How To Build An Effective Warehouse Inventory Management System

To proceed further, we should distinguish two terms not to use them interchangeably: inventory management system (IMS) and warehouse management system (WMS).

WMS ensures the operation of a whole warehouse, where stock management is one of the main components. Simply put, warehouse management is the broad term referring to all processes inside a warehouse, while inventory management is a narrow specialization in a supply chain process.

Since WMS and IMS can be two different and autonomous software solutions, let’s discover the key features they might contain.

WMS includes:

• Design of a storehouse: Optimization of inventory allocation and ensuring customized working process as well as an accurate selection of picking methods.
• Inventory tracking: Using specific techniques such as IoT-enabled devices, RFIDs, barcodes that allow for automatically identifying the current location of items.
• Task management: Tracking workers’ effectiveness using customized performance metrics called KPIs.
• Dock scheduling & yard management: Enabling transport drivers to quickly find the right loading bay and assisting them in cross-docking.
• Items receiving & put-away: Control of inventory’s putting away and retrieval using a pick-to-light (P2L) approach (picking items from warehouse shelves using lights to direct operators). By the way, the report states that P2L systems can improve pick rate productivity by 30–50%.
• Pick and pack process: Ensuring a more efficient operation of picking and packing goods by warehouse operators.
• Shipment procedures: Creating bills of lading, packing slips, and invoices for deliveries, sending of shipment notifications.
• Improvement measures: Generating reports based on key KPIs, warehouse operations to find gaps for improvement.

Since IMS is a part of WMS, some of their functions coincide, including pick and pack fulfillment, shipping, inventory tracking, and more. But there are also some more specific features to mention.

IMS also includes:

• Optimization of goods location: Ensuring that items are correctly placed in the warehouse, can be easily found, and accessed without eating too much space.
• Order fulfillment: Accepting inbound orders and getting them ready for completion.
• Cycle counting: Using a special inventory auditing technique that allows counting of inventory in small portions every day to keep the total amount always up-to-date.
• Asset tracking using barcodes: Providing barcode scanning of items and integrating this data with shipments, financial procedures, and other operations.
• Gathering data and generating reports: Collecting and analyzing data for creating smart measures to enhance performance and achieve more accurate decision-making.

Broadly, the difference between WMS and IMS varies from company co company. Warehouse management systems are typical for large enterprises owning at least one giant storehouse or several in different cities or even countries. On the contrary, the SMBs prefer inventory management systems as they don’t need all the capabilities of a multifunctional WMS.