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Warehouse Management System Requirements/WMS Requirements

Originally published on August 18, 2019 by Logiwa Marketing, Updated on February 1, 2023

A Smart Investment Starts With A Warehouse Management Requirements List

It seems simple: You want to get a warehouse management system (WMS) so you can improve order picking productivity and improve warehouse efficiency. But, if this is your first time leading a software procurement process, figuring out your wms requirements might be overwhelming.

How do you get what you need without breaking the bank or spending on unnecessary features?

The good news is that you don’t have to make things up as you go. You can apply procurement best practices to your buying process to save money and make a smart purchase.

In fact, the first 2 steps of the standard 10 step procurement cycle can help you make an accurate list of your warehouse management system functional requirements template. These steps are:

  1. Needs Recognition
  2. Specific Needs Assessment

Here’s what you need to know to create a comprehensive WMS  rfp template.

BONUS: Before you read further, download our WMS Requirements Template excel to help you identify which provider meets your unique needs.

Needs Recognition: Why Does Your Warehouse Business Need a Software?

If you’re reading this article, it’s because you need a new system for your warehouse. But have you thought carefully about what exactly you need your warehouse management software to do?

If your justification for buying a new system is a vague desire for better technology, it’s hard to know which features you need and which you can live without.

Think about your warehouse operations carefully and identify your strongest pain points. The following questions might serve as a good starting point:

Warehouses are labor-intensive environments. Consequently, warehouse owners must find systems and technologies that help them use labor effectively.

Consider the different categories of activities in traditional warehouse management. You have workers:

  • Receiving incoming shipments
  • Putting incoming goods away
  • Recording putaway items in the inventory management system, which informs the system
  • Picking items for new orders
  • Printing packing slip and packaging picked items for shipment
  • Bringing picked items to the shipping dock for delivery

Your warehouse may experience bottlenecks in one or all of these areas. Figure out where they happen the most, and the answers to these questions will determine your WMS features checklist. If you know what problems you’re trying to solve, it’s easier to find what you want.

The warehouse world – much like the enterprise resource planning (ERP) system world – is overflowing with jargon.

Having a clear picture of the solution you’re looking for helps you cut through the buzzwords and seek straightforward answers from vendors.

Specific Needs Assessment: Which 3PL System Features or Warehouse Software Features Are Most Important For Your Warehouse?

Completing a specific needs assessment will also help you make smart trade-offs.

Why is this important? Because this is about finding what you need instead of agonizing over what you can’t have.

The reality is your budget may not have room for certain features. When you don’t have a clear understanding of opportunities in your warehouse, it’s easy to fall under the spell of a sales representative and think everything is a problem that must be solved. Which, of course, is not true.

In a perfect world, you could purchase a system with all the bells and whistles. In the real world, you may not have the budget for that. A clear understanding of your priority improvement areas limits the hand wringing over which features to buy.

So, once you’ve identified your problem areas, you can start categorizing the various warehouse features you’ve heard and read about.

Warehouse Problem Features to Solve
Can’t putaway incoming goods fast enough to pick new orders Automatic job and task management that generates a directed putaway list the minute an inbound shipment is processed
Don’t have enough time to create putaway schedules for warehouse workers Automated putaway list generation that takes historical data about fast-moving goods into account and prioritizes popular items for putaway
Can’t design efficient putaway paths for employees Putaway path optimization that directs warehouse workers to take the best route using dynamic putaway algorithms
Don’t have enough time to manually create pick schedules that align with outbound shipping schedules  Automated list generation that allows your warehouse to use a wave picking methodology/process
Can’t create/design efficient pick paths for your warehouse workers Pick path optimization that directs warehouse workers to take the best route 
Struggle to maintain accurate inventory data An accurate and centralized inventory system that integrates with your order management system and automatically updates your system
Have to pull data from countless systems to arrive at an accurate inventory count Easy integration with your various sales channels including Amazon, Shopify, walmart and Magento
Struggling to manage a recent increase in order volumes Automated picking jobs and task management for single, single SKU, multi- and oversized item orders
Experiencing frequent stock outs Safety stock formula that uses historical data to identify reorder points and automatically send a purchase order
Struggling to adjust to a recent shift in business model (e.g., B2C to B2B or B2B to B2C, B2B to DTC) Dynamic system that allows you to manage inventory based on units or batches, change units of measurement, or integrate a warehouse control system to incorporate with the latest warehouse technology trends
Struggling to fulfill orders across multiple warehouses The ability to do order routing across multiple warehouses , and to add new warehouses to your system, with the accompanying integrations

FREE DOWNLOAD: Our WMS RFP template lists out the most common requirements for businesses that typically use a software. Download our warehouse management system functional requirements template for 3PL warehouses or none 3pl warehouses to help identify which provider suits your specific needs.

Get Senior Leaders Buy-In On Your WMS Requirements List

Once you’ve drafted a list of your warehouse pain points and warehouse and inventory management software requirements, consult with senior leadership.

You should not skip this step! It’s important for three key reasons:

  1. There may be features you hadn’t considered.
  2. You can obtain buy-in before making any big expenditures and avoid conflict with senior stakeholders down the road.
  3. You can finalize the budget and potentially secure approval for a higher budget.

Before you take your plans to others, be sure to clearly outline the need for change using the pain points, or opportunities, you identified earlier. In addition, present the anticipated cost of a new software based on your preliminary list of must-haves (your requirements) and your nice-to-haves (your wishlist features).

If you can, also consult with your warehouse workers since they’ll be the ones using the system day in and day out. While they may not hold the power to approve the investment, they are an important stakeholder whose willingness to use the new technology will make or break your implementation efforts.

The goal of the needs assessment stage is to ensure you don’t wind up with a system that you, your management team, or your workers don’t like or won’t use.

Don’t Forget to Keep Future WMS Requirements In Mind


When you’re identifying your warehouse’s pain points and listing your requirements, there’s a tendency to focus on the here and now.

This makes sense. You’re trying to address your existing problems and improve your current warehouse after all.

But, keep in mind that implementing a new system is a significant undertaking. Which means you want to make sure you get it right. At a high level, you’ll need to:

  • Find a requirements template
  • Speak to multiple software vendors and collect quotes
  • Identify which vendors are capable of fulfilling your desired customization
  • Oversee the implementation process in collaboration with employees from the provider’s team
  • Run tests to ensure your software properly integrates with your other enterprise systems
  • Conduct dry runs to ensure your new software works properly before completely switching over to the new system
  • Train employees on the new platform and troubleshoot issues as workers adapt to the new technology

Chances are you’re not going to change your warehouse software every year, given how much effort it requires.

In fact, many companies operate on a three- to five-year timeline for big expenditures like this.

This means that you need to think about your current warehouse management system functional requirements as well as what your requirements will be in the near future.

Your historical data can help you determine how much business you’ll have in the next couple of years, assuming everything goes well. If you’ve experienced exceptional year-over-year growth, you should take a look at other features that may be worth adding now, while you’re already doing the work.

Unsure what may be worth adding? Consider some of these warehouse management system features that are popular among warehouse operators.

Receiving Process

As your business grows and you process a greater volume of orders, you may want to accelerate the receiving-storing-shipping process. Cross-docking is one method businesses use to do this.

With cross-docking, warehouses skip the storage process (also known as the directed putaway process) for certain goods. When goods come in, their software flags items for cross-docking. Then, goods arriving on the inbound trucks are simply transferred to the outbound dock.

This is particularly useful for companies who process a high volume of goods in a business-to-consumer environment. Putting these goods away when they need to be shipped out the same day doesn’t make sense. Instead, it introduces a bottleneck and slows down a warehouse’s fulfillment time.

That said, managing a cross dock operation is impossible without warehouse software equipped to facilitate it. The entire operation consists of three phases:

  1. Planning
  2. Scheduling
  3. Coordinating

During the planning stage, warehouse managers need their system to identify containers with pallet exchange relationships, calculate the minimum number of doors at the docking area and the minimum amount of time required to complete the day’s cross-docking operation, and more.

Once managers have identified their cross-docking needs, they need to quickly schedule workers (based on order volumes) as well as schedule specific doors at the dock. They’ll need to be able to adapt to changes in real time, especially when there’s a shipping delay that affects worker scheduling.

Finally, technology is required to coordinate all of the moving parts involved in a cross-docking operation. You don’t want a process designed for efficiencies to introduce bottlenecks instead.

If you anticipate serious growth over the next few years, and believe cross-docking will be a valuable feature, then you should consider adding it to your list of warehouse management system features.

FREE DOWNLOAD: Before you read further, download our WMS ROI Calculator Excel so that you can follow along and calculate the return on investment you’re getting from your warehouse management system.

Inventory Management

Your inventory management processes and systems must keep up with your warehouse’s growth. An inventory management system that lags behind your warehouse’s growth will throw a wrench into your success.

To this end, consider whether it’s worth investing in advanced inventory management features.

At minimum, mobile scanners should be a key component of your WMS requirements list. This will allow your workers to instantly capture the location of goods. It also limits inventory data errors and ensures you have full visibility over your stock.

If you anticipate significant growth, or you expect to service bulk orders for more B2B businesses, you should consider introducing RFID scanners that can account for larger shipments. Such technology allows you to capture more information quickly and without compromising accuracy.

In addition, you may want to introduce more automation into your warehouse such conveyor belt systems. If you think this is more than five years out, perhaps ask your prospective vendors how easily you can incorporate these features down the road.

Packing and Shipping Process

Once your goods get to this stage, it feels like the work is done, which. isn’t necessarily true. An inefficient packing process can cost your business big money. While the packing and shipping process is an area where inefficiencies aren’t quickly identified, it’s still important to plan for future improvements.

There are helpful features that may be worth including on your wms functionality list when assessing vendors. These include:

  • Package Type Suggestion: This functionality will tell your workers the right box to place items into. Using packing type selection algorithms will improve your shipping costs.
  • Automated cardboard box construction: You can save time at the assembly stage with a machine designed to automatically prep flat corrugated cardboard boxes.
  • Automatic taping machines/stuffing machines: This may be something your business doesn’t need yet, but it’s good to check whether your system provider can support integrations with such a system.
  • Warehouse Software Automation Features: Advanced systems also provides features such as rate shopping, shipment rule automation, dropship

To Maximize Return, Invest In Properly Determining Your WMS Requirements

Your software keeps your entire warehouse in motion so it’s vital that your team invest time and energy into understanding your warehouse management requirements. Talk to your workers on the ground, your management team, and other subject matter experts within your organization to understand your business’s opportunities and to purchase a system that helps you capture them.

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