To manage and control daily operations in a warehouse, companies need to find a warehouse management software (WMS) that supports their warehouse operations. This software guides inventory receiving and storing, advises on inventory replenishment, and optimizes the picking process and shipping of orders. For a third-party logistics (3PL) business that transports physical materials and goods to and from customers, utilizing a WMS software is crucial.
Without a WMS in place, 3PLs may risk falling behind on inventory control, picking, and shipping their orders, which translates into lost time and money. To avoid this, you should know which types of WMS software there are to determine which one will best suit your needs. The most popular types of WMS software often utilized by third-party logistics businesses include:
- Standalone systems
- Cloud-based systems
- Supply chain modules
- ERP modules
All these types of WMS systems have similar features, and most of them have various tools that can handle different components of a WMS. What sets them apart is the package and delivery style, and you should weigh their pros and cons against what your business needs or will need in the future.
A standalone warehouse management system software is typically the most affordable, but it lacks many of the tools and features from an integrated software solution. These systems are typical on-premise systems deployed on the business’s native network and hardware and used only for their warehouse management features.
Most warehouse management systems are standalone, third-party packages that businesses must integrate with other business software it utilizes (e.g., Enterprise Resource Planning software). That process is often filled with challenges like interface issues, information delays, customization expenses, and duplicate data entry. Furthermore, standalone WMS software includes only the most important features of WMS software and comes without extra supply chain functions. The most important features of a WMS are warehouse operations and inventory tracking and management.
If you decide to go with a standalone WMS, the features you will get include:
- Bar code scanning
- Expiration date tracking
- Cycle count
Standalone systems are great for small businesses or businesses that don’t have a large software budget. These systems can be used as inventory management systems and utilized in fields outside of warehouse management.
Cloud-based WMS software are a SaaS (software-as-a-service) model that is completely web-based. They employ enterprise cloud technology, which allows them to provide the same benefits of a traditional WMS while lowering costs and providing a faster implementation. They are also noted for their quick deployment, scalability, and reduced IT maintenance (because they’re hosted on a private or separated server). Thanks to being hosted on an external network, cloud-based SaaS WMS software boasts higher data security protocols, which are essential for large businesses that manage high-value inventory.
Since they are web-based, cloud-based WMS don’t require installation and integration with native hardware and networks. When the software is in the cloud, customizations can be made to it (as long as WMS vendors manage the software). Being able to customize your WMS offers many benefits in terms of complexity and flexibility and is an excellent choice for 3PLs with multi-location needs. Regardless of complexity, volume, or operational size. A cloud-based system can adapt to your requirements and boost business productivity, allowing your business to grow without altering the flow of your practices.
The advantages of cloud-based WMS software include:
- Scalability – It can be operated on any computer with an Internet connection, and users can add more licenses as the warehouse grows.
- Lower cost – You don’t need specialized equipment or long-term licenses to use a cloud-based system, and you likely already have the resources to maintain and host the system.
- Easy-to-use – End-users find that cloud-based, SaaS WMS software is fairly easy to use. When the software is easy to access and operate for its everyday users (your employees), your warehouse operations can be more efficient.
- Quick implementation – Standalone WMS software may take months to implement. A cloud-based warehouse management software system may only take a week or two to set up because the software vendor takes care of hosting, configuration, and implementation.
Other benefits of cloud-based WMS software include better security, disaster recovery, and the ability to receive automatic software updates.
Supply Chain Modules
Supply Chain Management (SCM) software is much broader in scope (WMS is actually a subcategory under SCM) and can help users manage various aspects of the supply chain. The primary focus of an SCM is to automate inventory management, product cycles, sourcing of materials, and other common tasks. However, it can also manage assessments of risk, ongoing business processes, and relations with vendors. To use an SCM as a WMS, your business will have to invest in supply chain applications that come with warehousing features. That will enable your warehouse to explore other benefits related to SCM use. The difference between a standalone WMS software and SCM is that a standalone solution typically covers only warehousing, while SCM supports the management of the entire supply chain.
If you already use warehouse and inventory management software and are considering implementing an SCM solution, you should aim to minimize any overlaps with your current software. Either combine your current software solutions into a single SCM platform or choose an SCM that can integrate with your other business software (e.g., ERP and payroll).
Enterprise Resource Planning (ERP) software is a software used to manage the resources of the whole organization or enterprise. Besides core applications, such as human resource, sales and marketing, finance and accounting, and CRM, some ERP vendors offer a WMS or SCM module built into their ERP system. ERP modules are the perfect choice for companies that want to use an all-in-one WMS solution, improve their software solutions, improve their ROI, and gain a competitive edge.
Both WMS and ERP systems are at the core of any wholesale or distribution business, with ERP integration being the pinnacle of all WMS. It can be costly, but at the same time, it has a large scope and can replace many other software applications. If you’re looking for a way to consolidate all your current warehouse management software solutions into one centralized system, ERP software may be the right option for you.
The best 3PL companies already have the right technologies in place, and customers get the benefit of using new technologies to support their logistics system. At Red Bird Logistics, we understand that data and technology are at the core of every supply chain strategy because it helps integrate data within and between systems.