Industrial Engineering Deparment Dokuz Eyl?ºl University
Definition of WMS
Warehouse Management is a proven, advanced WMS software solution for manufacturing, distribution, and retail enterprises and third-party logistics providers (3PLs) that can be used by enterprising organizations of all sizes. It helps companies maximize product placement strategies, prioritize tasks, implement fair productivity standards, and increase logistics efficiency.

Warehouse Management Systems (WMS)
The evolution of warehouse management systems (WMS) is very similar to that of many other software solutions.
To use the grandfather of operations-related software, MRP, as a comparison, material requirements planning (MRP) started as a system for planning raw material requirements in a manufacturing environment.
The expansion of the overlap in functionality between Warehouse Management Systems, Enterprise Resource Planning, Distribution Requirements Planning, Transportation Management Systems, Supply Chain Planning, Advanced Planning and Scheduling, and Manufacturing Execution Systems will only increase the level of confusion among companies looking for software solutions for their operations.
I.Necessity of WMS
Not every warehouse needs a WMS. Certainly any warehouse could benefit from some of the functionality but is the benefit great enough to justify the initial and ongoing costs associated with WMS? Warehouse Management Systems are big, complex, data intensive, applications.
You need to “manage” your warehouse “management” system. Often times, large operations will end up creating a new IS department with the sole responsibility of managing the WMS.
The Claims
The Reality
The implementation of a WMS along with automated data collection will likely give you increases in accuracy, reduction in labor costs (provided the labor required to maintain the system is less than the labor saved on the warehouse floor), and a greater ability to service the customer by reducing cycle times.

While increased accuracy and efficiencies in the receiving process may reduce the level of safety stock required, the impact of this reduction will likely be negligible in comparison to overall inventory levels.

The predominant factors that control inventory levels are lot sizing, lead times, and demand variability. It is unlikely that a WMS will have a significant impact on any of these factors.

Beyond labor efficiencies, the determining factors in deciding to implement a WMS tend to be more often associated with the need to do something to service your customers that your current system does not support (or does not support well) such as first-in-first-out, cross-docking, automated pick-replenishment, wave picking, lot tracking, yard management, automated data collection, automated material handling equipment, etc.

II. Setup
The setup requirements of WMS can be extensive. The characteristics of each item and location must be maintained either at the detail level or by grouping similar items and locations into categories.

An example of item characteristics at the detail level would include exact dimensions and weight of each item in each unit of measure the item is stocked (eaches, cases, pallets, etc) as well as information such as whether it can be mixed with other items in a location, whether it is rackable, max stack height, max quantity per location, hazard classifications, finished goods or raw material, fast versus slow mover, etc.

Although some operations will need to set up each item this way, most operations will benefit by creating groups of similar products.

For example, if you are a distributor of music CDs you would create groups for single CDs, and double CDs, maintaining the detailed dimension and weight information at the group level and only needing to attach the group code to each item.

In reality most operations have a much more diverse product mix and will require much more system setup.

Setting up the physical characteristics of the product and locations is only part of the picture.

It’ s very common to combine multiple logic methods to determine the best location. For example you may chose to use pick-to-clear logic within first-in-first-out logic when there are multiple locations with the same receipt date. You also may change the logic based upon current workload. During busy periods you may chose logic that optimizes productivity while during slower periods you switch to logic that optimizes space utilization.

III. Other Functionality/Considerations

Wave Picking/Batch Picking/Zone Picking: Support for various picking methods varies from one system to another. In high-volume fulfillment operations, picking logic can be a critical factor in WMS selection.
Task Interleaving: Task interleaving describes functionality that mixes dissimilar tasks such as picking and putaway to obtain maximum productivity. Used primarily in full-pallet-load operations, task interleaving will direct a lift truck operator to put away a pallet on his/her way to the next pick.
Integration with Automated Material Handling Equipment: If you are planning on using automated material handling equipment such as carousels, ASRS units, AGVs, pick-to-light systems, or sortation systems, you’ ll want to consider this during the software selection process. Since these types of automation are very expensive and are usually a core component of your warehouse, you may find that the equipment will drive the selection of the WMS.

Advanced Shipment Notifications (ASN): If your vendors are capable of sending advanced shipment notifications (preferably electronically) and attaching compliance labels to the shipments you will want to make sure that the WMS can use this to automate your receiving process.
Cycle Counting: Most WMS will have some cycle counting functionality. Modifications to cycle counting systems are common to meet specific operational needs.
Cross Docking: In its purest form cross-docking is the action of unloading materials from an incoming trailer or rail car and immediately loading these materials in outbound trailers or rail cars thus eliminating the need for warehousing (storage). 

Pick-to-Carton: For parcel shippers pick-to-carton logic uses item dimensions/weights to select the shipping carton prior to the order picking process.  Items are then picked directly into the shipping carton. 
Slotting: Slotting describes the activities associated with optimizing product placement in pick locations in a warehouse.  There are software packages designed just for slotting, and many WMS packages will also have slotting functionality. 
Yard management: Yard management describes the function of managing the contents (inventory) of trailers parked outside the warehouse, or the empty trailers themselves. Yard management is generally associated with cross docking operations and may include the management of both inbound and outbound trailers.
Activity-based costing/billing: This functionality is primarily designed for third-party logistics operators. Activity-based billing allows them to calculate billable fees based upon specific activities.


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