Warehouse management system: what it is, functions and differences from an ERP

November 13, 2026 · 7 min read

A warehouse management system is the software that runs the inside of the warehouse. The acronym is WMS (Warehouse Management System), and SGA in Spanish. Here we go over what it is, the functions it has from inbound to returns and how it differs from an ERP.

What a warehouse management system is

It is the software that knows what is in each bin of the warehouse and that hands out and checks the work of those who move the goods. It does two things at once: it keeps an exact record (what, how much, where, from which lot) and it directs the tasks (what to receive, where to store it, what to take for each order and in what sequence).

The piece that joins the two is the scan. The operator works with a PDA: the system tells them what to do, they scan the bin or the item and the system accepts it or warns them of the error. That is why the stock is up to date without anyone “entering the data” afterwards. If you have never worked with one, we explain it in what a warehouse PDA is and how to use it.

Functions of a warehouse management system

The functions follow the path of the goods.

Inbound (receiving). The system knows what is due to arrive: a purchase order or a notice from the supplier or the client. When the truck arrives it is counted by scanning and compared. What is missing, what is over and what arrives damaged is noted on the inbound delivery itself, which is when it can be claimed. If the product carries a lot or an expiry date, it is captured here.

Put-away. What was received is taken to its bin. The system proposes one according to the type of product and the free space, and the operator confirms by scanning item and bin. From that moment the system knows where each unit is.

Stock. It is the consequence of the above: stock on hand by item, by bin and by lot, updated with every movement. It includes what is reserved for orders already received, what is blocked (for quality or for being damaged) and the history of inbound and outbound for each item.

Order picking. The system receives the orders, reserves the stock and generates the picking tasks. It decides which bin and which lot each line leaves from, according to the rule that applies (FIFO, FEFO or LIFO), and sorts the bins so that the route is short. Orders can be picked one at a time or grouped. The operator scans each item as they take it.

Packing and dispatch. At the table the order is verified as complete, the box is closed and the carrier label is obtained. When the parcels are handed to the driver, the list of what they take is left, signed. The system sends the tracking number back to the store or the ERP.

Returns. The parcel that comes back is identified (which order and which customer it is from), it is inspected item by item and the destination of each one is decided: it goes back into stock, is set aside or is written off. Without this function, returns pile up in a corner and the stock stops being reliable.

Inventory. The system lets you count bin by bin without closing the warehouse, compares what was counted with what was expected and leaves the adjustments pending approval. The normal way is to count a little every day: that is cycle counting.

And underneath it all, traceability: every movement with its date, its operator, its origin and its destination.

Functions that some systems add

→Replenishment: warning or generating the task when a picking bin runs low.
→Several clients: separate stock, rates and billing, for third-party logistics providers.
→Connection to online stores, marketplaces and carriers.
→KPIs: pending orders, picking pace, making each carrier's cut-off time.
→Several warehouses in the same system.

Differences between a warehouse management system and an ERP

Swipe the table sideways to see all the columns →

	ERP	Warehouse management system
What it runs	The company: purchases, sales, invoices, accounting	The building: bins, movements and tasks
How it sees stock	A quantity per item (and sometimes per warehouse)	By bin, lot, expiry date and status
Who uses it	Administration, purchasing and sales	Warehouse manager and operators with a PDA
When it is updated	When the document is recorded (delivery note, invoice)	On every scan
What it decides	What to buy and what to sell	Where to store, where to take from and in what sequence
Picking errors	It does not see them	It detects them on scanning

They do not compete: they share out the work. The ERP sends the warehouse system the sales orders and what is expected to arrive; the warehouse system sends back what was received, what was shipped and the stock. Many ERPs have a warehouse module, which is fine as long as what you need is to keep quantities; it falls short when operators have to be guided bin by bin.

Which warehouses need it

→Those that pick orders every day, especially with many SKUs.
→Those that have several people moving goods at once.
→Those that work with lots, expiry dates or serial numbers.
→Third-party logistics providers, which store goods for several clients.
→Those that sell on several channels and need a single reliable stock.

If you are still not sure whether that is your case, the signs are in what a WMS is and when you need one.

Ubika's warehouse management system

Ubika is a warehouse management system for non-automated buildings. It covers the cycle we have described: receiving against the inbound notice, put-away, stock bin by bin with lot and expiry date, guided picking, packing with the carrier label, a manifest signed by the driver, returns inspected item by item and counts with the PDA. The PDA is a web page that opens on a phone or on any Android with a scanner. To talk to your ERP or your invoicing software it has an open API and automatic notifications (webhooks).

More detail in warehouse management software and, if you store other people's goods, in software for third-party logistics providers.

Frequently asked questions

What is a warehouse management system?

It is the software that controls and directs what happens inside a warehouse: inbound deliveries, put-away of the goods, the stock in each bin, order picking and dispatch, returns and inventory. It is abbreviated WMS, and SGA in Spanish.

What are the functions of a warehouse management system?

Receiving the goods against what was expected, putting them away, keeping stock by bin and lot, guiding order picking, verifying and dispatching, recording returns and taking inventory. It also keeps the history of every movement.

What is the difference between a WMS and an ERP?

The ERP runs the company: purchases, sales, invoices and accounting, and knows the stock as a quantity per item. The WMS runs the building: which bin each unit is in, which task each operator does and the check by scan. They normally work together.

Does a warehouse management system replace the ERP?

No. The WMS does not do accounting or taxes. The usual setup is for the ERP to send the orders to the WMS and for the WMS to send back what has been shipped and the stock that is left.

What does it take to implement a warehouse management system?

Numbered and labeled bins, items with a barcode, an initial stock count by bin, PDAs or phones for the operators and network coverage in the building.

Is a warehouse management system any use for a small warehouse?

Yes, provided orders are picked daily or more than one person moves goods. For small warehouses it is best to have one that does not require its own terminals or a long implementation.

Keep reading

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