There are many acronyms and weird terms used in logistics for those new to the game. In this hopefully brief read, I aim to answer the most commonly asked questions when it comes to warehouse software for ecommerce and 3PL shippers. So let's get started with the word thrown around like a hot potato. WMS.
- What is a WMS?
- The different types of WMS
- Typical WMS Features
- Typical 3PL WMS Features
- Conclusion
What is a WMS?
As with anything in logistics, we can't get away from the buzzwords. When looking at software for a warehouse, you will often hear the term WMS. So what is it exactly?
A Warehouse Management System (WMS) is a software solution designed to optimize and manage the operations within a warehouse. It streamlines processes such as inventory tracking, order fulfillment, and warehouse layout planning, ensuring efficiency and accuracy in warehouse operations.
What are the different types of WMS?
When it comes to shipping ecommerce orders, there are many options of software which can all be different types of WMS. These include solutions that offer various levels of warehouse control. From shipping orders with Shipstation to more full featured cloud based solutions such as ShipHero, Logiwa, InfoPlus or Extensiv 3PL Central (let's not forget Packiyo!) that offer more warehouse operations control.
The more popular choices for these types of solutions are known as ERP (Enterprise Resource Planning) Modules which are typically used for sourcing, forecasting and purchasing, as well as cloud based WMS (like Packiyo and ShipHero) or Supply Chain Modules such as Extensiv, Deposco, Jasci and even Manhattan. Each solution brings a unique set of features, complexity and cost.
What are the main features of a WMS?
Much like a warehouse, most WMS platforms designed for ecommerce shipping and fulfillment have the following core features:
- Receiving Inbound Inventory
- Put away and Storage
- Picking
- Pack & Ship
- Returns
Let's cover these in a bit more detail.
Receiving Inbound Inventory
Think of this as making sure you get what you ordered for your warehouse – the right stuff, in the right amount, and at the right time. It's like a mini adventure that includes:
- Purchase order creation (also referred to as an ASN, meaning advanced shipping notice).
- Knowing where in the warehouse the inventory will be received and put away.
- The receiving of inventory, that is, making sure what was ordered and and listed on the PO (purchase order) has actually been sent and is not damaged.
- Confirming quantities of each item received. Was too much sent? or not enough? or are items rejected because of damage or incorrect preparation?
Putaway and Storage
This is all about getting your products to their perfect spot in the warehouse. It's crucial to know exactly what each item is (that's where SKU, or stock keeping unit, comes in) and where it should go. You also need to make sure the storage conditions are safe for both the products and your team.
The way you organize your space and design your warehouse can really make a difference in making things smooth.
Picking
When orders are to be shipped, the items for those orders need to be fetched or picked from the stored locations. This part can be tricky – it's often the most expensive, takes the most time, and is where mistakes happen a lot. Using mobile devices that guide pickers and require barcode scan confirmation can make life easier by saving time and cutting down on errors. Also, picking the right method, like pick wall, or wave picking, can be a game-changer.
Pack & Ship
This is where you put all the ordered items together, make sure they're all good, and get them ready to ship out. It's important to know everything about the order and how much and what kind of packing stuff you need. Simple instructions for the packer that requires barcode validation when packing items help eliminate errors. Additional solutions such as Rabot (https://rabot.us) offer vision tracking which can be especially helpful when packing performance and accuracy are critical.
Shipping with modern WMS solutions such as Packiyo makes it easier for the right shipping label to be generated and printed when the order is packed. Shipping carriers like USPS or FedEx for example, can be mapped via pre-set rules, or by allowing the system to choose the cheapest shipping option. In Packiyo, we call this Ship Rate Shopping.
Returns
No one likes returns, but they're part of business, especially online. David Sobie, the big boss at Happy Returns, says while only about 5 to 10 percent of stuff bought in stores is returned, online purchases have a 15 to 40 percent return rate. Dealing with returns and refunds is a pain, but you gotta do it. This means sorting out the returned items, deciding whether to put them back on the shelf, recondition or dispose.
What features are typically included in a 3PL WMS?
So far we've covered the core element of a WMS that enables a warehouse to run fulfillment operations. Not all WMS provide features for 3PLs (also known as third-party logistics providers). 3PLs take the standard WMS to the next level because they're shipping for multiple ecommerce businesses and brands at the same time. With that said, what are the most common 3PL WMS features?
The most common 3PL WMS features are:
- Billing
- Client Portal
- Reporting
Billing
Keeping track of storage used, purchase orders received, inventory picked, orders packed & shipped or any other special process for each client can be very time consuming for a 3PL to manage. Especially when managing fulfillment for multiple ecommerce businesses. Look for billing features that automate this by allowing you to setup rates (standard or specific for each customer) and generate invoices automatically.
Client Portal
Many ecommerce business teams want access to real-time inventory, the ability to change orders, create returns, create purchase orders and generate reports such as shipments, shipped items or stale inventory. 3PL WMS solutions such as Packiyo (shameless plug) make it easy for a 3PL to offer each client a branded dashboard and portal to do all of these things without sending emails or making phone calls.
Reporting
Warehouses are busy places. From inventory, orders, workforce activity - the only way to stay on top of operations is to view the reports. 3PLs not only want to know whats happening across all the key functions of the warehouse, they also want to know and share insight with every customer.
Conclusion
Like anything with logistics, things can get complicated fast. The good news is it really doesn't need to. What's more surprising is how many busy warehouses still use spreadsheets and paper. When it comes to how to simplify, choose a WMS that's built for what you're trying to do, and if that happens to be shipping ecommerce as a business or as a 3PL - feel free to reach out to us!
