What is a Warehouse Management System? Part 1

Part 1 - Basic Features and Functions Of A Warehouse Management System


A warehouse management system is a specialized software designed to track inventory and manage the warehouse operation processes, making the running of warehouse operations easy and efficient.


One of the misconceptions about warehouse management system is that the software is only for recording inventory balances in the bin locations within a warehouse. It is more complicated than that - a warehouse management system must process at least the following functions for inventory:


Inventory Management

The ability to record the quantity of each Item coming in and going out of the warehouse with the necessary attributes to allow proper execution of warehouse operations. Typical attributes include inventory status (eg. normal, hold and quarantine), inventory condition (damaged and expired), inventory attribute (eg. batch number, manufacturing date, expiration date or country of origin), serial number or catch weight.

Location Management

The ability to manage different type of locations within the warehouse such as Selective Racking, BIN, Double Deep Location, Multi-depth Locations, Pigeonholes Locations, Drive-In Locations, Drive Through Locations and Floor Locations. In addition, maintain and manage the capacity of these locations.

Inventory Attribute Management

The ability to capture and manage inventory attributes. Two of the common attributes are lot number and expiration date. The main purpose of the Inventory attribute is to further breakdown inventory of an item into multiple buckets so as to achieve better control and management of stock. For example, a warehouse received 10 cartons of a soft drink yesterday with a specific expiration date and the same warehouse could receive another 10 cartons of coke today with another expiration date. Without inventory expiration date attribute, warehouse will not be able identify expired stock and ensure they are properly handled. It is also worth mention that it is not uncommon for a warehouse to receive inventory which has an earlier expiration date than the inventory they already received into the warehouse.

Inventory Rotation Management

The ability to manage the stock rotation, as a minimum, the ability for rotation of First-In-First-Out (FIFO), First-Expire-First-Out (FEFO), Last-In-First-Out (LIFO) and Last-Expire-First-Out (LEFO).

Inventory Status Management

The ability to manage the inventory with different status. The common status is on-hold. A good warehouse management system must allow users to not to put the entire inventory of an Item on-hold but only the inventory of a specific attribute, such as a lot number. Another common status is Reserved.


Ownership Management

The ability to allow inventories to have different owner. For example, there are 8 cartons of a soft drink in the warehouse, 2 cartons belong to owner A and another 6 cartons belong to owner B.


There are other important features and functions of a warehouse management system, such as managing the receiving, storing the inventory, picking, and shipping the inventory. One important note is that these basic features should not be hard-coded or customized based on specific requirements of a company or an industry, a good warehouse management system has all these features built-in, and allow users to configure them to their specific requirement.


Click to read What is Warehouse Management System Part 2, Part 3, Part 4, Part 5 and Part 6.


Click here to look at some good warehouse management systems.

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