What Is A Warehouse Management System?

Allison Champion
4 min read
August 19, 2021
Modified: March 20, 2023

To begin at the beginning, let’s first answer the question, “what is a warehouse management system?” A WMS, as it’s also known, is essentially software that assists in the organization and optimization of a business. A WMS may be integrated with primary inventory accounting methods, as well. But, that’s just the textbook definition! Keep reading to learn more about how a warehouse management system can help streamline a warehousing operation, increase operational efficiency, and raise profits. 

How Do Warehouse Management Systems Work?

A functional warehouse management system (WMS) refines warehouse operations to simplify the logistics process, heavily focused on order fulfillment, from the time products are received from suppliers to the moment those products are packaged and shipped to customers. 

Through an integrated warehouse management software, a warehouse team can easily: 

  • Pick, package, and ship orders as soon as they’re placed 
  • Track and store incoming inventory 
  • Eliminate errors that may occur from picking and packing the wrong items

For warehouse managers and operators, a WMS makes it possible to:

  • Track products up and down the supply chain in real-time, enabling better anticipation of needs.
  • Optimize labor and warehouse space by determining the most effective strategies for storage, task distribution, and travel between various points in the warehouse. 
  • Analyze warehouse productivity to see which aspects of the fulfillment and logistics process can be improved. 
  • Lower operating expenses by optimizing warehouse flow.
Types of Warehouse Management Systems 

Implementing a warehouse management system can help a warehousing and fulfillment business grow and maintain efficiency, leading to better adherence to SLAs. The types of WMS systems vary depending on business needs and capabilities. 

There are three popular types of warehouse management systems: 

  • Standalone WMS system 
  • Integrated WMS system
  • Cloud based WMS system 

Standalone Systems 

A standalone warehouse management system is a standard, in-house system that works in concert with a business’s existing network. It’s usually a third-party package that prioritizes warehouse management over other aspects of business operations.

A standalone system typically offers a greater variety of options for managing order fulfillment, sorting inventory, and reporting than other types of systems.

Despite the name, however, standalone systems often must be integrated with other software or programs a business might already be using, including external programs for purchase ordering, inventory management, and point of sale operations. 

The integration capabilities of standalone systems are limited and can result in inventory errors and operational challenges, such as:

  • System silos – With standalone systems, the various departments of a business, from inventory control to accounting, operate on separate disconnected systems, which can create inefficiencies within the fulfillment process. 
  • Integration delays – Siloed systems often prohibit information updates in real-time, creating information lags between various departments.
  • General capabilities – Because standalone systems are popular across a variety of business types, they’re not always developed with the e-commerce sector in mind. This may mean paying for services you won’t use and missing out on technical assistance geared specifically to e-commerce businesses. 

Integrated Systems

An integrated warehouse management solution is used in combination with larger enterprise resource planning (ERP system) modules. As part of an all-in-one solution that has most of the capabilities of warehouse management systems, integrated systems streamline operations by using the same database for orders, inventory, reporting, and accounting

Unlike warehouse management systems, however, integrated warehouse systems do not offer the optimization of inventory based on real-time information. ERP does not have the ability to generate reports based on historical trends and data that identify the best location for each stock item.

Cloud-Based Systems 

A cloud-based system is a web-based software as a service (SaaS) management system that hosts warehousing and fulfillment information on the Internet, rather than on-premise.  

Unlike standalone or integrated systems, cloud systems require minimal on-site hardware. They can also alleviate the need for a robust IT department, as system issues and updates are generally handled by the WMS vendor or company that sells the system. 

There are countless benefits to cloud-based systems, especially in today’s increasingly fast-paced,  multichannel markets. Some of the benefits of a cloud-based WMS include:

  • Seamless integration – Cloud-based WMS can easily be integrated with other warehouse systems, allowing operators to take advantage of new technologies and platforms for future growth and success. 
  • Scalability – Whereas other types of WMS software may have a set limit on the number of SKUs and amount of warehouse inventory tracking they can manage, cloud-based systems offer unlimited scaling capacity for a growing product selection.
  • Enhanced security – Because cloud systems are web-based, they’re routinely among the first to adopt valuable cybersecurity innovations that help protect business information, as well as the personal information of e-commerce customers.
  • Streamlined software – Cloud-based systems allow for regular and automatic software updates, as well as simple integrations that allow merchants to connect their multiple sales channels to the platform. This eliminates the need to purchase supplemental software and maintain multiple systems.
Optimize Warehouse Operations With Flowspace 

Implementing a cloud-based WMS is often the best way to enable e-commerce operations. Flowspace’s warehouse management system can transform legacy warehouse operations, or enable a fulfillment center to be operated out of any appropriate space.

Get in touch with us today to find out how to transform warehouse operations.


Written By:

flowspace author Allison Champion

Allison Champion

Allison Champion leads marketing communication at Flowspace, where she works to develop content that addresses the unique challenges facing modern brands in omnichannel eCommerce. She has more than a decade of experience in content development and marketing.