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WMS VS Inventory Management System

4 years ago
Rita K

Distinguishing Between Inventory Management System and Warehouse Management System

Prospective customers sometimes confuse inventory and warehouse management systems. This is very understandable, because these terms are sometimes used interchangeably.These terms are not, however, interchangeable.
An inventory management system (IMS) is typically used to mean that you can record and manage the total amount of stock that you have on hand. These quantity records are frequently “site specific” meaning that if you have multiple warehouses or fulfillment centers, your IMS will provide information about each separately, but will not aggregate or identify the specific locations for particular inventory.

Conversely, a warehouse management system (WMS) is a highly sophisticated and complex management tool that incorporates sophisticated data management and complicated process control.

A WMS will manage the following processes, among others:Warehouse Mapping in Three DimensionsReceivingPutawayCross DockingInventory LocationMin / Max ControlsPaperless PickingWave PickingBatch PickingIntegration with ShippingShipping Optimization

A WMS will manage inventory storage in multiple locations within a single facility, or among many facilities.
Your IMS, on the other hand, will often only tell you the quantity of particular items.
Your WMS will be fully integrated with your purchasing, sales, financial accounting, customer relations, inventory management, shipping, order processing and returns functions. Fully integrated means that the data about your inventory and warehouse processes will be seamlessly transferred to the other systems without duplicate data entry, in real time. An IMS will generally only be integrated with your marketplace functions.
A WMS will give you critical information about warehouse efficiency, which includes how much inventory you ought to have, when you should plan to order and receive it, how productive your warehouse personnel are, how accurately you are picking and shipping your orders, how fast you are able to ship after receiving orders and many other essential things that will help you increase sales, reduce inventory and personnel cost, reduce facility space requirements and improve customer relations. A WMS can facilitate drop shipping, allowing your company to offer many more products than you want to keep in inventory. It will permit the real time data management of orders that are received in one location and fulfilled in a separate location.

These benefits may not seem obvious. For example, you might not think that a WMS can help you increase sales. It can. If your orders are shipped accurately and quickly, your customers won’t call customer service personnel and complain about having received the wrong items, or getting them late. Instead, customer service personnel will spend their time having positive conversations with happy customers. Your customer service personnel will have complete information, in real time, and will be able to provide customers with all the information they might need about orders. Automated notices will advise customers when orders are received, picked and shipped. Orders will not be accepted when items are out of stock. You will avoid returns and contribute to the development of sincerely satisfied customers who become your evangelists, encouraging new customers on account of their word of mouth testimonials. Most people think of a WMS merely in terms of warehouse functions. But, there is a universe of other benefits that a WMS will provide.
The real ah-ha moment often comes when a customer realizes that a WMS offers total control of inventory and investment in inventory, while an IMS will only keep the company abreast of inventory quantity.

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As such, it is not surprising that an IMS can be purchased for very little. Because it does very little, it is inexpensive and simple to implement. However, it provides only minimal benefit and can be an impediment to growth.
An excellent WMS will cost considerably more, but it delivers a great deal more versatility and what it delivers will take your company to the next level. It will be scalable and grow with your company. It will support the increasing sophistication of your business as you grow. It will save you money and help you increase sales.
In fact, a really good WMS ought to have an ROI of under two years.

Expensive? Not really. In light of what it can bring to your business and how it can launch your company to the next level, a top notch WMS is a bargain, one you really shouldn’t live without.
Where do you find the very best WMS?


Take Control.