ERP vs. WMS: What's Right for Your Business?

ERP: Overview, Limitations, and Implementation Considerations

ERP Overview and Key Functionality

Enterprise resource planning (ERP) software typically consists of integrated modules that include different functional areas of an organization, such as finance, human resources, supply chain management, manufacturing, and customer relationship management (CRM). One of the main benefits of an ERP system is storing enterprise data in a centralized database, ensuring data consistency, and preventing data duplication. The system serves as the sole source of real-time data, which can often be accessible via mobile devices. It will also streamline core processes and automate tasks to reduce dependency on manual tasks and data entry. Here are a few ways that an ERP system can impact different enterprise processes:

• Finance: enhanced inventory management ensures accurate tracking of stock levels, helping to optimize working capital, lower holding costs, and contribute to better overall financial control. Financial modules also include accounting, budgeting, and financial reporting which help to maintain accurate financial records and support compliance and regulatory activities in addition to automating and error-proofing workflows.
• Human resources: ERP systems assist in managing HR functions, such as payroll, employee records, and workforce planning.
• Supply chain management: supply chain modules help manage the entire supply chain process, from procurement and production to distribution. This functionality supports enhanced coordination between suppliers, manufacturers, and distributors. 
• Customer relationship management (CRM): many ERP systems include CRM modules to manage customer interactions, sales, and marketing activities.

ERP Limitations

In some cases, ERP systems intended for smaller businesses may not have the ability to add a WMS module. In these cases, you will have to pursue upgrading to a larger ERP system (with a WMS module) or integrating a standalone WMS application that can supplement your existing software applications. Many of the ERP systems designed for larger businesses will include (optional) WMS and order management (OMS) modules, in which case your ERP would have full capabilities around inventory management, order management, and order fulfillment. Learn more about ERP module-based WMS applications in this blog post.

ERP Implementation Considerations

Significant investment and resources are required to implement an ERP system. The cost of implementation includes various direct and indirect cost drivers, including software licensing, professional implementation services, hardware and infrastructure, customization, and internal project management and training resources. Some of the larger (Tier 1) ERPs also require a specialized team to manage and maintain the solution, once live and in production. Given the large cost of implementing an ERP, it is important to clarify the goals and objectives of the implementation, as this will inform system requirements and implementation phasing details.

WMS: Overview, Limitations, and Implementation Considerations

WMS Overview and Key Functionality

Warehouse management system (WMS) software is a specialized application designed to optimize and manage operations within a warehouse. The WMS plays a critical role in improving warehouse efficiency, accuracy, and overall productivity. A typical WMS provides real-time data insights into key operational data, including inventory management, order management, slotting, order fulfillment, and task management. 

WMS Limitations

When considered as a standalone application, most WMS systems cannot easily integrate with broader enterprise databases such as HR, finance, order management, etc. The WMS feature set is often designed specifically with warehouse operations in mind. Compared to most warehouse control systems (WCS), the WMS may lack the ability to provide real-time control of MHE and automation systems. If one of your goals is to control your MHE and automation systems, you will want to select a WMS with built-in WCS capability or with the ability to easily integrate your WCS.

WMS Implementation Considerations 

While typically not as costly as ERP implementation, WMS implementation still requires significant investment and careful planning. As in the case of ERP implementation, you must clearly define goals and objectives as prework for WMS selection and implementation. You will also have a choice to either install the WMS application on local servers (i.e., on-premises) or as a cloud-based application. 

Conclusion

We hope that this blog helped compare ERP vs. WMS systems and illustrates the differences to inform your decision on how a WMS system can help improve your warehouse operation. If you are a larger business with an existing ERP system, you may have the ability to add WMS capability through an ERP module to improve the performance of your warehouse operations.
For smaller businesses, it may make sense to pursue a standalone WMS solution that can act alone or complement an ERP system. This is particularly relevant for smaller businesses that may not have the ability to add WMS modules to their ERP systems. Maveneer is here to help you on your WMS journey, whether you are an established business looking to upgrade WMS functionality or a smaller business in need of WMS capabilities to keep pace with your growing operation. Our team of experts can assist with all phases of selection and implementation, including crafting your strategy and goals, selecting a vendor, defining requirements, and implementing the WMS in your operation.