What is a WMS, and how does it improve operational efficiency?

In recent years, industries such as e-commerce and manufacturing have caught the wave of rapid growth in demand. The number of orders to be processed and parcels to be dispatched is increasing. Yet the more work, the higher the risk of manual errors, delays, and compliance issues. How can your business address these challenges?

Support for the coordination of daily warehouse operations is a warehouse management system (WMS), which optimises and streamlines supply chain management. What is a WMS for, and what do you gain by implementing this powerful software in your business? Discover everything in our article!

What does WMS software do? A brief overview

A warehouse management system is software that supports companies in managing supply chain operations from the moment a product arrives at a logistics centre to the moment it leaves it. A WMS provides real-time visibility into inventory levels, improves order accuracy and reduces operational costs by automating tasks like picking, packing and shipping products. For example, Amazon integrates robotics within its WMS to automate picking and packing, demonstrating the potential for reducing manual intervention.

The core features of a WMS system include:

• receiving and outbound operations,
• inventory control,
• order management,
• shipping,
• labour management,
• warehouse analytics.

Advanced WMS solutions can integrate with cloud platforms, TMS and ERP systems to allow seamless data flow across departments. Real-time updates of warehouse processes improve company development by making more accurate business decisions.

Main types of warehouse management systems

If you have already taken an interest in choosing the right WMS for your business, you will surely have noticed several different types of software applications on the market. Each has distinctive features, delivers various results and comes at a different cost. What does each type of WMS mean for you? Check it out below.

Standalone WMS

A standalone WMS is designed specifically for warehouse management tasks. It is ideal for small businesses or companies with straightforward operations due to its affordable setup costs and basic integration capabilities. However, it can also be effectively implemented in larger warehouses where supply chain management is managed separately. These solutions are often faster to deploy compared to more complex systems.

The limited scope of standalone WMS can hinder efficiency, as it lacks comprehensive features for complex operations. You may need to implement additional tools to manage other aspects of the supply chain, which creates operational silos.

Integrated WMS

An Integrated WMS combines efficient warehouse management with other enterprise systems, such as Enterprise Resource Planning (ERP). This solution provides real-time data synchronisation across departments, which enables streamlined workflows and reduces errors.

The upfront costs of the integrated WMS may be higher than those of standalone systems, but the long-term savings make it cost-effective for growing companies. However, integrated systems can be complex to implement and require a long learning phase until the teams can fully utilise their capabilities.

On-premises WMS

On-premises WMS is hosted on the organisation’s infrastructure. This solution gives your business control over the data and inventory management software. On-premises setup is advantageous for companies that want to manage their data without involving third-party service providers or operate in areas with limited internet access. Industries like pharmaceuticals often rely on on-premises solutions to comply with strict data localisation laws.

If you want to implement on-premises WMS, you need to invest in hardware, software licenses, and maintenance. Moreover, scaling on-premises software may be challenging in rapidly changing industries​ because extending the system to match your growing business can be resource-intensive.

Cloud-based WMS

Cloud-based warehouse management software solutions are hosted on external servers and accessed online. Cloud systems are excellent for your business if you want cost-effective, real-time data access to data from multiple locations. Using the cloud eliminates the need for heavy infrastructure investments and provides effortless integration with other tools.

Custom WMS

Custom warehouse management solution is software built and tailored to meet your unique operational requirements. Custom software development will be convenient if your warehouse or distribution centre has specialised processes and needs highly adjusted workflows.

Custom WMS will fit into your company's infrastructure like a puzzle piece. But you must know that a solution tailored to your needs may cost more than off-the-shelf software.

Benefits of using a warehouse management system in your business

What benefits can you gain from managing your warehouse space with a professional system? See how your business will grow and adapt to rapidly changing conditions with inventory tracking software.

Cost reduction

Implementing a WMS will help your business minimise expenses. WMS optimises inventory management, reduces waste and better uses the warehouse space. For example, advanced simulations and real-time data tracking can control expiry dates and storage conditions for perishable products.

Automated workflows reduce human errors and labour costs associated with manually handling all tasks. You need fewer people to carry out the same functions and grow your business faster using the saved money.

Increased operational efficiency

The WMS streamlines warehouse processes such as receiving, storage, picking and shipping. Thanks to automation, all operations are perfectly coordinated, and individual tasks are performed with fewer errors.

Integration with CRM, ERP or third-party logistics systems increases your business efficiency by aligning inventory management with complex business processes.

Improved service quality

In an era when your customers expect instant delivery of their favourite products, implementing a WMS will definitely increase their satisfaction. Real-time inventory overview and automated task allocation allow you to provide reliable and fast service without making common mistakes that discourage customers.

Flexibility and scalability

Cloud-based warehouse management systems guarantee your company's high scalability, which will help you easily adapt to changing business needs. WMS systems will help you expand your operations without significant investment in infrastructure. It is the perfect solution if your business operates seasonally or has started to grow rapidly in recent months.

Smart inventory management with modern WMS features

Modern WMS systems are getting intelligent features that transform inventory management into a futuristic experience. AI-based algorithms provide real-time demand forecasting, optimal stock distribution and automated decision-making. Taking over these tasks by a smart system significantly reduces human errors and improves operational efficiency.

IoT devices, such as smart sensors and RFID tags, track inventory and warehouse assets, delivering accuracy and visibility across the supply chain. These systems integrate seamlessly with ERP tools, logistics software and analytics platforms to ensure all operations run smoothly. For instance, Walmart extensively uses RFID technology in its warehouses to enhance inventory accuracy, resulting in improved product availability in stores.

Some intelligent WMS systems support real-time synchronisation with sales platforms like Allegro, eBay, and Amazon, often requiring additional integrations. It eliminates the need to constantly develop custom solutions, improves inventory tracking and speeds up order fulfilment. By leveraging AI and IoT, intelligent WMS solutions enable organisations to operate with precision, agility and competitive advantage in a dynamic marketplace.

Ready to streamline your warehouse operations?

A well-designed warehouse management system can make all the difference in keeping your business efficient and competitive. At Happy Team, we’ve contributed to the development of StoreFeeder, a platform that simplifies warehouse management, inventory tracking, and multichannel order management, helping businesses run smoothly.

Whether you’re planning to build a custom WMS or need support for an ongoing project, we’re here to help. If you’re facing challenges like finding skilled developers, our staff augmentation services can provide the expertise you need. And if you’re looking for strategic advice, our CTO as a Service (CTOaaS) offers insights to shape the system that’s right for your business. Let’s create a solution that works for you and your customers.