What Is Warehouse Management Software?

what is warehouse management software?

What Is Warehouse Management Software?

The warehouse management software industry is predicted to grow at a compound annual growth rate (CAGR) of 19.5% between 2024 and 2030. This is largely due to the rising demand for warehousing as online purchasing grows.

In a saturated market that’s rapidly expanding, it has become crucial for businesses to match their competitor’s products and services while coming up with innovative offerings that set them apart. If you’re looking to grow your customers in the warehousing industry, using warehouse management software is a must.

Keep reading as we update you on warehouse management software and why it’s an important resource for any warehousing business.


What Are Warehouse Management Systems (WMS)?

Warehouse management systems (WMS) are software solutions that enable a business to manage and execute its day-to-day warehouse operations. This typically includes every operation from the moment the goods enter the warehouse until they leave it. It involves but isn’t limited to the following activities:

  • Inventory tracking and management
  • Picking, receiving, and put-away
  • Transport scheduling
  • Order fulfillment
  • Warehouse equipment tracking and management

Some warehouse management software offers additional features that provide businesses more control over their operations such as resource utilization, labor management, yard and dock management, analytics, etc.


Warehouse Management Software Types and Features

Warehouse management software solutions differ based on the services they offer and the types of warehouses they support. Here are the top 5 types of warehouse management software you’ll find today:

1. Standalone Systems

Perfect for small and mid-sized businesses, standalone WMSes can handle all major warehouse operations. However, they aren’t equipped to manage tasks beyond the premises. Standalone systems can be combined or integrated with existing or future company solutions such as order management, inventory control, customer relations, enterprise resource planning (ERP), etc.

Standalone systems are an affordable solution but they may cost more to implement. They offer specialized warehouse management features while giving businesses greater control over warehouse management software and data.

If you’re managing your warehouse and inventory with an Excel spreadsheet and are planning on an upgrade, a standalone system is your best option. Its specialized features are also ideal for businesses that offer value-added services that require kitting, light assembly, etc.

2. Integrated With ERP Systems

When WMS software is integrated with ERP, businesses can manage a broad range of overlapping operations such as accounting, inventory, orders, customer relationship management (CRM), reporting, etc. from a single platform. These solutions allow end-to-end transparency between different business areas which improves operational efficiency.

A WMS integrated with ERP is ideal for larger businesses that want to upgrade their platforms to meet large-scale requirements.

One of the drawbacks of such systems is implementing them requires business owners or managers to train their staff. This can be a lengthy process, especially if employees aren’t receptive to the transition.

3. Cloud-Based Systems

Cloud-based systems are software-as-a-service (SaaS) solutions. The licenses to use them are sold on a monthly or yearly basis, however, they offer the fastest integration among all the available options.

In terms of functionality, these systems are similar to traditional WMSes and can even be integrated with ERP and other software solutions. They also enable single-system warehouse management.

Cloud-based warehouse management software allows businesses to access and manage their operations from any location and device. They are easy to use, maintain, and upgrade because they’re managed by a third-party service provider. There’s no need to worry about updating systems, ensuring security, or disaster recovery.

They also offer the most flexible solutions for growing businesses. The upfront costs are much lower and you can upgrade or downgrade your plans anytime. If you frequently use on-demand warehouses, you’re better off with a cloud-based system.

Cloud-based solutions are ideal for businesses that have straightforward warehousing operations such as cross-docking warehouses.

4. Supply Chain Modules (SCM)

Supply chain modules offer businesses control over warehouse operations and other aspects of the supply chain. SCM includes features like vendor relationships, risk evaluation, supplier and customer contact management, transportation, material handling, etc.

SCMs are ideal if you’re working with raw materials or finished goods that require specialized handling or temperature-controlled storage and transport. They can also be used to ensure timely delivery. These solutions are popular among large enterprises and third-party logistics providers (3PLs).

The only drawback in using SCMs is if your business is already using software solutions that overlap with one or more of the SCM’s functionalities. If this is the case, make sure your SCM can work with the software you’re using for smooth implementation.

5. On-Premise Systems

On-premise warehouse management software is integrated into the company’s native hardware and network. Its maintenance is hence also managed by the company. On-premise systems are preferred by companies that want more control over their warehouse operations such as private warehouses that cater to a single client.

However, these systems require businesses to deploy large amounts of internal resources.


Difference Between Warehouse Management and Inventory Management

Warehouse management involves handling, organizing, and managing inventory within a warehouse. It often includes tasks like picking, packing, physical storage, product handling, shipping, layout organization, etc.

On the other hand, inventory management involves the optimization of stock levels to ensure consumer demands are met. Inventory management encompasses tasks like ordering/receiving inventory, tracking stock levels, packing, shipping, etc.

Some parts of inventory management often overlap with warehouse management. However, warehouse management has a broader scope.

The key functions of warehouse management can be categorized into the following tasks:


This process refers to most inbound tasks. These include logging items into the system after verifying the time they were received, their quantity, condition, physical receipts, etc. This is also when goods are labeled with barcodes and scanned for easier sorting, storage, and retrieval.


The put-away process involves moving items from the receiving dock, sorting them, and sending them to appropriate areas for kitting/de-kitting, damage evaluation, storage, etc.


This aspect of warehouse management entails deciding on an optimum layout, the organization method for the items, and safely storing them for accurate and efficient picking.

Picking and Packing

Picking and packing involves collecting items from storage and sending them to packaging areas where they are prepared for shipment. Once items are received at the packaging station, they’re packed and labeled carefully to ensure minimum damage during shipping and accurate delivery.

Shipping and Returns

This involves sending out the finalized sales orders after confirming the order, packaging quality, weight, timing, documentation, transport vehicle, etc. There’s also the task of efficiently handling returns.


Challenges of Warehouse Management and How WMS Provides a Solution

Managing warehouse operations is different from managing inventory. The challenges are also different. Small and large businesses are bound to encounter some problems in their attempts to effectively manage their warehouses.

Here are some common issues you may come across and how WMS helps businesses solve them.

Redundant Processes

Redundant processes, such as multiple data entries for the same item at different locations, are a huge obstacle for businesses. WMS solutions can help eliminate manual processes at various touch points through automation.

Poor Inventory Management

The manual processes in warehouse management also result in incomplete or inaccurate data, which can lead to poor inventory decisions. WMS can get rid of such issues by automating error-prone and time-consuming inventory management processes.

Demand Fluctuations

Demand fluctuations due to seasonal changes, consumer behavior, financial crises, etc. are pretty common and unavoidable. A WMS can help businesses deal with these fluctuations while reducing their impact on operations with effective demand forecasting.

Poor Layout

Warehouse managers often overlook layout and organization. This can result in poor handling, inefficient picking/packing, and wasted space.

A WMS can enable managers to optimize their use of warehouse space for the smooth flow of goods and optimum storage capacity.

Most warehouses opt for a triadic warehouse design, which involves sorting goods into fast-moving, medium-moving, and slow-moving categories. However, even if your business uses a non-triadic design, it shouldn’t be a problem. WMS solutions can help you identify which slotting and sorting system suits your needs best while utilizing existing resources.

Lack of Visibility

Getting insight into operations is difficult for businesses that employ manual processes because there’s simply too much data to track and analyze. WMS solutions can help businesses gather and evaluate all the available data to enable greater operational visibility.

Budget Constraints

Small and mid-sized businesses are often plagued with budget constraints that make it difficult to allocate resources for growth strategies. With the help of WMS, they can easily optimize a wide range of processes to minimize costs in those areas.



From better control over warehouse operations to increased visibility and reduced costs, warehouse management software can offer serious benefits to your business. It’s a must-have tool, especially if you’re planning on growing your operations.

We hope our insights and analyses offer you a greater understanding of warehouse operations, the potential issues you might encounter, and how a WMS can help you address them.

For intelligent inventory management, you can always rely on Nest Egg. Our proprietary warehouse solution is fast and easy to use, scalable, flexible, and accessible on various devices.


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