ERP and WMS: Integration of the common good

21st March 2018 Written By Sophie Dell

ERP systems really are the backbone of any wholesale or distribution business, automating a host of business processes and enabling the flow of information between functional areas. Highly specialised ERP systems may include robust supply chain execution functionality. But more typically, ERP software only offers capabilities for managing inventory, such as tracking the process of items as they’re picked, packed and shipped. So many businesses, particularly those with high-volume and highly-automated distribution facilities invest in a dedicated warehouse management system, or WMS, to digitise and automate all aspects of their inventory control.

A WMS provides more sophisticated warehouse functionality that comes as standard with an ERP system. This enables organisations to continuously monitor products’ progress as they move in, through and out of the warehouse; keep the receipt, storage and movement of goods under control; and use real-time intelligence to optimise product location and shelf duration, helping them make smarter use of space.

The warehouse isn’t an island: other departments, such as manufacturing, purchasing and customer service, need to access warehouse data for decision-making. That means if you have a WMS, it needs to be able to talk to your ERP system.

Interfaced vs Integrated

The trouble is, most third-party WMS applications are only interfaced, rather than seamlessly integrated, with their ERP cousin. The two applications are therefore run on separate databases or even separate servers, and use middleware or batch export/import processes to physically shift data between systems. This leads to unnecessary complexity and data duplication, and the need for custom interface development inevitably incurs yet more expense. With two discrete sets of inventory information, it’s impossible for departments to obtain a single version of the truth.

Is the distinction between an interface and integrated ERP and WMS on a single platform really so great?  Well, that depends on how important it is to your business to ensure that orders are manufactured and shipped on time…

If your ERP and WMS are only loosely coupled, you won’t be able to:

  • Achieve the speed and agility your business needs to be competitive in today’s market
  • Provide management with the real-time information they need to make confident decisions
  • Equip your sales team to only make promises that your business can deliver
  • Enable your customer service team to keep customers in the loop
  • Update purchasing based on what has or hasn’t been delivered
  • Truly implement customer-centric picking strategies such as customer-driven shelf life combined with FEFO stock rotation
  • Eliminate human intervention (and the errors associated with data re-entry) with a straight-through transactional flow
  • Improve billing speed and accuracy.

With full integration, you effectively have a unified system that covers all your bases, cross-linked for visibility and control, giving you the benefit of streamlined, transparent, end-to-end business processes. Goods can be optimally organised to make best use of your physical warehouse space and employees’ time. And you’re able to feed the rest of the business with the single source of truth they need to make reliable, fact-based decisions and create value.