How Does a Warehouse Management System Work

Redbird Logistics Services > Supply Chain > How Does a Warehouse Management System Work

To imagine a well-functioning logistics and supply chain management system without a WMS is impossible. When considering the strength of your entire supply chain, warehouse management system logistics are integral. Some businesses falsely believe that the role of a warehouse is to be a simple storage facility. Still, the truth is that a supply chain can only work efficiently and quickly as its warehouse efficiency permits.

There are a handful of WMS programs designed following the stature or size of the business. Typically, vendors use different WMS software versions that can be scaled to fit different company sizes. Because a WMS can be configured according to an organization’s specific requirements, vendors can effectively add customizations. For a brick-and-mortar retailer, the customization added to their WMS will differ from an eCommerce retailer. Also, configurations and designs can vary based on raw materials and items the company sells. For example, a sporting goods retailer WMS will be quite different from a grocery chain.

So, how does a warehouse management system work? It has its own devoted and specific way of working that’s different from traditional warehouse operation. Take a look at our detailed points on how it works and what it includes.

Essential Features of the Right WMS System

  • Inventory Management System

Closely related to warehouse management, inventory management system is a term that’s often confused because it doesn’t denote the same thing. An inventory management system controls the inventory of the same warehouse and uses the same functions currently in operations.It can be a part of or warehouse management system, but not vice versa.

  • Shipping and Receiving

The warehouse is the place where items are stored. The purpose of a warehouse management solution is to track the items as they come in, move around, and go out of the warehouse. Whenever an item is received, it needs to be updated in the WMS and tracked with its arrival time and location from which it’s supposed to be sent.

  • Picking and Kitting orders

Warehouse services often go beyond just storing goods, and many vital activities have to be considered integral parts of warehouse working systems. Series or parts of goods with their own designated SKUs are kitted together to create a new set of SKUs. Order fulfillment and management play a pivotal role in creating and tracking pick and pack orders when WMS is the kernel factor.

  • Reporting

Real-time reporting can be a significant boosting factor when it comes to warehousing. With other business operations going digital, comprehensive reporting features of a digital WMS solution can provide a lot of insight to help build on current processes. The warehouse manager is competent to oversee and monitor data generated in the form of graphs and charts and make informed decisions about how to manage the warehouse effectively.

  • Staff Management

Since warehouse personnel management is a significant factor that affects the cost of managing a warehouse, it is considered to be a primary action in the WMS system. If warehouse management can effectively check and monitor the warehouse staff, they can better understand the personnel performance. By improving staff performance, warehouses can achieve a substantial reduction of costs.

  • 3PL Integration

3PL (third-party logistics) is another important part of the warehousing process. If your warehousing operation is smaller, then you probably don’t need 3PL services. However, they cannot go unmentioned because a staggering 92% of 3PL providers and 73% of 3PL users say that 3PL providers are innovative when it comes to improving the effectiveness of logistics. As a company grows and warehousing operations become more complex, keeping up with everything is tough, and that’s where 3PLs step in to help. Many of them have their own WMS software solutions with their particular needs in mind, which is an excellent step toward optimizing the WMS selection process.

How Warehouse Management System Functions

The first step in getting started with a WMS is considering various sets of motivations and expectations. You should collect the expectations and motivations from all stakeholders involved. Company C-suite execs and logistics/operations managers usually expect maximum user-friendliness in the improved job ease. WMS also focuses on eliminating poor warehouse habits and practices, along with focusing on eradicating inefficient processes.

With such a system that automates specific processes and is not threatening the staff’s designated jobs, the team looks forward to making their work easier and minimizing errors. The implementation of WMS software can lead to a significant boost in revenue if the WMS vendor clarifies the benefits and potentials it would bring into the warehouse.

  • Reduction of Risk

The core objective of a WMS is to help assess the potential risk that might arise once the system is implemented and active. The reduction of risk is a pivotal factor in WMS implementation, and it is supposed to chalk out measures to negate or minimize risk. The more experienced and competent the WMS provider and client are, the less the probability of being prone to further risks.

The beginning of the WMS project is initiated with business review sessions, which enable the company to estimate, dissect, and analyze the current ongoing set of warehouse operations and functions. It helps with meeting the requirements and needs of the warehouse.

  • Implementation Schedule

The lack of proper scheduling is among the biggest challenges that are met to implementing a WMS solution. It is the reason for any type of detected risk, and WMS implementation seems to fall out due to improper planning and unexpected obstacles. Without a realistic implementation plan, you won’t be able to schedule a successful warehouse management system implementation.

  • Customization and Design

We mentioned how important business review is to the WMS implementation project, and the same goes for customizing the system to meet the business’ requirements. Minimizing customization can be a key factor for making your WMS project successful in the shortest period possible. With a flexible WMS, there won’t be much customizing to do. The basic utility of an advanced warehouse management system software is to meet the industry standards. Still, each warehouse operates in a certain way, so both the risks and expectations should be addressed accordingly.

  • Big Data Utilization

This phase deals directly with the WMS implementation, and it includes the transfer of warehouse data from the old system into the new one. The database containing the existing warehouse data needs to update as per the newly-integrated data terminology and scheme. Also, the addition of modified and missing data should be done and adjusted according to the new system requirements.

  • Training and Testing

Training is an essential part of new technology implementation and critical for the application of feature customizations and future design. Some WMS vendors believe that WMS operation training is unnecessary because it can be a time-consuming activity. Nevertheless, giving proper training to your warehouse staff is highly advisable, so they complement the compatibility and aptitude to handle the newly-integrated system.

When it comes to testing, it’s performed mostly on real warehouse data. That includes comparing the results of warehouse process execution before and after WMS installation. Systems in multiple warehouses are tested for bugs in the design frame, corrected by the WMS supplier or provider implementation team.

  • WMS Deployment and Support

After system customization, data transfer, training, and testing, deployment comes next. It’s done by uploading a close accurate data snap of the warehouse data to the new WMS database.

Once the new WMS software has been implemented, the warehouse management will encounter further challenges that weren’t appropriately addressed in the implementation stages. Support is an integral part of a successful WMS implementation because it provides quick resolutions for complexities that come in later stages. If you don’t have a quick resolution at your hand’s reach, it may take you a lot of time to deal with them, which delays your operations. Large companies may use cloud-based WMS and work on the SaaS model, making their operations smooth with a negligible number of errors detected.


This was a detailed guide on how a WMS system works and how to properly implement it. With careful and thoughtful implementation, you will unlock all the potential power good WMS software holds. Each of these implementation stages is absolutely vital and must be followed with skilled supervision and full attention. Today, when the eCommerce retail industry has a global reach, companies realize that they need cutting-edge technology to stand out from the competition. Warehouse management systems have a range of added advantages, the two major highlights are seamless operations and the reduction of costs.

If you’re not looking to manage your own supply chain and warehouse operation and license a WMS, but you’re interested in outsourcing warehouse inventory management and order fulfillment to a 3PL, reach out to Red Bird Logistics. With an extensive network of fulfillment warehouses across the country and proprietary warehouse management software, your business can leverage fulfillment services, discounted shipping rates, support, and economies of scale without having to invest in WMS technology.

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