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ERP vs WMS: Why Not Both?

Those relying solely on an ERP system to effectively manage supply chain data may be fighting an uphill battle. So what’s the answer? Is there a role for these systems and what does this mean for your ERP investment?

Mnet 192059 Supply Chain 0
Dave TamburrinoDave Tamburrino

Each scan of the barcode, each click of the mouse and each push of the button says something about your business. Tools, technologies, systems and personnel throughout practically any business are generating data at an unprecedented clip. As a result, there is more information available than at any time in history; and this means more opportunity to leverage technologies, streamline operations, boost efficiency and accelerate productivity. So what’s the best way to manage this broad spectrum of information within your supply chain?

ERP Has Its Place

Today’s Enterprise Resource Planning (ERP) systems are capable of handling vast amounts of data. And while not specifically designed to operate within the supply chain realm these systems are generally adequate for smaller, low volume distributors. But as they grow, companies in warehousing, distributing, manufacturing and other supply chain-driven industries should replace or enhance ERP capabilities with a Warehouse Management System (WMS).

Just as ERP systems were created to operate within the world of finance, a WMS is specifically designed to handle the types and volume of data being generated throughout supply chain and/or manufacturing processes. Sales, order fulfillment, shipping, replenishment, inventory, tracking, manufacturing raw materials and beyond, are all areas of the operation must be tightly integrated as part of a complete supply chain management strategy. A WMS drives responsiveness and supports critical decisions with the most up-to-date and accurate information. This in turn synergizes the entire operation turbo-charging efficiency, productivity and ultimately improving the bottom line.

In today’s world warehouse, distribution, and transportation management systems are affordable for virtually any size company and offer various levels of functionality to meet varying needs and unique requirements. Fortunately for smaller to mid-size businesses a WMS doesn’t need to break the bank. Now even modest sized companies can get the same results as their Tier 1 counterparts without spending millions. If you have already deployed an ERP system, a WMS leverages the strengths of each to deliver a truly automated and responsive distribution environment. The result is a clear, accurate and on-demand view of the complete operation.

ERP/WMS Integration

Today’s complex supply chain operations must be well-choreographed to generate, feed, process, update, receive and disseminate information at every stage. From sales, order fulfillment, shipping, replenishment, inventory, tracking to finance and beyond, all areas must be part of a complete warehouse management strategy.

Some smaller companies, or those just beginning to explore the benefits of a WMS, might simply see the system as a way to automate current processes or in other words: a way to do things faster. While it is true that this approach will yield some, albeit incremental improvements, the real value of a WMS lies in its ability deliver flexibility or to do things differently. Companies who embrace the technology in this manner are empowered to branch out of traditional thinking and in doing so are poised to boost their ROI exponentially.

A WMS has the power and flexibility to handle more than just SKU data. A WMS is capable of servicing a variety of customers (B2B, B2C, Internal, etc.) while closing the loop by managing downstream tasks such as transportation and shipping. This ensures meeting delivery dates/times, printing messaging on packaging, determining best carrier, lowest rates and so on. By eliminating steps, removing bottle necks, boosting efficiency/productivity and maximizing tools, a WMS transforms companies who are now able to leverage lean “do more with less” principles.

Flexibility and scalability are key for any size company. One way to win business is to be able to meet all the needs of a customer. In the end a lower price is nice but the ability to service a customer’s needs builds a long standing partnership. In the upstream order-taking stage a WMS works with ERP systems allowing users to say “yes” to customer needs. This encourages the building of partnerships and fostering of relationships rather than simply performing transactions. All organizations strive to be flexible. But with limited resources and capital, smaller companies have to be “extra-flexible”. Staff must fill multiple roles while optimizing time and resources.

A tightly integrated ERP/WMS delivers the level of visibility, control and responsiveness needed to support such a strategy. When it comes to WMS/ERP integration, care should be taken to select a solution from a company with proven experience. Understanding the intricacies of an ERP system is key to accelerated implementation while fully leveraging the strengths and capabilities of each system.

Real-Time Visibility/Real-World Examples

There are a number of supply chain-related challenges facing companies today.

  • Real-time visibility: Immediate access to the latest information allows quick response to changes on the floor, provide continuous improvements, and hold everyone accountable.
  • Flexibility: Businesses must have the freedom to choose the tools that fit their needs, direction and budget. Technologies should empower users — not limit decisions.
  • Integration: Technologies, tools and processes must be seamless connected. In this way information flows across systems, departments and processes to update, track and manage the entire operation.
  • Scalability: Technology must be configurable, affordable and grow to support future needs.

Warehousing, distribution, and manufacturing companies of all types and sizes are documenting tremendous results by bridging ERP with a WMS. Here are a few results:

  • Gaining real-time visibility and reducing bottlenecks
  • Boosting order fulfillment speed, accuracy and volume with little or no added headcount.
  • An integrated environment that doubled annual revenue growth.
  • Real-Time visibility in orders, SKU movements, inventory status, individual/team productivity and other key metrics
  • 99 percent + order accuracy
  • Year-end inventory virtually eliminated

The key to overcoming warehousing and distribution challenges lies in the ability of a WMS to bridge disperse tools and processes found throughout. An integrated WMS/ERP solution maximizes the return on your investment by augmenting ERP capability with WMS sophistication.

Dave Tamburrino is Director of Customer & Business Development at FASCOR.

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