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What is a Warehouse Management System (WMS)?

What is a Warehouse Management System (WMS)?

Once an ecommerce retailer starts thinking about growing their business, they will need to figure out how to optimise their warehouse processes. This is where a warehouse management system will come in. This guide will help you learn all you need to know about warehouse management systems and how to choose the right one for your business.

What is a Warehouse Management System or WMS?

A warehouse management system (WMS for short) lets organisations control, manage and administer warehouse operations. Giving complete visibility of warehouse operations from when goods enter the warehouse to when they are shipped out.

How do warehouse management systems work?

Warehouse management systems work by keeping track of all products and warehouse operations. They sync up your warehouse operations with your inventory management and order fulfillment processes. Allowing ecommerce businesses to easily keep on top of their warehouse operation.

There are two main types of warehouse management system you can choose: standalone and integrated. 

Which one is better for you: a standalone or integrated warehouse management system?  

If you use a standalone you will need to integrate it with the rest of your operational systems. While an integrated solution will encompass your whole order management process. 

Before choosing the best one for your business, you should consider the advantages and disadvantages of both.

Standalone WMS

A standalone WMS is a warehouse management solution that focuses just on warehouse management. While it may integrate with other solutions its features will be warehouse focussed.

Advantages

  • Offer a wide array of warehouse operations features: such as cycle inventory counting, warehouse reports and different picking options.
  • Should be capable of integrating with operational solutions, such as; inventory management software, point of sale cysts, ERP solutions etc. 

Disadvantages

  • Lack of visibility over processes. As they are only concerned with warehouse operations, there may be gaps in your reporting when trying to look at the entire fulfillment process.
  • Standalone solutions can be time-consuming as you have to log in to different products to complete the ecommerce fulfillment process. 
  • Often these are not suitable for multichannel ecommerce as they will not include real-time integration with sales channels, nor will they often provide complete inventory tracking and control features. Making it harder to keep on top of your stock levels.
  • They can be cost-inefficient as you will have to purchase other solutions to be able to manage your fulfillment. 

Integrated WMS

This type of wms will have the same database as the rest of your order management system. Meaning that your entire order management flow will be integrated together. 

Advantages

  • Integrated systems give you one centralised system for your order fulfillment needs. This means your orders, inventory and shipping information are perfectly in sync at all times. 
  • Advanced reporting and forecasting. As this type of system keeps track of all your order fulfillment data, it can be used to create more comprehensive reports and make more accurate forecasts.
  • Saves time and money. As you only have one software to login and use this reduces the time it takes to manage your fulfilment process. It also makes it easier for your staff, as they only have to learn how to use one system. You also only have to work with one support team and only have to pay for one solution. 

Disadvantages

  • Depending on the standalone and the integrated solution you are choosing from, it may be that the integrated one has fewer warehouse, or less specialized,  functions. 

Ten steps to choosing a warehouse management system

Choosing the right warehouse management system can often be as simple as taking a few considerations into account:

Step 1. Understand your current systems

If you are already using software to manage your warehouse operations or part of your warehouse operations, then you should start by looking at it in detail. What functions does it have that you like? What functions does it not have that you want? 

You will also need to know what integrations you require from your warehouse management system. For example, you may require it to integrate it with your shipping carriers or sales channels. 

Step 2. Decide if your picking process requires a WMS

If you are running a very small ecommerce operation, like a side-hustle, a WMS is unlikely to be necessary. But, if you are moving any reasonable number of products or you have any ambitions to scale you will need a more sophisticated solution.

Step 3. Understand what you are looking for in a warehouse management system

This is where you make your checklist of ‘must-haves and ‘like-to-haves’. You can then compare this list against your options.

Step 4. Decide on your budget 

Of course, good warehouse management systems will cost money. So you will need to know how much money you can commit from your cash flow to purchasing one.

Step 5. Create a shortlist

There will be a few different options you can choose from. The easiest way to decide which ones to shortlist is simply to create a list or spreadsheet listing prices and features.

Obviously, we hope you choose Veeqo! But the key is making the right choice for your business.  

Once you have created a shortlist you can then go and use free trials or book demos with those you think are right for you.

Step 6. Check it integrates with your entire fulfillment process

Warehouse management is only part of the puzzle of ecommerce. Your WMS should also connect with your inventory management system and shipping carriers.

Veeqo is a complete ecommerce fulfillment platform, so it covers all of these areas in one platform. But not every WMS does. 

Step 7. Check it gives you the reports your need

A good warehouse management system will give you reports that can make definite improvements to your business. It should provide these reports in an easily accessible way.

It’s also good if the WMS provides demand forecasting as this will help prevent under and overstocking in the future. 

Step 8.  Check it works with your ecommerce tech-stack

You probably use a range of platforms, marketplaces, sales channels and shipping carriers. You need to check that your warehouse management system either has a native integration, seamless workaround or open API to do this.

This is where you can make use of a free trial. As it’s hard to know if a system works for you without testing it out.

Step 9. Is it easy for pickers to use and understand?

A good WMS will be easy for your pickers and warehouse team to understand and use. While there will always be a training period with any new software, you should look for an intuitive interface and easy-to-understand processes. This will make it easier for your team to pick up the new system and cut down on training time for new hires. 

Step 10. Does it come with support?

Your business will be unique, therefore it’s important that any service you purchase comes with support. This support will be able to help you through any issues that arise with the product.

Key Features of warehouse management systems to look For

There are many different warehouse management solutions on the market, so choosing one that suits your business needs can be daunting. So, here are some of the key features you should look for in your warehouse management system.

Automation

Automation can be a great tool for an ecommerce business to save time and be more efficient. Automation should be able to help you reduce the scope for human error in your fulfilment process. This is because, once set up, what happens to products is determined based on pre-set rules. Which your picking and packing team then just needs to execute.

Digital picking

While many ecommerce businesses start out with paper picking, as they grow they will probably want to move towards digital picking. Whatever warehouse management system you choose, it should be set up to allow for digital picking if it is going to be in any way futureproof.

Easily accessible reports 

Amazon Seller Tips - Veeqo Reporting

Ecommerce is a data-driven industry. The more data you have access to, the easier it is to make correct decisions. A good warehouse management system will provide you with all of this data in an easily accessible form.

A WMS offers many opportunities to track and generate reports to oversee different aspects of your warehouse operations, such as pricing, tax systems, landed cost management, best-performing sales channels, peak sales season, most efficient picker, etc. 

Inventory tracking & control

A modern, integrated WMS will let you track inventory movement at all times. Giving you a live inventory tracker.  This is the first step in giving you control over your inventory. You can learn more about inventory control in this guide.

Cloud-based

It’s increasingly important you are not tied to your desk to access the information you need. Cloud-based systems allow you to access your WMS from anywhere you need. 

Demand forecasting

Demand forecasting and the appropriate purchase order generation is a standard feature many leading WMS’s offer, which is important so that you don’t end up processing surplus orders. Veeqo comes with a powerful reporting and forecasting feature.

Key benefits of a WMS

Faster, more accurate fulfillment

Today’s ecommerce world requires being able to offer fast, reliable, delivery. Your customers will expect Amazon-like performance. If you can deliver it, you will get positive reviews and repeat customers. If you can’t meet this expectation, you will receive poor reviews and fewer repeat customers. 

Whether you are a smaller ecommerce business or a larger operation, human error can still hold you back. Simple mistakes can result in mispicks, returns, and bad reviews. A WMS will drastically reduce the scope for human error. Both speeding up your fulfillment process and making it more accurate. 

Connects your warehouse to your entire ecommerce operations

To succeed in the modern ecommerce world, you will need to make sure your sales channels and marketplaces are in sync with your warehouse process and inventory management. This way you can fulfil your customer orders accurately without having to worry about overselling, mispicks and returns. 

Fulfil more orders with a smaller team

As a business grows and makes more sales, it can lead to their warehouse team growing in size. However, doing this leads to a more expensive and often less efficient warehouse operation. That’s one way a warehouse management system can prove its worth, by streamlining processes so that you can do more with a smaller team.

Manage multiple warehouses or just one location

As your ecommerce business grows, you may likely need more than one location from your stock. A warehouse management system will tie all of these locations together, giving you one source of data for each location.

More visibility

Warehouse management software should be able to provide everyone with the visibility they need to do their job accurately. This could include having a live dashboard everyone can see, providing an audit trail for all stock or live inventory counts. 

The importance of digital picking

While many companies still do paper picking, more and more are turning to digital picking each year. Veeqo supports both paper and digital picking. 

How digital picking works

Digital picking works by connecting the products you sell to those in your warehouse through a system of barcode scanning and batch picking. 

Once a sale is made, an order is added to a queue to be picked by your warehouse team. A queue is simply a group of orders sent to your warehouse to be picked and shipped.

Once the picker accepts the batch, they then pick and scan the orders and take them to packing stations to be shipped.

Advantages of digital picking

The number of retailers taking advantage of digital picking is growing year on year. It’s a growing trend because:

It’s better for the environment

Digital picking saves paper with every order, helping reduce the carbon footprint of your business and the ecommerce industry as a whole.

It’s efficient and accurate

Digital picking reduces human error and optimises the picking, packing and shipping process.

It’s flexible

Veeqo’s digital picking process allows the ability to override automation when it suits you, such as prioritising certain orders.

To take advantage of digital picking in Veeqo you can either use the Veeqo App or the Veeqo Scanner.

The advantages of automation

As we’ve said above, automation is key to successful warehouse management. With Veeqo, the key benefits of automations are:

Automate warehouse tasks for increased efficiency

With Veeqo, you can create workflows to automate mundane tasks using custom triggers or conditions.

This lets you select shipping services based on delivery options, assign specific branded invoices to orders based on sales channel, add order tags based on customer ZIP code, and much more.

Update processes without decreasing accuracy

Changing processes as your business grows can be challenging,  especially when your frontline teams need to adjust their operations.

With Veeqo’s automation you can easily make changes to business logic, such as shipping services or priorities, without sacrificing accuracy or disrupting how the warehouse team works.

Use advanced picking batch creation to optimise your picking processes

One of the key ways you can reduce the scope for human error is by having your warehouse management system filter your orders into picking batches. These picking batches will figure out the optimal route for your pickers to take. Saving them time while picking and meaning your warehouse manager has one fewer job.

Save time with optimised picking routes

As businesses grow and their warehouse operations get more complex, it becomes more important to make sure the order pickers pick products is optimal. While not doing so may only cost minutes, these minutes quickly add up to real losses over time.

You tell Veeqo’s software the location of the different bins holding your products, Veeqo’s state-of-the-art software then works out the optimal route for your pickers to take.

Split picking lists between multiple pickers

Creating picking lists is a tedious process if you are trying to do it manually. You would need to figure out exactly the best items for each picker to pick based on order priority, bin location and more. Just to fulfil your orders.

A warehouse management system will manage all of this for you, so all your pickers have to do is press a button.

We hope you found this article interesting, and that you are interested in considering Veeqo’s ecommerce fulfilment solution.

If you’d like to learn more, then you many be interested in the following pages:


Unify your apps and processes to unblock growth

Inventory

Full realtime visibility across all sales channels.

Learn more about Inventory

Picking

Real-time picking updates and dashboards.

Learn more about Picking

Shipping

Quickly bulk ship orders, automated repetitive tasks.

Learn more about Shipping

Reports & Forecast

Report, forecast, purchase and replenish stock.

Learn more about Reports & Forecast

Start using Veeqo today

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