Warehouse Management Systems: Functions, Selection & Trends

Introduction

The concept and use of warehousing has transformed significantly over the past decade. With increased competition and advancing technology, warehousing has become a decisive tool in the global market, serving as a mechanism to gain competitive advantage over rivals in product quality, advertising, pricing, and consumer services — whereas previously it served merely as a stock-keeping unit. This evolution has required restructuring and superior mechanization so that the outcomes achieved include higher production output at lower costs (Nynke, 2005).

The process of warehousing requires all the essentials needed by any other production process — that is, precise and timely data on merchandise, competitors, market prices, capital, and available developments for the correct and efficient implementation of warehouse services. The warehouse management system (WMS) is responsible for providing these facts. It takes on the task of supplying, accumulating, and describing all the necessary data to manage warehouse operations from the point of product arrival through to delivery (Nynke, 2005).

The importance of WMS has grown considerably to the point where, according to the Gartner Group, any company that does not incorporate WMS into its infrastructure is setting itself up for a disadvantage in the global market. Why has WMS grown so important over the past decade? After the implementation of an efficient WMS structure, companies experienced a range of positive outcomes: more intelligent use of available space, support for consumer EDI requirements, a decrease in the number of registrations required, amplified production efficiency, lower prices, and reduced error rates (Nynke, 2005).

Scope of Warehouse Management Systems

The main and most essential task of a WMS is to manage the inflow and outflow of products through the accurate use of relevant data. The position of WMS within the production process requires it to communicate and coordinate with other processes and personnel, including the assembly section, financial officers, merchandise approval, transportation and infrastructure departments, security, and industrial control structures such as AS/RS management and PLC systems — all in support of timely product delivery. Most of these processes can be incorporated into one industrial component called an enterprise resource planning (ERP) system; in simpler terms, the WMS must maintain constant and clear contact with ERP systems in order to carry out its functions competently (Nynke, 2005).

There is relatively little similarity between the operations and scope of an ERP system and those of a WMS. The origins of WMS were triggered by parallels in the data needed, the procedures, the management requirements, and ERP processes. ERP operations encompass long-term planning and management of all significant internal and peripheral business utilities. A WMS, by contrast, deals primarily with short-term preparation for the stocking of merchandise, the utilization of available space, and at times the delivery of merchandise. The foundational principles of a WMS were initially developed for a single large warehouse and then adjusted to meet the varying requirements of different warehousing environments (Nynke, 2005).