ERP or WMS: Eight Tips for Making the Right Selection

There is no one right answer; it all depends on how your business operates


One other important point to consider is the environment in which it will be used. Some warehouses and distribution centers are fairly simple in their operation. They don’t require a lot of functionality or adaptability because their rhythms are steady and predictable. In those cases, a WMS module that is part of an ERP solution will likely be sufficient. For those with more complex, dynamic environments, especially those involving eCommerce, a best-of-breed solution likely will be a better choice.

How well does your software provider know the supply chain industry? Insight into the expertise of the supplier’s warehouse management and logistics is a fourth and critical factor in your decision-making. You want to work with a provider that understands the complexities of distribution and logistics at a deep level, preferably one that came up through distribution rather than the manufacturing world. You’ll want them to be investing heavily in research and development that is specific to your business to ensure they are providing the solutions you need now and in the future.

Can you build a partner relationship with the supplier? When you are on the verge of purchasing a product that is transformational for your company, it’s necessary to consider your supplier as a partner. The reason is whether you’re talking about ERP or WMS, system implementation is no simple task. You need to define potential problem areas before your activities and your relationship with your customers are impeded. Moreover, the requirements of the customer are constantly changing. It is extremely important that your supplier can meet your expectations in terms of new technology, support, etc. when changes in the system are required.

Do you have the right technical tools (and personnel) at hand? Your internal resources’ technical capabilities should also factor into the decision. If you already have an ERP system installed, adding its WMS module will likely not be a stretch technically. A best-of-breed WMS, while more feature-rich, will likely also require additional technical skills.

Another technical consideration is that in some organizations the WMS solution will need to interact with existing applications (such as TMS, CRM, etc.). This integration is often built into best-of-breed WMS solutions because integration and communication with trading partners by EDI or other electronic means is required by definition. Integrating an ERP system’s WMS module may be considerably more difficult because those modules are designed primarily to work within the ERP system. The result is a need to hire or bring in additional technical expertise, adding to the cost and time to implement.

Finally, many warehouse operations, particularly those with a high picking volume and strict requirements in terms of packaging and shipping, cover advanced materials handling equipment. Such equipment includes conveyors, sorters, A-frame picking systems, pick-to-light or voice systems, etc. Most of the best-of-breed WMS suppliers do have extensive experience integrating their solutions with these types of equipment. This level of complexity is usually handled by a third party whenever a warehouse module of an ERP is used.

At what stage is the product, and what is its future? Understanding product maturity and future strategy must be a part of the evaluation process. Is the product time-tested and proven? Is there room for growth and evolution? Can it grow at the same pace as your organization? If you don’t pay the necessary attention to these questions you might choose a solution with a limited service life. Which means you will be back to square one in a few years.

For many ERP systems, the warehouse module is actually a new addition, often with limited functionality that’s best-suited to less complex business processes. For others it may have been around a while but has had limited investment/improvement over those years. Because of their focus, best-of-breed WMS solutions tend to have more emphasis placed on their functionality, and often have multiple ways of solving business requirements.

No matter which way you go, you want to be sure the solution provides all the details of an order, shipment and available inventory, and is able to respond quickly to customer demands. Without those capabilities, the solution is sure to fall short.

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