Warehouse software: what are the best tools for management, accounting, inventory and tracking

DDI Development
company

July 2019

IT news

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warehouse software

According to the Global Forecast, the warehouse management market is estimated to reach USD 4.82 billion by 2024 from USD 2.1 billion in 2018. Now we already see warehouse expenses growing worldwide - British businesses, for instance, spent more than 3.7 billion on warehouse management. This trend remains true to US, European, and Asian markets.

With such costs at play, business owners reevaluate their methods of handling warehouse management. The most common and accessible innovation is warehouse management software.

What is warehouse software?

Warehouse management software, also known as a warehouse management system (WMS) organizes warehouse functionality, monitors key efficiency metrics. Such systems perform planning, scheduling, staffing, controlling, and executing resource disposal as well as goods’ movements and storage.

A management system is, basically, the core of a warehouse. It’s a strategic unit, responsible for planning and analytics. It’s often integrated with an ERP system for a synchronized data exchange. This way, information from a WMS can be easily integrated into the main business processes.

Types of Warehouse Management Software

The basic scope of all warehouse management tools is related to providing staff with data on warehouse activity and automating repetitive tasks. However, the specific objectives of the tools vary depending on their functionality, costs, and usage scale.

All WMSs can be divided into three large groups. Usually, one software falls into one category, although in rare cases they can be combined. Let’s review these types, taking a closer look at their objectives and technical specifics.

1. Standalone WMS

This type of WMS acts independently from other management services and is responsible for handling local repetitive tasks - stock analysis, budget management, and employee administration.

It’s the simplest type of a warehouse management system, perfect for a small warehouse. It’s also a suitable option for companies that only started considering the automation of their warehouses. The small scope of its operations allows trying out the essential features of WMS and enjoying the key benefits of automation.

Key functionality:

Tracking expiration dates and removing spoiled goods;
Slotting management;
Barcode scanning;
Control over packing and slotting;
Employee performance metrics.

2. Supply chain modules

Software, dedicated to supply chain management, naturally requires a much broader functionality, considering the bigger scope of tasks. Just like a standalone WMS, this type also takes care of inventory management. The only difference is that these features are also complemented with product cycling trackers and sourcing management algorithms.

Supply chain management tools automate operations in logistics, product life cycle analysis, order management, manufacturing, maintenance, and procurement. All the key fields of supply chain management are integrated into a single multifunctional system.

Modern supply chain modules include AI and IoT. The machine learning algorithms analyze typical tasks and performance trackers and propose their own strategies for supply chain improvements. Internet of Things supports multiple devices simultaneously, receiving real-time data on logistics, and synchronizing business processes with multiple users.

Key functionality:

Order administration;
Demand analytics;
Inventory supervision;
Staff performance management;
Logistics control, analysis, and real-time reporting;
Return control and planning.

3. Integrated with ERP

For those companies who already implemented smaller automation solutions, the next development stage is an EPR-integrated WMS. This is the most powerful option since it directly connects the warehouse management to other essential business processes. Typically, these fields are retail management, accounting, CRM, digital marketing, and others. Now, warehouse management integrates itself into the complex of retail and marketing activities - and the strategy can be adjusted accordingly to all these fields.

The scope of the third WMS type covers inventory organization, accounting, supply chain management with all its key components, HR-management, customer relations, and documentation.

Key Functionality:

An integrated database for all business departments with various levels of access and permissions;
Automation of repetitive tasks and automatic scheduling;
Complex data management, multi-layered forecasting, and AI-powered analytics;
Visual representation of all collected data via graphs and charts;
Built-in tracking tools for staff, transportation, and packaging;
Accounting solutions;
Documentation library for all departments.

EPR-integrated WMS

ERP-integrated warehouse management software equips business owners with tangible data for each department and for each day, week, month, or quarter. With such a system, managers can make informed decisions and build data-driven strategies.

Key Warehouse Management Features

We already briefly covered the key functionality of each type of WMS - now let’s take at the essential possibilities of a WMS, common for all three types. These pieces of functionality make up a core of automated warehouse management.

Tracking capability

Track-and-trace ability lies the foundation for warehouse management. A manager can find out the location of goods at any time and communicate the data with process participants. WMSs provide a balanced outlook on transportation, supply business owners with real-time data, and allow uninterrupted communication with logistics providers.

Automated inventory management

WMS systems provide labels and unique codes to inbound and outbound goods, tracking the combination automatically through RFID - radio frequency identification. Whenever the product enters or exits the facility, the team is notified immediately. All movement records are stored in a single database and can be accessed anytime.

inventory management software

If an item is lost or loaded in the wrong car, managers can easily find it and prevent future location mix-ups. With the Internet of Things, the tracking capacities of WMSs keep increasing - the products can be traced via a smartphone and the data is synchronized with all connected devices.

Accurate reports

Warehouse managers constantly collaborate with suppliers, distributors, and co-packers, and the cooperation with each of them often adheres to a specific set of terms and conditions. Keeping track of all deals and requirements manually is impossible. However, the software records the cooperation conditions, sorts through all partners and clients, and combines this information into a single intuitive report.

The same reporting process works for products just as fine as for stakeholders. Data, collected via RFID tags, is stored in a database and can be pulled out in a PDF or XLS format.

Return management

When a company needs to return a product to the manufacturer, the process can be slowed down due to miscommunication and the lack of information on the product transportation. However, with increased visibility on return processing and logistics tracking, companies can control the state of their returned goods, and receive fair refunds.

Order fulfillment management

With a WMS, warehouse managers bring transparency into their interactions with customers and shippers. Modern systems can adapt to manual and automated order processing and handle various types and forms of products. Operators can set clear sequences for fulfillment operations, standardizing the order-taking algorithm.

fulfillment management software

With pick-to-light technologies and voice picking innovations, the software is capable of item management, organizing, and retrieval of non-palletized products. The system provides comprehensive reports or fulfilled orders with visual statistics.

The key benefits of order fulfillment management tools:

Seamless integration with other management tools.
End-to-end transparency.
Exception-based management.
Simultaneous control of various warehouse locations.
Direct communication with customers.
Inventory organization.
Staff management.
Product labeling.

Labor Management

Effective automation of staff management leads to decreased expenses and increased employee motivation. Through accurate planning, managers can engage their teams into the most efficient activities, according to the employee's key skills. Improved morale leads to less turnover and provides stability in the company.

Labor Management software

Main technologies:

Cloud-based reports to decrease the total cost of ownership and increased efficiency.
Role-based team management with the support of mobile devices.
Trend analysis and AI-based insights.
Open statistics into the workload, productivity, and employee downtime.
Automated planning, task allocation, and work quality evaluation.

Analytics and Reporting

An average analytical WMS typically includes four main types of analytical content.

Dashboard

All orders, shipments, inventory changes, product updates, task changes, and sales are shown on a large dashboard. This page can be shared with the entire team, access restrictions are typically available.

Data-based forecasts

The software predicts re-orders and calculates the necessary produce number for an optimum stock level.

Descriptions

Detailed information on inventory, locations, logistics, orders, manufacturers, inbound and outbound products, and others.

Reports

Detailed analysis stock value, logistics, inventory, supplies, gross margins, and other key data.

Backups and Integration

WMS tools have built-in cloud storages where all crucial business data can be automatically saved in backup copies. If technical issues arise with a hard drive, the essential information will be never lost.

The integration features allow connecting the tool to other management software, including ERP and CRM. Such practices integrate warehouses into full business strategy. After all, warehouse organization is only a component of retail management, and other aspects of business should be connected to it as well.

How to benefit from warehouse software?

1. Reducing costs

By receiving clear data on warehouse activity, managers evenly distribute the workforce between strategically important and minor tasks. Timely detection of expired products and space management leads to more efficient use of the space and reduces maintenance costs.

2. Better customer service

With order fulfillment automation, suppliers know exactly what items were ordered and when. With tracking tools, there is always real-time data on shipment and logistics. Operating these insights allows reducing order waiting time.

3. Increased productivity

Combined with ETM (enterprise tool management) instruments, warehouse management is powered by tangible data on its progress and efficiency. Using detailed reports in the process of organization allows to achieve the following objectives:

analytics on team efficiency;
accurate restocking plans;
forecasting future capacities and assigning locations of future inbound items;
risk management.

4. Agile and scalable management

Whenever a manager wants to change a certain aspect of the warehouse organization, there is tangible data which can serve as the foundation for such changes. WMSs make innovation easier, considering that there is no need to act in blind - all decisions will be powered by real numbers and accurate metrics.

5. Increased transparency

All team members have a clear idea of what the team is working on. If the warehouse management system is connected to a CRM or ERP, the warehouse management will be integrated into the overall business strategy. Also, this way warehouse management can benefit from insights from marketing, HR, customer relation departments.

How to choose the right warehouse software for your business?

Calculate your budget. Define how much time you spend on performing repetitive tasks, manually tracking stocks, and collecting data. Calculate time on an hourly basis and use your employee's typical hourly rate.
Define what features matter the most to you. As you can see, certain tools take care of 3-4 aspects of WM, whereas others are focused on a single process. Define which ones matter to you the most and start automating those.
Make a list of favorite tools. 5-6 positions should be enough.
Contact the software provider and ask them questions. Even if you don’t have any, it’s a great way to start communication.
Let your employees try out the demo version and ask which tool was easier to use.
Integrate warehouse software with an ERP or CRM system that is a big advantage.

Bottom line

Warehouse software solutions automate the key processes in warehouse management, saving human efforts and time for more meaningful tasks. With a WMS in place, a warehouse manager can focus on strategizing the future development and cooperating with clients, outsourcing repetitive tasks such as organizing the inventory, scheduling work shifts, sending reminders to staff, and gathering stats on efficiency.

Choosing the right warehouse management system defines long-term business efficiency. Therefore, a decision about implementing WMS should not be rushed - it is important to take a step back, define specific objectives, try out available demo-versions, consult employees, and finally, make a choice.

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