Manufacturers that are on a mission to increase operational efficiency are ramping up efforts to integrate warehouse management system (WMS) software with transportation management system (TMS) software -- despite the fact the two technologies have traditionally operated in silos.
Through WMS-TMS integration, manufacturers and distributors are aiming to bolster end-to-end visibility across warehouse and shipping functions, resulting in a more holistic view of operations that should lead to better coordination and planning, experts say. Companies are aiming for a range of benefits with this integration, including the ability to optimize warehouse space and the reallocation of inventory, reducing the time and costs related to transportation and external routing, and the ultimate goal: improving delivery times for customers.
While efforts to create synergy and improve efficiencies between the warehouse and logistics operations have been on-going, most have been from the point of view of either the warehouse team or the logistics end. These efforts have lacked an approach that balances optimization with a shared set of goals, according to Chad Collins, chief marketing officer and WMS channel general manager at Accellos Inc., a provider of WMS software.
"In the past, it's either been a TMS-driven process or a warehouse-driven process," Collins said. "Now, companies are being much more thoughtful in terms of cross-optimizations between the warehouse and transportation, which drives tighter integration and more providers offering both set of capabilities."
WMS-TMS integration means faster delivery
Customer demand for tighter delivery windows, soaring transportation costs and the dynamic nature of business today are some of the key drivers pushing manufacturers to consider some level of integration between the two platforms, according to industry experts.
"It used to be that regardless of industry, it would be fine to get a customer something in a week," noted Tom Singer, principal at Tompkins International, a supply chain consulting company. "Now, you have much tighter delivery requirements; in most cases, customers want something in two days or they want it tomorrow. That promotes a much more dynamic paradigm that really dictates the need for tight coupling between WMS and TMS functionality."
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Operating as siloed systems, typically with oversight from separate organizations, WMS and TMS have traditionally had little to no coupling and took a relatively static approach to planning, according to Ken Mullen, a partner with supply chain consulting firm enVista LLC. In a typical workflow, an ERP or host system would send a batch of orders to a TMS, which would create a route and stop sequence based on those orders. The TMS would then send that information off to a WMS, which develops the pack and load strategy based on the routing sequence, he explained.
With WMS-TMS integration, the TMS has information on what's being manufactured and where it is in the warehouse, enabling the allocation engine to create a real-time load plan for the trailers, he said.
"Without interfacing the WMS and TMS together, you know what orders you have to process, you can pick them and stage them, but you don't necessarily know how they should be oriented on the truck going outbound or if the truck is readily available," Mullen said. "The benefit is less space required in the warehouse for staging in addition to less steps involved in picking product, staging it, orienting it on a trailer and loading."
3PLs and WMS
Given the potential benefits, companies employing third-party logistics (3PL) providers for transportation and fulfillment are looking to create similar integrations between their internal WMS software and the TMS packages used by the 3PL, noted Singer. "This provides an opportunity to re-plan on the fly rather than going with a more static plan," he said. "It allows both the warehouse and 3PL to react much more quickly to changes as well as respond more quickly to order demands with a tighter delivery model."
Companies that have a sophisticated ERP package should consider making that the central control point as opposed to point-to-point integration directly between WMS and TMS for greater flexibility, said Gavin Clark, chief commercial officer for Snapfulfil.com, a SaaS-based WMS provider. "It allows a customer to change a WMS or TMS, because there is only one integration point to rebuild and remap," he explained.
In fact, some supply experts will argue that complex, point-to-point integrations are overkill between these two core systems. "You can simply run a report in the TMS and look at what needs to go out on a certain day and plan the WMS accordingly. You don't need tight integration to do that, noted Ian Hobkirk, managing director of Commonwealth Supply Chain Advisors, a supply chain consultancy.
Hobkirk noted that while WMS-TMS integration was a top priority years ago among his clientele, he's seen a drop off in interest, in part because of cultural and organizational issues, which make it difficult to get buy-in on a shared implementation.
"The people buying TMS and WMS are different people and they invest in the software at different times and for different reasons," Hobkirk said. "It's rare that's there's a project where a firm is jointly selecting a WMS and TMS at the same time."
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