The main types of warehouse management systems explained

What's the best warehouse management system for your business? Explore your options in our no-nonsense guide.



How do you manage a warehouse? It's a question that requires a veritable spidergram of answers.

Space and layout need to be optimised. Receiving, picking, packing and dispatching procedures need to be put in place. Staff need to be trained.

It's a lot –  especially if your business is growing. And while there are still a handful of businesses that do it all by hand and mouth, most invest in technology to help run a tight ship.

There's more than one way, however, to manage a warehouse. There are standalone warehouse management systems, cloud-based warehouse management systems, enterprise resource planning systems and supply chain management modules.

So, which is best for you? It all depends on the needs and growth forecast of your business. In this article, we break down each one while keeping jargon to an absolute minimum.

Four types of warehouse management software

1. Standalone warehouse management system

This is how many warehouses have been managed for decades. Companies acquire a dedicated warehouse management system (WMS) that runs on premises, covering warehouse operations and nothing more.

These systems are highly specialised and share many functionalities with today's cloud-based equivalents.

So, if it ain't broke, why fix it? The fact is that these standalone warehouse management systems have a few significant drawbacks.

First, they need to be maintained in-house, whereas the maintenance of cloud-based solutions is covered by the vendor.

Secondly, they can only be accessed on-site. In the age of hybrid working, this is a significant limitation compared to their cloud-based counterparts. These, by contrast, can be accessed from any location and any device that has the right access permissions.

And finally, these standalone WMS solutions have storage limits. If your business has a growth spurt, it will take time and money to scale up your software accordingly. With a cloud-based WMS, by contrast, scalability is built in and can be achieved with little more than a few mouse clicks.

2. Cloud-based warehouse management system

A cloud-based WMS is what it says on the tin –  a WMS based in the cloud. Like Netflix, Google or countless other services, it's accessed online and hosted on external servers.

And what, you might ask, is so good about that? The range of answers to the question might surprise you.

Cloud services tend to have lower upfront costs. They're maintained and updated remotely by the vendor, keeping disruption to your business to a minimum. They're easy to scale when your stock gets bigger or smaller.

They also offer real-time, end-to-end visibility. And because the software is based on the cloud, not on a specific device or network, that information can be accessed from any device in any location at any time.

Moreover, a cloud-based WMS can be quickly and seamlessly integrated with existing systems – and updated remotely to support more. Do you work with eCommerce platforms, barcode scanners, RFID tags or voice picking headsets? These can become part of the system, unlocking efficiencies across the board.

3. Enterprise resource planning system

An enterprise resource planning (ERP) system is a type of software used by organisations to integrate and automate core business processes as one unified system.

These processes cover everything from finance to HR, from services to procurement, from manufacturing to supply chain management.

The ERP serves as a central database. It provides real-time insights into all aspects of a business's operations.

The strength of an ERP is that it puts everything in one place. The weakness is that it's only as good as its components. In the case of warehouse management, a dedicated system often unlocks better and deeper data.

4. Supply chain management modules

A supply chain management (SCM) module is a specialised software component that manages a specific aspect of the supply chain.

These modules can include:

• Supply chain planning
• Procurement (supplier relationships, purchasing orders, vendor performance)
• Manufacturing (production scheduling, shop floor management)
• Inventory management (inventory levels, movements and costs)
• Warehouse management (shipping, receiving, transportation, picking, etc.)
• Order management (sales orders)
  
  

Done right, SCM modules can improve the accuracy of your inventory and your partnerships with suppliers. It can also improve the accuracy of your order fulfilment, leading to better customer satisfaction.

Which type of WMS is best for my business?

ERPs and SCM modules offer an integrated approach to supply chain management – from procurement to delivery. What's not to like?

The problem is twofold. First, they're not as specialised as warehouse management systems. And secondly, they put everything in one place. So, if that one place goes down, the whole warehouse goes down with it (albeit temporarily!)

A cloud-based WMS, by contrast, is built for warehouse management. It gives managers the tools they need to oversee every aspect of warehouse operations.

Some WMSs also come with client portals that let customers see the status of their transactions with you. This demonstrates transparency and can improve customer trust.

Essentially, a good WMS takes one element of your chain (whether that's an SCM module or the warehousing section of your ERP) and puts it in the fast lane.

It maximises efficiency, accuracy and speed. Your inventory is presented to you in real time, so you always know how much you have in stock, what's been ordered, what's in delivery and so on. Meanwhile, you can integrate with voice picking and optimise your picking paths.

On top of this, a cloud-based WMS comes with powerful analytics tools. These can send you automated notifications when you need to restock and make forecasts about demand that help you plan. And when it's time to scale, you can increase capacity swiftly and seamlessly.

All of this isn't just a relief to you. It's also felt by your customers, who get timely, accurate deliveries. Win-win!

Are you looking for highly capable cloud-based warehouse management software? Our systems deliver end-to-end visibility, empowering you to see more, know more and grow more. To learn more about how our systems can fuel your success, book a demo with Minster WMS today.