their long term profits through an overall reduction in the costs associated with running and maintaining quality warehouse operations.


See the 5 Ways Optimizing Labour Management Improves Warehouse Operations.