What is a warehouse management system (WMS) and when do you need one

November 2, 2026 · 7 min read

A warehouse management system (WMS) is the software that directs what happens inside the warehouse: where each item is stored, which bin to visit to pick an order, how much stock there is at any moment and what leaves today with each carrier.

What WMS means

WMS stands for “warehouse management system”. You will also see it written as “warehouse management software”, “warehouse software” or, in Spanish, SGA (sistema de gestión de almacén). All those names refer to the same thing.

What sets it apart from other software is the level of detail: it does not work with “I have 40 units of this item”, but with “I have 28 in this bin, 12 in this other one, from this lot, and 5 are reserved for today's orders”.

What exactly a WMS does

→Receiving: it records what comes in against what was expected and notes the differences.
→Put-away: it says which bin to store each thing in and keeps a record of where it is.
→Order picking: it guides the operator bin by bin and checks every item.
→Packing and dispatch: it prepares the box, produces the carrier label and records what leaves.
→Returns: it identifies what comes back and decides whether it goes back into stock.
→Inventory: real-time stock, counts and traceability of every movement.

Each function is explained in more detail in warehouse management system: functions.

How the WMS works day to day

In the morning the orders come in from the online store or the ERP. The WMS checks that there is stock, reserves it and generates the tasks. The operator picks up their PDA and gets the first one: which bin to go to, which item to take and how many units. They scan the item; if it is the right one, they move on to the next line; if not, the PDA warns them.

With the order picked, at the table it is verified and the box is closed, and the carrier label comes out. Meanwhile a truck arrives: another operator counts the inbound delivery by scanning, the WMS compares it with what was expected and proposes the bins to store it in. Everything is recorded on the spot, so the office sees the same stock that is on the shelf. If you have never used one, see how to use a warehouse PDA.

WMS, ERP and Excel: they are not the same

An ERP runs the company: purchases, sales, invoices and accounting. It knows how much stock you have in total, but not in which bin or who moved it. The WMS goes down to warehouse detail: the bin, the lot, the box and the operator.

Excel is fine for getting started, but it does not warn you when someone makes a mistake, it does not update itself when an order comes in and it does not let several people work at once without overwriting each other.

Swipe the table sideways to see all the columns →

	Excel	ERP	WMS
Total stock per item	Yes, if it is written down	Yes	Yes
Stock by bin and lot	Hard to maintain	Depends on the ERP	Yes
Guides the operator	No	Not its job	Yes, with a PDA
Flags the error on the spot	No	No	Yes, on scanning
Several people at once	With problems	Yes	Yes
Invoices and accounting	No	Yes	Not its job

Types of WMS

→Installed or in the cloud: the first runs on your servers and you maintain it; the second is used over the internet and paid for by subscription.
→For automated or manual warehouses: the first govern conveyors, robots and stacker cranes; the second are made for people, racking and forklifts.
→For your own goods or for third-party logistics providers: the second keep each client's stock and billing separate.
→Warehouse module of an ERP or standalone WMS: the module is simpler to sign up for; the standalone one usually goes further in operations.

Signs that your warehouse needs a WMS

→The stock in the system and the stock on the shelf do not match.
→Only one person knows where everything is.
→There are picking errors: wrong product, size or quantity.
→Orders are copied by hand from the store to Excel and to the carrier.
→New people join in peak season and take days to become useful.
→You work with lots or expiry dates and the wrong thing leaves first.
→If you store other people's goods, you do not know how much to bill each one.

What it takes to get it up and running

→Numbering and labeling the bins.
→Having every item with its SKU and its barcode.
→Counting the opening stock, bin by bin.
→PDAs or phones for the operators and network coverage throughout the building.
→Deciding how orders come in (store, ERP, file) and which carriers they leave with.

What to look at when choosing one

→That it covers the whole cycle, from receiving to dispatch.
→That it does not force you to buy expensive terminals: today a phone can act as a PDA.
→That it connects to your stores and your carriers.
→That the price is clear and there is no lock-in.
→That you can get your data out whenever you want.
→That you can try it with your own items before deciding.

The full list of questions, and what to test in a demo, is in WMS software: how to choose it. And what it costs, in how much a WMS costs.

Ubika is a WMS designed for non-automated warehouses: the PDA is the phone, it connects to your stores and carriers and the price is published. See how it works.

Frequently asked questions

What does WMS mean?

Warehouse management system. It is the software that controls stock bin by bin and directs the work inside the warehouse.

Are SGA and WMS the same thing?

Yes. SGA is the Spanish acronym (Sistema de Gestión de Almacén) and WMS stands for Warehouse Management System. In Spain both are used for the same kind of software.

What is the difference between a WMS and an ERP?

The ERP handles purchases, sales, invoices and accounting, and knows how much stock there is in total. The WMS knows which bin each unit is in, who moved it and which task is next. They are usually used together.

Is a WMS any use for a small warehouse?

Yes, if orders are picked daily, several people move goods or the stock does not match. If the warehouse is run by a single person from memory and with few orders, invoicing software with stock may be enough.

What does it take to use a WMS?

Numbered and labeled bins, items with a barcode, an initial stock count and a PDA or a phone for each operator.

How much does a WMS cost?

It depends on volume, users, integrations and setup. Ubika publishes its price: Start €199/month up to 1,000 shipments a month, Pro €499 up to 3,500 and Max €799 up to 8,000, VAT not included and with no lock-in.

Keep reading

What Ubika does: warehouse management software · software for 3PLs · WMS for e-commerce