What warehouse software do I need?

What warehouse software do I need?

Many of us don’t feel comfortable when we start speaking about what software we need for our warehouse. The different kinds and approaches of suppliers, the different names of products, and solutions that seem to overlap one to another make complicated the matter for the layman.

Probably the first step is to understand which ERP we have and what options can provide to us. Many ERPs have logistics functions or warehouse modules. Whether the best option is to use the ERP’s solution, or a solution offered by a software-house, an automated logistics systems provider or a mix of them, is a very tricky issue that we can’t pretend to solve or provide advice in a blog. There are many implications and constraints that a company should analyze and ponder before to take a decision that will affect not only the warehouse and logistics or even the IT department. It may have implications in the way the company operates.

Anyway, we will have providers that will talk to us about WMS, WES, WCS, DOM, LMS, YMS, and even TMS. It’s difficult to understand among so many acronyms what they mean, what they are for, and which one makes for you. I consider myself a layman, and I will be more than happy to be corrected if I write here something that is not correct – the best way to learn is feedback- but I am going to jump into trying to describe what means each of these acronyms. In this way, you may be a bit closer to understand what you will be talked about the next time you have a supplier or a collaborator trying to explain to you why you need a WxS instead of a WyS.


WMS (Warehouse Management System)

WMS are software solutions that initially appeared for the management of warehouses and distribution centers. The formal definition of WMS, according to VDI guideline 3601, published in 2015, is:

the management, control, and optimization of storage and distribution using a software system (including storage and storage management, as well as the management and administration of the equipment), with extensive methods and means for checking the system conditions and with a selection of operational and optimization strategies. The task of a warehouse management system (WMS) is to manage and optimize in-house storage and transport systems.”

So, a WMS must have these basic features:


Essential functionalities:

  • Warehouse structure
  • Inventory Management
  • SKU’s master data



  • Goods receiving
  • Goods return
  • Deconsolidation
  • Quarantine
  • Quality inspection
  • Storage


Internal processes:

  • Relocation
  • Replenishment
  • Booking
  • Inventory level management



  • Order management
  • Picking
  • Consolidation
  • Packing
  • Dispatch


Nowadays, it is essential to pay attention to several features:

  • Capacity to manage different warehouses in different locations to control the entire material flow and fulfill orders in the most efficient way.
  • Management of manual and automated areas of the warehouse.
  • Cross-docking, very useful in some situations.
  • Dashboards reporting with configurable KPI’s to analyze where improvement is possible.
  • Wave and Waveless order processing.


Some of the software systems explained below may be part of a modern WMS.


WCS (Warehouse Control System)

WCS is a software system used to organize the activity flow within a warehouse or distribution center. It coordinates material handling systems such as AS/RS, rack shelves, carousels, VLM’s, conveyor belts, and sorters. The system establishes several logical destinations or decision points, and every time that a load unit arrives at such point, the WCS determines the most efficient route and directs the equipment controllers to achieve the desired result avoiding bottlenecks in the system. WCS is used in facilities with automated material-handling hardware, integrated to an upper-level WMS.


WES (Warehouse Execution System)

WCS suppliers have been scaling up the solution and are now proposing it to the market as WES. They are offering new high-level features as waveless order processing, real-time operations intelligence, configurable business logic and rules set, segmentation of functional processing areas, and more advanced analytics.

Much of the attention that lately WES is getting is related to the need for a better and more complete software, capable of dealing with the complexities of omnichannel fulfillment. WES is incorporating some functions usually covered by WMS as order picking, wave management, or packing. These functions allow WES to provide most of the warehouse execution on its own or to work together with a WMS that might handle higher-level functions.


LMS (Labor Management System)

LMS software tracks the employee activity data and reports on individual and overall productivity levels. LMS functions are monitoring, measuring, creating reports, and planing labor activities in the warehouse. LMS allows us to review a single operator or an activity, what is needed to accomplish the activities scheduled, and creates standard measures useful for future planning and valuation of individual performances. LMS tracks historical data and presents prescriptive analytics for improving processes.


DOMs (Distributed Order Management System)

 A DOM allows having a complete vision of all of a customer’s order across all of the seller’s channels. With this information, it is possible to make an optimal decision on how to fulfill an order based on a set of logistics parameters. The system has a complete vision of the total inventory and decides how and from where to fulfill the customer’s order.


YMS (Yard Management System)


YMS is a solution designed to plan, track, and oversee the movement of inbound trucks and trailers, in the yard of the warehouse, or distribution center. It also controls the plan and stage of trailers for the outbound. YMS provides real-time information and allows us to plan incoming work, including staff, that allows for more efficient fulfillment. The data also helps to take strategic decisions for order fulfillment and assignment of the DOMs


TMS (Transportation Management System)

According to Oracle, a TMS is “a logistics platform that uses technology to help businesses plan, execute, and optimize the physical movement of goods, both incoming and outgoing, and making sure the shipment is compliant, proper documentation is available. A TMS provides visibility into day-to-day transportation operations, trade compliance information, and documentation, and ensuring the timely delivery of freight and goods. Transportation management systems also streamline the shipping process and make it easier for businesses to manage and optimize their transportation operations, whether they are by land, air, or sea.”

TMS helps to plan, selecting the optimal shipment method, and the more convenient carrier, depending on costs, distance, and availability. From an execution point of view, prepares documentation and provides tracking of freight.