The Definitive Guide to Warehouse Management

What is warehouse management?

Warehouse management is the ability to effectively store inventory and achieve 100% fulfillment so an organization can keep pace with growing internal and external business requirements. A warehouse is the backbone of an organization’s distribution infrastructure, and when managed correctly, it will reduce operating costs and improve levels of service.

Inventory management vs. warehouse management

Inventory management is the basic approach to handling stock levels whereas warehouse management is a more comprehensive strategy that includes all aspects of running and improving warehouse operations. Inventory management is under the warehouse management umbrella, but warehouse management involves a broader focus including inbound and outbound functions, such as putaway, pick, pack and ship processes.

Top 10 warehouse management best practices

Benefits of warehouse management

Supply chains are often invisible to consumers, but those in charge of warehouse management know the critical role these large buildings used for storage play in everyday life. Good warehouse management provides visibility of inventory and activity in real time as it moves through the warehouse processes and enables data-driven decisions. Additionally, the space utilization in the warehouse not only ensures the best use of the storage volume, but it makes picking and packing process workflows easier for efficient and rapid order fulfillment. Ultimately, this leads to savings in labor and costs. When managed correctly, an organization can make quick and accurate decisions, attain flawless execution, deliver excellent customer service, and stay ahead of the competition.

Principles of warehouse management

Understand the key goals of the warehouse

Your warehouse needs to match your business and the first principle is to ensure the management goals within the warehouse match the goals defined by your organization. Things to consider are:

• What are your key business objectives?

• Who are your key customers?

• What are the most important goods you supply?

• Is the warehouse as efficient as it can be?

Manage your inventory levels

Inventory levels cost money and use up space; the warehouse manager needs to balance having the least inventory possible, but always having what is required by the customer. This process of managing the right inventory levels, and at the same time making sure it is in the right place within the warehouse, is the second principle and requires accurate forecasts and effective plans for resolving problems.

Control the movement of goods

The layout of the facility and the location of the goods within the facility all help in controlling the movement of goods within the warehouse. This principle is really the process of traveling the least distance possible to perform the most work possible.

Make quality a key target

Efficiency and optimization are only valuable if the work is accurate and quality has to be the first and foremost goal of the workers in the warehouse. Creating workflows that drive quality and self-correcting processes throughout the facility ensure the quality of work within the warehouse.

Pick the right WMS software and partner

Your warehouse management system (WMS) will either help or hinder your drive to the previous principles. Getting the right technology and right technology partner to run your warehouse will make things far more simple and attainable.

How to gain efficiency in the warehouse

The critical factor with gaining warehouse efficiency is understanding both the usage and availability of your space.
Getting a handle on the size of your warehouse and the sizes of all your products will allow you to drive efficiency.

• Attain accurate cube data on all your items and units of measure.

• Get accurate cube data on all the locations in your warehouse — this does not mean the dimensions, but the actual usable space of each location.

• Ensure your putaway process allows for flexible inventory placement.

• Consider the cube of the items when performing ABC slotting.

• Manage your cross docking and order staging with an eye to the dimensions of the goods.

What does a warehouse management system do?

At its simplest level, a warehouse management system utilizing mobile technology will lead an operator through the process of moving goods from place to place within the warehouse. The technology behind the WMS will attempt to do this in the most effective and efficient way, while making sure the operator makes zero errors during the process. In addition, the WMS will track and record the goods already in the warehouse to make sure they are being stored in the proper locations and consumed in the correct sequence.

Take for example a warehouse that serves a mid-sized distributor of hard goods; throughout the process of managing the warehouse there are decisions that must be made and critical instructions that must be followed. A WMS will track and manage these processes while ensuring 100% accuracy with the least amount of labor.

Receipt

This is the process of when goods arrive at the warehouse shipping dock. A WMS will efficiently help determine and confirm the right product, in the right quantities, in the right condition, weight and dimensions all at the right time.

Putaway

The objective is to move goods received to an optimal storage location as quickly and efficiently as possible. During the putaway process a WMS considers different factors (e.g., if the goods need refrigeration, if there is an order already waiting for the goods, etc.) and calculates the location and best possible route to take when putting away the items.

Storage

This is a critical process to ensure all available space in the warehouse is maximized without compromising productivity. A WMS tracks if goods are in the best location, if the amount of goods is accurate or if a reorder is necessary, if the goods have expired, etc.

Picking

This is the process used to retrieve goods in the warehouse and consists of picking by item, group or zone. The WMS communicates and controls the picking task by providing explicit direction to the pick person via mobile data devices, interactive voice and pick-to-light modules, and by controlling the quality of results with various forms of automatic identification (e.g., barcode scanning, etc.). Directions will include details such as how many to pick, what type of pack size is best to pick, which lot number to pick and if the item requires pre-work (e.g., price labeling, tagging, assembly or similar).

How does a warehouse management system fit in the supply chain?

A warehouse management system performs three key functions for the supply chain: cross-docking, distribution and warehousing. Balancing these three warehouse management functions creates an efficient supply chain operation and enables you to adapt to customer demands.

Why are companies upgrading their warehouse management systems?

The pivotal role of the warehouse management system

The WMS plays a crucial role in enabling your organization to complete daily activities spanning from receiving, putaway and inventory management to picking, packing and shipping — and much more. Anything less than a robust WMS will hinder your ability to grow and serve customers effectively.

Unfortunately, many decision makers delay the move to a best-of-breed warehouse management system because of the perceived disruption these projects can cause. A feature-rich WMS can certainly involve an extensive amount of work to develop processes, configure the software, integrate with your enterprise systems, prepare the IT infrastructure and execute testing plans. However, delaying the move to the right technology in turn can postpone responding to customers’ needs, revenue-generating growth and the competitiveness of your business in the market.

Some companies have elected to implement “WMS light” options designed with a reduced feature set. However, these typically do not allow for the type of growth and the associated complexity in distribution requirements these companies may ultimately require.

Cross-docking

This is the management of goods in the warehouse that are received and shipped within a very short timeframe. There is usually little to no on-hand inventory and the focus of a cross-docking operation is to eliminate storage and retrieval tasks. This is applicable to the initial receipt of seasonal items, non-stock or pass-through items and backordered items. The WMS helps ensure the product is received and staged for shipping in as few steps as possible.

Distribution

This is the management of goods that have relatively low inventory levels and a high turn rate. The focus of a distribution center operation is satisfying customer orders as efficiently as possible while holding the least inventory. The WMS simplifies the order picker’s job by using appropriately sized and identified picking locations. Overstock is usually kept near pick locations and there is an emphasis on the optimum slotting of items.

Succeeding in a challenging distribution environment

Simply put, it is not always easy to achieve highly effective distribution operations in today’s fast-paced environment. Customer expectations are exceptionally high in the era of the “Amazon effect,” when fulfillment cycles and delivery times must be continually compressed. This is because consumer expectations for expedited delivery have become the norm on the B2B side as well, placing untold pressures on global supply chains.

Exceptional warehouse management is the key to growth and long-term success. This is possible through the right approach to technology, which includes any necessary material handling equipment as well as a proven, feature-rich warehouse management system. Only with effective systems underpinning your operations can you process the growing volumes of orders, manage inventory and ensure your associates carry out each step of their directed tasks properly every minute of the day. Accuracy and reliability are essential. There isn’t any room for error if you want to stay competitive.

How to choose the right warehouse management system

A modern warehouse management system will support your business as it grows and changes into the future. You will want to find a system that offers low overall risk. This means you can get up and running quickly on the system via a rapid implementation model and can make software changes over time to meet new challenges. This adaptability is a critical factor in molding the system to your specific customer or industry requirements where appropriate.
Finding a system that is ‘future proof’ is also important. Not only do you need core functionality to be in place today, but you also need to be able to stay on the upgrade path down the road as new enhancements are released and you want your warehouse management system to keep pace.

Take a look at five key questions that will help you paint a clearer picture of how to choose a warehouse management system.

7 key steps to implementing warehouse management systems

Elite™ warehouse management system

Tecsys’ Elite™ WMS is a visionary, scalable and adaptable solution that addresses the complexity and economic challenges of distribution operations in several industries to help you keep pace with a shifting landscape and move forward confidently.

Your warehouse operation is your most vital asset to deliver on promises made to customers and achieve a high level of customer satisfaction. In today’s world, a combination of best practices and platform technology helps world-class distribution organizations achieve market differentiation, eliminate inefficiencies, improve order accuracy, reduce operating costs and attain high levels of service. Undoubtedly, your warehouse is more critical than ever.

For more than four decades, we have helped hundreds of leading organizations solve their unique warehousing and distribution challenges — landing us in the Gartner Magic Quadrant for Warehouse Management Systems for 13 consecutive reports, positioned as "Challenger" since 2022.  

Aetrex

Aetrex is widely recognized as the global leader in comfort and wellness footwear. Originally known for the landmark development of arch supports and medically oriented footcare products, Aetrex has come a long way to become one of the leading footwear companies in the U.S. and around the world. To meet its goal of becoming a major brand in footwear, fast-growing Aetrex needed a strong supply chain infrastructure to support its go-to-market strategy and provide its management and customer service staff with the right information to better serve clients and distributors.

Aetrex selected Tecsys’ warehouse, distribution management and EDI applications to support its goals. The company chose Tecsys due to its unparalleled customer care and responsiveness as well as the strength of its applications. Since implementing Tecsys’ solutions, Aetrex has grown at an aggressive rate and achieved its strategic sales and customer service goals. The results speak for themselves: Aetrex has increased volume by 80% without additional staff, increased inventory accuracy by 70% and reduced cost by 24%.