What Is a Warehouse Management System?

Every efficiently running warehouse has a good warehouse management system (WMS) that operates behind the scenes. A WMS records and manages almost all of the activity inside a warehouse, including shipping and receiving, the storage of goods, picking, packing and more. In public facilities, the WMS will also usually monitor the ownership of each item by the customer.

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What Does a Warehouse Management System Do?

A comprehensive warehouse management system integrates with a warehouse’s internal and external software systems. Once integrated, the WMS should provide an easy and efficient means of monitoring inventory and performance. With the right WMS, you can assess the operational systems that manage your supply chain, inventory, transportation, barcode scanning, enterprise resource planning and e-commerce platforms. For instance, with a WMS you can see the status of your inventory at any time and location, be it in a facility or in transit.

A good WMS also provides an organization the ability to customize workflow and picking logic. In turn, these ensure inventory allocation is optimized and the warehouse’s design is at its most efficient. The goal of a WMS is to reduce the likelihood of errors while increasing the speed at which orders are filled.

Types of Warehouse Management System

There are three primary types of warehouse management systems: standalone, enterprise resource planning (ERP) modules and cloud based. Below, we break down what each type of WMS involves.


Standalone: A standalone WMS exists on the premises, where it is deployed on native hardware using the business’ own network. It is also integrated with the rest of the organization’s business management software. This is the most common type of WMS, and they are usually operated by third parties. While standalone systems are the most affordable, they often lack the advanced features available with other types. Further, they can sometimes suffer from duplicate data entry, information delays, customization expenses and interface errors.

ERP modules: ERP modules make up part of an enterprise resource planning system. Operated by an ERP vendor, this type of WMS provides embedded electronic data Interchange, accounting, sales orders, material requirements planning and shipping management in real time. Typically, all of this information is accessed through an easy-to-understand interface.

Cloud Based: Cloud-based warehouse management systems operate via web-based software. Because no physical equipment is maintained onsite, this type of WMS is best in terms of flexibility, scalability, security and disaster recovery. It also offers the benefit of seamless integration and automatic software updates without additional capital expenditures, which ensures the operation is always using the latest technology.

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