Warehouse Management Software, Providers & Systems Comparison

Warehouse Management Software Definition: What is Warehouse Software?

Warehouse management systems (WMS) are commonly referred to as warehouse software or warehouse management software in both English and German business environments. These programs come with a variety of tools to make it easier to organize inventory in general. Movements within warehouses and between locations can be planned, executed, and recorded with them. In essence, WMS software assists you in handling specific processes of goods receipt, storage, relocation, retrieval, and shipping. The primary aim is to initiate and map corresponding goods or material flows. In addition, a warehouse management system monitors relevant processes and allows them to be traced clearly. This results in increased process transparency.

Why should companies use warehouse management system software?

Warehouse management is an essential aspect of successful logistics for companies that deal with goods. The latter is closely linked to ensuring the competitiveness of any such business. At the very basic level, it is important for smooth processes to know how many goods are in inventory and where. If this knowledge is not available, there may be shortfalls, non-compliance with delivery promises, and other damaging consequences. Generally, a lot of money can be wasted if warehouse management is not well organized. This particularly applies to expenditures for the following circumstances:

• Excessive costs for the warehouse location
• Unnecessary goods transport costs (including packaging and insurance)
• Excessive costs for internal transport or shelving systems
• Costs due to contract breaches in case of late deliveries
• Corresponding personnel costs and costs for office material

In order to operate efficiently, you should have a precise knowledge of warehouse capacities, inventory levels, and all associated cost factors and movements. Ideally, these should be organized or initiated and monitored from a central location. A warehouse software can provide enormous support in all of this. Especially for large (e-commerce) companies with a vast product range and various warehouses, using such a system is an absolute must.

How does warehouse and logistics software work?

Warehouse management software is often integrated on site into an appropriate IT environment and networked in larger companies that need to organize many goods across perhaps several locations. However, for small and medium-sized companies, there is also online warehouse management software (SaaS). This can be obtained from a provider and is (ideally) easily usable with any internet-enabled device simply via a browser or a special app.

How a warehouse management system works always depends on the functions it has and the support that the respective company wants to receive through these. In general, however, such programs act as a central unit for organizing one or more warehouses. This gives you an overview of all inventory-relevant data and processes. The warehouse software accepts orders from the ERP or inventory management system. It manages and plans these in a database.

Finally, after appropriate optimization, instructions are passed on to the responsible personnel and the connected conveyor technology. Employees and shelving systems, automated transport techniques, etc., ensure that the relevant goods are treated in accordance with the processes targeted in each case. They reposition products, pack and ship them, or store new items.

So, WMS software provides companies with much more support than just mapping the storage position of articles in high-bay warehouses or similar logistics systems. It can help to realize the entire route from goods receipt to goods issue, including picking for positions ready for dispatch.

The following features are often crucial for the function and practicality of warehouse software.

• Goods control and planning: With functions for goods control, warehouse managers can monitor products (in real-time). This allows the managers to see whether their stocks are over or understocked. This can indicate, among other things, whether the company is wasting money on certain products that are not being bought. Furthermore, practically all processes from goods receipt to dispatch are centrally controlled.

• Optimization of the warehouse layout: Through warehouse layout features, users can identify products according to demand, weight, or size. This allows items to be stored at places that enable more efficient movement. For example, if sales data indicate that a particular product is in very high demand, warehouse managers can ensure through software planning that this product is stored in an ideal location to shorten shipping times.

• Monitoring order fulfillment: With fulfillment functions, users can track, manage, and analyze the order processing of stored or to-be-shipped products. By synchronizing special labels on each product, it is possible to follow and locate each individual item even after it has left the company's premises.

• Labor Management: With labor management tools, warehouse managers can monitor the performance of their employees within the software. The tools allow for planning personnel resources and determining whether the participants are meeting their to-dos or whether there is potential for improvement in certain areas.

• Warehouse Modeling: With warehouse modeling, users of warehouse software can simulate warehouse workflows. Based on these models, efficiency can be optimized under real conditions. These features provide an excellent opportunity to test changes before they are even implemented. Within this function, warehouse modeling even proactively recommends adjustments so that warehouse managers know how to change workflows to maximize efficiency.

• Monitoring and Reporting: Warehouse management software is often equipped with specific monitoring or tracking tools. With the help of these tools, corresponding processes can be tracked and evaluated. This allows you to initiate optimizations based on data.

What are the advantages and disadvantages of Warehouse Management Solutions?

Software for the warehouse can drastically improve the efficiency of goods organization and tracking. With optimized tracking and inventory planning, users can make processes around the receipt of goods, picking, storage, and shipping of products faster and more accurately. This ultimately leads to the budget being used optimally, more shipments arriving on time at customers, and even increased sales. In conjunction with these clear benefits, the following arguments mainly speak for the use of warehouse management software.

• Meeting customer wishes: Shipping time is essential for average online shoppers. Since large e-commerce websites set the benchmark with shipping times of two days or less, other stores must offer the same to remain competitive. Maximizing the efficiency of inventory with a warehouse management system allows even smaller companies to send out more shipments on time and meet increasing customer demand. The same naturally applies to B2B businesses.

• Saving Money: Warehouse management systems help companies with demand forecasting. By monitoring the inventory of a particular product, you can determine whether they need to reduce or increase production or purchase. The use of historical data to develop an estimate of the expected customer demand ultimately saves companies a lot of money or even boosts sales in a different way.

• Better Personnel Management: WMS software can drastically improve onboarding processes for new employees and the efficiency of long-serving warehouse staff. The typical functions of a warehouse system include performance monitoring, work forecasts, KPI management, and a schedule optimization. There are features that allow companies to set goals for their employees, which they must achieve based on certain metrics. This can be of great benefit for compensation based on performance and can also provide a boost in motivation. Conversely, there are excellent features for time schedule optimization that provide warehouse employees with daily schedules and tasks. This keeps them always up to date and prevents them from being idle in the warehouse.

These are undoubtedly very strong arguments for using a Warehouse Management Solution. The question is: is there anything against such programs? Not actually, but it can lead to certain challenges when using a warehouse management system. You should consider these before purchasing. The following difficulties are typical.

• Implementation: The biggest challenge with WMS software is its implementation. The reason for this is that there are hardly any standardizations in the use of a warehouse management system. While an online e-commerce company manages its inventory in a certain way, a car dealership or a manufacturing industry business may do it in a completely different way. These companies have different processes in the areas of sales, compliance with warehouse and shipping regulations, and other logistics-related areas. Therefore, many companies have to rely on a custom, at least modular or highly customizable WMS.

• Integration: Another challenge that also comes up in the context of implementing a warehouse management system is the integration of the application into the entire supply chain. Depending on the degree of connection, some companies have to use their warehouse management system software together with other logistics software providers. The connection to an ERP is required in most cases. Unfortunately, not every warehouse system works perfectly with all other relevant programs. To avoid corresponding difficulties, you should pay attention to compatibility with the rest of the software architecture from the beginning.

Finding the best warehouse management system provider: How to choose a suitable WMS provider?

To find out which provider from the warehouse management software comparison is the best for your company, you should consider specific features and possible advantages. The following factors are central to consider at the beginning of the research. Through them, the selection can usually be effectively limited according to the respective need.

Seamless Integration To provide maximum benefits, the WMS ideally needs to work hand in hand with the used ERP system at least. However, other important programs are often involved in typical warehouse management processes. Therefore, you should make sure to only shortlist systems that integrate seamlessly with the most important established programs in your company.

Maximum Functionality Before you look at a WMS comparison, ask yourself what a warehouse management software needs to do to rationalize as many as possible crucial warehousing processes. Based on this answer, the right functions can then be determined exactly.

A good or comprehensive WMS supports companies in complete warehouse management while reducing the resources needed for order fulfillment at the same time. In the course of this, productivity (ideally) also increases. You'd be wise to make sure that your chosen WMS can track inventory, support delivery operations, and generate reports.

Within a comprehensive warehouse management software, inventory and warehouse processes can be seamlessly controlled, planned, and initiated. Meanwhile, detailed information about production, including the location, as well as inventory, packing lists, shipments, cycle counting, and much more converge in the system.

Flexibility A good WMS is characterized by scalability and flexibility. The introduction of a comprehensive WMS solution is usually a long-term commitment. Accordingly, the system should be able to grow with the respective company.

Even if no drastic increase in sales is expected in the near future, keep all likely future relevant doors open. Ideally, the system provider guarantees compatibility with future operating systems, integrated applications, and hardware in the long run.

Analytics and Data Presentation The degree of detail of data that a warehouse management program can collect, analyze, and present in reports should correspond to the complexity of the related internal company processes. The more products and different locations there are to manage, the more relevant it becomes not to run the processes blind. Errors can creep in enormously, and huge undiscovered potentials can arise.

Therefore, a sufficient portfolio of analytics and reporting features is significant. If you don't know exactly which data is relevant for your own company, you should rely on a solution with suitable automations or additional services.

A good warehouse management system offers easy-to-understand reports, charts, and other metrics that are quickly available for those in charge. The related insights help to plan efficiently for the future, ensuring that delays, downtime, and other deficits are safely ruled out.

Warehouse Management Software Costs: What are the costs of Warehouse Management Systems in comparison?

With WMS, there are generally two different pricing models: Either these systems are offered with an unlimited license or in a subscription model. The following explains the main differences between the two types of provision and their prices.

On-Premise Solutions An unlimited license often involves a one-time payment for an on-premise solution. This type of WMS is actually only offered relatively rarely. Subscription models are increasingly establishing themselves. But for some companies - especially larger ones - an on-site solution can make perfect sense.

It generally requires no internet connection. Furthermore, users of a local solution have full control over all the data contained within it. This includes confidential employee information and other sensitive facts.

Another very significant advantage is the possibility of product customization. When a WMS is purchased once, the product is usually very precisely tailored to the respective needs. This is also possible with cloud software, but not in such detail.

Accordingly, on-premise solutions usually cost quite a bit. The acquisition costs often move in the five-figure range.

Software-as-a-Service (SaaS) or Cloud Solutions Cloud products often work according to a SaaS model and are operated over the internet (in the cloud). They are generally sold as a subscription and require a recurring payment - usually in the form of monthly or annual transactions.

One of the biggest advantages of cloud systems is that they offer more ongoing technological innovations. Once the product is sold, companies benefit from the ongoing improvements by the respective provider. Another significant advantage is the practically non-existent maintenance effort. The system is kept up-to-date and generally fully functional by the provider.

These logistics software types are even quite inexpensive in comparison. They can be purchased from around ten euros per month upwards. With strongly limited functional scopes, they are even available as warehouse management freeware.