WMS vs. ERP - What is the Difference?
A warehouse management system (WMS) and an enterprise resource planning (ERP) software are both integral components of a successful organisational structure. However, contrary to popular misunderstanding, both of these software systems are not the same thing and instead meant to cater to two completely different sets of problems businesses face.
Want to learn more about the differences between a WMS and an ERP system, and how they operate together in harmony despite these differences? Well then, you’re in for a treat because in this blog, we dive into all of that and more.
Our advice? Keep reading!
Contents
- All You Need to Know About Warehouse Management System
- All You Need to Know About an Enterprise Resource Planning System
- How to Make the Most out of a WMS and an ERP?
- Conclusion
All You Need to Know About Warehouse Management System
First, let’s start off by looking at WMS, the full form of which is ‘warehouse management system.’
What is a Warehouse Management System (WMS)?
Naturally, the predominant question that comes to mind when we are first talking about WMS is what it actually is. As the name suggests, a warehouse management system is a software system that is designed to help businesses streamline their warehouse activity.
Although warehouse management sounds like a pretty straightforward job, anyone that has actually had to manage a warehouse in their lifetime would know how challenging it can be to supervise a warehouse, or any fulfilment centre for that matter; so much so that it becomes impossible to do so manually.
Taking care of thousands of processes with nothing to rely on but your manual workforce and paper-based systems? No thanks – those days are long gone, and these outdated ways of managing a warehouse have been replaced by technology such as a warehouse management system.
A warehouse management system automates all the necessary warehouse processes that need to be taken care of – from stock handling to labour management, everything can be tapped into and improved with the help of a robust warehouse management system.
Warehouse Management System – Pros
And now, let’s take a look at the various benefits a warehouse management system is meant to provide you with.
Reduced operating expenses
One of the best benefits offered by a warehouse management system is that it helps you reduce your operating expenses, and that too in various ways. For example, it helps you determine the most efficient manner in which your labour should be utilised, which helps you cut down on labour costs wherever needed. All the processes that can and should be automated are automated. It also helps you minimise waste and optimise your storage layout so that maximum space can be utilised within the warehouse, which will help you save money on a lot of ends.
Gain more visibility
Another benefit to using a warehouse management system for streamlining your warehouse activity is that it helps you gain more visibility. With the help of your WMS software, you can acquire accurate data that will help you keep an eye on your stock levels as well as fulfilment ongoing in real-time. With the use of barcoding, RFID tracking, and serial numbers, you get to stay in touch with your fulfilment processes from the start right till the end.
More effective inventory management
Your warehouse’s primary job is to ensure that your inventory is kept safe and that you have the right management mechanism in place to take care of and organise everything. However, this also proves to be one of the most challenging aspects of warehouse management. With the help of a warehouse management system, you can make sure that you are achieving a balanced, optimal inventory that actually contributes to the success of your business. This is done through various ways, out of which accurate demand forecasting is an important one as it really helps you make sure that you are maintaining just the stock levels that you need to keep everything prim and proper.
Better standing in the industry
Believe it or not, you can actually improve your standing in your industry with the help of the right warehouse management system. This is because a good warehouse management solution will help you implement any hot and trending industry best practices, which enables you to make sure that you are on the same level as your competitors and have what it takes to be considered a top gun. This benefit is the most relevant if you have a cloud-based warehouse management system. A cloud-based system will automatically update itself over time so that you get nothing but the best innovation and tools.
Efficient workforce management
At the end of the day, your warehouse is only as good as your workforce is. This is why a warehouse management system can also be used to improve your employees’ output. Not only will it help you determine which one of your employees is the best fit for the job, but it will also help you a lot with easy delegation of tasks and staying on top of them once they are assigned. This way, you can also increase employee morale. No longer does your staff have to worry about being overburdened with tedious routine tasks, because most of them will be automated anyway.
Who Can Use a Warehouse Management System?
Here’s the best part about warehouse management systems: almost EVERY business can utilise a warehouse management system and benefit from it. More or less every industry out there has a warehouse that needs to be managed, and there is no better way to manage a warehouse than by employing a WMS that will automate and streamline the fulfilment activity to the best extent.
Therefore, no matter what your industry is or what kind of business you run, a warehouse management system will help you evolve in the right direction and become a lot more successful.
All You Need to Know About an Enterprise Resource Planning System
Now that you know everything that there is to know about a warehouse management system, let’s turn and look at enterprise resource planning: what it is, what benefits it offers, and who should be using it for optimal results.
What is an Enterprise Resource Planning (ERP) System?
An enterprise resource planning (ERP) system is a type of software that helps you manage not one process but multiple processes that need to be taken care of on a daily basis, such as supply chain operations, compliance, risk management, project management, procurement, and accounting. So, whereas a warehouse management system is aimed towards managing a warehouse, an ERP is more targeted towards organisation-wide management.
The way that an ERP works is by providing you with different modules for each area of your business that requires looking after your organisation. For example, the enterprise performance management module within the ERP suite is catered towards planning, budgeting, predicting, and reporting on an organisation’s financial results. Similarly, there are modules for customer relationship management, human resource management, sales management, inventory management, and procurement management.
So, let’s think of it this way; whereas a warehouse management system particularly concerns itself with your warehouse, an enterprise resource planning system concerns itself with more or less everything.
Enterprise Resource Planning System – Pros
Getting the basics out of the way, it is now our turn to turn to the benefits offered by an ERP system. These include (but are not limited to):
Better business reporting
Business reporting is important as it helps you gauge the standing of your business in the best possible way. However, if you don’t have an ERP system that helps you stay in control with almost every aspect of your business, you may not have the right resources you need to make accurate reports. With the help of an ERP, on the other hand, you get access to all the right kinds of data which can enable you to create reports that are equipped with real-time information. What’s even better is that no matter how many different databases you are dealing with, you can integrate everything together and make reports that use data from all these different fields.
Better customer service
An enterprise resource planning system is also a great way to enhance and improve your customer service. With the help of the right ERP system, you get better access to customer information. This further helps you improve your response times, on-time delivery, and order accuracy. All in all, with the help of ERP solutions you can actually make tangible changes to your customer experience, which are bound to resonate with your customers and allow them to have a better impression of you as a brand. A business that is looking to leave a lasting impression should definitely consider integrating an ERP suite in their operations.
Optimised inventory costs
If you use the inventory module within an ERP, you can make adjustments to your inventory in a way that will help you save money. For example, an ERP may help you optimise your stock levels; if you use it properly, you will be able to understand just how much stock you need. This will help you avoid having too much or too little inventory on board, and in turn you can make sure that you are not draining your resources on overhead costs as well as that your customer fulfilment times are not longer than they absolutely need to be.
Better cash flow
Not only does an ERP system help you save money, it also helps you bring in cash faster. So, you can speed up your invoicing and billing processes, which further enables you to receive cash faster and make sure that you have more of it on-hand for your business. Finance management is one of the best things provided by an ERP system, and this is because with the help of an enterprise resource management system you can expand your margins and make sure that the money that you are spending is being spent on the right things that truly need the investment.
Business process improvements
The whole point of an ERP system is to automate and streamline as many processes as possible. This is a great benefit for business, because automation generally means more efficiency, smarter workflows, and more productivity. All of these go towards creating a better framework for your business to flourish. Not only is this a way to ensure that your business is in it for the long run, but it is also the best way to impress your customers and put in the effort to make them choose your business time and time again.
Who Can Use an Enterprise Resource Planning System?
Similarly to WMS solutions, ERP solutions can also be pretty much used for every business. However, since they are more far-fetched, bigger businesses and established organisations will benefit from them the most. So, if you are a business that has a wide range of departments and you are looking to improve how each of it operates, you should look into different ways you can use an enterprise resource planning system to help you achieve that.
How to Make the Most out of a WMS and an ERP
We know you have been holding your breath to get to know the best way to use both these solutions. Well, here you have it; the best way to use a WMS and an ERP is to use them together. Yes, you heard that right. By integrating a ERP with a WMS, you can make a winning combination that will help you take care of almost every area within your organisation.
In fact, in our opinion, integrating warehouse management with resource planning is more or less an obligation for businesses operating in the current fulfilment era. Your customers expect a lot from you, and the only way to ensure that you are providing what they look for is to have ever single ground covered.
If you pick the right systems, the integration between your warehouse management system and enterprise resource planning software will be as easy as cake. Luckily, Canary7 integrates with almost every ERP software out there, which makes us the perfect choice for warehouse management for your business!
The Bottom Line
A WMS software and an ERP system are two different software solutions. While a WMS is primarily and solely centred towards managing your warehouse, an ERP system will take care of almost every area of your business, including your warehouse. Whether you have an Unleashed, NetSuite or another ERP system, for the most advanced results, you should be integrating it with a new and discrete WMS system like Canary7, as it will allow you to benefit from better and newer innovation for your warehouse.
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