One of the key questions we get asked when helping a client select a Warehouse Management System (WMS) is ‘Which Tier of WMS should we consider?’ or ‘Which WMS Tier is most suited for us?’. Before we jump into that, it is important to understand the various Tiers of a Warehouse Management System.
Although the lines are getting blurred (highly customisable, cloud-based WMS are in trend), Warehouse Management Systems can traditionally be divided into three tiers. The difference between each is explained below:
Tier 3
Tier 3 offers basic WMS functionality to allow users to manage the flow of materials in manual warehouses and on conveyors. These can be integrated into picking systems and ERPs. They are designed to run on personal computers and use common operating systems such as Ms Windows. A Tier 3 WMS has the features of a standard inventory management system with functions such as manual picking and put-away. They allow users to create orders, identify finished goods, and print shipping labels. Inventory prioritisation methods include first in first out (FIFO) and last in last out (LIFO). Implementation is quite painless, but this tier has limitations against the more advanced tiers.
Tier 2
Tier 2 includes the features of a tier 3 WMS but also support advanced functionality such as cross-docking, planning, automatic waving, system-directed replenishment, and stock location management. Some of the higher-end tier 2 solutions now enable warehouse automation, directed putaway, directed picking and order consolidation. Tier 2 WMS providers, with labour planning, load management, and compliance reporting, are also available. Most have good reporting functionality. Some also integrate with Voice / RF and support B2B / B2C integration. Implementation can take 4-12 months and the costs are affordable for most medium size enterprises.
Tier 1
Tier 1 includes the features of tier 3 and tier 2 WMS plus added functionality such as task management, task interleaving, voice activation, RFID, wireless communication and automation support. Unlike less advanced products, a Tier 1 WMS can be fully integrated with software for material requirement planning (MRP), ERP, accounting and e-commerce. Common Tier 1 WMS include Manhattan Associates, JDA, HighJump Advantage, Oracle and SAP EWM. Implementation is a big undertaking and can often take 9-24 months, depending on operational complexity. The costs are also much higher than the other two tiers.
| Functionality | Tier 1 | Tier 2 | Tier 3 | Appropriate Tier |
| Non-volumetric operations | Yes | Yes | Yes | Tier 2 or 3 |
| Manual directed task options | Yes | Yes | Yes | Tier 2 or 3 |
| RF based operations | Yes | Yes | Yes | Tier 2 or 3 |
| Dynamic cycle counting, Perpetual Inventory | Yes | Yes | Limited | Tier 1 or 2 |
| Analysis / control / management information | Yes | Yes | Limited | Tier 1 or 2 |
| SKU variability (batch, lot, serial, etc.) | Yes | Yes | Limited | Tier 1 or 2 |
| Containerisation | Yes | Limited | Limited | Tier 1 |
| Sophisticated slotting | Yes | Limited | No | Tier 1 |
| Advanced picking / replenishment (rules based) | Yes | Limited | No | Tier 1 |
| Wave release optimization | Yes | Yes | Limited | Tier 1 or 2 |
| Inventory optimisation (demand driven inventory) | Yes | Yes | Limited | Tier 1 or 2 |
| Sorting and consolidation (orders) | Yes | Limited | No | Tier 1 or 2 |
| Integration (with ERP, TMS etc.) | Yes | Yes | Yes | Any |
| Automation friendly, integration with WCS | Yes | Limited | No | Tier 1 |
| Task Interleaving | Yes | Limited | No | Tier 1 |
| Task management / allocation | Yes | Limited | No | Tier 1 |
| Labour management | Yes | Limited | No | Tier 1 |
| Embedded TMS (basic functionality, integration with TMS) | Yes | Limited | No | Tier 1 |
| Integration with Voice, Vision, RFID. (task execution) | Yes | Yes | Limited | Tier 1 or 2 |
| E-commerce enablement – integration with B2B & B2C portals | Yes | Yes | No | Tier 1 or 2 |
| Cloud options | Yes | Limited | No | Tier 1 or 2 |
| Yard Management, basic TMS | Yes | Limited | No | Tier 1 or 2 |
| Dynamic picking / putaway | Yes | Limited | No | Tier 1 or 2 |
| Expiry date management, FEFO | Yes | Limited | No | Tier 1 or 2 |
| BOM functionality and application | Yes | Limited | No | Tier 1 or 2 |
| Cross docking / flow through | Yes | Limited | No | Tier 1 or 2 |
| Offsite storage | Yes | Limited | No | Tier 1 or 2 |
| Track & Trace, POD | Yes | Limited | No | Tier 1 or 2 |
| Receipt against ASN | Yes | Limited | No | Tier 1 or 2 |
To find out more about how BoxLogic can help you solve your WMS challenges then visit our services page.
If you want to discuss any of the functionality listed above, or talk about how you are using your warehouse management system then leave us a question at enquiries@box-logic.co.uk. You can also get in touch with Nishit Nisudan on LinkedIn.
