A warehouse management system (WMS) is an important component in the suite of automation tools that modern warehouse operators use to optimize their operations and processes.
When selecting a WMS, companies generally have two main options to choose from: on-premise systems, which are hosted locally and managed in-house, and cloud-based systems, which are hosted on remote servers and accessed via the internet.
While both systems have their merits, cloud-based WMS has gained immense traction in recent years and is becoming the go-to option for small and medium-sized businesses (SMBs) seeking flexibility, scalability, and cost-effectiveness.
In this blog, we’ll explore the rise of cloud-based WMS solutions, their essential features, and the benefits they bring to modern warehouse operations.
Let’s dive in.
What is a cloud-based WMS solution?
A cloud-based warehouse management system (WMS) is a software solution that utilizes cloud technology to streamline and optimize warehouse operations. These systems are hosted on remote servers that one accesses via the internet, unlike traditional systems that are typically hosted on locally installed servers and hardware.
The cloud model offers businesses unmatched advantages in flexibility, scalability, accessibility, efficiency, and much more.
So it’s not a big surprise that many companies are shifting from on-premise to cloud WMS systems. Research shows that the cloud-based WMS segment held the highest revenue share in 2023. It’s also expected to be the fastest-growing segment, with a compound annual growth rate (CAGR) of 20.1% from 2024 to 2030.
Top benefits of cloud-based automation software
Centralized visibility across locations
For companies operating multiple warehouses, on-premise systems can create silos of information, with data confined to individual locations. Cloud-based systems consolidate all warehouse data in a single platform, offering a bird’s-eye view of inventory, order statuses, and operational performance across your entire network. This centralization makes it easier to coordinate activities, balance stock levels, and optimize resources across different warehouse locations.
Remote access
Cloud-based systems are accessible from anywhere with an internet connection. This remote accessibility allows managers and teams to stay connected to their warehouse at all times. They can monitor operations, track inventory, respond to issues and manage many other warehouse related tasks even when they are offsite.
Cost-savings
On-premise systems often require hefty upfront investments in physical infrastructure — such as servers, data storage, and other hardware — along with the associated costs of maintaining that equipment over time. This can be a major financial burden, particularly for growing SMBs.
With cloud-based WMS, these substantial capital expenses are eliminated. Since the software is hosted remotely, businesses don't need to purchase expensive hardware or maintain a dedicated in-house IT staff to manage the infrastructure. These cost savings can be channeled into other growth initiatives.
Furthermore, cloud-based software operates on a subscription model with predictable monthly or annual fees, which can help simplify budgeting.
Easy scalability
Adapting an on-premise system to accommodate business growth often involves expensive upgrades or infrastructure overhauls.
Cloud-based solutions, on the other hand, are inherently scalable. Whether you’re expanding into new markets, handling seasonal surges, or managing additional warehouse locations, cloud systems can scale effortlessly to meet your needs. For example, scaling might be as simple as upgrading to a higher subscription tier, or contacting the provider and asking them to assign you more resources or features.
Rapid deployment
On-premise systems often require weeks if not months of planning, installation, configuration, and testing before they are up and running. In contrast, cloud-based warehouse automation software can be deployed in a fraction of the time. Since there is no hardware or infrastructure to procure and install, or complex setups to manage, businesses can start using and achieving a return on their investment almost immediately.
Back and disaster recovery
The top cloud-based providers invest heavily in security measures such as firewalls, advanced encryption, and multi-factor authentication to protect business and customer data.
Additionally, cloud-based systems include inherent backup and disaster recovery capabilities, which ensures that in the case of events like equipment failure or natural disasters, your data can be quickly and easily restored. This level of security and disaster recovery is usually not possible with on-premise WMS solutions.
Automatic updates
Another significant benefit of cloud-based WMS solutions is the automatic software updates. Unlike on-premise solutions that require manual updates and sometimes lengthy downtime, cloud-based systems automatically deploy updates in the background. This means your team can continue working without disruption, and your system remains current and optimized for performance and security without needing any intervention on your part.
Essential features of modern cloud WMS solutions
Modern WMS solutions are packed with features that streamline warehouse operations and provide valuable insights to enhance decision-making. Here are some of the most notable features.
Real-time inventory management
A cloud-based WMS solution provides real-time visibility into stock levels in your warehouses. It includes or integrates with tools that allow you to track every stock movement in your warehouse. Real-time visibility supports more informed decision-making and planning and can help you avoid the risks of stockouts or overstocking.
Integration with other business tools and systems
The best cloud-based WMS tools integrate with other business tools and systems such as Enterprise Resource Planning (ERP), Transportation Management Systems (TMS), Customer Relationship Management (CRM) and many more.
This integration ensures smooth data flow between different business processes and departments and eliminates silos which can lead to operational inefficiencies.
Multi-channel integration
Today’s businesses operate across various sales channels, including ecommerce stores, retail stores, and online marketplaces.
The best cloud WMS solutions support seamless integration and data synchronization across these channels. For example, a sale in your ecommerce store or physical store automatically updates your warehouse stock level records and vice versa. This automatic synchronization can help avoid situations like overselling, which diminishes customer trust, or underselling which can lead to lost revenue.
Advanced reporting and analytics
Cloud WMS solutions often include advanced reporting and analytics features. They can analyze key performance indicators and generate reports on various aspects of warehouse operations, such as order fulfillment, warehouse productivity, inventory turnover, shipping accuracy, storage utilization, labor efficiency, and many more. Companies can then use this insight to identify potential areas for improvement and make data-driven decisions that enhance operational efficiency and improve overall business outcomes.
How to choose the right cloud WMS for your business
If you are in the market for a cloud-based WMS provider, here are some key factors to consider to ensure you make the best choice for your needs.
User-friendliness
Prioritize solutions with intuitive interfaces and user-friendly dashboards. Simple navigation and easy-to-understand features can reduce training time and ensure quick adoption by your warehouse staff. Many vendors offer trial versions or demos which can help you gauge how user-friendly the system is before committing.
Customization and industry fit
Every business has unique operational requirements. Look for a WMS that offers customization options to tailor workflows, reporting, and user roles to your specific needs. Additionally, consider WMS solutions designed for your industry, as they often include specialized features that address common challenges in your field.
Vendor reputation and support
Research the vendor’s reputation by reading reviews, case studies, and testimonials from similar businesses in your industry.
Additionally, assess the level of support offered by the vendor. A cloud WMS should come with comprehensive customer service and technical support. Look for vendors that offer 24/7 support and multiple ways to get in touch such as live chat, email, and phone.
A good vendor should also offer training, educational content, and other materials like FAQs to help you and your team solve issues independently and get the most out of the system.
Wrapping up: Why Cin7 is the right Partner for WMS solutions
Traditionally, companies relied on on-premise WMS, which required significant upfront investment and in-house IT management. However, with the rise of cloud technology, businesses now have access to a more affordable, more flexible, and scalable alternative: cloud-based warehouse management systems.
Among the numerous providers of cloud-based WMS solutions in the market, Cin7 stands out as an excellent choice. Cin7’s inventory management software comes with a built in warehouse management solution is designed to help SMBs to streamline warehouse operations and achieve excellence with top-tier features like real-time inventory management, multi-channel integration, employee performance monitoring, integration with barcoding scanning technologies, batch and expiration date tracking, guided walk paths, and many more.
Book a free demo today and learn how Cin7 can help you unlock the full potential of your warehouse operations.
