Sunday 16 December 2018

Warehouse management system (WMS)

A warehouse management system (WMS) is software and processes that allow organizations to control and administer warehouse operations from the time goods or materials enter a warehouse until they move out. Operations in a warehouse include inventory management, picking processes and auditing.

A warehouse storing certain items and issue in a certain amount. Suppose x is then the storage expenses could be just x or x + y, where y is the buffer stock, the buffer Level need in Indonesia, given the continuity of supply is not guarantee by the vendor, but zero's theory says the stock is a good thing, but it was at high risk against the potential loss of sales of the company.

Warehouse management system


Reservation is made base on the needs of administrative expenses. The needs of expenditure foreseen in advance by historical data or being estimate. The reservation is made to suppliers with the agreement time (term of payment (TOP)), where the TOP later achieve the number bigger than DSI (Day Sales Inventory) or time save items to be money.

For example, if the company manage to sell within 3 days and the TOP is 6 days, then the company profit, because it manage to sell 2 times but recently paid as much as 1 time.

Many Administration deals with suppliers. The agreement also returnable products profitable companies than buy system broke up.

Types of Warehouses

In general, here are the types of warehouses

  1. Retail Distribution Center: This type of warehouse typically supplies product to retail stores, such as Wal-Mart or Target. The customer for this type of warehouse is the retail store.

  2. Service Parts Distribution Center: This type of warehouse holds spare parts for expensive capital equipment, such as planes or other types of manufacturing. Toyota has a network of supply parts distribution centers where they supply automotive parts to the manufacturing plants.

  3. Online Retail or e-commerce: This type of distribution center receives orders online, then those orders enter the pick, pack, ship process to the end customer.

  4. 3PL Warehouse: This type of warehouse is where a brick-and-mortar retailer of an online retailer outsource their warehouse operations. For example, often acts as a 3PL to large retailers, such as Target. In other words, if you purchase an item from, that inventory is actually house in’s fullest centers and will be ship from there. In this example, acts as a 3PL to Target.

  5. Perishables Warehouse: Similar to the examples above, this type of warehouse holds food items or pharmaceutical items that have a short shelf life. This type of warehouse usually is part of a “cold chain” where temperature and other conditions that can impact the merchandise is closely monitor and control.


This Agreement could even be such a tight, such as one foreign retailers that cases caught in CHOCOLATE, one of them because of the alleged agreement on prices so that suppliers are getting into retail should be cheaper than retail anywhere ordering of goods equal to the supplier. This is a form of monopoly practices.

The close relationship the Administration also conduct in order to establish supplier relationship management. Many factors affect the supplier relationship management and it's a lot of business ethics is concern.

Data Inventory

Administration is spearheading the entire recording of the incoming goods flow out, so the more operational control be facilitate by the existence of the accuracy of the data. Evidence of logging stuff out entry would affect some of the following:

  1. The number of stock items.

  2. Claim payment of goods in and out.

  3. The basis of ordering goods.

  4. Study the trend of sales.

This demanding preparation Data accuracy of data in real time and can be account for.

Robust administration needs to be built through computerization and integration between resources that run it. Information systems related to the database requires people who are familiar with the database.

Here are a few main reasons why warehouses exist:

  1. Match Supply with Customer Demand: Because demand can change quickly, having the appropriate level of merchandise ready to ship to the customer. It is a key ingredient in a good customer experience. In this case, the warehouse allows for quick and rapid response and acts as a buffer to the changing customer demand.

  2. To Consolidate Product: In warehousing, the debate isn’t about one-piece flow versus batch. It’s really about what level of batch is appropriate. There is a fix cost any time product is transport. To lessen the cost burden on the supplier. It often makes sense to fill the carrier to capacity. Because of this dynamic, consolidation of inventory has come into play. It is a major strategy to reducing overall supply chain land costs.

  3. Provide Value Added Processing: In some situations, to differentiate in the market require adding some value added processing prior to selling merchandise to the customer. This might mean strategies such as creating kits of various pieces of inventory. To create a sale-able product (known as kitting). An example of this is with bicycles: bicycles come in parts and are consolidated at a warehouse for assembly. The company then sells the bicycle whole, not in parts.

Despite the complexity, WMS implementations do offer businesses significant benefits. Not only will placement and removal cycle times be reduced, but inventory accuracy should be improved as well as increased storage capacity, more organized storage of materials and greater flexibility of warehouse operations.

Implementing with software

The complexity of a WMS implementation varies with every business. The physical dimensions and characteristics of each item in the warehouse are required to be collected and entered into the new system. Capacity calculations require the physical size and weight of the item as well as the dimensions of all the storage bins or racks in the warehouse.

The storage options for each item are require, for example if the item can be store separately, in box, pallet or if it can be stack. Each item must be review to see if it is physical limitations on its storage, such as requiring refrigeration. Hazardous material information needs to be collect so that the item is not store in certain areas.

Configuration of physical stocks of warehouse

This information is only part of the requirements of the WMS implementation. The system requires decisions or configuration to be made on how items are to be place or remove from the system. In what order, for what types of materials and what methods of placement and removal should be use. The implementation requires significant input from the resources. That operate the warehouse on a day to day basis and this can be a strain on warehouse operations.

A successful project will recognize this fact and ensure that the key personnel require for the implementation are give adequate back up. So that warehouse operations do not suffer.

After the successful launch of the WMS system, many businesses will find that the resources require. To operate the system is greater than prior to the implementation. This is primarily due to the data intensive nature of the software and the fact. That warehouses are in a state of flux; racks are move, placement and removal strategies change, new items add, new processes develop.

Increase Accuracy

Warehouse accuracy is paramount for the software to operate. Even and to do this data will need to be enter accurately and in a timely fashion. Although most WMS implementations will reduce labor costs in the placement. Even and removal of materials, there is often an add warehouse management function require. Just to operate the software.

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