Warehousing Information System
A Warehouse Information System (WIS) is a software suite that acts as the central nervous
system of a warehouse operation. It integrates data from various sources across the warehouse
to provide a holistic view of inventory levels, product locations, order fulfillment status, labor
productivity, and more. This data is then analyzed and used to optimize warehouse processes,
improve efficiency, ensure accuracy, and boost overall productivity.
Fig 1- Warehouse process flow chart
Benefits of a Warehouse Information System:
Improved Inventory Accuracy: Real-time tracking helps prevent stockouts and
overstocks.
Increased Efficiency: Automation of tasks like picking and shipping leads to faster
fulfillment.
Reduced Costs: Improved efficiency and inventory control translate to lower overall
warehouse costs.
Enhanced Customer Service: Real-time visibility into orders allows for better
communication and service.
Key Components of a Warehouse Information System:
1) Warehouse Management System:
A warehouse management system is software that helps companies manage and control
daily warehouse operations, from the moment goods and materials enter a distribution
center until the moment they leave. A WMS manages all inventory, including raw
materials and finished goods, allowing an organization to conveniently monitor
inventory along with its location, whether in a facility or transit. The core functions are,
Inventory Management: The WMS acts as a centralized repository for all inventory data,
tracking product locations, quantities, and status (received, allocated, shipped). This
real-time visibility allows for optimized storage practices and minimized stockouts or
overstocks.
Order Fulfillment: The WMS plays a crucial role in order fulfillment. It automates
processes like order picking and packing, generating pick lists that optimize routes and
minimize picking times. This ensures accurate and efficient order fulfillment, meeting
customer delivery expectations.
Labor Management: The WMS optimizes labor allocation within the warehouse. It can
track employee performance, assign tasks based on skill sets, and identify areas for
improvement in workflow. This empowers better utilization of labor resources and
maximizes worker productivity.
Fig 2- Warehouse import and export process diagram
How a Warehouse Management System Works:
The way a warehouse management system works may differ depending on the type of WMS
you have. Generally, a WMS works by:
a) Receiving goods: When an item arrives in the warehouse, they are scanned into the
WMS using barcodes or RFID tags.
b) Put-away: Based on product type, storage capacity, and demand forecasts, the WMS will
direct warehouse staff on where they should place the item to store it in the warehouse.
c) Inventory management: As goods enter and leave the warehouse, the WMS
continuously tracks these in real-time providing information on the level of inventory
within the warehouse at a given time.
d) Order picking: As orders are received, the WMS generates a list of items that need to be
retrieved, providing staff with important information such as item location.
e) Order packing: Once the order has been picked, the WMS aids the user in efficient
packaging and labeling the order for dispatch. Some WMS may also print shipping labels
and packing slips.
f) Shipping: When the order is ready for dispatch, the WMS coordinates information
including carrier selection, package labeling, and tracking, whilst updating the inventory
records to reflect that the item has left the warehouse.
g) Returns management: If an item is returned to the warehouse, a WMS can manage the
reverse logistics, updating the inventory records as necessary.
h) Reporting and analytics: The WMS generates reports and provides analytics on various
warehouse metrics including inventory levels and efficiency of processes to help make
informed decisions and to optimize warehouse operations.
Fig 3- Warehouse Management system processes
The 4 types of Warehouse Management Systems:
Standalone system: This is a self-contained software system specifically designed for
warehouse management. It offers core functionalities like inventory control, order
picking, and shipping management. Standalone WMS is ideal for smaller warehouses or
those with less complex operations. They are typically easier to implement and manage
compared to other types
Cloud-based system: Unlike the previous types that are installed on local servers, a
Cloud-Based WMS is delivered as a service over the internet. This eliminates the need
for on-premise hardware and software maintenance, making it a scalable and cost-
effective solution for businesses of all sizes. Cloud-based WMS offers similar
functionalities as traditional WMS but with the advantage of remote accessibility and
automatic software updates.
Integrated with ERP: An ERP system manages various business functions like accounting,
human resources, and manufacturing. An integrated WMS within an ERP offers the
benefits of core WMS functionalities alongside real-time data exchange with other
business functions. However, this tight integration can make the system more complex
and potentially more expensive.
Supply chain modules: This type of WMS is integrated as a module within a larger
Supply Chain Management (SCM) software suite. It offers the core WMS functionalities
but also interacts with other modules within the SCM system, such as transportation
management or procurement. This provides a more holistic view of the entire supply
chain but might require additional integration effort.
Fig 4- Warehouse Management System
Other Sub-Systems: Depending on the specific WIS, functionalities can be expanded into:
2) Warehouse Control System (WCS): The WCS acts as the translator between the WMS
(the brain) and the automated equipment (the muscles) within the warehouse. It
receives instructions from the WMS and translates them into commands that robots,
conveyors, and other machinery can understand. This real-time communication ensures
smooth operation, optimizes equipment usage, and minimizes errors during tasks like
product picking and sorting.
3) Warehouse Execution System (WES): The Warehouse Execution System (WES) serves as
a critical intermediary between the Warehouse Management System (WMS) and the
external environment, particularly your customer base. It fosters seamless integration by
capturing customer orders from various channels (e.g., e-commerce platform, Electronic
Data Interchange [EDI] system) and transforming them into a format that the WMS can
readily comprehend. This ensures efficient order fulfillment by enabling the smooth flow
of order information into the warehouse.
4) Yard Management System (YMS): The YMS focuses on the often-overlooked but crucial
activities happening in the warehouse yard. It acts as a traffic controller, managing the
scheduling of incoming and outgoing trucks, assigning dock doors, and tracking trailers.
This streamlines the flow of goods in and out of the warehouse, reducing congestion and
optimizing yard utilization.
5) Labor Management System (LMS): The LMS is all about optimizing your human
workforce, the heart of any warehouse operation. It tracks employee performance data,
assigns tasks based on skillsets, and identifies areas for improvement in workflow.
Additionally, the LMS can help optimize break schedules and ensure proper labor
allocation throughout the day to meet fluctuating order demands.
6) Inventory Management System (IMS): While sometimes integrated into the WMS, the
IMS focuses solely on the critical task of managing stock levels. It tracks the movement
of inventory throughout the warehouse, from receiving and put away (initial placement)
to cycle counting (regular inventory verification). This ensures accurate stock data,
minimizes the risk of stockouts, and helps identify potential overstocking situations.
7) Transportation Management System (TMS) (not strictly WIS): The TMS, while not a core
component of a WIS, often integrates with it to manage the outbound shipment process.
It helps plan optimal delivery routes, select the most cost-effective carriers, and track
shipments in real time. This provides greater visibility and control over the final leg of
the supply chain, ensuring timely deliveries to your customers.
Differentiating Between WMS, WCS and WES
Chart 1- The Crossover between WMS, WES, and WCS
