What’s the Difference Between Warehouse Management and Warehouse Inventory?

Retailers, both traditional and eCommerce, use inventory management or warehouse management tools as integral parts of their workflow. Both systems have distinct similarities and differences.

Here’s the breakdown:

An Inventory Management System (IMS) has one core set of features that focuses on tracking inventory levels.

A Warehouse Management System (WMS) must not only track the flow of inventory but also calculate real-time available quantities, automate purchasing and receiving, and track employee accountability.

It’s understandable to use the terms interchangeably, but it’s important to have a clear understanding of the differences between the two.

The Basics of an Inventory Management System

The goal of any good IMS is to simply and efficiently track an operation’s inventory flow. The user interface should be so intuitive so as not to necessitate training An effective IMS communicates two key metrics, 1) all items in the warehouse, and 2) where to find them.

This may seem simple, but just being able to say that you know exactly what you have and where you have it puts you ahead of many businesses.

The Benefits of an Inventory Management System

As mentioned above, there is significant value in knowing exactly what products you have on hand and where to find them. Knowing what you have is a must if you want to do any type of planning, forecasting, or purchasing. It’s also crucial for your fulfillment times.

A good IMS should include the following:

  • Quantity Tracking
  • Inventory Level Reporting
  • Simple Picklist Routing
  • Locations
  • Barcoding

The Basics of a Warehouse Management System

As your warehousing operation grows, you’ll face increasing complexity in product movement and personnel concerns.

Growth also brings with it the necessity to pivot to other business models and sales channels. Scaling any business is enticing because of the exponential increase in profits. But with it comes an exponential increase in complexity.

At this stage of growth, a warehouse management system is critical for organizing processes and providing team members with a framework to get their work done.

The Benefits of a Warehouse Management System

A helpful way to conceptualize how a WMS helps is this: an IMS handles inventory, whereas a WMS handles workflows relating to inventory.

A WMS handles all the processes of your warehouse, whereas an IMS only handles one segment of those processes.

Beyond just tracking inventory flows, a WMS gives you a scalable platform that can be utilized to ensure capital is spent wisely and that metrics are hit for goals and performance standards.

Consider all the processes that happen in your average warehouse:

  • Managers create a PO
  • The warehouse receives the item(s)
  • Employees stock the item
  • A customer purchases the item
  • Employees pick the item and send it through quality control
  • Finally, it’s packed and shipped
  • Closely tracking these workflows and processes is crucial to succeeding and competing.

In short, the right warehouse inventory system paired with the right warehouse management system can help you to accomplish your goals and focus on what is important to grow the business instead of constantly putting out fires.