What are the costs of a warehousing system?

A "warehouse system" can be as simple as a smart way of using a spreadsheet program, or as complex as a fully-automated high-bay warehouse. Warehouse systems can be divided in four layers, from simple to complex, from low to high cost.

The four layers you can discern are:

  1. Fully manual: all processes are inside a person's head and registration is done on paper. This layer is useful for very small warehouses but can tedious very fast. Because of that, many people will use basic office software to digitize the processes. Since this is not a warehouse system per se, we do not consider this layer any further here.
  2. Digitization: processes are digitized in a specialized warehouse system. Many of these software packages exist, from low-entry cloud based to large Warehouse Management Systems (WMS).
  3. Mechanization: when more handling is done in a warehouse, some mechanization will enter the warehouse. This can be as simple as a stand-alone machine to apply labels or close boxes, or systems that help in order picking.
  4. Fully automated: this last layer is where all processes in the warehouse are completely automated. All items in the warehouse are transported over conveyors and all handling is done by machines and the administration is completely connected.



A digitized warehouse has at least a simple Warehouse Management System (WMS). Many different systems exist and the simplest are often cloud-based and can be paid with a monthly fee. Those systems digitize all the basic processes in a warehouse.

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