Warehouse Management Solutions – Choosing between an ERP and a WMS

When it comes to obtaining warehousing solutions, ERP solution are becoming more popular among organizations due to the various advantages they provide. An ERP is low cost and it provides complete visibility of various key processes. However, there are certain shortcomings of an ERP which need to be overcome if an overall warehousing solution needs to be provided. Here is a view at why an ERP package in itself may not be sufficient and why a WMS may be required to complement an ERP.

WMS and its purpose

A warehouse management system (WMS) helps in automating warehouse operations. The primary aim of a WMS is to control the storage and movement of materials inside a warehouse as well as processing the associated transactions such as shipping, receiving, sorting, picking and packing.

A warehouse management system is used to accomplish the following purposes:

1. Manage Warehouse Locations
2. Optimize Location Utilization
3. Tracking Inventory across warehouse locations
4. Manage efficient warehouse operations
5. Preventing wrong material shipments and receipts

WMS utilizes location algorithms and logic such as First-In-First-Out (FIFO), Last-In-First-Out (LIFO), zone logic, reserved locations etc. for optimizing warehouse location utilization. Automatic identification such as bar codes and RFID can be used to track inventory within the storage location and during shipment. Technologies such as optical character recognition (OCR) and voice picking can be used to prevent wrong material shipment. Warehouse operations can be managed efficiently using techniques such as task interleaving and cross docking.

ERP and its purpose

An enterprise resource planning (ERP) solution includes systems that employ information technology to manage a focus area of the company. The primary focus of a warehouse management ERP is precise management of warehouse even in the most complex storage and distribution system. This makes inventory monitoring more efficient.

Some of the key purposes of a warehouse ERP are:

1. Maintain up-to-date inventory positions in a warehouse.
2. Efficiently manage procurement, manufacturing and sales
3. Handling finances and accounts

Shortcoming of an ERP

ERPs have come off age. They are now offering far more functionalities than the traditional ones and have become far more efficient. However, despite their vast functionalities, an ERP has drawbacks in certain areas such as core warehouse processes. For example, an ERP fails in tracking the actual physical movement of inventory. Another shortcoming of an ERP is that it lacks in certain functionalities such as dock scheduling or shelf life management.

There are also few technical kinks involved with ERP solutions.

1. ERP implementation is not easily achievable in decentralized warehouses.
2. Some of the questions that usually pop up in mind are whether the solution is scalable across warehouses, is it accessible through a mobile device and can any of the existing hardware infrastructures be used.

How does WMS overcome ERP’s shortcomings?

A WMS has advantages over ERP when it comes to certain areas of warehouse management. Some of them are:

1. WMS provides detailed and in-depth location-wise tracking of inventory.
2. WMS is capable of recording any kind of inventory exceptions
3. Various WMS related technologies such as bar code and RFID prevent wrong shipments and receipts.
4. WMS offers richer functionalities for warehouses such as asset definition and tracking, dock scheduling, shelf life management, yard management, material handling management and so on.

As seen above, ERP has definitely its own advantages and certain disadvantages. It can also be seen that a WMS can overcome these limitations. Hence, an ERP and WMS can be a powerful combination if you are looking for a powerful warehouse management solution for your organization.