Warehouse Management Systems [WMS] and Enterprise Resource Planning [ERP] systems are often used interchangeably in the supply chain landscape. While both these systems streamline processes and increase efficiency, there are essential differences between them in their role and capabilities. Let’s explore WMS vs. ERP in more detail.
A Warehouse Management System or WMS and an Enterprise Resource Planning or ERP system are often uttered together in a single sentence in similar contexts. The choice between WMS and ERP depends on these contexts. While selecting the right system for an operation might not sound like a big deal, it does have a lasting impact on the operational and financial aspects of the business. With the right system, the software can be integrated seamlessly into the operation, making it an automated, accurate, and fully functional process. If the correct system is not chosen, there will be more glitches and bottlenecks in the operation introduced through the implementation, and it will harm the overall health of the business.
Understanding the advantages and disadvantages of the Warehouse Management System and Enterprise Resource Planning system is crucial when deciding which system to choose for businesses. This allows business owners to make informed decisions and implement software that is more suited to their business requirements.
What is WMS
A Warehouse Management System, as the name suggests, is a software primarily used to manage the goods stored in a warehouse. Each product is tracked, and the movement is recorded. The tracking begins when the product is received in the warehouse and continues until it leaves. The cycle starts when the product is entered into the system and placed with other similar items, and then the product is eventually picked, packed, and shipped from the warehouse. The WMS system helps optimize product placement inside the warehouse. Based on real-time information, the operators can search current and historical data to decide the best location and placement of the good.
WMS can help operators track the actual inventory. Real-time data is used to remove stocks or allocate stocks to an order, which is also noted in the system. The location can be set up according to the priorities the system suggests for optimal packing efficiency. The product movement is tracked accurately throughout its cycle. If a product enters the warehouse and is required to be immediately shipped, that entry and immediate exit is also recorded in the system.
WMS can seamlessly track the activities within the warehouse; however, it does not track or monitor any other aspects of a business. This is one of the reasons why it can blend with an effective Enterprise Resource Planning system to enable a business to operate seamlessly in all of its areas.
What is ERP
Enterprise Resource Planning, or ERP, is software used to automate operations across the various departments of a business. For example, inventory, customer relationship, and warehouse management. ERP aims to smoothen the information flow between the various departments of a business. Certain ERP systems also integrate aspects of the Warehouse Management System which could be perplexing for some. Based on the business requirement, it is advisable to have one software running the operation smoothly and ensure all the information flows in the right direction.
Some commonly used ERP systems include Microsoft Dynamics, SAP, and Oracle. These incorporate both the features of warehouse and stock management. Many ERP systems have some form or another of WMS integrated within the software. The coverage of the ERP system is much wider; however, it can be quite inflexible. Implementing multiple software applications for a single business might prove to be counterproductive. It might also decrease the efficiency of the overall operation. ERP gives the user one platform to manage all their critical back-office functions. Business owners are not required to navigate multiple interfaces to gather data.
Difference Between WMS and ERP
While WMS and ERP are often used interchangeably, there are quite a few differences between them. These differences are crucial to know before making a conscious decision about which one is suitable for a business.
WMS focuses completely on managing the warehouse and its associated aspects, such as managing inventory, suggesting space optimizations, and fulfilling orders. ERP manages broader aspects of a business, including accounting, customer relationship management, and order entry.
If WMS is implemented in a warehouse, the system offers several ways to manage the inventory. For example, picking routes, scanning barcodes, and optimizing storage space. Alternatively, ERP provides a broader overview of the business of which warehouse management is just a part.
ERP gathers data from all business departments, including purchasing, accounting, and warehouse management. However, WMS only provides real-time data from the warehouse.
ERP systems are more versatile and span various industries, while WMS has a specific niche market. A business with no requirement for a warehouse will not require a system to manage it.
In certain industries, implementing a Warehouse Management System specific to the individual business needs could often be more expensive than integrating a generic ERP software. However, ERP is inflexible in its features, which can be limiting for some businesses.
How to Choose Correctly
Choosing the correct software to manage the requirements is crucial for the success of a business. Businesses can choose between WMS, ERP, or a blended system. Many software systems nowadays prefer to incorporate different aspects of each system to give the right blended feature. Implementing a dedicated customized system to focus strictly on a warehouse might be expensive but essential for some businesses. Before choosing the right software, companies must decide what they want to achieve by implementing it. The goal can dictate the choice of system management. Factors such as flexibility, budget, required functions, and focus must be key in deciding the correct software. The goal is to ensure that the system the company implements delivers its expected value and performance. Consequently, asking the vendor the right questions is crucial to determine what best suits the business. A list of desirable features and functions will help narrow the choices and make the right one.
Conclusion:
A Warehouse Management System (WMS) and an Enterprise Resource Planning (ERP) system are critical parts of supply chain management. They are designed to ensure that businesses run smoothly and reduce error margins as much as possible by automating most of the processes. When companies choose the right software, it can integrate seamlessly with the operations, thus drastically smoothening the entire process. Based on the budget and the features required, the correct software system can be a step away, and so can the lessening of daily hassles that come with running a business manually.
Connect with XPDEL for your WMS or ERP solutions and give your business the seamless operation it deserves.
About XPDEL:
XPDEL helps eCommerce brands accelerate their growth, empowering them with multi-channel fulfillment, whether shipping directly to consumers, delivering to businesses, or selling through retail stores. We are founded and operated by veterans with experience from Amazon, FedEx, UPS, JDA, Walmart, Target, and other leading companies in eCommerce and retail. Guided by these experts, we provide customer experiences that help you grow your business.
