Warehouse Management System

Published by MBA Skool Team, Last Updated: January 22, 2018

What is Warehouse Management System?

The objective of this distribution system is to minimize cost and  maximize customer service level. The efficient warehouse management performs the following

  • Provides timely customer service.
  • Keeps track of items so that they can be located easily.
  • Minimizes physical effort and cost of moving goods in the store.
  • Minimizing capital costs –These include material, equipment handling floor space during peak demand ,docks, offices, ancillary requirements.etc
  • Lowering the operating  cost involved with operating personal, warehouse layout ,stock location system , stock picking etc.


The activities in the dock range from receipt of goods after transportation from the dock, material is checked against the bill no . The material is checked for damages .

Identification of a SKU : The location, number and the quantity loaded at each stock keeping unit is decided.

Dispatching of goods where goods are sorted and put away.

Holding where the goods are stored under protection

Picking involves taking the selected stock in the marshalling area.

Marshalling area is where goods are brought under a single order are inspected for defects.

In order to maximize productivity and minimize costs

a) Floor  space should be utilized  effectively since most of the capital costs is associated with the floor space and is calculated in cubic meter since goods are also stored above the floor space.

b) Effective labor and equipment management – Select the optimal mix of labor which controls the operating cost and equipment which contributes to the capital cost

c) The stock keeping units should be easy to access  and find . The stock should have a good location and layout.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 6 categories.

Search & Explore : Business Concepts

Share this Page on:
Facebook ShareTweetShare on Linkedin