How Warehouse Management Systems Work: Receipt to Fulfillment

The days of traditional paperwork and manual tracking processes are all but behind us. In their places we find warehouse management systems (WMS), software that incorporates all elements of warehouse management into a single, easy-to-use platform. Few shippers are familiar with all the ins and outs of these platforms, but understanding how they work isn’t too hard with some fundamental knowledge.

Key Takeaways

• A warehouse management system stores information about inventory, including stock keeping units (SKUs) and location in the warehouse.
• When orders are received, the WMS automatically communicates with IOT technology, including RF scanners, to notify warehouse employees of further instructions.
• To interface with your own business software, a WMS will use a data transfer protocol such as an EDI or API. Doing so facilitates an easy exchange of information between the two systems.
• Third party logistics (3PL) providers with advanced WMS can offer shippers the fastest dock-to-stock times and fully detailed tracking and tracing. 

In this article, we’ll go over how warehouse management systems work step-by-step, and how the advanced WMS at Fulfillment and Distribution will help you meet the needs of your business.

How a Warehouse Management System Works

Before we get into the step-by-step functions of a WMS, keep in mind that there are four basic types with some differences between them.

• Standalone: These are designed to carry out basic functions such as supporting barcode scanning, picking, packing, and putaway. Standalone systems don’t integrate with outside software.
• Supply Chain Execution Modules: Modules like this are meant to be added to pre-existing software, adding WMS functionality to the program in question.
• Enterprise Resource Planning (ERP) Systems: As a fully integrated system, ERPs can contain WMS functionality, but also incorporate software that supports human resources, accounting, supply chain management, and several other business operations.
• Cloud-Based: Utilizing a software-as-a-service model, cloud based WMS can be altered, updated, and scaled faster than traditional systems.

Steps may vary based on the type of WMS being used, but there are some general features they all share in terms of how they work. 

1. Receipt of Advance Ship Notice (ASN)

Before your shipment arrives at your 3PL, the vendor should provide an ASN via the warehouse management system. This allows the 3PL’s management to staff their warehouse properly and avoid delays stemming from insufficient labor.

2. Check In and Verification

When the shipment arrives, staff will use WMS-enabled scanners to reconcile the contents of the physical shipment with the ASN and note any discrepancies. This avoids manual paperwork, reducing the potential for human error and maintaining accurate on-hand levels.

3. Simplifying the Putaway Process

One of the primary purposes of a WMS is optimizing use of available warehouse space, and this is evident in the putaway process. In addition to ensuring there’s no wasted space, the WMS can provide a warehouse map for employees to follow during putaway.

4. Order Picking

When the warehouse receives an order, the WMS will be triggered to send tasks to warehouse pickers. Notifications are sent via RF devices or voice systems.

5. Packing and Labeling

The system facilitates easy fulfillment by printing out retailer-specific labels and instructing workers on the most efficient packing methods. This minimizes the chances for products to be shipped to the wrong address and reduces cargo shifting in transit.

6. Upstream Synchronization

Upon completion of an order, the WMS updates the warehouse’s inventory. In a 3PL, this usually involves communicating new inventory levels to the shipper’s ecommerce platform via electronic data interchange (EDI). 

With these general steps in mind, you may still have specific questions about a 3PL’s WMS while looking for a logistics partner. These will vary based on your business needs.

Related: How to Choose the Right 3PL Warehouse Provider for Your Business

Shipper’s Checklist: Questions to Ask a 3PL About Their WMS

Now that you’ve seen the basic steps of how a WMS works, it’s understandable if you have questions about greater details of those functions or capabilities that weren’t mentioned. If you’re a shipper looking to partner with a 3PL, you should ask questions about each provider’s WMS to make sure it will address the needs of your business. 

Keep the following questions in mind as guidelines:

• Can your WMS integrate with my business software?
• Is it strictly designed for warehouse management or does it include functions like route planning and data trend analyses?
• Does the system facilitate fast scaling of business needs as they fluctuate?
• Is your WMS frequently updated?
• How do you measure your inventory accuracy rate, and can you share that rate with me?
• Can your WMS accommodate needs such as customized labeling and compliance requirements?

If you’re ready to start partnering with a 3PL for your warehousing and fulfillment needs, we’re here to help. 

Efficient Inventory Management With Fulfillment and Distribution

With carrier partners and warehouses across the country, including strategically located 3PLs, Fulfillment and Distribution is the logistics partner you’ve been looking for. Our advanced WMS offers seamless integration with ecommerce platforms to make doing business a breeze.
Call us at (866) 902-4262 or submit a contact form online today to get started on the road to superior inventory management.