A Comprehensive Guide to Warehouse Management System Development

The expansion of Warehouse Management Systems (WMS) is intricately linked to the burgeoning realm of eCommerce. As online retail experiences a meteoric rise, the demand for seamless and efficient warehouse operations has become pivotal. The surge in eCommerce transactions, often characterized by substantial order volumes, necessitates the precision and automation capabilities offered by WMS.

With eCommerce platforms dealing with diverse product inventories, ranging in sizes and storage requirements, a warehouse management system emerges as the linchpin for organizing warehouse space effectively. The real-time management of inventory, coupled with WMS integration with eCommerce platforms, ensures a synchronized system for order processing and fulfillment. The competitive landscape of eCommerce, with its emphasis on order accuracy and swift fulfillment, is aptly addressed by the automation features of a warehouse management system (WMS), encompassing key processes like picking, packing, and shipping.

As customer expectations for timely deliveries escalate, a warehouse management system (WMS) aids in optimizing warehouse processes to meet these demands. Furthermore, the scalability inherent in WMS aligns with the growth trajectory of eCommerce businesses, accommodating increased order volumes and diverse product ranges. The data-driven insights generated by WMS contribute to informed decision-making, enhancing overall operational efficiency in the dynamic and competitive eCommerce landscape.

Since warehouses have been available for an extended period of time, digital innovation has become crucial in this specific industry segment to facilitate self-growth and an efficient eCommerce operation. Let’s check in this blog post why digital transformation is required in warehouse management, what are the core components of WMS, and future innovations in WMS. But, let’s first understand the warehouse management system with a definition.

What Is A Warehouse Management System?

A Warehouse Management System, abbreviated as WMS, is specialized software designed to facilitate the comprehensive management and oversight of daily warehouse operations. Its purview spans from when materials come to the distribution or fulfillment center until they leave. This system encompasses a series of policies and processes meticulously created to streamline the functioning of a warehouse or distribution center, ensuring optimal efficiency and the achievement of predetermined objectives.

A Warehouse Management System’s fundamental role is recording inventory arrivals and departures. From that starting point, additional features are added to a warehouse management system, such as precise stock location tracking within the warehouse, space utilization optimization, and the coordination of tasks to enhance overall efficiency. Currently, WMS is operated by several businesses at different complexity levels. Here are some of them:

1. A basic WMS primarily focuses on inventory management and location control, providing performance data limited to throughput—measuring the volume of stock movement within a specified timeframe. A basic WMS  is almost indistinguishable from the Inventory Management System at this level.
2. An advanced WMS offers a deeper analysis of capacity and stock levels. It can track the time and labor invested in various activities, generating data that assesses efficiency and recommends avenues for improvement. Currently, most WMS implementations fall into this advanced category, especially outside of East Asia. At this stage, a WMS’s responsibilities may intersect or surpass those of a Warehouse Control System or Warehouse Execution System.
3. An advanced WMS operates with high control, exchanging data with external systems to incorporate information beyond the warehouse confines, such as manufacturing requirements, customer orders, and transportation logistics. It can interface with automation or IoT devices, garnering feedback and control as necessary. Additionally, it may engage in continuous simulation and testing of strategies to enhance operations, potentially leveraging machine learning.

Why Does Warehouse Management System Need Digital Transformation?

The digital economy doesn’t operate in silos, the process includes a massive web of shipping, warehousing, packaging, and distribution systems to deliver on the digital promise. This infrastructure of this process is what keeps the digital eCommerce world operating. While the entire digital eCommerce industry is improving, companies are still struggling with the pressure of extended delays, as mentioned in a recent Global Supply Chain Pressure Index.

All such reasons ignite a need for digital transformation in warehouse management processes. Digital transformation in warehouse management needs to introduce automation, reduce human errors, and increase operational efficiency. Let’s explore additional reasons that demand digital transformation in the warehousing sector.

Data Exponential

The increasing number of global supply chain requirements facilitated by eCommerce has increased the volume and complexity of data involved in warehouse management. Digital transformation in such scenarios allows for the seamless integration of data from various sources, providing real-time insights and improving decision-making processes.

Growing Customer Expectations

With digital commerce, customer expectations have evolved multifolds. They are now demanding faster and more accurate order fulfillment. Enabling digital transformation in warehousing hence allows the use of advanced technologies such as RFID, IoT, and data analytics, which enhance visibility into inventory, optimize order processing, and contribute to timely deliveries, resulting in better customer service and satisfaction.

Enhance Communication and Collaboration

Digital transformation enhances collaboration and communication within the supply chain pipeline. With global supply chain needs, warehousing companies can leverage cloud-based systems that promote collaboration in real-time by facilitating information sharing among different stakeholders, fostering a more connected and responsive supply chain network.

System Scalability

Warehouse management systems built on monolithic architecture in the past decades may struggle to scale with the growing needs of businesses. Digital transformation of legacy warehouse systems allows for scalable solutions that can adapt to changing demands, support integration with innovative offerings, and make it easier for warehouses to handle increased volumes and diversified product ranges.

Compliance and Regulatory Requirements

Compliance and regulatory requirements are becoming more stringent day by day. Digital transformation helps warehouses stay compliant by providing tools for accurate record-keeping, traceability, and reporting. For instance, AWS offers a comprehensive set of tools and services that support compliance and regulatory needs of warehouse management systems such as IAM, CloudTrail, key management services for encryption, compliance certificates, secure global data centers, compliance regions, and many others.

Warehouse management systems built on legacy platforms, tools, and technologies fail to keep up with the ever-shifting retail landscape. Therefore, they are seeking technologies and processes to facilitate the various high-speed processes that come with digital transformation to keep pace with the evolving business landscape.

How Does the Warehouse Management System Fit In The Supply Chain?

The speed, precision, and effectiveness of the entire supply chain depend directly on warehouse processes’ speed, accuracy, and efficiency. A WMS is a crucial part of supply chain management by managing order fulfillment processes, from receiving raw materials to shipping finished goods. A WMS supports an efficient and faster supply chain workflow and is often used alongside or integrated with other related systems, including ERP, transportation management systems (TMS), and inventory management systems.

The diagram above illustrates the distinct roles of each system in order processing and outlines the types of data they must exchange. This collaborative data sharing is crucial to guarantee the timely delivery of the correct product to the customer.

What Are The Core Components Of Warehouse Management System Development?

A warehouse management system is not a standalone solution but a cluster of different components that cater to streamlining the operations in one way or another. Here are the WMS components, where each one serves an important purpose.

1. Inventory Management

Arguably, the most critical and “talked about” aspect of any WMS is inventory control. There are various challenges involved in keeping accurate records of every item that enters, resides in, or leaves the warehouse. Modern WMS systems integrated with Inventory management software help warehouses track inventory levels, monitor stock movements, and manage product expiration dates.

In addition, inventory management functions in WMS help in providing visibility for businesses to avoid stockouts of units. It also helps enhance the stock accuracy in the warehouse and achieve higher sales efficiency for businesses, reducing the need for manual data entry and tracking inventory management functions in the WMS.

Technologies used

• For Inventory Tracking Systems: Barcode scanners, RFID (Radio-Frequency Identification), and IoT (Internet of Things) sensors enable real-time tracking of inventory levels. This reduces manual data entry errors and ensures accurate stock counts.

2. Order Fulfillment

As mentioned earlier, of co-connection between each and every element of WMS with each other, order management, too, goes hand in hand with inventory control. A WMS facilitates end-to-end order processing, including receipt of orders, picking, packing, and shipment. Some advanced systems are also integrated with transportation management systems (TMS) to facilitate seamless logistics planning, including carrier selection and route optimization.

Technologies used

• For Automated Picking Systems: Automated guided vehicles (AGVs) and robots assist in picking and packing orders, reducing the need for human intervention and improving order accuracy.
• For Voice and Augmented Reality (AR): Workers use AR glasses or headsets that provide visual or voice-guided instructions for picking, packing, and shipping, increasing productivity.

3. Labor Management

Another component of the WMS that’s important to streamlining the operations is the built-in labor management feature that assists in

• Scheduling
•  Task assignment, 
•  and Performance metrics.

Through real-time tracking and historical data analysis, warehouse managers can identify bottlenecks, redistribute workloads, and track employee performance, leading to increased productivity and reduced labor costs.

4. Reporting and Analytics

Data-driven decision-making is essential for continuous improvement in warehouse operations. Modern WMS solutions offer comprehensive reporting and analytics tools that allow managers to assess performance metrics, identify inefficiencies, and suggest improvements. KPIs like order accuracy, inventory turnover, and labor costs can be analyzed for actionable insights.

A WMS collects vast amounts of data related to warehouse activities, including:

• Inventory movements
• Order processing
• Labor productivity
• Equipment usage.

Data sources may include barcode scanners, IoT sensors, and manual data entry. The reporting and analytics feature provides graphical representations of data, including charts, graphs, and dashboards. These visualizations make it easier for users to understand complex data patterns and trends.

5. Picking and Put-Away

A sophisticated WMS allows businesses to optimize picking and put-away processes. “Picking” refers to retrieving items from warehouse storage to fulfill customer orders, while “put-away” stores receive goods in optimal locations. An effective WMS provides intelligent routing, zone-picking, and batch-picking options, thereby reducing time and human error.

The Warehouse Workflow- The Process

Let’s understand how the warehouse workflow works with the six fundamental warehouse processes, including receiving, putaway and storage, picking, packing, shipping, and returns.

Receiving: This process can control the delivery to the warehouse of the correct quantity of the desired product and the right quality at the right time and can be broken into smaller ones:

• Placing a purchase order,
• Space preparation in the warehouse,
• Unloading (manual or automated),
• Verification,
• Filling in the database, etc.

Putaway: This is the delivery of goods to the optimal place in the warehouse by identifying each SKU (stock-keeping unit). Slotting, space management techniques, and overall warehouse design are the critical factors for streamlining these operations and using space most effectively.

Picking: Picking is the process of collecting goods from the storage place according to the customer’s order. It is considered the costliest, most time-consuming, and most error-prone. The WMS works most efficiently for the picking process by automating the manual work. An efficient WMS also adopts one of the picking methodologies, including cluster picking, zone picking, wave picking, etc., to save both time and money.

Packing:  This process involves packing the picked items together, checking their quality, and preparing the product for shipment. At this point, it’s important to have all the necessary order data and the type/amount of packing material required for each order.

Shipping: This process ensures that the picked-up products are delivered safely and on time. Again, proper scheduling, labor management, and tracking systems are key to satisfying customer demands.

What Are The Top Features Of A Warehouse Management System Development?

The ever-changing consumer demands and preferences have forced businesses across retail, commerce, and manufacturing to rely heavily on advanced technology to ensure a smoother supply chain and logistics operations.

Identifying the features of a robust WMS helps the warehouse manager provide a connected experience among all the stakeholders involved, from procurement of inbound goods to delivering them in the order fulfillment step.

Let’s check the most important WMS features below:

1. Stock-Keeping Unit Management

Stock-keeping unit (SKU) management is a subset of inventory management that helps to identify, track, and categorize sellable inventory using a unique alphanumeric code. If done correctly, SKU management can save a lot of time and cost for the warehouses. SKU management is mainly done with the help of warehouse management systems integrated with the SKU management software to eliminate overstocking and understocking.

2. Barcode and RFID scanning

Barcode and RFID scanning features are integral components of a Warehouse Management System (WMS) and play a critical role in improving inventory accuracy, order processing efficiency, and overall warehouse operations. Barcodes are used to identify items in the warehouse uniquely; they are scanned using the features of WMS, making it easy to track the location and movement of inventory at any step of the warehouse process.

3. Real-time Inventory Visibility

Real-time inventory visibility is a crucial feature of a Warehouse Management System that provides up-to-the-minute information about the location, quantity, and status of inventory items within the warehouse. Real-time tracking of the stock using IoT devices ensures that inventory counts are continuously updated as goods are received, moved, picked, packed, and shipped.

Over 71% of warehouse managers surveyed deemed poor and timely visibility of activities as one of the major factors in poor decision-making.

4. Automated Sorting and Picking

Automated sorting systems remove the need for manual operations. This helps to increase the efficiency and labor productivity of the process. Sortation and picking is another crucial feature of a modern warehouse management system that plays a vital role in the day-to-day operations of warehouses and distribution centers and is one of the most significant functions of warehousing and the supply chain process.

5. Single Point of Control

A warehouse management system works as a single point of control for the manager by promoting collaboration between assets and connecting activities, warehouse labor, and all sorts of mobile devices and robots being deployed. This involves simpler activities like rule-based putaway, more complex cross-docking, and assigning the right picker and packing station for the orders.

Role Of Advanced Technology In Modern Warehouse Management System Development

Technology is pivotal in modern warehouse management by enhancing efficiency, accuracy, and overall operations. By leveraging technologies like artificial intelligence (AI), machine learning (ML), and cloud computing, businesses can transform their warehouse operations and achieve new levels of efficiency and effectiveness. The shift from a reactive to a proactive state is not just beneficial but vital in today’s competitive landscape.

In the Warehouse Management Systems (WMS) realm, technological advancements are nothing short of revolutionary but an advancement of technological evolution that we have seen over the years across industries. Integrating AI and ML in WMS enables predictive analytics, which allows businesses to anticipate future demand patterns and adjust their inventory accordingly. This proactive approach reduces the risk of stockouts and overstocks, leading to significant cost savings. Here’s how modern warehouse management is leveraging technology to make the supply chain more efficient and streamlined.

Role of Artificial Intelligence In Warehouse Management System Development

The adoption of artificial intelligence across the supply chain industry is changing the essence of warehouse operations, and companies can take advantage of these advancements to stay ahead of the curve.

The use case of AI is similar in all industries based on the data and analysis as per the algorithms. Integrating AI-backed models in warehouse management systems can analyze vast amounts of data from multiple sources to identify patterns, detect anomalies, and predict future supply chain disruptions. This predictive capability enables warehouse management systems to optimize supply chain processes, anticipate demand fluctuations, and make informed decisions in areas such as procurement, transportation, and inventory management.

Predictive maintenance in AI can also be used to improve the overall performance of the warehouse and increase the lifespan of the equipment used. By using the capabilities of AI technologies to monitor equipment performance, warehouse operations can be largely optimized, and it leads to increased efficiency and reduced costs. A predictive maintenance program utilizing AI can decrease overall maintenance costs by up to 10%.

Artificial Intelligence-powered algorithms optimize order-picking routes, considering factors such as product characteristics, picking frequency, and real-time order priorities. By intelligently sequencing orders and optimizing travel paths, warehouses can improve order accuracy, increase throughput, and reduce labor costs.

Role Of IOT Integration In Warehouse Management Software Development

Warehouses across industries face many challenges, including lack of space, offloading delays, inaccurate usage of warehouse space, limited visibility, and many more. To tackle these challenges, IoT has become vital by monitoring and simplifying the operational processes in warehousing.

The power of IoT integration with the warehouse management system is applied by utilizing smart devices with software integrations, simplifying critical order management processes, removing the need for manual location planning, and generating reports by developing a direct interface with the warehouse management system.

No industry is now untouched by the plethora of benefits IoT has to offer; similarly, in WMS, not only does IoT provide a precise method of inventory management, but it also increases safety and security, decreases costs and waste, and makes data easily accessible for analytics purposes.

How does IoT in the Warehouse work?

With the integration of IoT-powered features providing location, packing, shipment, and transportation data, companies can achieve real-time monitoring and tracking of products. These small IoT devices have an in-built battery that allows for continuous Bluetooth connectivity and an IoT application connected to the devices, enabling the precise tracking of assets.

Warehouse Automation and Robotics

Automation through Warehouse Management Systems is a hot topic. It’s a process that automates the flow of information and the movement of materials into, within, and out of warehouses to optimize the entire warehouse operation with little human interaction.

The rise of automation technologies in warehouse management systems reduces the need for manual labor, improves efficiency and safety, and reduces the risk of workplace accidents through the automation of tasks like picking and packing.

Warehouse management systems are leveraging robotics and automation technologies at large to transform their operations, such as autonomous mobile robots (AMRs) and robotic pickers. These intelligent systems can navigate through warehouse aisles, locate items, and quickly perform tasks like picking, sorting, and packing. By deploying AI-powered robotics, warehouses can increase productivity, reduce human error, and improve safety.

Research says that 38% of logistics companies are actively using autonomous/robotic solutions in their processes, freeing up human workers to focus on more strategic tasks.

Warehouse Management Automation Trends!

Cloud Software

AI-backed models led the automation of warehouse operations, which is also a subset of cloud-based Warehouse Management Systems or cloud storage of data.

Like any other digital solutions today (See The Power of Cloud in Patient Care and Data Management), warehouse management systems (WMS) can now be provided as cloud-based services – accessed via the internet.

For users, this immediately removes the great cost and upheaval of installing and maintaining servers, software, and other IT resources.

Cloud-based systems are often touted to be more scalable and flexible than a site-based WMS, so reconfiguring to match a company’s changing size, complexity, and market conditions becomes easier and less costly in the cloud. Cloud-based WM systems set you up for success because they are flexible and scalable.

Technical Architecture of WMS Development

On-premise vs. Cloud-based Solutions

Just like hosting any solution that works digitally on-premise and on the cloud, when it comes to hosting your Warehouse Management System (WMS), you have two main options: cloud hosting and on-premises hosting.

On-premise WMS is installed on servers within a business’s facility, while cloud-based WMS is hosted on external servers and accessed via the Internet.

Here, to understand the basic difference between the two.

Here Are The Advantages Of Cloud-Based WMS Development

1. Limitless Scalability

The WMS needs an upgrade as the business grows, related to the adaptations required to reflect that growth. Cloud-based WMS offers a pay-as-you-grow model, where you can scale your operations up or down as needed without large upfront investments. You pay for the resources you use.

2. Interoperability with Multiple Systems

You may have your Warehouse Management System, your Warehouse Control System, and a separate Warehouse Execution System. Handling all the data within separate systems can be inefficient and time-consuming. When you switch to a cloud-based WMS instead, you can merge many of these systems into one multifunctional setup.    

3. eCommerce and Omnichannel-friendly

The 24/7 reliable approach of a cloud-based solution means that you will have a WMS that is always there for you. Therefore, you can let the WMS do its 24/7 job and not worry about it outside the workday.

This is perfect for omnichannel and eCommerce, where orders can arrive at any time, especially when dealing with different time zones. (Check out our cloud-native development services to scale up your WMS to heights like never before.)

4. Low Maintenance and Upgrade Cost

With cloud-based WMS, you don’t need to invest in and maintain on-premises servers and hardware, saving capital expenses. Maintenance and upgrades are managed by the cloud service provider, reducing the need for in-house IT staff and associated salaries and training costs. Even when your business grows, you can easily scale your WMS without incurring substantial infrastructure costs.

5. Faster Processing

A high-end cloud-based warehouse management system helps you avoid data issues with the system’s ability to perform various real-time tasks and operations with increased compute power that increases overall business efficiency.

APIs and integrations that facilitate the seamless exchange of data and automate processes.

• RESTful APIs: Commonly used in modern WMS to enable communication between the WMS and external systems using standard HTTP methods, such as GET, POST, PUT, and DELETE. RESTful APIs are known for their simplicity and flexibility.
• SOAP APIs: Protocol for exchanging structured information.
• Webhooks: HTTP callbacks or endpoints that allow external systems to receive real-time updates or events from the WMS.
• SDKs (Software Development Kits): Pre-built libraries and tools for developers to create custom integrations more easily.

WMS integrations for seamless operations

• ERP Integration: For synchronization of inventory, order, and financial data and providing a holistic view of the supply chain.
• Transportation Management System (TMS) Integration: For better coordination of transportation and shipping processes, optimizing routes, and reducing shipping costs.
• E-commerce Platforms: For seamless order processing, inventory updates, and tracking of online orders.
• Carrier Integration:(e.g., FedEx, UPS) For real-time shipping rates, label printing, and tracking information.
• IoT and Sensor Integration: For real-time data on temperature, humidity, and equipment status, helping maintain product quality and reduce downtime.
• CRM Integration: For managing customer orders, preferences, and service inquiries related to warehouse operations.
• Reporting and Analytics Integration: For in-depth data analysis and visualization of warehouse performance.

Compliance and Regulations

Warehouse Management Systems (WMS) often adhere to various industry standards and guidelines, including those established by organizations like ISO (International Organization for Standardization) and ANSI (American National Standards Institute). These standards help ensure the quality, safety, and interoperability of WMS software.

Moreover, if your WMS processes the personal data of European Union residents, you must comply with GDPR requirements for data protection, consent, and breach notifications.

Warehouse Management System Development: DevOps and Agile

Companies are turning to warehouse automation in response to the growing demand for streamlined supply chain management. It’s the correct time to understand that the right level of automation and autonomy enables faster, safer, and more efficient day-to-day operations. It cuts costs and improves delivery times for a faster, leaner, more scalable, and sustainable operation.

Yet, many companies across the industry are struggling to find the right approach for their WMS development. They’re experimenting with innovative solutions, mixing them with already ‘tried-and-tested’ approaches that ultimately hinder success.

Warehouse management system development experts at Successive Digital follow a new path to warehouse automation that aligns with the broader vision of the role warehouses are expected to play in overall supply chain strategies. With a DevOps mindset and agility at the heart of development, our processes revolve around everything as code and automation so that products can quickly evolve as and when required with improved operational efficiency.

By using automation, testing, and monitoring tools, we help you ensure that your data warehouse is consistent, accurate, and available. Agile and DevOps can help you foster a culture of collaboration and innovation among your data warehouse team. You can enhance your team’s performance and creativity by breaking down silos, sharing knowledge, and learning from failures.

CI/CD Pipelines for Continuous Improvement:

We develop the WMS using the CI/CD pipelines to automate the deployment process while minimizing integration issues, making it possible to release new versions of the WMS rapidly and reliably.

Agile Frameworks Like Scrum and Kanban

Agile methodologies like Scrum and Kanban help us to emphasize iterative development, frequent releases, and close collaboration with stakeholders for the faster development of warehouse management systems.

Automated Testing and QA

We run automated testing, including unit tests, integration tests, and end-to-end tests, which is a crucial part of DevOps. It helps ensure that changes to the WMS do not introduce regressions.

Future Trends of WMS Development

The warehouse management systems (WMS) world is evolving rapidly, driven by technological advancements and changing consumer expectations. Automation is set to play an even more significant role in WMS in the coming years. This includes the adoption of autonomous robots, IoT drones, and automated guided vehicles (AGVs) for tasks such as picking, packing, and inventory management. Here’s what the tech-driven future for WMS looks like.

Machine Learning for Demand Forecasting:

ML techniques enable efficient processes, resulting in cost savings and increased profits.

Using intelligent machine learning software, supply chain managers can optimize inventory and find the most suited suppliers to keep their business running efficiently while forecasting the demand based on the data collected by warehousing, transportation systems, and industrial logistics.

Drone Technology for Inventory Management:

As the warehouses operate on a large scale and the pick size shrinks, AI-driven drones have sensors and cameras that enable real-time inventory tracking and monitoring, allowing for better inventory management and reduced losses. This creates an abundance of new, real-time data in the warehouse that can be used for predictive analytics and improved controls of the warehouse processes.

Robots:

The future of Warehousing is in the hands of robotics as their adoption is on a massive rise.

Alibaba uses robots and carries out an incredible 70% of tasks, whereas Amazon and Ocado set the standard for effective robotic use, which is connected with an IoT-backed application. This includes robots of many types: Collaborative robots (cobots) have arms designed with multiple sensors to operate safely when a human is nearby. Exoskeleton robotic suits can increase a human’s capacity to lift items by 20 times or more. Automated guided vehicles, or AGVs, smooth the transport of items within the warehouse.

Conclusion

The perspective of warehousing has changed largely due to three factors that will be known as the future of warehouse management systems: advances in both automation and mechanization technologies and intelligent planning and execution software, newfound labor shortages, and an increase in supply chain complexity.

The eCommerce industry has effectively taken over the retail world and is on track for continued growth in the future. To meet today’s shifting consumer needs, warehousing must continue to evolve as well. To accomplish this, many companies are shifting their focus from a single solution or turnkey provider to building a portfolio of solutions that fit their warehouse needs.

Companies can excel in innovation by replacing their tried-and-true approaches to warehouse automation with in-house capabilities to explore earlier-stage implementation.

Successive Digital offers a structured approach that helps to pinpoint the company’s current status, identify available and suitable options, and implement warehouse automation through robust mobile application development and solution utilization—including harnessing analytics enabled by warehouse automation.

Contact our solution experts to get an automated approach to the warehouse management system, redefine your supply chain strategies, and respond quickly to deviations from the plan.