What is a WMS (warehouse management system)

What a WMS controls

A WMS works with the smallest unit the warehouse needs to control: the location. An administrative system records that the warehouse holds 1,240 units of a product. A WMS records that 48 of them are in location A-01-01-1, with lot L2410, and that 36 are in quarantine awaiting inspection.

With that level of detail, a WMS controls the warehouse processes:

• Receiving: compares what arrives with what was expected and captures the lot, expiration date and serial number.
• Put-away: suggests where to store each product and records the final location.
• Stock: shows the quantity of each product by location, lot, serial number and status.
• Picking: allocates the location and lot that fill each order and guides the picker.
• Packing and shipping: builds the packages, loads them with the carrier and produces the manifest.
• Counts and adjustments: compares physical stock with recorded stock and records each adjustment with its approval.
• Returns and transfers: records what comes back and what moves between warehouses.

How a WMS differs from an ERP

The ERP manages the business: purchasing, sales, invoicing, accounting and inventory valuation. The WMS executes the physical work behind those transactions. The purchase order originates in the ERP. The receipt against that order, with its lot and location, takes place in the WMS, which reports back to the ERP what actually arrived.

Many ERP systems include an inventory module that is sufficient for a small warehouse with few products. The difference appears when the warehouse needs locations, lots with expiration dates, several people working at the same time and scan validation. The comparison WMS and ERP explains when each one is appropriate.

How a WMS works on the warehouse floor

A WMS is used in two places. On a computer, administrative staff create products and locations, receive the documents from the ERP and review the indicators. On the floor, operators work with handhelds: mobile computers with a barcode scanner and, in some cases, an RFID reader.

The handheld shows the operator the next task, and each step is confirmed with a scan. If the operator scans a location or lot other than the one assigned, the system reports it at that moment, before the error reaches the customer.

Example: an order from receiving to shipping

The following is the path of a product in Chainlink WMS, with the codes the system generates:

1. Receiving. Purchase order PO-1211 arrives. The operator scans the GS1-128 label on each case, and the system records product P-2001, lot L2410 and the expiration date. If the lot expires before the product's minimum shelf life, receiving stops.
2. Put-away. Closing the receipt creates task MT-000231: 48 units to location A-01-01-1, which already holds the same lot.
3. Picking. An order arrives. The system allocates the lot that expires first (FEFO), and the picker receives the pick: location A-07-03-2, product P-2001, lot L2409, 4 units.
4. Packing. The packer builds the package by scanning each item and records its weight and dimensions.
5. Shipping. The package is loaded onto the shipment by scanning, with the carrier, license plates and seal, and the manifest is printed.

Each of these steps is posted to the product's stock ledger, with the date, the user and the document.

Cloud or on-premise

A cloud WMS is purchased as a service: the provider operates the servers, backups and updates, and the company pays a recurring fee. An on-premise WMS is installed on the company's own infrastructure, and the company takes on its operation. The guide cloud WMS or on-premise server compares both options.

Signs that a warehouse needs a WMS

• The system inventory does not match physical stock, and the difference cannot be explained.
• Finding a product depends on one person's memory.
• A lot that expires later ships first, or expired goods are shipped.
• Orders ship incomplete or with another customer's product.
• The annual count stops the warehouse for one or more days.
• The operation exceeds the capacity of a shared spreadsheet.

If several of these signs apply, the guide how to control warehouse inventory describes the basic controls, with or without a system.

About Chainlink WMS

Chainlink WMS is a cloud warehouse management system from Business in a Wave, S.A. de C.V., based in Guadalajara, Mexico. It includes a web application for administration, an Android app for Zebra and Honeywell handhelds, label printing on Zebra printers and, in Professional and Enterprise, RFID. Its prices per user license are published on the pricing page.