Inventory Management Systems vs. Warehouse Management Systems: Do you Know the Difference?

January 24th 2019 16:00:00 PM

As your manufacturing business grows, the challenges and rewards will multiply. One of the challenges you will encounter is managing the number and quantity of items for sale. If you are at the point where you know you need help, how do you decide between an inventory management system and a warehouse management system?

You’ve taken an important first step, and that’s to do your homework. If you already know which system is the best option for your business, contact us online today to arrange to speak with a solutions expert or call (330) 645-9959. 

Inventory Management System (IMS) 

An inventory management system includes hardware and software, as well as the procedures that monitor stocked items. These items can be made up of raw materials, supplies, parts, or finished products that are ready to be shipped to vendors or consumers. The IMS is also made up of the following components: 

  • A means to identify each item held in inventory and its details, such as barcode label or tag
  • A device for reading the barcodes, such as a dedicated handheld scanner or a smartphone with a barcode scanning app
  • Inventory management software, which provides the database for all the inventory, along with the ability to analyze sales data and make detailed forecasts about demand for specific items 

If you are manufacturing a limited product line or have low order volumes (at present), an IMS could be the right solution for your current needs. It is a step up from attempting to track everything on a spreadsheet since you have no control over who is adding data or whether complete rows are being eliminated in error! 

Warehouse Management System (WMS) 

As the name implies, a warehouse management system is a type of software package that is used to manage the operations of the entire warehouse. It includes the functions of inventory management, order picking, how the orders are processed and auditing. 

The goal of the WMS is to ensure that all the processes in the warehouse run smoothly and efficiently. For example, in a company with warehouses in multiple locations, the WMS will use real-time data to determine which location is best for retrieving the product for expedited shipping. The customer only knows that the shipment is received in good order, and in a timely manner. 

A WMS can help to manage the amount of stock that a warehouse carries at any one time, reducing the number of out of stock items. When these types of errors are minimized, customer orders can be filled promptly, leading to more sales and a higher level of customer service. 

The system can help you identify items that are frequently ordered together. Items that are often sold together can be physically placed close together, which saves steps for your pickers and makes them more efficient at filling orders. This strategy is also more convenient for promotions involving related items being sold together or complimentary gifts offered as incentives with purchases. 

The WMS also allows you to track the location of various products in multiple warehouses to keep a good handle on how long it takes for inventory to move from being received at the warehouse to its end destination. The system can track variations in the length of time items remain in the warehouse due to seasonal changes or holidays. This information is very helpful when forecasting and ordering. 

IMS vs. WMS: The Difference 

The major difference between the two systems is their level of complexity. The IMS keeps track of individual products. The WMS will manage your warehouse space and handle extra functions, as well. If you need a system that is robust enough to handle receipts for orders and also shipping documents, then the WMS is likely the better option. 

Scanco can help you find the right options for your warehouse business, whether you need an inventory management system like or a warehouse management system. Let one of our solution experts guide you by calling (330) 645-9959 or contact us online.


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