What Is a Warehouse Management System (WMS)?

Staff scan barcodes when new inventory arrives and when each unit is picked for an order, so the WMS shows how much inventory is stored in real time. Instead of written processes they have to remember, they can follow predetermined workflows inside the WMS.

Key features include:

• Integration with barcode and radio-frequency identification (RFID) devices
• Back-office integration with order entry, inventory control and purchase order modules
• Real-time inventory tracking of stock movements
• Support for multiple picking and packing methods, with overviews of picking zones
• Compliance labeling and advanced shipping notices (ASNs) to manage the arrival of new inventory

Shopify's WMS guide names three types:

• Standalone WMS: usually on-premise and used only for warehouse management. Standard features include bar code scanning, cycle counting, slotting, putaway, picking, packing, receiving, shipping and cross-docking. It doesn't cover other supply chain operations.
• Integrated with ERP: some ERP vendors offer WMS modules built into their systems, giving warehouse management alongside broader capabilities.
• Supply chain management modules: broader supply chain software with a subset for warehouse management.

X12 defines transaction sets that a depositor and a warehouse exchange. The depositor sends an EDI 940 Warehouse Shipping Order to tell the warehouse to make a shipment, confirm one, or modify or cancel one sent earlier. The warehouse answers with an EDI 945 Warehouse Shipping Advice once the shipment is made, which is used to reconcile order quantities with shipment quantities.

A distributor's Shopify store receives a B2B order with three lines:

• 6 cases of cable ties at 12 per case = 72 units
• 4 cases of connectors at 24 per case = 96 units
• 30 loose conduit straps = 30 units
• Total: 72 + 96 + 30 = 198 units

Order routing assigns the order to the east warehouse, which has all three items. Warehouse staff pick the three lines, scanning each unit picked into the WMS. Packing produces 6 + 4 = 10 full cases plus 1 carton for the straps, or 11 cartons. Once all 11 cartons ship, the store records a fulfillment with the tracking information, and the order shows as fulfilled.

In Shopify, a warehouse is a location: any physical place where you sell products, fulfill orders or stock inventory. Some apps, including third-party logistics services, can also be locations. Locations let you track inventory separately at each place and fulfill orders from the location closest to your customer.

Online orders are assigned to locations based on available inventory and the order routing rules you configure. By default, locations aren't prioritized by proximity to the shipping address. To fulfill from the closest location, add the Ship from closest location rule.

A third-party warehouse can connect through a fulfillment service app, which prepares and ships orders on the merchant's behalf. Each fulfillment service has its own location, which Shopify creates automatically:

A fulfillment service app can subscribe to fulfillment order webhooks for these steps, such as when a merchant submits a fulfillment request or the service accepts it.

Shopify also supports custom fulfillment services, provided the service can process orders by email. Marking the order as fulfilled emails the service the order details, but the order status doesn't update automatically. Shopify's WMS guide notes that most WMS platforms integrate with tools such as shipping solutions and the ecommerce site, so there's no manual back-and-forth data feeding.

Uncap's guide to multi-warehouse inventory visibility is clear that real-time sync doesn't mean ripping out the ERP or the warehouse management system already in place. It means connecting them to the storefront through an integration built to handle B2B-specific data: location-level stock, customer-specific pricing, and order status, moving in both directions.

• Order management system
• EDI 940 (Warehouse Shipping Order)
• EDI 945 (Warehouse Shipping Advice)
• Backorder
• Lead time
• ERP integration

• Shopify: Warehouse Management System: What It Is and How It Works
• Shopify Help Center: Locations
• Shopify.dev: About fulfillment services