WMS and OMS: What is the difference?
Contents
- Part 1: Order Management System
- What is an OMS
- OMS Benefits
- Part 2: Warehouse Management System
- What is an WMS
- WMS Benefits
- Part 3: How to use an OMS and a WMS
- Conclusion
Mapping out the success of your fulfilment activity is no easy task – it is in fact a multi-layered process and involves dependence on a range of different technologies, including an order management system (OMS) and warehouse management system (WMS).
Although these two serve completely distinct purposes, it is not unusual for business owners and warehouse operators to get confused between the two, which more often than not means that neither one of the two software programmes are able to be used properly to the best of their potential. This is a problem, and can cause you to struggle with improving your operations the specific way you intend to.
The solution is to understand the differences between an OMS and WMS as well as the purposes they are meant to serve within your organisation. If you do this, it would be easier for you to ensure that both these technologies are being utilised in the best possible way, and that your business is actually, genuinely, benefiting from them!
Excited to find out more?
Then keep reading, because this blog comes jam-packed with everything that you need to know about OMS and WMS, and how they can be used for the betterment of your business processes. For better understanding on your end, we have divided the following discussion in two parts; Part I, that is all about understanding order management systems, Part II that focuses on warehouse management systems, and Part III, which will shed light on how an OMS and a WMS can be used hand in hand for the best results.
And now, without further ado, let’s get right into it.
Part I: Order Management System
Let’s start with OMS or order management systems.
We all know that managing orders is one of the most challenging parts of running a retail business. Especially in today’s time and age where consumers have all the resources to place orders whenever they like, businesses have to be on their toes 24/7 to ensure that the mechanisms they have in place are adequately accommodating customers – a feat that is surely easier said than done.
However, the good news is that with the help of an order management system (OMS), it can actually be quite easy to navigate this area of your business and fulfilment procedures.
What is an OMS?
Firstly, what is an order management system?
An order management system is essentially a platform that helps you streamline your order processing from the second your customer places an order, right down to the minute it actually gets delivered to them. As such, its role spreads across multiple components and it can help you track stock levels, combine order data from different sources, and keep a track of all your customers by consolidating all the necessary information in an accessible client database.
While back in the day order management systems were one-dimensional, today they have evolved to cover different elements of order processing and fulfilment. They deal with customers, sale channels, product information, inventory levels, and even things like order printing, picking, packing, processing, and shipping.
OMS Benefits
And now, onto the actual benefits an order management system offers you.
1. An order management system will help you keep your operational costs low.
Because an order management system allows you to be completely in control of your inventory and sales with automation. This allows you to cut down on operational costs and hence, save money. For businesses that are struggling to get their profit margins up, this is very helpful and can actually allow them to get to the financial place they actually want to get to.
Not only that, but automation means that your actual employees have less work to do. This will help you optimise your labour force in the best possible way, and make sure you are not paying for more than you are getting. Again, this is an absolute must for businesses that are currently focusing on making as much money as possible without having to splurge on investment.
2. An order management system will help you deliver orders quicker.
Speed is an important factor when it comes to customer satisfaction. In fact, did you know that 70% of customers believe that speed, convenience, and friendly service matters the most when it comes to their overall shopping experience with a brand? Therefore, it is important for companies to have mechanisms and technologies in place that can help them achieve speed as well as the other tenets mentioned above.
That’s what order management systems provide businesses with. With the help of an order management system, you can actually ensure that your orders are leaving your warehouse on time and there are no unnecessary delays being caused that would taint the brand experience you have to offer to your customers.
3. An order management system will enable you to make data driven decisions.
Another great benefit that an order management system offers you in the ability to make data-driven decisions. Essentially, what this means is that you can leverage data to forecast your sales, perform trend analysis, and just make sure that the back end of your business i.e. the order processing is well-aligned with your sales activity.
Needless to say, this in itself will help you save money, boost efficiency, and make decisions that actually contribute to the well-being and sustainability of your business. Also, making data-driven decisions when it comes to order management is the only way you can keep up with the growing competition in the market, and hence an order management system becomes somewhat of a necessity that needs to be employed in your organisation if you are concerned with improving the way you deal with customers.
Part II: Warehouse Management System
Now, let’s talk about warehouse management systems.
Your warehouse is an uncapitalised asset; in fact, it is one of the most important ones. If you are genuinely keen on working towards the success of your business, you have to take the right steps and organise your warehouse to the best capacity.
Again, it is easier said than done. A functional warehouse involves hundreds of processes, and in order for it to remain functional, each of these processes must be streamlined and taken care of. If you expect to do everything manually, chances are you will never get to the bottom of it and actually turn your warehouse into a hub of productivity as it should be.
However, if you use a warehouse management system, all your dreams involving your warehouse will very well turn into reality – without an ounce of worry tainting the experience.
What is a WMS?
A warehouse management system is a kind of software that helps you streamline all your warehouse operations in a way that maximises labour and space utilisation. It is meant to coordinate and optimise resource usage and material flows, which makes it easier for warehouse operators to achieve their goals with considerable ease. For many businesses, a warehouse management system is a necessity that must be implemented into their operations if they aim on making a permanent place in today’s dynamic, omnichannel, fulfilment economy. And for good reason – because there are quite a few advantages a warehouse management system brings to the table.
WMS Benefits
Here are some of the benefits of a warehouse management system:
1. A warehouse management system helps you optimise warehouse space.
Warehouse space is expensive, and no business wants to be put in a place where they are spending money on space unnecessarily. Which is precisely why a warehouse management system comes into a picture. With the help of a WMS, you can optimise warehouse space and ensure that no matter how much or how little space you have, it is being utilised to the best of its capacity.
This will save you a lot of trouble and money, which is ultimately the best way to make sure you are on the right track when it comes to your business.
2. A warehouse management system improves inventory visibility.
Warehouse management is deeply connected to inventory visibility and management. In fact, one of the main aims of streamlining your warehouse activity should be inventory visibility, as this will be the main way to ensure that your operations are contributing to the success of your business.
So, with the help of a warehouse management system, you can gain visibility of accurate, real-time inventory levels and ensure that they are fit for business. This will help you make sure that there are no stock outs or events of overstocking, so that you can provide a seamless experience to your customers while not going overboard with your costs either.
3. A warehouse management system makes labour more effective.
Because warehouse management systems are all about automating the day-to-day tasks taking place at a warehouse, they work to lift a burden off the shoulders of your workers as well. When your workers don’t have to worry about menial tasks that can easily be automated, they can sit back and relax – an aspect that makes their work more efficient and effective.
With the help of a warehouse management system, you can actually retain employees for a longer period of time, boost up employee loyalty, and make sure that your employees have just the right resources they need to work through the various warehouse challenges they may face on a daily basis.
Part III: How to Use an OMS and a WMS
Now you know that an OMS and WMS serve completely different purposes. While an order management system is all about managing orders, the purpose of a warehouse management system is to ensure that all the operations taking place within the warehouse are perfectly streamlined.
However, just because the two serve different purposes doesn’t mean that they can’t be used together. In fact, if you are looking to actually achieve maximum efficiency and productivity, you will be keen on using the two together.
First, let’s discuss why it is important to do this. With the rise in eCommerce and the use of omnichannel sales, it becomes important for businesses to bridge the gap between what happens out the front of your business and what happens in the back. Whereas an order management system is more focused on getting and managing orders at the front, a warehouse management system aims to make sure that everything on the back end is in working order so that your business doesn’t have to suffer in any possible way.
To put it simply, using both an OMS and WMS hand in hand will enable more connection and integration between different aspects of your business, and is hence an important factor to focus on.
In addition, the other benefits that an OMS and WMS can provide your business together are as follows:
- Increased supply chain efficiency since you and your customers can anticipate bottlenecks and always know where your inventory is.
- Improve the systems’ ability to gather and report data accurately
- By delivering real-time inventory levels for all goods across all channels, you can reduce inventory theft and loss.
- Boost client satisfaction by increasing visibility and encouraging open dialogue.
- Spare time by automating everything from start to finish.
- Sync systems to ensure that you and your customers are on the same page and that they always have enough stock on hand to reduce expenses.
- By automating inventory operations such as cycle counting, you can get rid of manual mistakes.
Key Takeaway
While an order management system and a warehouse management system serve two different purposes and needs, they are still a good fit together. In fact, businesses that are handling their fulfilment processes with utmost perfection do so with the help of both of these technologies, and that’s what you should do.
And guess what? It’s not hard – thanks to Canary7. Canary7 offers the best fulfilment solutions out there, including a cutting-edge warehouse management system and an equally efficient order management system. Our solutions are designed to help you make the most out of your warehouse and order activity, which means that no matter how much effort you are putting in, Canary7 will maximise it with end-to-end automation and make the outcome all the more worthwhile.
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