WMS vs. ERP – Functionality & Differences

Warehouse Management Software and Enterprise Resource Planning systems are regarded as necessary for managing the supply chain. These systems do, however, have many differences, including the areas of functionality. We will look at their functions and differences in this article.


What is WMS?


Warehouse management software (WMS) is a system or application used to support and improve warehouse functionality and the management of the distribution centre. WMS assists in managing daily operations of the warehouse, such as planning, staffing, organizing, and controlling resources that are stored and moved to and from the warehouse. The differences between warehousing and WMS is that warehousing primarily deals with the storage of products. In contrast, WMS ensures full transparency throughout each aspect of the supply chain and inventory management.



WMS Functions


WMS contains a significant number of functions that can be beneficial for any warehouse. These functions include:


1. Tracking Goods

Through WMS, managers can see how much stock they have available in the warehouse at any given time, which helps them restock certain products that are running low. The ability to track goods ensures that the warehouse avoids under-stocking or overstocking. Having the right stock at hand at the right time can be beneficial in preventing product shortages, and it saves space in the warehouse.


2. Picking and Shipping

WMS uses retrieval strategies such as FIFO (first-in-first-out) or LIFO (last-in-last-out) to ensure that the right products are picked each time based on the business rules. The system also guarantees that the correct order is shipped at the right time, saving you money as it costs a lot to ship out the wrong order to customers.


3. Tracking and Visibility

The ability to track inventory is an essential function of WMS, and the system does so through information relating to orders like lot details, serial numbers, expiry dates and UPC. Tracking inventory ensures that you quickly move goods, reduce additional costs, and offer your customers a positive experience as there are better tracking and management of orders. The visibility provided through inventory tracking also improves the daily operations and productivity within the warehouse.


4. Reporting and Analytics

WMS collects data and insights regarding customer data, inventory data and employee information. This data may be used to create reports used to make decisions and understanding warehouse operations. Businesses can use WMS data to measure KPIs and implement changes where there are issues in supply chain processes.



WMS Benefits


Implementing warehouse management software provides many benefits to a warehouse which include.


1. Increases Productivity

One of the first benefits of WMS is that it collects KPIs and performance parameters. From this, it creates an easy to follow working structure that can be used by the staff, which improves the way they conduct their work better.


2. Better Transparency and Visibility

WMS offers transparent and accurate data which can be used to plan production with suppliers, which is beneficial for both parties. Warehouse managers can use the insights gained from the data to improve the services offered to customers.


3. Stores Stock Safely

The conditions in which goods are stored with WMS ensures that they are safe. For example, perishable goods are stored in cooler conditions. This reduces stock from being wasted and damaged.


4. Improves Customer Relationship

WMS guarantees that the customer receives the right products at the right time, ensuring that they are happy each time. Customer satisfaction with your business dramatically improves customer retention.




What is ERP?


Enterprise Resource Planning (ERP) system refers to software that automates and integrates a business’ core processes, like taking customers’ orders and maintaining customer records. ERP enables them to focus on being practical and achieving simplified success, maintaining and managing business functions.



ERP Functions


These are some of the functions that you can expect from an ERP system.


1. Manufacturing

ERP helps to manufacture as it offers tools to users used during product development and production that enable them to manage resources, shop floor and finances. The ERP manufacturing function should assist with planning and scheduling, budgeting, and acquiring and handling materials.


2. Accounting

ERP offers accounting tools to support accounts receivable, accounts payable and general ledger functions required to manage your finances. Some added functions that it provides include tax reporting, payroll and time tracking. When ERP is incorporated with accounting software, the ERP database will provide the accounting module with information about the company’s processes. This can reduce errors and the time spent collecting financial information.


3. Human Resources

ERP can manage Human Resources, such as payroll, training, and performance management. Performance management functions include analytic and reporting tools. All this data relating to Human Resources are stored in a database that shows you patterns relating to your hiring practices and employee performance.


4. Inventory Management

The inventory management function of ERP software assists in gaining stock control and visibility through data. The data acquired can be used in manufacturing, sales, and distribution. It can also be used to predict issues that might occur, like running out of stock and preventing those issues from occurring.



ERP Benefits


When you implement an ERP system, you can expect the following benefits.


1. Saves Money

ERP can save your business money as it automates the process, which in turn decreases your administrative and operational costs. Through inventory management, you will also reduce inventory costs as there is less wastage.


2. Traceability

You can track inventory through an ERP system and see any defects and hazards that those products might have in their parts or ingredients. The detection offered allows you to recall or re-evaluate batches that might have issues.


3. Enhances Customer Satisfaction

One way an ERP system guarantees customer satisfaction is that it ensures that the right product is being produced at the right time. All the products will be made according to the customer’s needs, and they will be delivered at the right time, which is essential for customer retention.


4. Increases Productivity

Since an ERP system has automation and streamlining capabilities, it ensures that it reduces tedious tasks, production delays, and redundant processes. Automated processes allow workers to focus on other pressing tasks and processes, further increasing productivity.




WMS and ERP Integration


WMS can increase the efficiency of warehouse operations, while an ERP system serves to automate processes throughout your entire business operations. Integrating both these systems together can lead to automated business processes, even in warehouse operations. This can be beneficial as it will improve your business operations, decision making, sales, finances, and customer service. The keyways integration can occur is through point to point integration, middleware, and shared components.




Take a look at the 5 Challenges to Anticipate When Upgrading Your WMS.