There is no doubt that technology for businesses is moving at a very fast pace.  Organizations today can leverage modern software systems to streamline their operations and get access to critical business decisions along with the necessary tools to achieve better efficiencies.  If you are a company that is in Wholesale Distribution, Manufacturing, or handles the movement of any sort of inventory, you typically rely on software solutions to help in these processes.  Companies today have many options when selecting either ERP or WMS Software Systems.  However, to further help explain, this post will discuss ERP Compared to WMS Software.

What is ERP Software?

Enterprise Resource Planning Software, or ERP Software, has been around since the 1990s.  The goal then, as is now, is the availability of one powerful software system to bring many different business areas together in one solution.  Think about all of the different business departments such as accounting, sales, shipping, purchasing, warehousing, management, and others.  There is a great synergy when these different departments can coordinate business processes and share communication.  ERP Software can also be classified as Business Management Systems or Software.  In addition, Enterprise Software Enterprise Solutions, or just ERP are all terms for this same technology.

When we discuss ERP “Software”, we must discuss “Cloud Software” Cloud Technology is in which your business system and data reside, for the most part, on Internet Data Platforms. Cloud technology offers businesses many advantages over traditional “On Premises” Systems such as more frequent updates, much less reliance on physical on-site infrastructure, and a lower cost as companies “rent” their ERP system.  Cloud Business Technology, and not just ERP Cloud Systems, has rapidly been adopted and continues to be the preferred software delivery platform.  However, some companies and software vendors still provide on-premises software options or a hybrid deployment in which part of your Enterprise Solution is in “the Cloud”.

What Does ERP System Do?

Enterprise Systems, in short, connect companies’ departments.  ERP Software is heavily developed and engineered to meet the needs of a growing company’s requirements.  Even Small to Mid-Sized Organizations can benefit from advanced technology to connect business departments together using Enterprise Technology.  It is important to note that there are many ERP system software providers and many Cloud Software programs available.  At its core, however, ERP Systems perform the following:

  • Financial and Advanced Financial Management
  • Sales, Marketing, CRM
  • Inventory and Supply Chain Management
  • Project Management
  • Reporting and Analytics
  • Human Resources
  • Warehousing
  • Manufacturing
  • Reporting and Analytics
  • Automation

It’s important to note, in addition to many ERP systems on the market today, some are these tailored or “vertical ERP” solutions. Vertical ERP Software is designed specifically for certain industries.  These Vertical ERP Solutions can be vast and unique such as technology just made for companies that specialize in industrial supplies, plumbing, electronics, sporting goods, and much more.

Other ERP Technology Providers will develop robust business management cloud software systems that can be expanded to meet a company’s unique business requirements.  One example of this is a popular ERP system called Microsoft Dynamics 365 Business Central which has functionality that can be expanded through a network of Business Apps called Microsoft AppSource.

What is WMS Software:

As mentioned, there are vertical ERP solutions providers for various industries.  In addition, there are software providers that develop business systems that integrate with ERP systems.  ERP technology can be very complex and robust to provide the necessary capabilities that I company needs.  However, having said that, software companies develop specific solutions for select ERP software systems.  These Independent Software Vendors (ISVs) are designed to integrate and work with popular EPR software systems to complete a total business solution package.  Knowing that business requirements can be very complex, ERP solutions are designed to meet most if not all of the necessary functionalities a business needs.  However, there are cases in which business requirements demand advanced Warehouse Management capabilities not typically found in standard ERP software. When this occurs, companies select WMS Software

What does WMS Software Do?

Warehouse Management Systems (WMS) or WMS Software, can be viewed as an ISV solution for Enterprise Technology.  WMS has a goal to move inventory more accurately and efficiently throughout the supply chain.  These systems can be just or more complex than Enterprise Technologies and very robust.  Although functionalities can vary between WMS software; core WMS Software capabilities include:

  • Advanced Warehouse Picking Options
  • Inventory Replenishment
  • Handheld Bar Code Readers Technologies
  • Inventory Receiving
  • Cycle Counting
  • Lot/Serial Number Tracking
  • Order Allocation
  • Warehouse Transfers
  • Shipping
  • Reporting

Warehouse Management Systems as you will notice have advanced technology to streamline the movement of inventory through a warehouse.  Interesting to note, that several ERP Packages, have warehousing management capabilities as part of their system.  However, this lighter version of warehousing and inventory management may not be enough to gain the necessary requirements for companies.  Depending upon inventory levels, shipping requirements, and the actual inventory that is being managed, basic or “light” WMS functionality within an ERP system will not suffice.  For example, what is a company managing inventory with expiration dates? If an item has any sort of LIFO (Last In, First Out), or FIFO (First In, First Out) requirements, these advanced warehousing inventory management requirements are typically not found in ERP packages.  WMS Software also has advanced picking options, as an example, that make the picking, packing, and shipping of inventory as efficient as possible. These more robust inventory tracking capabilities are just not typically found in ERP solution packages.

What is Right for your Business?

Is ERP or WMS software better for your company?  This will depend on numerous business requirements and the goal is for the organization.  If a company is using a legacy business management system and it is adequate, typically making the move to a proven ERP Software system would be the correct choice.  However, if a company is already benefiting from an ERP system that meets their business requirements except for gaining more efficiency in warehouse operations, then an integrated Warehouse Management System would be the right choice.

Next Steps:

Learn more about ERP Systems such as Microsoft Dynamics 365 Business Central

Research topics such as ERP and WMS in our Free Supply Chain Management White Paper Resource Center

Posted by iCepts Technology Group, Inc. a Microsoft Dynamics ERP Software Reseller in Pennsylvania