Best-of-breed WMS vs. ERP advanced warehouse management

Steve Phillips

Not long ago, very few ERP packages offered the depth of software functionality required to effectively manage the warehouses or inventory locations found within many companies. Back then, the typical ERP software in this area addressed only basic inventory transactions, pick slip generation, product allocation, shipment processing, barcoding and perhaps a few other items that could be considered warehouse functions. In other words, the systems were primarily designed to support stockroom or raw-material-type warehouses, not complex or automated finished goods distribution centers. 

Due to ERP software limitations, many niche best-of-breed warehouse management system (WMS) vendors developed software that successfully filled this gap. No doubt, when selecting a software package the functionality within the system is a key to success, and one should never compromise important software needs. But it might be time to give the warehouse module within your ERP package another look -- particularly if yours is a manufacturing company. Here are a few reasons why best-of-breed WMS might be the right choice.

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Many ERP vendors have significantly enhanced their products in this area, or purchased and integrated a WMS another vendor originally developed. This means support is now provided for higher-end functionality needs, such as inbound materials put-a-way, license plates, space optimization, automatic replenishment to forward bays, outbound order planning, wave picking, radio frequency and data collection integration and cross-docking.

Also keep in mind, even if it is necessary to make a limited number of custom software modifications to incorporate capabilities not in an existing ERP solution, this can be better than incurring the additional costs associated with a third-party WMS.

Business integration out of the box with best-of-breed WMS

With best-of-breed WMS, extensive software development is typically necessary to interface the system to other business applications. The time and money to accomplish this is usually underestimated. Also, considering the best way to accomplish an interface with the WMS, warehouse personnel may be required to work within the WMS and other systems in order to perform their jobs on multiple databases.

For example, warehouse processes in most manufacturing companies must integrate with sales orders, purchasing, work orders and inventory. Also, interfaces may be required with quality management systems, transportation management and equipment maintenance. With ERP, this integration with the warehouse module is part of the standard product offering.

Reduced IT costs

A third-party WMS is usually more expensive to acquire compared to a similar module an ERP vendor offers. This also implies higher annual maintenance fees. In addition, some third-party WMS packages run on a separate system infrastructure and have dedicated IT support personnel. This results in support redundancies and can substantially increase the total cost of ownership.

View the next item in this Essential Guide: How to examine and deploy new WMS technology or view the full guide: A guide to warehouse management systems technology

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