Should You Implement a Warehouse Management System or an ERP?

For warehouse operations, finding a better return on investment than the right warehouse management system (WMS) has been hard to come by over the last couple of decades.  Warehouse managers have taken control of scheduling, shipping and receiving, product locating, replenishment and even shelflife supervision with powerful warehouse management software.  However, with the ever-increasing market share and popularity of whole Enterprise Resource Planning (ERP) systems, many CIO's are beginning to question whether it's better to implement a WMS or an ERP.

Of course, the Corporation's specific requirements always need to be taken into account when trying to answer such a question.  When it boils down strictly to whole dollars, implementing a WMS is typically far less costly than is an enterprise solution.  Enterprise solutions generally contain numerous cross-functional modules with a WMS being one or more of those module configurations. 

Important to consider when choosing between a WMS and ERP system are metrics such as system responsiveness, flexibility and functionality.  System responsiveness is a measure of the ability of the system to take input from various sources, multiplex that input and deliver it to the database in a timely fashion.  When researching WMS and ERP systems, be sure to request a demonstration to determine the responsiveness of the system.

Flexibility of management software is a measure of whether configuration or customization of the system is required to meet your company's needs.  Typically, configuration is far less costly than is software customization.  Is the package scalable across multiple warehouses?  Can the system be operated via mobile devices?  Can any of your company's existing hardware infrastructure be used?  These are some of the questions that can help to determine whether the system that you're researching is flexible.

Perhaps the most important metric is functionality.  Obviously, if the WMS or ERP system doesn't contain the proper functionality for your facility then that solution can quickly be excluded. In general, WMS systems offer far greater functionality for distribution centers and warehouse operations than do ERP warehouse or inventory control modules.  Critical warehouse functionality found in best-of-breed WMS systems such as asset definition and tracking, material-handling management, dock scheduling, yard management and shelflife management features are often lacking in ERP warehouse modules.

In the initial stages of determining which warehouse module to implement, clearly define the required functionality.  Even from WMS package to WMS package, there are vast differences.  Be sure to evaluate each package of interest against your list of desired functionality. Garnering the advice and guidance of consultants trained in methodologies for package selection can save your company time and money by ensuring that the selection, implementation and migration are done right the first time.