What is a WMS (Warehouse Management System)?

A Warehouse Management System (WMS) is a software that allows for the control, management, and execution of all operations carried out in a warehouse.

From goods receipt to shipments, including storage, a WMS becomes the fundamental tool to ensure the efficiency and smooth operation of a warehouse. It’s a top priority for retailers within their unified commerce strategies today.

Basic WMS Functions

Master Inventory Data Management

As a precursor to operations management, WMS systems allow for the creation and configuration of existing products in each warehouse.

Attributes and parameters of commonly used products, which will drive much of the logic within the system around various warehouse processes, include among others: units of measure and alternative units of measure, barcodes (or use of RFID tags), batch, serial number or expiration date, and popularity codes, to classify high or low turnover stock.

Product configuration includes, among other options, establishing minimum and maximum quantities of product per location, necessary for effective control of replenishment needs. Likewise, the possibility of variant management, through the use of characteristics such as sizes and colors.

An important attribute of inventory in the warehouse is its status, which will allow, for example, controlling whether certain products can or cannot be considered in tasks such as picking.

Inbound Operations

These include functionalities to support warehouse processes in scenarios such as receiving purchase orders or transfers from other warehouses, for example, for replenishments or to receive goods that have reached the end of their useful life or end of season, in sectors such as fashion and others. Likewise, in reverse logistics operations with the receipt of customer returns or goods requiring repair and maintenance.

Basic functionalities offered by a WMS for these types of operations include features such as the possibility of automatic diversion to quality control zones or to the shipping area for pending orders (cross-docking). Similarly, the use of different storage algorithms (put-away) allows for the selection of the best locations according to various warehouse strategies.

Outbound Operations

Oubound operations include the preparation and shipment of items out of the warehouse. This includes a variety of outbound operation processes for tasks such as picking, packing, and shipping items in activities such as order preparation, transfers to other warehouses, or returns of purchase orders.

Among these operations, picking stands out, which is fundamental today to ensure a fast and efficient order preparation process. By applying different warehouse algorithms, WMS systems support a variety of picking strategies, which determine the locations and quantities that the system will suggest to operators in the processing of order outputs.

Picking can be done for an individual order or for multiple orders, with the possibility of configuring picking waves. These waves result from the selection of a set of orders, storage areas, and scheduled intervals for the execution of picking.

Stock Transfers and Replenishments

These involve the physical movement of materials. They can be external, from one warehouse to another, or internal, between storage areas belonging to the same warehouse.

By using the minimum quantities configured for each product, WMS systems can also automatically generate replenishment requests.

In the case of stock transfers between warehouses, a WMS system will also allow detailed control of the inbound and outbound processes in each involved warehouse, as well as the quantities in transit.

Inventories

To ensure accurate stock level information, WMS systems offer various inventory procedures adaptable to the needs of each warehouse. These include physical counts, typically associated with planned counts for the entire inventory, recounts, similar to the former but commonly used to indicate that a previous count might be incorrect, and cyclic counts.

Interoperability

The interoperability of a WMS system is another fundamental feature today for increasing the operational efficiency of any warehouse, facilitating the exchange of information with systems such as CRM, ERP, or labeling, transportation, and logistics systems. This allows for increased automation of processes and eliminates the need to duplicate data or perform manual entries, reducing errors and increasing efficiency.

A flexible query API also allows for the integration of information on the status and inventory levels in warehouses from other systems, such as the eCommerce platform or point of sale, to inform online and in-store buyers.

Mobility

Another fundamental feature offered by a WMS system today is the ability to perform inventory tasks from mobile devices. Mobility functions allow employees to access system information in real-time from anywhere within the warehouse. This increases their efficiency and work accuracy, reducing errors and enhancing productivity.

Extended WMS Functions

Extended functions offered by more complex WMS systems include:

1. Workforce management: to control aspects such as available capacity, shifts, and performance of workers.
2. Task interleaving: this functionality allows for the combination of executing different tasks in a single trip or movement within the warehouse. For example, picking and put-away activities executed in the same trip instead of individually.
3. Dock scheduling: for the reservation of vehicles, trailers, or specific containers to specific dock doors at specific times to enable workflow in a warehouse environment.
4. Yard management: the yard management functionality (Yard Management System or YMS) of a WMS system allows for the management of vehicle movement in the yard, docks, parking lots, and access control points to the warehouse.
5. Slotting: Inventory slotting consists of tools that provide a set of methods and algorithms used to determine the most efficient locations for each item in a warehouse. Information to consider for efficient slotting includes product rotation rate, expiration dates, or internal warehouse flows.
6. Logistic provider billing system: functions typically required by a logistics provider, who must invoice each of their clients for concepts such as the number of movements made or value-added services offered.
7. Value-added services: support for managing activities within a warehouse to add value to shipped products. For example, repackaging, gift wrapping, kit creation (kitting), or partial assembly.
8. Voice: WMS systems that make use of voice recognition and/or voice synthesis technologies to drive activities in warehouse operations. This allows for hands-free operations.

What type of WMS to choose?

When evaluating a WMS, it’s important to understand the complexity of the warehouses it must serve. Gartner establishes a model with 10 dimensions to define the operational complexity of a warehouse (1):

1. Size: including surface area, volumes, heights…
2. Existing limitations: such as the number of employees and physical structures…
3. Process cycle time and performance requirements.
4. Layout: considering work areas and storage zones within the warehouse.
5. Types of operations: such as picking, counts, movements…
6. Volume of operations (number).
7. Product characteristics: including batch control, serial numbers, expiration dates, weights, variants…
8. Number and variability of activities in the processes.
9. Degree of automation.
10. Process variability: whether they are stable or require frequent changes.

Supply chain leaders must understand this complexity at the level of each individual installation as well as collectively, across all installations (i.e., the combined effect of complexity across all installations). This understanding begins by evaluating each installation, or groups of installations with similar characteristics, individually.

Based on this model, Gartner establishes a classification of WMS systems into 5 levels (2), from lower complexity, level 1, to higher complexity or level 5, corresponding to highly complex and highly automated installations.

Benefits of a WMS

The implementation of a warehouse management system offers significant benefits to retailers:

• Increased operational efficiency: By automating and optimizing processes, a WMS allows for the reduction of errors and execution times, thereby increasing warehouse efficiency.
• Cost reduction: By improving inventory accuracy, operational efficiency, and more efficient use of available storage space, a WMS can significantly reduce storage and operational costs.
• Improved customer service: With precise inventory control and efficient order management, retailers can enhance their response time and provide better customer service, which are essential today for increasing customer loyalty and succeeding in the execution of their unified commerce strategies.

Openbravo WMS

Openbravo WMS is a cloud-based SaaS (Software as a Service) warehouse management system for retail within the Openbravo Commerce Cloud. The solution provides flexible and automated support for processes related to inbound and outbound operations, inventory management, transfers, and replenishments. These tasks are guided by the system through the application of a wide range of warehouse algorithms and can be executed by operators using mobile devices, through a fully web-based frontend that is resistant to connectivity issues.

All of this is managed from a single point and in real-time, allowing for a unique and centralized view of all operations and available stock across all warehouses. Built on a fully modular and cloud-based platform, it also offers a flexible API that facilitates integration with various external systems.

References:

(1) Use Gartner’s Model to Understand the 10 Dimensions of Warehouse Complexity Before Evaluating WMS Solutions, 19 January 2023, Simon Tunstall, Dwight Klappich (only accessible to Gartner clients)

(2) Apply an Architectural Framework to Stratifying Warehouse Management Systems, 5 May 2023, Simon Tunstall, Dwight Klappich, Rishabh Narang, Federica Stufano (only accessible to Gartner clients)