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Crucial Factors for Implementing Warehouse Management System

A warehouse management system (WMS) is a type of software solution designed to optimize and provide support to warehouse operations, aside from having a clear view of the warehouse inventory, WMS also offers access to many functions such as receiving, put-away, picking, sorting, shipping and tracking of goods. In implementing a warehouse system, the organization should conduct a thorough planning and careful understanding of the system requirement. Ensure to gather all crucial factors and key benefits that will help achieve an effective system. The total cost of the system is one of the crucial factors that need to be considered. Try not to get a simple system that in the end, it will just cost a huge impact to re-construct because it did not work the way the business wanted. System requirements, users’ responsibility and comprehensive system training will also play a big part in the implementation stage of the system, a system will not properly work without a user interface and understanding.

System Requirements and Customization

In selecting a warehouse inventory management system, it is important to ask the right questions and define the operational needs. This will benefit the warehouse to run with smooth transactions and free from error. Each business has different needs and requirements according to its day-to-day operations. A common warehouse system should provide a way to store, control, arrange, achieve and analyze inventory data. Furthermore, the other importance of customizing a system is to improve the system security function and the ability to give the users a different level of system access, features and functions.

effective logistics system
Image taken from SIPMM: https://publication.sipmm.edu.sg/crucial-factors-connectivity-effective-logistics-system/

Total Cost of Implementation

The total cost will be the highest contributing factor in purchasing a warehouse management system. A new warehouse system will require adjustment to properly align and suit the warehouse operation and user requirements. It is also important to know the future cost associated with the software maintenance such as system upgrade, the cost per license, and initial training provided. The basic WMS installation packages that include additional functionality and enhancements designed to increase picking productivity can cost between $200 and $300 per user or $1,000 to $1,500 per facility/month. Some companies include the training and step-by-step procedures for the implementation of the software but not the system upgrade cost.

User’s Role and Responsibility

Setting up the access roles for each user is one of the most important things to consider in implementing the warehouse management system. The key roles are warehouse manager, supervisor, picker, packer, and receiver. The warehouse manager’s role is considered a super-user role. This role has full control to manage and overview the overall function of the system. The supervisor’s role is the one who plans, arranges, and supervises the daily operational activities such as shipment orders, shipment preparation, stock inventory, and outgoing shipment. The order picker’s role has access to the entire picking task in the system while the order packer’s role has the access to the packing screens, this screen will provide all the required information such as printing shipping labels, packing slips, cancelling the order, scanning the barcodes, and selecting the type of box. Receiving and unloading of goods to a staging area, reporting damaged goods, and put-away pallets of goods into inventory location are the receiver’s role.

practices logistics integration
Image taken from SIPMM https://publication.sipmm.edu.sg/essential-warehousing-practices-logistics-integration/

Data Flexibility and Comprehensive Training

Having a user-friendly system in a warehouse will accelerate the workflow of the warehouse operation because a warehouse system that is not designed for user-friendliness can affect the work progress. It is also important for the system to provide accurate, manageable, and flexible data as the user will always depend on and rely on it. A warehouse system with accurate and flexible data willincrease customer satisfaction and provide credibility to the business. Depending on the warehouse system requirement and complexity associated with it, more training for the workforce should be provided. Assigned users must fully understand every function of the system and how it will affect the whole operation if problems occurred during the implementation stage. Users should be systematically trained on how the system works. This will pay huge dividends in the short- and long-term use of the employees.The most implemented warehouse system includes step-by-step procedures and guidelines to be followed by the user and by the warehouse itself. It is important to know the significance of these procedures and their effects.

RFID Technology Integrated with WMS

Radio frequency identification is also known as RFID – refers to a wireless system consisting of two types: tags and readers. A warehouse management system that is combined with RFID technology will help improve the efficiency of warehouse management and be able to provide speed on receiving and delivery of goods.RFID Technology offers accurate real-time information, picking location and the ability to plan the product allocation, reduces labour costs by hiring less workforce needed for tracking and warehouse operations.

essential technologies
Image taken from SIPMM: https://publication.sipmm.edu.sg/essential-technologies-automated-warehouse/

Blockchain Technology for WMS

Blockchain technology provides the power to control, track and record the movement of both goods and information to the entire warehouse operation. In a warehouse management system, a proper infrastructure is set to develop the ability to serialize the materials with tagging and record them in a platform that is shared in the network. Any transaction recorded in the blockchain is undisputable, transparent, and has no chances of fraud. This system makes everything in the network visible, manageable and secured.For example, when a shipment is delivered, the received confirmation, date and time of delivery, and condition will be transmitted to the blockchain system to be verified with agreed terms and conditions. Once verified, proper payments will be issued to the designated paying channels. This type of automation increases efficiency, integrity, and data security.

Technology Risks and Contingency Plan

An efficient warehouse management system allows a warehouse to operate smoothly and productively. Downtime and weak data security are common drawbacks in implementing a warehouse system. Downtime error occurs when there is a poor network connection, system failure, and sometimes due to human error that causes production time lost. To prevent this system error, practice regular system tests and if necessary, upgrade the system to the latest version. Another drawback is poor data security, having poor data security is just like inviting hackers to attack the warehouse system and retrieve all the important information of the warehouse operations. To prevent this, ensure strict security protocols are followed. Proper training for the employees should be provided to prevent data security breaches and ensure all cybersecurity firewalls are active and up to date.


Implementing a warehouse management system is critical in managing the complicated activities and operations performed in a warehouse. Crucial factors such as system requirements, the total cost of the system, user interface, comprehensive training and integrated technologies will affect the whole warehouse process if not executed accordingly. Careful understanding of these factors and their importance would help the organization improve the inventory system, enhance operation productivity, reduce labour cost, decreases errors in receiving, picking, shipping of goods, improve customer service and customer satisfaction at the lowest cost. A successful WMS will benefit the operational efficiency for both labour and physical inventory space of the warehouse.


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Clarus WMS. (2017). “How to avoid the pitfalls and risks of a poor WMS implementation”. Retrieved from https://claruswms.co.uk/avoid-pitfalls-risks-poor-wms-implementation/, accessed 05/12/2021.

Erhan Musaoglu. (2017). “What are the main user roles in a warehouse management system?”. Retrieved from https://www.linkedin.com/pulse/what-main-user-roles-warehouse-management-system-erhan-musaoglu, accessed 05/12/2021.

Muhammad Fadly Bin Mawasi, DLSM. (2021). “Picking Technologies for Smart Warehousing”. Retrieved from SIPMM:https://publication.sipmm.edu.sg/picking-technologies-for-smart-warehousing, accessed 04/12/2021.

Muhammad Yazid Bin Mustafa, DLSM. (2021). “Essential Technologies for an Automated Warehouse”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/essential-technologies-automated-warehouse/, accessed 07/12/21.

SrinivisanVaradarajulu, ADPSM. (2018). “Blockchain Technology Enabling Seamless Supply Chain”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/blockchain-technology-enabling-seamless-supply-chain, accessed 06/12/2021.

Analyn Enderes Trinidad
Analyn Enderes Trinidad
Analyn Enderes Trinidadhas substantive experiences in the field of logistics and warehousing, as a materialscoordinatorand specifically in the shipyard sector. She holds a Bachelor degree in Computer Science and she is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). She completed the Diploma in Logistics and Supply Management (DLSM) in December 2021 at SIPMM Institute.

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