Warehouse Management System - Meaning & Definition

Published by MBA Skool Team, Last Updated: September 08, 2021

What is Warehouse Management System?

Warehouse Management System is an application or a set of processes which ensures efficient operations of a warehouse or a group of warehouses which includes inventory placement, retrieval, transportation, order management and overall warehouse management.

A good WMS should ensure that:

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.

Functions of 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

1. Ensure proper warehouse management activities and workflows from the arrival to dispatch of an inventory item based on order.
2. Keeps track of items so that they can be located easily.
3. Minimizes physical effort and cost of moving goods in the store.
4. Minimizing capital costs: These include material, equipment handling floor space during peak demand, docks, offices, ancillary requirements etc.
5. 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 number.  The material is checked for damages.

Other functions include:

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.

Hence, this concludes the definition of Warehouse Management System along with its overview.

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 5 categories.

Continue Reading:



Share this Page on:
Facebook ShareTweetShare on Linkedin