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4 Types of Warehouse Software: What to Know


Person picking up box in a small warehouse halfway full of inventory kitting

Long gone are the days when a clipboard and a calculator could manage a warehouse. Today’s supply chain demands integration, transparency, and accuracy at levels previously unimagined. There is so much data that needs to be accumulated, sifted, collated, and acted upon that no human is capable of tracking it all. The warehouses of today require specialized software to manage the flow of data and goods efficiently. The business of today also needs to have complete real-time transparency in inventory levels, movement, reorder points, and the ability to track KPIs for assessment and evaluation.


The Four Types of Warehouse Software

There are four primary software suites used in warehouses today: Enterprise Resource Planning, Warehouse Management Systems, Warehouse Control Systems, and Warehouse Execution Systems. Knowing what each of these are and how they are used can help you decide which system is right for your organization.

Enterprise Resource Planning (ERP)

ERP systems have been around since the 1990s and originally focused on the internal functions of a company, with little thought of customer integration. Over time, they have developed to incorporate modules for almost every aspect of a business, from back-end manufacturing to human resources, and even e-commerce.


The basic characteristic of an ERP system is that it is an integrated suite of software that shares data via a common database through a consistent-looking user interface. ERP systems are designed to combine finance, manufacturing, human resources, supply chain management, and many other departments into an integrated whole. They have dramatically altered the business landscape by allowing access to information from one department to another without conflicting software issues, and have allowed data to be looked at holistically rather than in a department-by-department siloed environment.

Warehouse Management Systems (WMS)

WMS systems are specialized software that controls the daily management functions of a warehouse. Their primary function is to support employees in order receiving, putaway, storing, picking, reordering, and shipping. This highly customizable software tracks SKUs, inventory storage locations, receiving/shipping locations, and more to optimize daily workflow. They are also used to assign employees based on projected peak times and wave locations to minimize staging.


WMS systems on the market today support mobile scanning of inventory using smartphones or tablets. They are also excellent at cycle counting, expiration date tracking, and documentation. They can be used as a standalone system or integrated into an ERP for a more cohesive operation.

Warehouse Control Systems (WCS)

WCS controls the material handling subsystems such as conveyors, sorters, palletizers, etc., using a unified interface. The primary function of the WCS is to take the orders from the WMS and allocate material handling resources efficiently to execute those orders. The WCS can collect data in real-time on operational performance in order to optimize order fulfillment and routing requirements. The WCS can determine at each step the most effective routing of a product through the warehouse’s integrated systems and shift resources to reduce staging or downtimes.


The WCS is designed to work with the WMS acting as the host. While the WMS tells the WCS what to do, it is the WCS that determines how best to accomplish that order.

Warehouse Execution Systems (WES)

WES is a relatively new software concept and can be considered as a hybrid of the WMS and WCS systems. This software specializes in material movement and automation control using more advanced Artificial Intelligence technologies to manage inventory and workers. WES systems have an advantage over WMS or WCS in their ability to incorporate omnichannel fulfillment operations. Like the WMS, the WES can integrate with an ERP.

Warehouse Execution Systems are starting to take the place of the WMS and WCS by fulfilling both roles in terms of material handling as the WES is optimized to handle high volume orders on a real-time basis and direct workflow to increase waveless processing. Waveless processing creates a constant flow of work rather than batches that can affect efficiency.

How The Four Software Systems Are Used

Each warehouse software suite specializes in a specific task. Let’s look at a simple example of how these systems operate together in a warehouse.


Person using a forklift moving several boxes of inventory through a large warehouse

Let’s say an e-commerce order comes in. The ERP system that takes the order will pass on the product information and shipping location to the WMS. The WMS will direct employees to the proper storage locations for picking while automatically generating the picking lists and order invoices. Or, if the warehouse is automated, the WMS will pass the inventory location information on to the WCS, whose job will be to direct the robots and conveyors to retrieve the product. If multiple items are placed in the order, the WCS will determine the most efficient picking order for the items to ensure they all arrive at the packing point simultaneously.


At each stage of the journey, information is flowing back up to the ERP and on to the customer regarding order status. If inventory levels are getting low, the WMS will issue an automatic replenishment, and the billing information will move up to the ERP system’s finance module.

Which System Is Right for You

The type of software your organization incorporates is determined by your specific needs and working environment. For a small business with a single warehouse, a standalone WMS can meet your needs. If your warehouse uses a lot of automation, a WCS can provide a uniform management system. For a larger company, or one wishing to integrate each of its department’s data, an ERP system can provide the customizable functionality desired.

When choosing a system, there are many variables to consider, including cost, hosting, implementation, support, and training, just to name a few. While there can be a high initial cost of investment, the ROI can be considerable when the company finds it now has the ability to see real-time data and how the integration reduces lead times, mispicks, and returns.

 

ABOUT THE AUTHOR


Jason Kelly is currently completing an internship with ASCI. He is a senior at the University of Alaska Anchorage finishing his final semester for a bachelor’s degree in Global Logistics Supply Chain Management with a minor in Computer Information Systems. He is also scheduled to receive an Occupational Endorsement Certificate in Business Analytics. His experience in logistics lies in oilfield supply, inventory consignments, and air cargo shipping.  


Contact us at hello@ascillc.com or (907)348-1610 if you would like to set up a free consultation appointment to help with your business’ inventory management needs. 

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