Stock and manufacturing glossary
WMS
Warehouse management system
A WMS (warehouse management system) is software that runs the work inside a warehouse: where each item sits down to the rack or bin, and how goods are received, put away, picked, packed and dispatched. It goes deeper than a stock register, which records quantities.
Why it matters to your business
Stock is often the largest asset an SME owns, and the warehouse is where it quietly leaks: goods misplaced, expired, picked wrongly or never recorded when damaged. Whether you need a full WMS or just good stock control, the aim is the same: the quantity in the system matches the shelf, and the right goods leave on the right truck.
How it works
In a full WMS, a delivery of 100 cartons is received against the purchase order, each carton is scanned, the system tells the storekeeper which rack and bin to put it in, and later generates a pick list for each order that routes the picker to the right bins in the shortest path.
Many SMEs need something simpler. A distributor with two warehouses might:
- Receive goods against the purchase order and record batches and expiry dates.
- Print barcode labels for anything that arrived without one.
- Transfer stock between warehouses with a document, so both locations stay right.
- Record damage or expiry as adjustments with a reason.
- Count a few items each week and post the difference after approval.
If the books show ₹48,00,000 of stock and a count finds ₹46,50,000, the ₹1,50,000 gap is visible item by item, and you know where to look.
Common mistakes
- Moving goods without a document. Stock carried to another warehouse on a phone call leaves both locations wrong.
- Recording damage at year end. Write off damaged and expired goods when it happens, with a reason, so losses are visible each month.
- Counting everything once a year. An annual count finds differences too late to trace them.
- Buying a WMS before the basics work. Bins and pick routes do not help if receipts and sales are not recorded accurately first.
Questions about WMS
What is the difference between inventory management and a WMS?
Inventory management tracks how much of each item you have, where (by warehouse) and what it is worth. A WMS also manages the physical work inside each warehouse, such as exact locations, picking routes and staff tasks.
Does a small business need a WMS?
Usually not at first. If you run one or a few warehouses and staff know where things are, accurate stock by warehouse, regular counts and batch tracking cover most needs. A WMS pays off when volumes, item counts or staff turnover make finding goods slow or error-prone.
What is FEFO?
First expiry, first out: the batch that expires soonest is sold or used first. It matters for food, medicines, chemicals and cosmetics, where expired stock is a loss and a compliance risk.
How often should I count stock?
Count fast-moving and high-value items often, such as monthly, and the rest at least once a year. Rolling counts of a few items at a time avoid shutting the warehouse for a full count.
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