Inventory Management Vs Warehouse Management

By Annapoorna


Updated on: May 18th, 2022


5 min read

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Although inventory management and warehouse management are essential for monitoring and managing stock, there are several differences between inventory management and warehouse management. While inventory management works on a much wider level, warehouse management is limited to monitoring the stock in a warehouse or storage facility and not the entire business.

Inventory Management Vs Warehouse Management

Inventory ManagementWarehouse Management
Tracks and monitors the overall inventory or stock of a business.Tracks and monitors the inventory available within a warehouse or storage facility.
Facilitates calculation of sales trends, production trends, inventory costs, and profitability.Evaluates sales trends, production trends, inventory costs, and profitability.
Generates a replenishment list based on inventory reduction or past sales and trends.Identifies opportunities to ease operations.
Inventory management is comparatively simpler as it only specifies the quantity of stock stored in storage facilities.Warehouse management is a bit complex as it specifies the entire storage system, including the location of each product within a warehouse.

Inventory Management

Inventory management refers to the tracking and managing of the inventory across all warehouses, stores/shops, and other business storage facilities. It is considered the first step taken before implementing warehouse management.

Warehouse Management

Warehouse management is a part of inventory management that works at a narrower level and deals with monitoring inventory within a warehouse or storage facility.

Inventory Management System Vs Warehouse Management System

Inventory management system or IMS keeps a record of the stock available across all warehouses and storage facilities and the information regarding which warehouse stores what products. Warehouse management system or WMS, on the other hand, tracks the inventory along with their location within a storage facility or warehouse. Inventory management systems and warehouse management systems are often used together to enhance stock management.

Inventory Management SystemWarehouse Management System
Monitors inventory movement and location across all channelsMonitors inventory movement and location within a warehouse
Provides a broader perspective of all inventory of a businessDevelops inventory status reports
Deals with fulfilling orders by monitoring inventory levelsDeals with acquiring, packing, and shipping stocks

What is an Inventory Management System?

An inventory management system/software is responsible for managing supply chains and delivery systems. The software monitors raw materials and works in progress (WIP) goods in warehouses or storage facilities and finished goods in stores/shops. An efficient inventory management software helps businesses identify high selling or best selling products and save inventory costs by spending less on poor-selling products. One of the major benefits of investing in inventory management software is automation and error-free monitoring and management of stocks. The software will generate a list of products that need to be replenished or automatically ordered.

What is a Warehouse Management System?

A warehouse management system/software deals with the day-to-day tracking of warehouse stocks/inventory. The software eases acquiring, storing, auditing, monitoring, and managing stock within the warehouse for fulfilling orders. The warehouse management system can either be a part of the Enterprise Resource Planning (ERP) suite or a stand-alone system. It also helps in enhancing customer experience by alerting businesses about stock-outs from beforehand. Unlike inventory spreadsheets, a warehouse management system provides accurate and efficient inventory tracking and replenishment lists. The software uses customisable barcoding to capture products into the database as “inflows” along with important details, instructions, warnings, etc.

Similarities Between Inventory Management System and Warehouse Management System

  • Both inventory management and warehouse management aids in the movement of inventory from the supplier to the customer/buyer. 
  • They deal with ordering, storing, shipping, and reordering stock.
  • Both use barcoding and Radio Frequency Identification (RFID) to enhance accuracy and efficiency.
  • Both provide details about stock either with a warehouse or across the entire business ecosystem.

Combining Warehouse Management System and Inventory Management System

For enhanced efficiency and sales, it is always advisable to automate warehouse and inventory management by combining warehouse and inventory management systems. Integrating the software/systems offers seamless operations, accurate cycle counting, and automated inventory management.

About the Author

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more


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