WMS System in Microsoft D365 SCM

Essence of Warehouse Management

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Warehouse management is a set of activities aimed at organizing and controlling all stages of handling items in a warehouse, including receipt, put away, storage, movement, and shipment. The goal of warehouse management is to ensure efficient warehouse operations, optimize storage space, maintain product quality, and reduce costs.
To achieve this, it is essential to maintain accurate records of all items so that every item entering the warehouse is registered and has a clearly defined storage location. This helps prevent errors such as stock shortages or overstocking. At the same time, easy and quick access to items is crucial for ensuring warehouse efficiency and timely order fulfillment.

Warehouse management also involves quality assessment and control throughout the entire storage period. Continuous monitoring allows for the timely identification of issues and minimizes risks related to product damage or loss.
Warehouse space allocation is another key component. Efficient space utilization not only optimizes warehouse capacity but also enhances internal items movement processes, improving overall operational efficiency.
Effective warehouse management requires careful planning and coordination of warehouse operations, including inventory tracking, organization of human and technical resources, and warehouse safety. These factors contribute to convenient and efficient inventory management, minimizing errors, and optimizing costs.

There are two main approaches to warehouse inventory management:

Basic Management (Inventory Management)
Advanced Management (Warehouse Management)

Goods Receipt

Manual identification
Recounting
Defect detection

Goods Shipment

Loading onto transport
Document generation

Goods Storage

Simple (non-bin-based) storage of goods in the warehouse

Goods Placement

Manual distribution of items within the warehouse

Order Picking

Items search
Manual identification
Picking execution

Goods Inventory

Items search
Manual identification
Recounting execution
Data transfer for system entry
Data entry into the system

Internal Goods Transfers

Items search
Manual identification
Movement execution

Goods Receipt

Automated items identification
Recounting
Defect detection
Items labeling

Goods Shipment

Loading onto transport
Document generation

Goods Storage

Automated identification of items and locations
Location-based (bin) storage of items in the warehouse

Goods Placement

Automated distribution of items across warehouse zones and locations
Execution of items put away operations

Order Picking

Automated identification of items and locations
Route optimization
Execution of picking operations

Cross-Docking

Execution of cross-docking operations

Quality Control

Automated items identification
Execution of quality control operations

Replenishment of Picking Zones

Automated identification of items and locations
Execution of replenishment operations

Goods Packaging

Automated items identification
Selection of packaging units
Execution of packaging operations
Labeling

Warehouse Topology Management

Warehouse layout maintenance
Ensuring automated location identification
Operational management of warehouse locations

Goods Identification

Ensuring automated items identification
Providing label printing and items labeling

Internal Goods Transfers

Automated and manual items search
Automated identification
Automated and manual creation and execution of warehouse movement works

Goods Inventory

Cycle counting planning
Manual and automated inventory cycle counting
Automated items identification
Execution of cycle counting operations (recounting and data entry via mobile application)
Automated data entry into the system

Mobile Application

Support for warehouse operations execution
Ensuring mobile execution of warehouse operations

Equipment Integration

Printing equipment
Other equipment

Approaches to Warehouse Inventory Management

Inventory management covers all key warehouse processes, such as receipt, put away, storage, movement, and shipment, but at a simpler and more generalized level.

This approach is typically used in small to medium-sized warehouses with a simple structure, where complex warehouse operations and large inventory turnovers are absent. It does not include additional warehouse processes such as packaging, replenishment of picking zones, etc., nor does it provide visibility into workload distribution across human and technical resources or ensure sufficient mobility in warehouse operations.

Warehouse Management, in addition to the core warehouse operations, supports additional warehouse processes such as packaging, cross-docking, replenishment of picking zones, etc. It enables management of these operations at a more complex and detailed level, with the flexibility to configure all warehouse processes according to specific needs.

The primary difference between these two approaches is their level of complexity and the management tools they provide.

Advanced Warehouse Management

Warehouse Management focuses on detailed planning, control of physical items flows, and their synchronization, considering multiple factors such as:

Human resources
Technical resources
Mobility and warehouse operation specifics
Warehouse layout (topology)
Product characteristics and constraints

This approach allows for precise planning, execution, and control of warehouse operations of any complexity, ensuring efficient use of warehouse space and improved workforce productivity. As a result, it helps reduce errors and warehouse costs while enhancing customer service quality.

Warehouse management utilizes a specialized mobile application compatible with various mobile devices (e.g., smartphones, tablets, or specialized handheld devices). The mobile app provides numerous key features, including:

Planning and execution of warehouse operations
Product, batch, serial number, and location identification via barcode scanning
Real-time data access and visibility
Additionally, the mobile app enables precise tracking and monitoring of warehouse operation execution times, allowing performance assessment for each employee.

Warehouse Management includes comprehensive analytical reporting with real-time insights, enabling effective warehouse performance monitoring and data-driven decision-making for managers.

Prerequisites for Implementing an Advanced Warehouse Management System (WMS)

Prerequisites for Implementing an Advanced Warehouse Management System (WMS):

High error rates in warehouse operations (incorrect shipments, lost inventory)
Lack of accurate inventory control
Long order processing times and low staff productivity
Inefficient use of warehouse space and resources
Business expansion, increasing product assortment, and growing operational volumes
Implementation of barcode scanning and warehouse process automation
Reduction of warehouse and logistics costs
Minimization of losses due to spoilage or theft

The Essence of Warehouse Management Automation

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A key component of successful warehouse inventory management is the use of modern Warehouse Management System (WMS) software to optimize warehouse processes, improve inventory accuracy, reduce costs, and enhance other aspects of warehouse automation:

Robotic process automation in warehouse operations
Use of mobile device
Label printing and product tagging
Using of various types of barcodes
Integration with other systems and diverse warehouse equipment

A Modern Warehouse Management System Should Enable the Following Warehouse Processes:

Warehouse Layout Management

The process of organizing, optimizing, and maintaining the warehouse structure to ensure efficient storage, handling, and movement of items in response to changing business needs. It includes managing locations and zones, organizing product flows, managing movement routes, and other aspects that help reduce processing time, lower costs, and improve efficiency.

Product Identification

The process of collecting, processing, and verifying product information to ensure accurate tracking and inventory management. This is crucial for warehouse operations such as receipt, storage, replenishment, picking, shipping, and inventory control. In WMS, product identification is the foundation of all warehouse processes - without it, items cannot be processed or moved correctly.

Routing and Picking

The process of gathering products from different warehouse locations using an optimal route based on an order or demand request. It ensures timely order fulfillment, improves accuracy, and enhances efficiency by considering the physical layout of warehouse locations.

Inventory Status Management

The process of setting and tracking product statuses within the warehouse. Product status can restrict or allow specific warehouse operations, influencing planning and workload distribution.

Storage and Put away

The process of distributing received or transported items to specific warehouse locations. This is crucial for efficient storage, quick access, and optimal use of warehouse space.

Receipt

A set of operations aimed at verifying, registering, and placing items upon arrival at the warehouse. It ensures inventory accuracy, prevents errors, and supports efficient warehouse operations.

Replenishment and Inventory Optimization

The process of delivering new inventory units to the warehouse for replenishing storage or picking zones. Replenishment is a key element of inventory management, ensuring stock levels meet demand and preventing shortages.

Location Inventory Audits

The process of verifying the actual presence of stored items against recorded inventory data. This minimizes errors, detects shortages or excess stock, and ensures accurate inventory tracking.

Packing and Shipping

The process of preparing and transporting selected items to external transportation. Shipping operations include multiple stages, from packing and quality control to transferring the items to delivery vehicles.

Internal Movements

The process of transferring items between different locations within the warehouse (e.g., receiving zones, storage zones, picking zones). It optimizes warehouse space, ensures proper product put away, and improves accessibility for subsequent operations like order picking and shipping.

Quality Control

The process of ensuring product quality at all stages of its lifecycle, from receiving and manufacturing to final delivery and usage. It provides information about product conditions, supporting informed decision-making.

Cross-Docking

A process where items move directly from the receiving area to the shipping area, bypassing storage put away. This reduces order processing time, lowers handling costs, and optimizes warehouse space utilization.

Warehouse Layout Management

Provides a wide range of functions for warehouse structure management. The warehouse structure includes the organization of zone groups, zones, and locations, as well as defining rules for working with various elements of the warehouse structure.
Key management capabilities:

Locations, their masks and types, zones, and zone groups.
Weight and dimensional characteristics of locations.
Mixing of warehouse stocks in locations (e.g., by product statuses, analytics, and batches).
Parameters for replenishment and inventory of locations.
Possible storage units of measurement in locations.
Assigning multiple additional zones, a sorting code, and a control code to a location, enhancing the flexibility of warehouse operation rules.
Interaction with the location (last activity date and inventory date of the location).
Fixed storage locations.

Items Identification

The system offers extensive functionality for product and packaging identification, ensuring:

Accurate product accounting
Efficient inventory management
Optimization of warehouse processes
Product safety

The system supports various approaches to product identification:

Barcodes:
1. Support for different types (UPC, EAN, Code 128, QR, GTIN, etc.).
2. Barcode management by product analytics and units of measurement.
3. Barcode generation and printing directly in the system.
Mobile devices:
1. Use of mobile device cameras and a mobile app for barcode scanning.
2. Fast product identification during receiving, storage, and shipping processes.

Receipt

Ensures flexible and efficient management of the items receiving processes in the warehouse. The system allows for the automation, optimization, and increased accuracy of receiving operations, reducing errors, accelerating processes, and improving inventory control. Items receiving includes several key features:

Receiving items based on:
1. Purchase Order
2. Production Order
3. Transfer Order
4. Return Sales Order
Use of mobile devices for barcode scanning, quick item identification, and receipt registration
Automatic and manual creation of put-away warehouse works during items receiving
Receiving into a temporary receiving area or placing items in a permanent storage zone
Use of routing codes for automatic determination of the storage area in the warehouse
Real-time automatic updates of order statuses and warehouse inventory

Inventory Status Management

The system enables the determination of the physical current state of items in the warehouse and stores this information within the system, ensuring:

Accurate inventory tracking
Flexible availability management
Optimization of warehouse processes

Key features:

Flexible configuration of inventory statuses (e.g., available, defective, etc.)
Automatic status assignment in warehouse logistics processes
Status management at the warehouse, zone, and location levels
Use of a mobile application to change inventory statuses
Inventory status tracking
Control over product availability for sales, transfers, or production
Setting restrictions on inventory usage (e.g., blocking defective products)

Put away & Storage

Ensures precise and efficient put away of items after receiving. The system minimizes manual labor, optimizes warehouse space utilization, and ensures compliance with put away strategies. Put away and storage include several key features:

Flexible configuration of put away rules and their activation based on the item, its parameters, warehouse layout, customers, vendors, or other business conditions
Automatic determination of available storage locations based on location availability and configured put away and storage rules
Sorting locations and determining the optimal put away location according to configured rules and strategies
Automatic creation of put away works
Use of mobile devices to execute put away works
Manual overriding of put away locations and automatic search for the optimal location based on configured rules
Support for consolidated put away of items within a location

Internal Movements

The system ensures precise and efficient movement of items between locations and zones within a single warehouse, enabling:

Effective warehouse space management
Optimization of logistical flows

Key features of internal items movements:

Planned movement
Instant manual movement
Use of mobile devices for internal movement works
Consideration of storage restrictions and special conditions
Items transfer tracking (all transfers are recorded in the system with a change history)
Manual overriding of picking locations and automatic search for the optimal picking location based on configured rules

Replenishment

The system enables both automatic and manual replenishment of warehouse locations. This optimizes inventory distribution, ensures continuous order fulfillment, and reduces the risk of stock shortages in active zones. Key warehouse replenishment features:

Support for various replenishment types:
1. Min-Max Replenishment
2. Manual Replenishment
3. Immediate Replenishment
4. Load Demand Replenishment
5. Wave Demand Replenishment
Configuration of replenishment rules based on item parameters, characteristics, and warehouse structure
Automatic and manual creation of replenishment works
Use of mobile devices for replenishment works
Configuration of picking strategies (FIFO, FEFO, LIFO, etc.)
Automatic determination of picking locations based on available stock and configured rules

Routing & Picking

Ensures the automation of planning and execution of picking operations, reducing errors and increasing warehouse productivity.
Key picking features:

Configuration of picking rules based on item parameters and warehouse layout
Flexible activation conditions for configured rules based on orders, products and their characteristics, customers, or business conditions
Configuration of picking strategies (FIFO, FEFO, LIFO, etc.)
Automatic determination of picking locations based on available stock and configured rules
Sorting locations and determining the optimal picking location according to configured rules
Manual overriding of picking locations and automatic search for the optimal location based on configured rules
Automatic creation of picking works
Optimization of picking routes considering layout, batches, serial numbers, etc.
Support for simultaneous picking of multiple orders (Cluster Picking)
Use of mobile devices for picking works

Packaging & Shipment

The functionality ensures the automation, control, and flexible configuration of packaging and shipping processes. This allows companies to enhance logistics efficiency, minimize errors, and optimize transportation costs. Key packaging and shipping features:

Creation of packages considering product characteristics (weight, dimensions, quantity)
Automatic determination of optimal packaging (boxes, pallets, etc.)
Grouping of products into packaging units (boxes, pallets, etc.) based on orders
Generation and printing of labels for packaging units
Use of mobile devices for packaging verification (barcode, GTIN, etc.)
Real-time tracking of packaging and shipping status
Integration with carriers (FedEx, UPS, DHL, etc.)
Support for packaging and shipping multiple orders simultaneously
Automation of the shipping creation process
Automatic and manual consolidation of shipments

Inventory

Includes powerful tools for warehouse location inventory. The functionality allows for controlling inventory accuracy, identifying discrepancies, and automating stock checks. Key inventory features:

Support for different types of inventory:
1. Full Physical Inventory
2. Manual Cycle Counting
3. Threshold Counting
4. Planned Cycle Counting
5. Spot Cycle Counting
6. Cycle Counting during Work
Automatic creation of periodic inventories for selected product groups or warehouse zones
Automatic creation of warehouse works for location checks
Support for configuring check frequency based on product importance (ABC method)
Support for conducting inventory for specific serial numbers or product batches
Automatic and manual confirmation or rejection of results
Use of mobile devices for inventory
Analytical data to review inventory results

Mobile App

Simplifies the work of warehouse employees, provides quick access to warehouse works in real time, and minimizes errors. The application features an intuitive interface for users of all levels.
Key features of the mobile application:

Ability to configure workflows to meet warehouse needs
Support for barcode and QR code scanning
Real-time integration with the WMS system
Creation and configuration of menus and submenus
Setting up checkpoints to verify works execution in warehouse operations
Support for various operating systems (Android, MacOS, Windows) and mobile devices (e.g., smartphones, tablets, specialized handheld divices)
Support for different ways of assigning warehouse works to employees, including:
1. User directed
2. System directed
3. User grouping
4. System grouping
5. Validated user directed

Quality Control

The system provides flexible configuration of quality control processes, enabling:

Automation of quality control processes
Guarantee of product compliance with standards, regulations, and requirements
Reduction of costs associated with unsatisfactory product conditions

Key features:

Automatic and manual creation of quality check orders
Integration of product quality checks with receiving, packaging, and shipping processes
Use of control criteria for different product categories
Registration of check results and subsequent actions (approval, return, write-off)
Viewing of advanced analytics and reports on quality check results
Moving items to a quarantine zone
Flexible configuration of triggers to start quality control processes
Flexible configuration of sampling rules for checks

Cross-Docking

This is a warehouse strategy that minimizes or completely avoids storing items in the warehouse by directing them directly from the receiving area to the shipping area. Key features:

Configuration of cross-docking rules based on product parameters and characteristics
Flexible activation conditions for configured rules based on orders, products, and their characteristics
Supports various cross-docking scenarios:
1. Pure Cross-docking
2. Transshipment Cross-Docking
3. Manufacturing Cross-Docking
4. Opportunistic Cross-Docking
Sorting of locations, automatic determination of product put away location based on configured cross-docking rules
Automatic creation of cross-docking works during items receiving
Use of mobile devices for barcode scanning of products and locations, quick identification of products and locations

Implementation Scenarios

01 Scenario

D365FO Enhancement

Enhancing the existing Microsoft Dynamics 365 Finance and Operations Applications (Dynamics 365 Finance, Dynamics 365 Supply Chain Management, Dynamics 365 Human Resources, Dynamics 365 Commerce) with Warehouse Management functionality.

02 Scenario

Migration to D365FO

Migrating from an old version of an ERP system to Microsoft Dynamics 365 Finance and Operations Applications by initially implementing the Warehouse Management module.

03 Scenario

Strengthening the Existing IT Ecosystem

Expanding the capabilities of the current IT ecosystem with the Warehouse Management module, considering its easy implementation and seamless integration with the existing IT environment.

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Warehouse Management Automation Impact on Performance Metrics

Data Accuracy

Enhanced data accuracy reduces the risk of errors associated with manual entry. Real-time warehouse information is ensured through integration with your company's IT infrastructure.

Mobility

Enables mobile execution of warehouse operations through the use of a dedicated mobile application.

Resource Efficiency

Improved utilization of warehouse resources helps optimize planning and execution of warehouse operations.

Decision-Making Quality

Provides quick access to accurate and up-to-date warehouse data, facilitating well-informed strategic decisions.

Productivity

Warehouse operations are optimized and accelerated, increasing overall efficiency.

Process Optimization

Eliminates duplicate efforts and enhances interdepartmental communication by automating warehouse processes as well as procurement, sales, and financial accounting workflows.

Advanced Warehouse Architecture and Workflow Configuration

The module provides full control over storage volume limits in warehouse locations, along with flexible configuration of inbound and outbound material flow scenarios. This enables companies to tailor the system to their specific operational needs, optimizing storage space and reducing overall operational costs.

Batch, Serial, and Variable Weight Tracking

The module fully supports tracking batches, serial numbers, and variable weights for all warehouse operations. This is crucial for industries requiring precise traceability and quality control. Thus, the module ensures compliance with mandatory regulations and standards.

Seamless Online Integration with Other Modules

The module is fully integrated with other Microsoft D365 Supply Chain Management modules, supporting key processes such as transportation, manufacturing, quality control, procurement, sales, and returns. This integration ensures a smooth data flow and alignment between different functional departments, significantly enhancing overall operational efficiency.

Multiple Outbound Operation Strategies

The module supports various outbound operation strategies tailored to business needs, including wave picking, cluster picking, packing & containerization, slot replenishment, cross-docking, and more. These features help optimize outbound processes, increasing order fulfillment speed and accuracy.

Effective Warehouse Employee Management

The module includes tools for detailed tracking and analysis of employee workload and productivity. It allows for efficient planning and scheduling of work shifts to minimize labor costs.

Flexible Online Integration of External Equipment

Full support for a wide range of warehouse equipment, including modern mobile devices (WMS mobile app for Android, iOS, Windows), scanners (barcode reading GS1, QR codes, etc.), label printers (using solutions such as Zebra ZPL, NiceLabel, Bartender, etc.), and various material handling equipment (using the MHAX interface).

Support for Business Analytics

The module supports intelligent analysis of warehouse processes and integrates with Power BI, providing valuable insights into warehouse flows and operations. It helps make data-driven decisions, optimize processes, and improve overall productivity.

If you have any questions, you can request a consultation or receive additional materials

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Warehouse Management Enhancing Warehouse Operations Efficiency with Microsoft Dynamics 365 Supply Chain Management