Smart Warehouse Management Software: Essence, Usage, and Perspectives

Updated 08 Sep 2023

16 Min




Did you know that 69% of consumers would be more likely to purchase products online if they had access to one day? About 80% of customers are willing to pay more for same-day delivery services. Yet, 77% of warehouses need help to accomplish same-day shipping goals. Finding ways to boost the supply chain speed, accuracy, and efficiency is a top priority, and 80% of decision-makers agree that labor optimization is a key to achieving these goals.

Warehousing is the inherent component of the entire supply chain picture. Introducing a smart warehouse management system is a proven way to maximize operational efficiency, meet dynamic customers’ expectations, and keep ahead of the competition.

To assist you, we’ve prepared a guide to disclose the most prospective technologies (from an effective point of view) of a smart warehouse. Keep reading it.

What is a Smart Warehouse and Why Does Modern Business Need It?

What is a smart warehouse? A smart warehouse is the last act of automating warehouse processes, enabled by multiple automated and interrelated technologies. Automated picking tools, Autonomous Mobile Robots (AMRs), RFID tags for data collection, and smart warehouse management systems are some examples of promising tech solutions. These technologies join forces to enhance the warehouse's productivity and efficiency, reducing the number of human workers and decreasing errors. With intelligent warehousing, you can get real-time data, streamline manual activities and enable automation across the fulfillment centers. This way, you can concentrate on more value-creating activities, such as client management.

The Marketsandmarkets report claims that the smart warehousing market size will reach 25.4 billion by 2026. The growing adoption of smartphones for efficient goods management as well as customer expectations for fast and convenient delivery services are the leading market drivers. While traditional warehouses are no longer fitting to satisfy modern customer needs. Smart warehouses know what your customers want even before the clients do, or at least they know the very second the customers click "buy now."

Jeff Bezos

Jeff Bezos

CEO of Amazon

"Smart warehouse is a symphony of humans and machines working together."

Innovative warehousing relies on cutting-edge technologies to effectively manage different warehouse operations: from receiving and picking to packaging and shipping. Now that you understand what a smart warehouse is, let's discuss what advantages it may bring to your business.

Reduced costs

Labor costs comprise nearly 65% of storage facilities' operating budgets. Smart warehouses decrease manual labor demand and improve logistics managers' performance, resulting in reduced operating costs. These cost-cutting measures enable lowering prices for goods and services for customers. The pricing factor plays a leading role in purchase decision-making. The ability to provide lower prices for similar products is a substantial competitive advantage.

Better space utilization

Smart warehouses can optimize the usage of warehouse space (e.g., through a warehouse yard management system). For example, automated picking and mobile sorting solutions enable the utilization of high racks and narrower aisles. Because the traffic and aisle congestion is decreased compared to ordinary warehouses, the amount of inventory that can be stored is increased with the same amount of space.

Faster shipping

In traditional warehouses, order processing takes a substantial amount of time. Operators often spend much time searching a warehouse to pick the products and fill orders. Besides, picking errors result in further delays in sorting and packing items. Just one picking error can abrade consumer trust and lower the profitability of an order by up to 13%.

Using voice-picking technology and drones (as an example), you can minimize the distribution time, accelerate picking and eliminate order fulfillment errors. These factors contribute to faster order delivery as one of the leading demands of online customers (second only to the price).

Predictive order processing

Smart warehouses take advantage of advanced analytics and Artificial Intelligence (AI) to receive detailed insights into orders handled by the storehouse. Supply chain analytics can assist in forecasting future orders. Predictive capabilities can be used to streamline warehouse activities and plan spikes and reductions in demand. When storehouse layout, high technology, and workers are coordinated with predictive models, it contributes to faster order processing and dispatching.

What is smart warehouse

Smart warehouse is resulted in interconnection of advanced technologies working together

It seems engaging to incorporate all possible advancements into the warehouse, yet you may wonder if it's helpful to satisfy your needs. Here are some examples of how integrating intelligent technologies can help increase warehouse logistics efficiency.

Bring AI to reduce manual work

AI (Artificial Intelligence) collects data from sensors, identifies patterns, and gives solutions to any possible concerns, whether it’s the timely replacement of lacking items or finding better picking routes. The ability for self-learning can enhance warehousing systems in a manner that humans cannot. For instance, Ocado, a UK grocery company, uses AI to diminish food waste by ensuring that goods are stored and shipped in a way excluding the likelihood of spoilage.

Make use of sensors to digitize data

Sensing capabilities turn physical assets into digital records. Connected sensors will give your employees better control over the inventory; they can receive real-time analytics and numbers, which opens possibilities for continuous improvement. Sensors in the storehouse enable data to be accessible through specialized digital solutions, such as warehouse inventory management systems. Every aspect of the order lifecycle is available for tracking and analysis via the program. It enables fast and precise data analysis and supply chain optimization.

Select the right warehouse management system

A well-architectured WMS can improve stock management, automated picking, monitoring, and shipping processes. For instance, a custom-built WMS can: optimize e-commerce fulfillment operations, lessen billing times, automate routine tasks, and free up time to improve the “brand-customer” relationship instead of combating internal issues with logistics.

But keep in mind that warehouse management software development will be better performed with a professional IT vendor, like Cleveroad, with deep expertise in warehouse tech development services.

Have questions?

Book a call with our Solution Architect, and get a consultation as to the smart WMS deployment

Top 8 Smart Technologies That Are Used in Warehousing Today

Here is the list of key technologies you should integrate into your storehouse to promote a process of smart warehouse operations.

  1. Automated guided vehicles
  2. Automated picking tools
  3. RFID technology
  4. AS/RS (Automated Storage and Retrieval Systems)
  5. IoT (Internet of Things)
  6. EDI (Electronic Data Interchange)
  7. ERP (Enterprise Resource Planning
  8. WMS (Warehouse Management System)

Automated guided vehicles

Automated guided vehicles (AGVs) are intended to speed up the storage and retrieval process when putaway, loading, and stocktake. They’re self-directing and encompass forklifts and pallet carts which follow a digital route to load and unload pallets, crates, and other shipping containers. You can easily incorporate these technologies into your warehouse and distribution center without completely revising the facility layout and systems. Moreover, you can add and scale your AGV complement as your business grows.

Automated picking tools

There are numerous tools that can be utilized to improve your picking processes, including voice-automated order picking, robotic order picking, and pick-to-light. Automated picking tools are best known for reducing picking time. For instance, pick-to-light solutions help associates to locate goods faster. First, the operator scans the barcode attached to the transport box. Then, the system lights the path to lead the worker to the stated storage location. After the worker picks the needed products and loads them into the container, they press the confirm picking button.

Another smart warehouse example is voice-picking technology. Such tools guide the warehouse operators to the stated place and inform them about picking tasks. Every manager carries a headset with a microphone, a mobile device, and a barcode scanner (in some cases). The program instructs the workers about which picking tasks need to be performed and where. Aside from working with your physical infrastructure, such solutions don’t need to be revised on the IT side. Typically, they come with software that integrates with your existing warehouse management system (WMS).

RFID technology

Radio-frequency identification (RFID) helps arrange and manage stocks. Radio waves help transmit data to/between the digital tags and automated scanning system, recording the goods' data. All the information is transferred via an antenna attached to a microchip; tags can be read at a distance for fast inventory processing. Afterward, the information is broadcasted from the reader to the smart warehouse management system. This technology supplants barcode scanners that need to be brought to the package to be read.

What is the use of RFID for stock management? Since there are no line-of-sight requirements, you can employ drones to scan freight as they arrive, recognizing and counting how many of each type of goods come. Built-in RFID tags can send information regarding temperature, damage to the object, etc.

What is RFID technology

How RFID works

Automated Storage and Retrieval Systems

Automated Storage and Retrieval Systems (AS/RS) are software-controlled systems that automatically place and retrieve stock within your warehouse with accuracy and speed, increasing your throughput and minimizing waste. Such systems can be used for various warehouse activities, such as kitting, order picking, storage, assembly, production, etc. In addition, the solutions can be combined in different ways to make solutions that match any application.

For instance, Unit Load AS/RS Systems are machines 100 feet that store and retrieve large loads with more than a thousand pounds. Vertical lift modules consist of a column of trays with an automatic insert or extractor to retrieve items stacked vertically.


IoT isn't a new term in logistics. But this technology is still actively used in the warehousing industry to improve storehouses and fulfillment centers' operational efficiency and safety. The lack of data available is a primary reason logistics organizations actively use IoT devices. A robust IoT network allows for remote monitoring and control of the entire facility. This way, you'll be able to save costs and time on multiple tasks, such as distributing products across the facility, tracking inventory movement, and keeping stock records.

There are numerous use cases of IoT in smart warehouse management. Here are the most prominent ones:


Drones assist warehouse associates in tracing stock in real-time. They can scan the products without human intervention, thus, mitigating the risk of errors and increasing efficiency.

Vision picking

Picked by vision optimizes storehouse processes and increases productivity. Smart glasses are easy to handle and integrate smoothly into any smart warehouse system. The picker sees only the current order details and is guided through the work processes with perfect precision.

Stock tracking

IoT sensors can be installed in different locations throughout the storehouse. They can identify when the goods are removed or added to a place, as well as trace the movement of items around the facility. Built-in GPS location allows workers to know exactly where every item is. In addition, every object will have a unique identifier.


Electronic Data Interchange (EDI) allows you to electronically exchange business documents, such as purchase orders, shipping notifications, freight invoices, etc., with your clients and partners. This technology also enables businesses to control inventory and trace the real-time movement of goods across the supply chain. Integrating EDI with an accounting system and smart warehouse management software is crucial since it significantly reduces the time processing orders. Moreover, it allows the team to work with the existing software solutions making use of the newly-adopted EDI.


To get a warehouse-focused and flexible smart warehouse management system, you need to integrate it with your ERP (Enterprise Resource Planning) software. When we talk about joining ERP and WMS, you should understand that they don't use the same platform, nor are they built to execute the same functions. However, both systems operate in sync to ensure smooth information flow.

The role of ERP software development is to build a system to handle the main business processes. For example, ERP systems make and sustain the core databases: it adds new suppliers, sends purchase orders, generates invoices, etc. So for these kinds of activities, ERP exceeds the WMS. But when, for example, products are received at the storehouse or orders are shipped, WMS informs the ERP and upgrades the stock data, thus, performing the leading role. Therefore, the WMS isn't an ERP module but rather software that should be designed specifically for handling warehousing operations.


A robust warehouse management system (WMS) is a backbone for introducing all your innovative technology. WMS is designed to optimize daily processes within your storehouse. It provides workers with a centralized location for managing all the storehouse-related operations, such as receiving goods, organizing and storing inventory, selecting picking routes, etc.

Some smart warehouse management systems can assist you in maximizing space usage by automating stock rotation and picking processes and more efficiently positioning goods in the receiving, assembly, packing, and dispatching areas. In addition, these solutions collect real-time and create custom reports allowing for analyzing data in dynamics constantly.

Your WMS can be part of the ERP system, or you can implement a standalone warehouse management system specifically built to manage warehouse operations and contain more advanced functionality.

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Promising Directions For Smart Warehouse Management

Intelligent warehouses aren't limited to the technology solutions discussed previously. Therefore, we've rolled out the list of disruptive technologies that should be considered to gain competitiveness.

  • 5G
  • Digital twins
  • Drones and cobots
  • Artificial Intelligence
  • Blockchain item tracking


While many warehouses are enthusiastic about implementing IoT to enhance performance, they don’t possess the proper infrastructure. The 5G takes warehousing connectivity to the next level. It provides an improved architecture for IoT devices and reduced latency. The better the bandwidth, the more sensors can be located within a square kilometer with ten times higher velocity. In AR vision picking, associates wear augmented reality vision goggles showing real-time data. Rather than carrying a traditional handheld scanner, employees wear a special ring scanner, making the entire process hands-free. It's a safer and more productive experience.

As for inventory counting, 5G-enable drones fly across various levels of the storehouse to capture images and create a list of barcodes to be reconciled against the smart warehouse management system. The true power of the 5G warehouse lies in its potential to adapt to the ever-changing needs across the logistics industry.

Digital twins

Digital twins are an integral part of future fulfillment centers, enabling continuous integration and continuous delivery. They stand for a precise, upgraded digital representation of a storehouse in a real-world environment. This technology allows for the virtual redesigning of the real supply chain to test modes, multiple scenarios, etc. With each new software and layout optimization, you can verify in the digital twin before delivering to the physical warehouse.

How does it work? The information from your warehouse IoT network and smart warehouse management software is united to generate a real-time model of your storehouse. For instance, when a pallet moves on the floor, its position is upgraded in the digital twin. If temperature changes occur, your sensors transmit that data to the model. The more detailed your storehouse's network of sensors and applications, the higher accuracy of your twin. Shipping organizations integrate digital twins to increase visibility across their supply chain, mitigate ineffectiveness, and streamline current processes.

Blockchain item tracking

Blockchain technology helps to address the challenges associated with inventory management: limited visibility, stockout situations, overproduction, a discrepancy of goods, etc. It gives workers instant visibility into how well their goods are selling and monitors their physical location. With blockchain, warehouse managers can track market demand in real time, enabling improved control of manufacturing planning, stock distribution, and replenishment. Indeed, you can still bank on minimum inventory volume or predictive patterns, but blockchain makes the forecasts more precise and timely.

Drones and cobots

Drone systems are integrated during inventory software development to simplify access to remote, hard-to-reach locations within a storehouse. Autonomous drones are supplied with cameras, sensors, RFID technology, or barcode scanners. They scan barcodes and identify if pallet positions are empty or occupied. That gives employees real-time inventory data and avoids manual counts. It can be visual data, depth data, or environment-sensing information (e.g., humidity, temperature). The drones operate mainly at night without staff present.

In contrast, cobots (collaborative robots) work with humans to perform heavy or repetitive tasks, such as machine feeding, material processing, or assembly tasks. For instance, a robotic arm can lift a hefty 1200 kg and control shipping pallets within a tenth of a millimeter accuracy. Labeling robots can label up to one package every second.

Artificial Intelligence

Under the growing pressure to deliver, storehouses need fast and scalable AI solutions more than ever. Artificial intelligence (AI) allows machines to gather, scrutinize, and learn from data. AI extracts insights from information moving across the digital business ecosystem. Whether it's analyzing sensor data to determine if a piece of equipment is about to break down or analyzing transaction data to define the best-performing trading partner.

AI optimizes operations for warehouses and fulfillment centers in many ways. For example, in the pick and pack process, AI improves accuracy by ensuring the correct items are picked and delivered to the proper workstation and packed timely for shipping. In the sorting process, AI enhances productivity by coordinating packages in the same direction, sorting packages based on the size or destination, and tracing containers at all times.

You don't need to execute an all-inclusive overhaul of your warehouse to make it smarter and more efficient. Instead, present technologies that add to your business and its processes first. If you need help deciding what technologies to introduce prime, you can always order IT consulting from specialized providers, asking for advice.

Learn how IT consulting services will help you implement a digital strategy aligning with your business goals

Practical Experience in Implementing Smart Warehouse Systems

With 10+ years of experience in IT services for logistics and transportation companies, Cleveroad develops digital solutions to help businesses optimize and reduce cost of logistics operations, improve workflow efficiency, and enhance customer experience.

Based on our experience, we’ve collected some practical tips on defining the effectiveness of a newly-adopted smart warehouse management system.

Warehouse scalability

Build a warehouse scalable enough to be able to accommodate business growth. This way, it can process large product flows and new product releases at any time. SaaS app development is a great way to approach building your scalable warehouse management system. This method allows for rapid feature integration and adaptation to changing business requirements. Moreover, the entire system may need to be put down while upgrades are finished. With SaaS solutions, all the updates can be performed quickly, and new integrations may be deployed without snorting the efficiency.

Warehouse visibility

As warehousing processes become more complex, your smart warehouse management software must be able to upgrade and save information instantly. Consumers and stakeholders want to access real-time data to know where their order is right now. Data visibility is also beneficial to receive valuable insights into the warehouse operations themselves. This can help detect inaccuracies in stock or shipping timing and prevent the issues in their infancy.

Agile warehouse coordination

Your smart warehouse system should strive to streamline the movement of goods from storage to shipping. You should also seek temporary storage opportunities and third-party logistics (3PL) providers in case of stock overrun. These actions will allow you to quickly adapt to rapidly changing market demands and customers’ expectations. Agility is also vital in digital tech solutions applied to intelligent warehouses. It means that all technologies must be able to support different platforms, sales systems, and other warehousing functionalities.

Proper project budget planning

It’s essential to properly plan the project costs to know what expenses to account for. Here are five questions you can ask yourself to prepare your smart WMS project costs.

  • What is your budget?
  • What pricing strategy do you use?
  • What are installation expenses?
  • What WMS features do you want to add?
  • What are any hidden charges?

But, before integrating a smart warehouse system, there is a sense to build a warehouse management system as a basis for data synchronization and then connect all intelligent technologies to receive an integrated system. And Cleveroad, as a competent IT vendor, can assist you with it.

Cleveroad is a professional software development company headquartered in Estonia. By selecting us, you’ll get to work with experts who have successfully delivered logistics and supply chain management software solutions for global transportation providers since 2011. Our team has in-depth competence in creating warehouse management systems, including order picking and fulfillment software, inventory tracking systems, shipping and receiving systems, and labor management software.

By cooperating with us, you’ll get the following:

  • Practical experience in deploying and setting up digital systems to address supply chain pain points, such as lack of visibility, costly asset management, and more
  • In-depth business assessment and selected the best suited system architecture for technology adoption
  • Building a personalized roadmap for system development and smart solutions implementation across the supply chain
  • Design and develop custom IT solutions that streamline stock management, warehousing and delivery processes, and help reduce operational costs
  • Fast initial project estimation from our Sales team with no hidden costs and initial fees
  • All guarantees for your corporate data security and NDA upon request

Reach out to Cleveroad today to learn more about services that can help you to bring innovative technology into your logistics business.

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Frequently Asked Questions
What is a smart warehouse?

Smart warehouse is the last step of automating warehouse processes, enabled by multiple automated and interrelated technologies.

What is a smart warehouse management system?

Smart warehouse management systems come from interrelated warehousing technologies working together. They form a technological enviroment where products are received, sorted, organized and loaded for shipment automatically.

Why do I need a smart warehouse?

Smart warehouse implies the last step of warehousing automation resulting in better productivity, reduced operational cost, more efficient material flow, and decreased manual processes.

How much does a smart warehouse cost?

It depends on numerous factors, such as the project’s scope and complexity, the types of technologies you want to integrate, the cost of warehouse tech development services, and more. You can start with creating warehouse management inventory software, as a basis for smart solutions integration, and then add technologies that bring added business value.

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About author

Evgeniy Altynpara is a CTO and member of the Forbes Councils’ community of tech professionals. He is an expert in software development and technological entrepreneurship and has 10+years of experience in digital transformation consulting in Healthcare, FinTech, Supply Chain and Logistics

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