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What Is a Warehouse Management System?

By D. Nelson
Updated May 17, 2024
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A warehouse is the area a business uses to store inventory items. Inventory normally includes products that a business sells or manufacturers and in many cases can include materials and tools that are used in production processes. When a businesses has a warehouse management system, that business has implemented a workflow or set of steps that must be taken when inventory items are received, shipped, or deployed to other locations. This system can also be used to track the count and health of various items, thereby allowing warehouse managers to determine when to restock, repair, and replace items.

Most business process experts consider a warehouse an important part of the supply chain. The supply chain describes all of the stages products pass through, beginning with production and ending in introduction into a market. Effectiveness of a warehouse management system impacts and is affected by factors such as speed of production, levels of demand, and pricing.

An inventory or warehouse manager generally is responsible for designing and optimizing a warehouse management system. He or she may be responsible for keeping up with new trends in technology that can improve efficiency of a system. A manager also might monitor areas where cost can be cut and determine solutions for improvement.

It is common for a manager to incorporate asset tracking technology into a warehouse management system. Some of the most common types of asset tracking systems involve the scanning of barcodes or the reading of Radio Frequency Identification (RFID) tags. Each of these technologies allow warehouse workers to scan inventory items to read information about items on a computer monitor, such as date received, user notes, and contract information when the scanned items are leased.

This kind of warehouse management system requires use of a primary database. Information regarding all items in a warehouse are stored in a database. Most warehouses include a number of employees and workstations. Larger businesses might need several warehouses that communicate with one another. For these reasons, a database normally is part of a Local Area Network (LAN). A LAN describes the servers, workstations, printers, and all other computer related components that interact in day to day operations in a contained geographical location.

To create an efficient warehouse management system, a manager may decide how asset tracking technology is used. He or she can be responsible for determining which information belongs in a database and which style of notation employees should use when updating files. Managers periodically train and assess workers in using a system.

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Discussion Comments
By anon319486 — On Feb 13, 2013

Thank you for this great explanation! I've always wondered about getting a Warehouse Management System but was never sure about their features and how they could be applied to a 3PL directly as there are multiple discrepancies that appear and require juggling. After researching the web I have located a business (Systems Logic) and I am wondering if anyone has any insight on their services? They appear to have great expertise in the field and include an innovative feature known as 'Visual Logistics' which interests me greatly considering it would allow me locate my inventory a lot faster.

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