ERP vs WMS: Comparing Two Popular Business Solutions

  • Posted on : August 4, 2021
  • Modified: August 4, 2021

  • Author : SPEC INDIA
  • Category : ERP

In a world ruled by business, software applications/business solutions are key to enhanced success, productivity, and profitability. Software applications like the Enterprise Resource Planning (ERP) system and the Warehouse Management System (WMS) are highly popular when it comes to inventory management, supply chain and logistics, wholesale, and distribution, fast-moving consumer goods, and much more.

Both these systems – ERP and WMS are often understood interchangeably, but that’s not true. They do have similarities but have their own features that stand out, individually. Both are fundamental to any distribution and warehouse business. Implementation of these systems is crucial to attaining excellent business results.

It is vital to understand what each of these solutions aims at doing, its key features, and an in-depth comparison between the two. This article attempts at doing the same, with a detailed analysis. Before we compare the two – ERP vs WMS, let us individually, have a look at what they are.

What Is ERP System?

Enterprise resource planning (ERP) is the integrated management of main business processes, often in real-time and mediated by software and technology. – Wikipedia

ERP stands for Enterprise Resource Planning that comprises a suite of integrated modules that together, perform the collaboration, streamlining, and automation of all the operational processes in the organization. It considers all involved data from different departments and acts as a centralized repository. This software solution collects, stores, manages, and interprets the collected data from the departments and performs a variety of transaction processing, report building, and dashboard generation.

When we talk of what is ERP, it involves processes like barcode scanning, manufacturing, human resources, order entry and processing, accounting and finance, inventory location tracking and management, warehouse management, purchase orders, eCommerce integration, customer relationship management, etc. It assists in the easy flow of information between departments with utmost security and accuracy. With a successful ERP implementation, all departments can avail shared, secured, and updated information, increasing profitability and productivity big time.

Benefits Of ERP System

  • Savings on money, time, and efforts
  • Traceability
  • Increased client satisfaction and productivity
  • Augmented business reporting and cash flow
  • Improvised inventory costs
  • Better cloud-based security and data
  • Business procedure enhancements
  • Supply chain management

What Is WMS?

A warehouse management system (WMS) is a software application designed to support and optimize warehouse functionality and distribution center management. – Wikipedia

A WMS is an effective software solution that is specially designed to cater to the day-to-day activities of the warehouse and thereby gain insights into the heaps of information stored in it. It helps in enhancing visibility into the inventory processes and gives a better and accurate view into the different warehouse operations. WMS helps manufacturers in offering an effective inventory movement across the entire chain. It possesses detailed knowledge about all stock items received, packed, shipped, and utilizes barcode scanners, wireless networks, and RFID technology to track the movement of products within different storage locations.

WMS are stand-alone systems and cater to specific business requirements. Hence, it needs supporting solutions to adhere to other parts of the enterprise functionalities. It does provide intelligence on optimization of inventory movement within your warehouse, depending upon the real-time information that is gathered. Different reports can be generated to find the best location of each product and where it must lie. It involves functionalities for picking, packing, receiving, and shipping of items, tracking goods, tracking, and visibility, reporting, and analytics. It also offers inputs about choosing an appropriate inventory location, setting priorities and ratings.

Benefits Of WMS

  • Lesser operating costs and best of space utilization
  • Transparency in inventory management
  • Efficient labor management
  • Optimization of travel time, internal operations, and supply chain
  • Easy tracking of inventory materials and better stock control
  • Leveraging automation benefits
  • Better client service with best of shipment management
  • Faster turnover of inventory

ERP-vs-WMS

ERP vs WMS: A Comprehensive Comparison

What becomes confusing is if ERP and WMS are the same or do, they serve different purposes? There are certain competencies that may be common to both, but overall, they are two different business solutions that have different objectives in mind. Both have features that are intersecting with each other, but apart from those, there are many other standalone features that are individual to both and hence organizations choose the one that is most viable to their requirements.

Here is a comparison matrix that compared both the solutions, based on certain parameters:

ParametersEnterprise Resource Planning (ERP)Warehouse Management System (WMS)
ObjectiveIntegration of all departments of the supply chain to ensure a smooth flow of informationStreamlining all included warehouse operations for a smooth information flow within the supply chain
Scope of WorkLarger scaleSpecific scale
Type of SolutionAll-in-one software solutionStandalone solution
Strong AreasSeamless flow of information within various departments via the software solution with the utmost securityTracking inventory items with real-time information of picking up, packing, and delivering goods
Key Feature SetManagement of entire process from procuring raw material to shipment of the finished product. Cost optimization, reduction in overhead costsManages warehouse deliveries – inbound and outbound, with sales receipts, goods return, pickup, and delivery schedules across warehouses
Ease of ImplementationERP is tough to implement since it involves multiple departments and usersWMS is easier to implement since it caters to a focused audience
Dependency on Other SystemsERP talks to other systems and has a well-defined inter-department networkWMS needs a separate network established to talk to other third-party systems
UtilizationBest for different manufacturing business segments that rely on a variety of departmental operationsBest for warehouses, with different inventory movements and monitoring involved, with real-time stock updates
ScalabilityEasy to scale, modular in design, and hence upscale or downscale as neededA little difficult in scaling requirements since it caters to a particular warehouse
Multiple Run of ApplicationsERP has multiple applications running since it deals with many departmentsWMS usually has a single application that caters to multiple warehouses
Intersection of BothERP cannot become a part of WMSWMS can be a part of ERP
Productivity and EfficiencyERP takes a while in ensuring productivity and efficiency since there are many departments involvedWMS finds it easy to gain productivity and efficiency since the focus is on a certain set of users
CostingERP could turn out costly because of its multiple modulesWMS could turn out more affordable because of its focused scope
Integration to Other SystemsERP may not need much integration with other modules since it already involves all of themWMS may need to cater to third party integration since it only caters to the warehouse module
Summing It Up

The ERP-WMS comparison is an exciting one since both have their own positives to showcase. Deciding between the two is a tough task and there are few things that must be considered while choosing the right solution. The long-term objectives must be defined, all technical conditions must be checked, the RoI of each system must be worked out and then the ideal solution must be chosen.

Both – WMS and ERP systems are of high value for your organization. It is just the need, budget, and organizational goals that will help you decide which one to go for. Although an ERP system will include some part of WMS, it will not offer a full-fledged WMS. So, if the need is to get comprehensive warehouse management done, it is better to go in for a WMS. If the need is to integrate all departments and have all functionalities involved, the benefits of ERP are many. Each module in both comes with its own costing figures and hence budget also plays an important role in deciding which one to take. It also depends upon the size of the organization – be it small, medium or enterprise. Hence, summing it up, it is ‘to each its own!

Author: SPEC INDIA

SPEC INDIA, as your single stop IT partner has been successfully implementing a bouquet of diverse solutions and services all over the globe, proving its mettle as a boutique ISO 9001:2015 certified IT solutions organization. With efficient project management practices, international standards to comply, flexible engagement models and superior infrastructure, SPEC INDIA is a customer’s delight. Our skilled technical resources are apt at putting thoughts in a perspective by offering value-added reads for all.


less words, more information

Tech
IN 200
words

Read our microblogs

Subscribe Now For Fresh Content

Loading

Guest Contribution

We are looking for industry experts to contribute to our blog section through fresh and innovative content.

Write For Us

Our Portfolio

Proven Solutions Across Industries
Technology for Real-Life

Visit Our Portfolio

Scroll Up