If you’re in the market for new business software, you may have come across the terms Warehouse Management System (WMS) and Enterprise Resource Planning (ERP) software.
Although ERPs have warehouse management capabilities, they’re not exactly the same – there are areas where WMSs outshine their counterparts in terms of functionality or customizability for your company’s needs!
So, what is the difference between WMS and ERP software?
The primary difference between warehouse management systems and enterprise resource planning is that a WMS is a standalone system that needs support from other additional software, and ERP is an all-in-one solution.
A WMS is specifically designed to optimize your warehouse operations. ERP software, on the other hand, is designed to automate processes across your entire business – from marketing and sales to human resources, client service, procurement, inventory and financial management.
What is a warehouse management system?
WMS software is used to manage inventory levels and storage locations within a warehouse. This type of software typically includes features like barcode scanning, order picking, and shipping/receiving.
Additional functionality in WMS solutions includes:
- Stock and non-stock locations allow you to view a true count of inventory, as well as separating products available and products already allocated to an existing order.
- Setting up stocking location priorities and ratings will allow you to more efficiently pick your inventory items.
- Tracking of product movement from shelf to cart.
- Cross docking features enable employees to receive, ship, and store products without putting them away.
Warehouse management systems (WMS) are often standalone systems that lack ERP functionality such as accounting, customer relationship management and other features. This means that the system need other supporting software for additional functionalities for your business. A WMS typically integrates with an ERP system to solve this issue.
Learn more: Warehouse Management Solutions
The Benefits of Warehouse Management System
A warehouse management system (WMS) can greatly increase the efficiency and productivity of your warehouse. By automating many of the tasks associated with running a warehouse, a WMS frees up your employees to focus on other tasks, such as customer service, product development, and marketing. In addition, a WMS can help you keep track of your inventory levels, so you can avoid stockouts and ensure that you have the products your customers want.
There are many different types of warehouse management systems on the market, so it’s important to choose one that’s right for your business. Here are some factors to consider when selecting a WMS:
The size of your warehouse: If you have a small warehouse, you may not need all the bells and whistles that come with a more comprehensive WMS.
The types of products you store: If you sell perishable goods or items that require special handling, you’ll need a WMS that can accommodate those needs.
Your budget: WMSs can range in price from being free to upwards of several thousand dollars. Be sure to shop around and compare prices before making a final decision.
Your IT infrastructure: Some WMSs are cloud-based while others require that you install software on your own servers. Be sure to choose a system that will work with your existing IT infrastructure.
Your business needs: Take some time to think about what features are most important to your business and be sure to select a system that includes them. For example, if real-time tracking is essential for your business, then be sure to select a system that offers this feature.
What is an ERP system?
As the business world has become more complex and competitive, the need for sophisticated software systems has increased. One such system is an enterprise resource planning (ERP) system. An ERP system integrates all aspects of a company’s operations, including accounting, human resources, customer relationship management, and supply chain management.
Additional functionality in ERP includes:
- Improved accuracy and accountability
- Collaborative environment
- Enhanced reporting
- Data security
- Lower IT costs long-term
Learn more: Enterprise Resource Planning Systems
Benefits of Enterprise Resource Planning (ERP) Systems
The benefits of ERP systems are numerous in both small businesses and large corporations alike. Some of the most impactful benefits of ERP implementation are:
Real-Time Insights into Business Operations
One of the most important benefits of ERP systems is that they provide businesses with real-time insights into their operations. This allows businesses to identify areas where they may be wasting resources or where they could be using their resources more efficiently. Additionally, real-time insights allow businesses to make informed decisions about where to allocate their resources going forward.
Streamlined & Automated Operations
Another benefit of ERPs is that they can help businesses to streamline and automate their operations. This can save businesses a significant amount of time and money by eliminating the need for manual data entry and other tasks that can be easily automated. Additionally, automated operations can help to reduce errors and improve efficiency overall.
Improved Customer Service
Finally, ERP systems can also help businesses to improve their customer service by providing them with the tools they need to track and manage customer orders and interactions. By being able to quickly track down information about a customer’s order history or previous interactions, businesses can provide a higher level of customer service overall.
Using ERP, businesses can create streamlined and customized software to better align with the needs of their clients or customers. By providing visibility across departments, businesses can quickly access reports, updates on projects, and make data driven corporate decisions. The right ERP can help companies monitor challenges they face in their process and develop an effective plan that leads to increased profitability.
Is ERP or WMS better for your business?
The short answer is this: it depends on your business’s needs.
You should first determine what your business needs are and how the software will support those needs. It is only when you understand your needs that you will be able to weigh up the advantages of each system.
How to tell which system best suits your business needs
When choosing between ERP software and a WMS, there are three main considerations:
- What are your long-term business goals?
- What existing processes and systems do you have in place which will need to integrate with your ERP or WMS?
- What ROI will your ERP or WMS deliver?
So, which type of software is right for your business? It depends on your needs. If you have a small business with limited inventory, WMS software may be all you need. However, if you have a larger business with multiple moving parts, ERP software may be a better choice.
In summary, WMS software is used to manage warehouse operations while ERP software is used to manage an entire business. Both systems were designed with completely different purposes in mind. Knowing the similarities and differences between the two solutions will allow you to determine what functionalities your business needs and accurately estimate what sort of ROI you may have with either solution.
Below is a video overview of the barcode system for Dynamics 365 BC.