Warehousing Management
System (WMS)
By
Dr. P. Ravi Kumar
WMS
• WMS is group of computer programs designed to help
a distributor perform WH operations more quickly and
consistently with fewer errors employing wireless
technology (RF or wireless network based).
• WMS ranges in complexity from very basic tools to
assist WH employees in performing daily operations to
highly sophisticated systems that replace workers.
• Two Key Elements;
– Use of Portable Computer Terminals (connected to host
computer and could be RF or a Palm Pilot like device
operating over a wireless network) to record work
performed in real time.
– Bar Codes are used to reduce amount of information to be
entered directly into terminal. Each terminal contains a
scanner, to scan labels that contain a bar coded
representation of bin, item & lot numbers, quantities,
and more whenever possible to eliminate keystrokes.
WMS CAN PROVIDE AN ORGANIZATION
WITH TANGIBLE BENEFITS
• Improving WH operations and increasing
efficiencies without adding headcount.
• Directed put-away and directed order
picking
• WH capacity management
• RF capability for data capture
• Load planning
• Cross docking
• Picking optimization
• ABC stratification
• Interleaving of work
COMMON CAPABILITIES OF A WMS
Receiving Inventory
• Objective is to record the receipt of goods accurately.
• Operator records the receipt of goods against a pur/ Tfr
order, customer return authorization, or a kitting or
production work order in the simplest form of receiving
• Advanced capabilities include receiving against packing
list or advanced ship notice and receiving by container.
Locating Inventory (Referred to as Putaway)
• Process of moving received inventory from the dock,
kitting, or production department to a storage bin
• User Directed Putaway (simplest form of putaway):
where the operator determines where to place inventory
and uses portable terminal to record movement
• System Directed Putaway (advanced form of putaway):
WMS determines bin in which the inventory is to be stored
and directs operator to place inventory in assigned bin.
COMMON CAPABILITIES OF A WMS (contd)
Inventory allocation
• Process of determining the bin from which inventory is
to be picked to satisfy a demand
• Operator performs inventory allocation by choosing bin
from which to pick inventory from a list of available
bins shown on a pick list
• WMS performs inventory allocation when an order is
released for picking
Picking inventory to satisfy sales, transfer, kitting, or
production/rework orders
• Basically operator uses a printed pick list and records
the results on the portable terminal.
• There are quite a variety of picking methods including
pick by order, wave picking, pick and pass, and batch
picking .
COMMON CAPABILITIES OF A WMS (contd)
Replenishment
• Process of refilling forward pick bins (sometimes called
dedicated or primary bins) for an item from reserve
inventory.
Shipping confirmation
• This function is often left in the enterprise software at
the most basic level
• Can be performed within the WMS or performed by
special shipping software that operates along with the
WMS or a combination of both.
COMMON CAPABILITIES OF A WMS (contd)
Cycle counting and physical inventory
• In the most basic form the operator counts inventory
and records the results using the portable terminal.
• More advanced systems determine the number of counts
that need to be performed each day, determine which
items to count each day, assign items to count to a
queue, and guide the operator around the warehouse in
an efficient manner to perform the counts
WH operations
• such as relocating inventory and recording inventory
gains and losses (adjustments) – an operator generally
performs these activities as required and records the
results using a portable terminal
ADVANTAGES OF WMS
A WMS helps improve customer service and
resource utilization by eliminating errors. The
result of eliminating errors can be measured by;
– Inventory accuracy – greater than 99% at the
item and bin level.
– Zero returns due to warehouse errors
– Checking operations are eliminated
– Improved order shipment completion
– Shortened order lead time and improved on-time
delivery performance
TANGIBLE COSTS
CATEGORY REASONS
Inventory reduction of up to 10% (one- Inventory visibility and accuracy
time savings)
Reduced inventory carrying costs up to Lower inventory levels; higher space
35% (industry average) utilization
Reduced investment based on cost of Reduced inventory
money @ 8%
Premium shipping costs Reduced shipping errors
Personnel handling paper - potential WMS automates the management of
headcount reduction or resource order and priorities, eliminating paper
redeployment
Personnel handling order picking – RF based picking productivity increases
potential headcount reduction or resource efficiencies
redeployment
Personnel handling shipping paperwork Eliminate preparation work for shipping
and confirmation - potential headcount documents and ERP ship confirmations
reduction or resource redeployment
IS WMS REALLY NEEDED?
• Is the benefit great enough to justify the initial
and ongoing costs associated with WMS: big,
complex, data intensive, and applications?
• The Claims:
– WMS will reduce inventory!
– WMS will reduce labor costs!
– WMS will increase storage capacity!
– WMS will increase customer service!
– WMS will increase inventory accuracy!
IS WMS REALLY NEEDED: REALITY
• Expectations of inventory reduction and increased
storage capacity are less likely: increased accuracy and
efficiencies in receiving process may reduce level of safety
stock required, impact of this reduction will be negligible
in comparison to overall inventory levels.
• Lot sizing, lead times, and demand variability control
inventory levels: WMS not likely to have a significant
impact on any of these factors.
• WMS certainly provides tools for more organized storage
resulting in increased storage capacity, it shall be relative
to just how sloppy pre -WMS processes were.
• Determining factors to implement a WMS is associated
with the need to do something to service your customers
that your current system does not support (or does not
support well) such as FIFO, cross-docking, automated
pick replenishment, wave picking, lot tracking, yard
