How to Build a Warehouse Management System (WMS): A Complete Guide

The need for advanced logistics software solutions is growing, while it remains the backbone of companies’ efficiency and productivity. Notably, 87% of warehousing, logistics, and retail leaders are either currently expanding or planning to expand their warehouses.

A well-tuned WMS ensures speed, accuracy, and customer satisfaction in modern logistics. The opposite is also true: logistics companies risk inefficiencies and errors when underscoring the significance of investing in high-quality logistics software development. Let’s discuss below how it works and how you can build a WMS that supports your needs.

Define Goals & KPIs: Set clear goals for your WMS project. These can be improving visibility, decreasing fulfillment time, or increasing forecast accuracy. Determine the metrics will indicate to you that you are on the right track.

Analyze Current Processes: Make an audit of your workflows, documenting all steps from start to finish and analyzing each step for possible bottlenecks or inefficiencies.

Form a Team: Gather all project stakeholders who can provide an expert outlook of project implementation and related challenges. Stakeholders can be warehouse workers, C-management, and the IT team. Consider hiring a reliable development service provider with expertise in building WMS software for consultancy if you have limited IT experience.

Define Scope: List all features you need to meet your goals based on the audit and stakeholders’ feedback. 

Build vs. Buy: Compare long-term costs, risks, and benefits of the two main options, custom vs. off-the-shelf solutions.

Vendor Selection: Vendor Selection: In either case, look for a vendor that can meet your WMS needs within your budget, building or providing functionality that covers your processes and can be seamlessly integrated with the ERP/TMS/ecommerce software you use.

Data Preparation: Prepare user data for a step-by-step migration to the new WMS, which can include the data related to the inventory, suppliers, and customers.

System Configuration: Adjust available WMS to your unique workflows or procedures. Emphasize stakeholders’ needs and pain points.

Integration: Connect WMS functionality to the rest of your business solutions via APIs.

Testing: Apply different types of testing activities to ensure all user needs are met, and the WMS solution functionality behaves as envisioned. 

Training: Offer specific training or guidance to those employees who struggle to understand how new processes or features work.

Go-Live: Deploy the WMS solution to production servers as soon as functionality is ready, and provide hot fixes if necessary. 

Monitor & Optimize: Monitor WMS health and performance, introduce improvements based on user feedback, and make regular optimization to evade unreasonable maintenance costs.

IT Craft is renowned for top-notch development of custom logistics software and will do its best to deliver a tailored warehouse management system that will meet your specific challenges and opportunities. The company offers a perfect blend of 25+ years of technological experience, deep domain knowledge in logistics, and a focus on business goals.

The company’s clients range from early-stage startups to established enterprises. It can quickly take over any WMS projects and get them up to speed. IT Craft developers can deliver cloud-based, scalable WMS solutions for inventory tracking, warehouse optimization, scanning, multi-locating operations, and more, ensuring seamless, low-level integrations.

Services & expertise: custom warehouse management solution development, warehouse management solution consulting, digital transformation, warehouse software modernization, data migration, WMS integrations, DevOps and cloud cost optimization.

Technology stack: Java, TypeScript, C#, Python, React, Angular, Kotlin, Swift, Flutter, React Native, Xamarin/.NET MAUI, .NET, Spring, Laravel, Symfony, Node.js, Azure, GCP, AWS, DigitalOcean, HuggingFace, Tableau, LangChain.

Team size: 330+ experts.

MyCarrierTMS startup focused on improving management of truckload shipments, aiming to build a friendly, high-quality platform for the transportation industry. The goal was to simplify and enhance the process of connecting shippers with carriers, making the booking, coordinating, and tracking of less-than-truckload shipments more efficient.

IT Craft engineers delivered an MVP solution on time, enabling the client to confirm the viability of MyCarrierTMS’s business model. The operation experienced notable growth, attracting multiple funding rounds. The project then shifted its focus to cloud integration for improved scalability and functionality expansion.

Results: 

• Securing $36.8M in funding.
• Recognized with the FreightWaves FreightTech Award.

Read Case Study

A Manhattan-based business, eLaundry required improvement and finalization of a comprehensive CRM system to automate and streamline all aspects of its operations. Later, the company pivoted towards B2B services, demonstrating versatility and responsiveness to market needs, while IT Craft developers helped with software transformation. 

IT Craft delivered a comprehensive CRM system that enabled granular order tracking and business process automation. Our engineers worked on functionality for scheduling, order pickup, calculating service rates, planning driver routes, and more, specifically tailoring the system for managing commercial clients, such as restaurants, hotels, and cafés.

Results: 

• Providing real-time monitoring and high coordination capabilities across 10 departments.
• Delivering a dashboard that allows for managing over 100 parameters.

Read Case Study

Orases is a proven partner for building high-quality WMS software that is completely aligned with a company’s warehouse workflow. It enables clients to quickly scale their internal teams with competent experts while offering end-to-end development services that emphasize transparent communication.

The firm’s developers have the necessary expertise in delivering complex functionality and establishing seamless connections with ERP solutions, accounting software, CRM systems, and other tools. An inclusive working culture ensures that Orases are highly engaged and committed to client projects.

Services & expertise: MVP development, workflow automation, UX/UI design, web and mobile development, IT consulting, API development and integrations, AI development, legacy software modernization.

Technology stack: TypeScript, React, Angular, Ruby on Rails, Node.js, .NET, Laravel, Python, Perl, Kubernetes, Twilio, Splunk, Kubernetes, Helm, Jenkins, AWS, Azure, IBM Cloud, Oracle Cloud, AWS Cognito, Okta.

Team size: 50+ experts.

Top clients: NFL, Next Day Dumpsters, American Kidney Fund, Invisible Fence, American Immigration Lawyers Association.

Not a classic vendor of WMS development services but a product company, Generix Group is on our list for the quality of its platform: its Warehouse Management System has been named in Gartner Magic Quadrant for WMS solutions for many years in a row, which speaks for itself about the company’s credibility and performance. 

Generix Group boasts a list of over 5,000 clients whom it provides with solutions that can be tailored to any needs, from simple to highly complex, while implementation options range from rapid start packages to customizable SaaS solutions. Global presence across 60+ locations ensures the platform is adjusted to serve different markets.

Services & expertise: warehouse management, labor management, vendor managed inventory, 3PL portal and order tracking, AP automation, onboarding services, order management system, customer journey and loyalty.

Technology stack: non-disclosed publicly 

Team size: 800+ experts. 

Top clients: Hitachi, Novexco, Bona, Danone, Couche-Tard.

Mind Studios has proven expertise in building custom management solutions for complex warehouse workflows that help reduce errors and related costs. The firm’s developers emphasize real-time inventory visibility, process automation, and secure integrations with the software systems operated by the client: ERP, TMS, or supply chain management tools.

The company offers strong skills in business analysis in addition to consistent communication, which allows its project teams to efficiently accommodate growing project scope when additional tasks emerge. It also offers competitive pricing for rendered services, striving to provide good value for the client’s investment.

Services & expertise: custom WMS development, inventory management, order processing and fulfillment, returns and reverse logistics, system modernization, IT consulting, AI-powered analytics, managed IT services.

Technology stack: Django, Node.js, TypeScript, React Native, PostgreSQL, MySQL, AWS, Azure, GCP, Swift, Kotlin, Salesforce, Dynamics 365.

Team size: 100+ experts. 

Top clients: WAREDND, Remy Cointreau, Fitr, TIKPACK LLC, UCSF.

ScienceSoft is a well-established service provider with 35+ years of expertise and a wide pool of IT experts who deeply understand the challenges and specific nuances of custom warehouse management software development. The company can help clients of all sizes, as it provides full-cycle services needed for both efficient project execution and long-term support. 

The company’s specialists have shown commitment to client success multiple times. In addition, ScienceSoft offers strong integration capabilities and tried-and-tested workflows that can be especially valuable on enterprise-level projects. ISO:9001 and ISO:27001 certifications testify to the agency’s adherence to high-quality deliveries.

Services & expertise: custom software engineering, advanced technology consulting, logistics solution implementation, IT staff augmentation, API development, web and mobile development, cybersecurity services,

Technology stack: .NET, Java, Python, PHP, Golang, Node.js, C++, JavaScript, React Native, Swift, Kotlin, Flutter, PostgreSQL, MySQL, AWS, Azure, GCP, Kubernetes.

Team size: 750+ experts. 

Top clients: Walmart, Greenwood Gearhart Inc., Saudia Cargo, Immertec, Hirschbach.

Exploring what is a Warehouse Management System (WMS) reveals its role as a vital tool in the logistics industry, central to managing warehouse operations efficiently. The worldwide market size for warehouse management systems is projected to grow at a Compound Annual Growth Rate (CAGR) of 16.1% between 2022 and 2030. 

If we want to define a Warehouse Management System (WMS), it is a software solution designed to optimize warehouse operations. It acts as the nerve center, directing the storage, movement, and handling of goods within a warehouse, ensuring they are processed most efficiently. 

This integration of technology streamlines operations, minimizes errors, and can significantly reduce labor costs, highlighting its role as an indispensable cog in modern logistics and supply chain management. 

Now that we’ve delved into Warehouse Management Systems and their pivotal role in streamlining warehouse operations, you can broaden your perspective by exploring our Logistics Management Software article.

Understanding a Warehouse Management System helps recognize how it streamlines processes from inventory control to order fulfillment, playing a critical role in modern logistics and supply chain management.

A robust WMS provides flexibility and comprehensive control in a high-velocity logistical framework by enabling real-time, accurate oversight of warehouse operations.

Contemporary WMS solutions break away from outdated spreadsheet models, facilitating seamless integration across various storage facilities and supply chain nodes. This integration gives warehouse managers real-time access to crucial inventory data, spanning the movement of goods from manufacturers to warehouses, distributors, and customers.

When paired with accounting software, WMS provides instant access to financial data, such as unit costs and overall inventory values.

The precision of live data capture is a significant upgrade over past methods, allowing for meticulous stock level tracking and substantially diminishing the risks associated with overstocking or depletion, particularly during critical, high-activity periods.

The most effective WMS provides a broad range of customizable options for inventory management, from logging methodologies to task assignments and even the nitty-gritty of picking processes.

Whether it’s leveraging smart scales, utilizing RFID technology for scanning, or employing sophisticated picking strategies like batch, zone, or wave picking, these systems can be tailored to suit the unique requirements of each warehouse operation. 

Integration with Transportation Management Systems (TMS) further refines the incoming and outgoing freight management, enhancing the cohesion and synchronization between the various moving parts of warehouse logistics.

Adopting and integrating these innovative solutions and technologies dramatically improves operational efficiency, reducing errors and eliminating unnecessary delays, thus facilitating a smoother and more streamlined workflow.

The impact of a well-chosen WMS extends beyond process improvements—it profoundly affects personnel and client relations. With clearer role definitions and streamlined operations, staff members often experience increased job satisfaction, autonomy, and accountability. 

Moreover, the real-time performance monitoring facilitated by WMS enables managers to provide prompt and tailored support and training, meeting the individual requirements of each team member. As in-house efficiency climbs, so does the quality of interaction with suppliers and clients. 

Error reduction and dependable inventory tracking result in smoother transactions and heightened satisfaction among business partners and customers.

The financial benefits of an efficient WMS are compelling. Streamlining operations is synonymous with cost savings in an industry where time equates to money. Delays and errors can be costly due to mismanaged orders, inefficient layout, or suboptimal picking and packing. 

A Warehouse Management System (WMS) boosts supply chain transparency and efficiency, optimizing space, labor, and resources for increased productivity. A properly implemented WMS not only organizes warehouses but also improves profitability. 

Adopting a suitable WMS is essential for modernizing warehouses and keeping up with evolving logistics technology, offering scalability to meet current and future challenges in the industry.

Understanding the different types of Warehouse Management Systems (WMS) is crucial for businesses to choose the right system that aligns with their operational needs, size, and complexity. 

Each type offers unique features and capabilities that cater to various logistical requirements. Below, we explore the predominant WMS types that modern businesses utilize to enhance their logistical operations.

A Standalone Warehouse Management System is a specialized solution focusing solely on warehouse operations. Its primary purpose is to manage inventory levels, optimize picking and packing processes, and streamline the receipt and shipping of goods. 

This system is particularly beneficial for small to mid-sized businesses requiring robust warehouse management capabilities without the complexities and costs associated with larger, more integrated systems. It offers simplicity and ease of use, often resulting in a shorter implementation period and significantly reduced training time for warehouse staff. 

Standalone systems are also typically easier to customize to the specific needs of a warehouse, making them a flexible option for businesses with unique operational requirements.

MarketsandMarkets reports that cloud-based warehousing is expanding swiftly, with a Compound Annual Growth Rate (CAGR) of 22.3%. Cloud-Based Warehouse Management Systems represent a modern approach to warehouse operations, providing the flexibility of remote accessibility. 

The cloud-based model is flexible and grows with your business. It’s good for companies that are expanding or have changing needs. It cuts down on the market for much money upfront and for regular upkeep because the service provider usually takes care of updates and infrastructure.

Supply Chain Modules within a Warehouse Management System are designed for comprehensive oversight of the entire supply chain. These modules extend the functionality of a standard WMS to include supply chain execution capabilities.

These systems help businesses coordinate their warehouse activities with the whole supply chain. This ensures a clear and connected movement of information and materials from suppliers to customers. They are good for big companies that handle complicated logistics and must keep all parts of their supply chain closely connected.

An Integrated ERP (Enterprise Resource Planning) system with WMS capabilities provides a unified solution for managing not just warehouse operations but all aspects of a business. This integration encompasses financials, human resources, customer relations, and inventory management. 

An ERP with integrated WMS connects warehouse operations with other business areas, streamlining processes and ensuring consistent information flow. This approach aids in informed decision-making and suits businesses seeking a comprehensive view of operations focusing on specific warehouse activities.

While exploring the various types of Warehouse Management Systems gives us insight into optimizing warehouse operations, understanding Transportation Management Systems (TMS) is equally crucial for comprehensively managing the broader logistics and supply chain management spectrum.

Effective warehouse management revolves around optimizing several key processes that drive efficiency, accuracy, and productivity. Understanding and refining these processes is vital for a well-functioning warehouse.

The receiving process is the first step in the warehouse workflow. Accuracy here is critical; errors can ripple through subsequent operations. It involves unloading goods, quality inspections, recording inventory, and updating systems to reflect new stock.

Once goods are received, they must be stored efficiently. Proper storage involves organizing goods to maximize space utilization while ensuring easy access for picking. High-demand items are often placed closer to the picking areas to speed up the process.

Picking is collecting items from their storage locations to fulfill customer orders. This labor-intensive process is often optimized through various methodologies like zone, wave, or batch picking to reduce travel time and increase efficiency.

After picking, items are packed for shipment. This step must ensure that the products are securely packaged to prevent damage during transport but not over-packaged to save on material costs. The packing process also includes weighing and labeling for shipping.

The shipping process involves the preparation of items for delivery to the customer. This can include consolidating items into shipping containers, generating shipping documents, and scheduling carriers. Timeliness and accuracy are crucial to maintaining customer satisfaction.

Effective inventory management ensures that stock levels are maintained to meet demand without overstocking. This process involves cycle counting, monitoring inventory levels, and using data analytics to predict future inventory needs.

Handling returns efficiently is essential for customer service. This process includes receiving returned items, assessing their condition, restocking or disposing of them, and managing refunds or replacements.

Quality control processes are integrated throughout the warehouse operations to ensure that the goods stored, picked, packed, and shipped meet the required standards. This minimizes the risk of defective or damaged goods reaching the customer.

Safety procedures are vital to protect workers and goods. Regular equipment and facility maintenance ensures a safe working environment and minimizes the risk of operation interruptions.

Continuous analysis of warehouse processes and implementing improvements are essential to remain efficient and competitive. This includes staying updated with the latest warehouse management technologies and best practices.

By focusing on these key processes, warehouses can streamline operations, minimize errors, and adapt to changing demands, ultimately leading to a more efficient and productive operation.

Integrating a Warehouse Management System (WMS) is pivotal for modern logistics. It bolsters warehouse operations’ efficiency, accuracy, and cost-effectiveness, directly impacting customer satisfaction and competitive edge. As we’ve explored, choosing the right WMS hinges on understanding key warehouse processes and aligning them with business goals, a specialty of IT Craft.

The future of warehousing lies in embracing innovations like AI and IoT; a WMS is a foundational step toward this tech-forward approach. IT Craft’s expertise ensures businesses meet industry benchmarks and prepare for future advancements.