Inventory management & warehouse management systems: What’s the difference?
Inventory management and warehouse management systems both play a critical role in helping ecommerce businesses save time, automate processes and gain a competitive edge.
You may think these systems serve the same purpose, and while there is some overlap between them, there are key differences in the capabilities and benefits of the two.
In this article, we explore what makes a warehouse management system (WMS) different from inventory management systems (IMS), the benefits they share and how you can combine both in one easy-to-use solution.
Inventory management software explained
An IMS, otherwise known as a stock control system, is software that enables an ecommerce business to streamline the process of procuring, storing, selling and replenishing stock. It allows them to track and control stock as it moves through the business, helping ensure the right amount of inventory is always available to fulfil customer orders.
An inventory management system automatically monitors stock levels and sales data across multiple channels, ensuring they are in sync. It provides real-time visibility of stock on hand and its location, while automating many processes required to store, move and replenish inventory.
The most advanced systems also enable businesses to forecast demand for certain product lines so they can order stock accordingly. They can even set triggers for the system to automatically reorder items when stock falls below a certain threshold.
What is a warehouse management system?
A warehouse management system is software that helps ecommerce businesses automate and streamline a range of processes – from receiving stock and putaway, to picking, packing and delivering orders. Essentially, it helps ensure goods and materials pass through the warehouse as efficiently as possible, while minimising costs and waste.
Providing a single platform to view and control end-to-end warehouse operations, a WMS automates many time-consuming manual tasks and workflows. It makes it easy to assign stock locations, optimise storage space and manage multiple warehouses, as well as track stock movement and count stock.
The system also allows businesses to set rules for how stock is handled, ensure quality control, as well as assign picking locations and enhance picking routes.
What’s the difference between the two?
From the above descriptions of the two systems, you may already have an idea of how they differ in important ways. Let’s take a deeper look at these differences.
1. Now vs the future
One of the key differences between the two systems is that inventory management systems help you plan and strategise about the future, whereas a WMS focuses on the here and now.
By analysing historical sales data, trends and customer behaviour, an IMS can forecast future demand for products with high accuracy. The system can also help you anticipate which products will be in high demand, so you can adjust inventory levels accordingly. Plus, an IMS enables you to set reorder points to automate replenishment processes, ensuring popular items are always in stock.
A warehouse management system, meanwhile, enables you to manage and streamline day-to-day tasks in a warehouse environment. It is designed to optimise the efficiency of processes like receiving, putaway, picking, packing and shipping, while providing real-time visibility of inventory levels, locations and movements within the warehouse.
2. Tasks vs stock
While both a warehouse management systems and inventory management systems are designed to increase the efficiency of warehouse operations, they diverge in their core focus.
An inventory management system predominantly focuses on stock control, including tracking inventory levels, monitoring stock movements and assessing stock availability. It provides comprehensive insights into the whereabouts of stock within the warehouse, as well as real-time updates on stock quantities.
Meanwhile, a warehouse management system is designed to streamline and enhance warehouse tasks and supply chain management workflows like picking, packing, receiving goods, putaway and shipping. It automates repetitive tasks and ensures seamless coordination between warehouse staff and equipment.
3. Holistic overview vs detailed focus
When it comes to managing warehouse operations, there is a clear difference between the broader visibility provided by a warehouse management system and the more granular focus of an inventory management system.
A WMS gives you a comprehensive, high-level view of your warehouse’s overall operations, providing visibility of performance and areas for improvement; for instance, metrics like picking accuracy rate. On the other hand, an IMS directs attention solely towards managing stock, allowing you to get deep into the details of stock levels, movements and availability.
Inventory management vs warehouse systems: What common benefits do they offer?
While there are clear differences between the purpose and capabilities of the two systems, they can both help your business:
1. Consolidate ecommerce platforms
Both inventory management systems and warehouse management systems offer integration with a range of platforms; not only with marketplaces, shopping carts and courier platforms, but also other business critical solutions like ERP, CRM or accounting software.
Consolidating all your ecommerce platforms in one system means data is synced across all, eliminating manual data entry and providing a comprehensive, end-to-end view of all critical business functions. It also means you do not need to log in to multiple platforms.
2. Save time with automation
One of the biggest benefits both systems offer is powerful automation that can eliminate many tasks burdening your team every day.
For instance, a WMS can automate processes like location management, pallet and carton handling, the generation of pick lists and shipping labels, and when it comes time to ship an order, it can automatically select the most cost-efficient courier.
An IMS, meanwhile, automatically tracks inventory levels and sales data to automate the process of adding new stock, tracking sales and updating stock levels. You can also define rules to automate what happens to orders during packing based on criteria like value, weight and shipping method selected.
Plus, you can automatically route orders to specific warehouses based on criteria like the customer’s address or stock levels.
3. Enhance business visibility
An IMS and WMS both give you a more accurate, data-driven view of critical ecommerce processes and metrics.
An ERP inventory management system can consolidate all your sales channels and automatically monitor stock levels and sales across all, ensuring they are synced and accessible from one place. The system ensures you always have up-to-date visibility of your inventory, no matter where it is.
With a WMS, powerful reporting tools give you real time updates on orders, inventory and shipments, while also providing a detailed view of storage capacity and operations across a single or multiple warehouses.
How to combine warehouse and inventory management in one system
Hopefully you now have a good understanding of the key differences and benefits that both systems can offer. While they are commonly offered via separate platforms, there is cloud-based software out there that combines both warehouse management and inventory software capabilities – fully integrated as part of a modular solution.
One of these software solutions is our own Access Mintsoft, which offers warehouse, inventory and order management capabilities in one intuitive cloud platform. The solution is trusted by over 600 ecommerce businesses worldwide to save time and automate tasks across the entire order fulfilment process.
With Access Mintsoft, you can gain real-time, accurate visibility of your stock, personnel and processes across your warehouse. It allows you to automatically reorder stock when levels are low and forecast demand, while also gain better control and time savings across the picking, packing, delivery and returns process.
The solution comes with over 175 integrations, so you can consolidate all your marketplaces, shopping carts and courier platforms in one system. Plus, API functionality means you can also integrate your ERP, accounting or CRM platforms.
