Which System is Right for Your Business: WMS vs ERP

As a business owner, one of the most important decisions you will make is selecting a system to use for warehousing and order management. There are two main systems that businesses use: WMS and ERP. This article will compare WMS vs ERP to help you decide which system is best for you.

What is meant by Warehouse Management System (WMS)?

A Warehouse Management System (WMS) is a software application that helps businesses manage warehousing operations in an efficient, cost-effective way. WMSs can be used to control inventory levels, optimise warehousing space utilisation, plan and execute pick/pack processes, monitor performance metrics such as on-time delivery and accuracy of shipped items, and track warehousing costs.

What are the different types of Warehouse Management Systems?

Warehouse management systems are available as a standalone, part of supply chain management (SCM), part of an ERP system or as a cloud system.

WMS is generally used as an integrated software platform, ERP module, cloud system and supply chains module. Each has its own advantages for the various needs of warehouses.

There are two main types of WMSs:

• On-premise WMS systems that are installed on your own servers and maintained internally;
• Cloud-based WMS systems, which are hosted in the cloud and accessed via web browser.

What are the modules in a Warehouse Management System?

The modules in a WMS system typically consist of the following:

• Inventory management module – This module is designed to manage and track inventory levels, item locations and other warehousing processes.   
   
• Order processing and picking module – This module is used to efficiently process orders from start to finish by planning pick routes, scheduling orders for delivery and tracking order status.   
   
• Receiving module – This module is used to manage the receiving process, from receiving incoming goods to planning and verifying stock levels.   
   
• Shipping module – This module is used for creating shipping documents such as invoices, packing lists and labels, as well as scheduling pick-up times for orders.

What are the benefits of using a Warehouse Management System?

By using a WMS, you can:

• Improve overall warehousing efficiency and accuracy
• Minimise warehousing costs
• Optimise warehousing space utilisation
• Monitor warehousing performance metrics such as on-time delivery and accuracy of shipped items
• Create detailed reports for warehousing operations

What is ERP?

An Enterprise Resource Planning (ERP) system is an integrated suite of software applications for business management. ERP systems combine accounting, warehousing, inventory, sales, marketing and customer service functions into a single platform that allows organisations to manage their business processes in an integrated way.

Compared to a WMS or SCM system, ERP systems are more comprehensive and complex.

For a more in-depth look on the various functions an ERP system may have. Read our article here.

How does ERP compare to Warehouse Management System?

While both ERP and WMS share similar objectives—to streamline warehousing operations— they serve different purposes.  A WMS provides an organisation with the tools to manage warehousing operations and optimise space usage, while ERP provides a comprehensive view of all aspects of business operations. In terms of their technical architecture, WMS is usually built on top of existing ERP systems, and while there are many ERP systems that include Warehouse Management as a module, some may not.

You may also be wondering how an ERP system compares to accounting software as well in terms of features.

Ultimately, the decision between WMS and ERP depends on the warehousing strategy of your business. If you want to focus solely on warehousing operations, then a WMS is the best choice. But if you need a comprehensive view of all business operations, an ERP system would be more suitable.

Can a WMS be integrated into an ERP system?

Yes, WMS can be integrated into ERP systems. This is often done to provide warehousing operations with the tools they need while also allowing access to data from other modules within the ERP system such as finance and accounting.

Integrating a WMS into an ERP system allows organisations to streamline warehousing processes, improve accuracy and visibility across warehousing operations, and ultimately, save time and costs.

How long does it take to implement an ERP system vs a WMS?

The implementation time for an ERP system is usually longer than that of a WMS. However, the benefits are significant especially if done correctly. It typically takes around 6-12 months to implement an ERP system, as it needs to be tailored to the specific requirements of the organisation. On the other hand, a WMS can be implemented in as little as 3-6 months, depending on the complexity of warehousing operations.

What is the pricing for WMS?

The cost of warehousing software depends on the particular needs of your business. Generally, solutions range from a few hundred dollars for basic warehousing software to thousands for more advanced systems with additional features and customisation options.

Finally, if you are looking for warehousing solutions that provide complete visibility into all operations within an organisation, then an ERP system will be more helpful than a WMS.

Final Thoughts

In conclusion, a Warehouse Management System (WMS) and an Enterprise Resource Planning (ERP) System are two warehousing solutions that serve different purposes. WMS is best for solely warehousing operations, while ERP is more suitable for organisations that need a comprehensive view of all business operations.

Ultimately, the decision between WMS and ERP depends on the warehousing strategy of your business as well as the budget allocated to warehousing operations. If you are in doubt, consult us for professional help so you can make an informed decision based on your needs.