How to Select Warehouse Management Systems
Warehouse management systems (WMS) are used to manage the movement and storage of materials in a warehouse. There are three types of products: Tier 3, Tier 2, and Tier 1. Tier 3 warehouse management systems (WMS) are the least expensive type. They allow warehouse personnel to manage the flow of materials on conveyors and can be integrated into picking systems. Tier 2 WMS applications are more robust than Tier 1 systems, but do not contain all of the features of a Tier 3 WMS. Typically, warehouse management systems (WMS) are used in large-scale or high-volume warehousing environments. Storage location management, automatic order selection, inventory control and replenishment, and shipping and receiving are common features.
Tier 3 warehouse management systems (WMS) cost between $35,000 and $200,000 (USD). Most products are designed to run on personal computers (PC) and use an operating system such as Microsoft Windows. Microsoft and Windows are registered trademarks of Microsoft Corp. A Tier 3 WMS combines the features of a standard inventory management system (IMS) with functions such as wave picking, zone picking, cross-docking, and directed put-away. Tier 3 applications may also offer serial number tracking, lot number tracking, or pallet tracking. Many Tier 3 systems allow warehouse personnel to create work orders, identify finished goods, and print shipping labels. Inventory valuation methods include first in, first out (FIFO) and last in, last out (LIFO).
Tier 2 warehouse management systems (WMS) usually cost between $200,000 and $750,000 (USD). Although most vendors sell mainframe applications, PC-based platforms and combined PC/mainframe systems are also available. Tier 2 warehouse management systems include the features of an IMS and Tier 3 WMS. Tier 2 products also provide cross-dock planning, automatic wave planning, system-directed replenishment, and stock location management. Tier 2 WMS software with outbound order management, system-directed put-away, labor planning, load management, and compliance reporting is also available. In some cases, Tier 2 warehousing software can be integrated with existing supply chain applications.
Tier 1 warehouse management systems (WMS) cost between $750,000 and $2,500,000 (USD). Most vendors provide mainframe or web-based applications that use an operating system such as UNIX, a registered trademark of The Open Group. A Tier 1 WMS includes all of the features of an IMS, Tier 3 WMS, and Tier 2 WMS. Tier 1 warehouse management systems (WMS) also include value-added features such as voice-activated technologies, radio frequency identification (RFID) tagging, wireless communications, and physical automation support. Unlike less robust products, a Tier 1 WMS can be fully-integrated with software for materials resource planning (MRP), enterprise resource planning (ERP), and accounting.