Opinion: ERP vs WMS

The emergence of the Software as a Service (SaaS) model has provided companies with an alternative to the exponential costs involved in having to buy, build, and maintain IT infrastructures. Today, organisations can subscribe to services built on shared infrastructure via the internet. The SaaS model has gained momentum because of the many benefits it offers to businesses of all sizes and types.

The model holds great cost and efficiency benefits for all sectors with the complex world of warehouse management being no exception.


Technology advancements have been the driving factor in the viability of renting software solutions from companies that make them available through hosted environments.  Some of the benefits include the fact that solutions are easily deployed as software is hosted & maintained centrally. Infrastructure is hosted & shared - the hosting of servers provides an increased level of security, fire protection and infrastructure redundancy while taking away from the client the necessity of setting up server rooms and back-up environments. The IT resource requirement is significantly reduced with all system administration tasks being executed and managed centrally.

Service levels are a priority. Providing a solution as a service enables the vendor to improve support with timeous upgrades and produce a better working relationship going forward.  Support costs are lower due to centralised servers being managed and response times are much shorter – basically it’s as though support is actually always on site.

The SaaS model has proven in general to have as much as a 70% lower total cost of ownership when compared with traditional on-premise and purpose built systems. The monthly rental method of payment removes software capex requirements and the operational model is more tax efficient.

How do ERP stock systems stack up against WMS?

When discussing warehouse management software, there is often confusion between the inventory management functionality - provided by many of the ERP systems - and that provided by a full Warehouse Management System.

Typically, the inventory management functions view the stock from an accounting perspective, using accounting principles, without considering the complex operational processes. By using a best of breed warehouse management system, businesses can optimise many of the processes, achieve greater accuracy and visibility and control the movement of stock through the facility.

Why is an ERP not as effective as a dedicated WMS

It should be noted that one fundamental difference between the two is that ERP is transaction based and the WMS is an execution level system.

The WMS module of an ERP system is one of many areas of focus for the providers of ERP software, whereas with companies providing WMS this is not the case, the provision of the warehousing software is their core focus and competency. What differentiates an ERP warehouse function versus true WMS functionality is that the latter offers a fully integrated system across all operations.

In examining the functionality of a WMS versus that of ERP several questions need to asked, including:

·         How closely does the system functionality fit to actual movements & operations taking place on the floor?  

·         What controls, checks & balances are there on an operational level to ensure that the operations are running effectively i.e. requiring a real time environment to achieve this?

·         Does the ERP provide on an operational level to ensure ops are running effectively?

·         Can the ERP measure forklift and other utilisation?


From a (Best-of-Breed) WMS perspective the answer to all of the above is “yes”. A WMS yields real value and ROI by providing:

·         Fully integrated Wi-Fi service connectivity / integration as opposed to paper based tasks.

·         Real time task interleaving.

·         Load building and scheduled release of work to the floor.

·         Tracking of specific products into multiple physical locations within the warehouse.

·         Capability to track batches through the warehouse from receipt to storage to customer.

·         Multiple packing configurations and bar code labelling per pack configuration.

·         Accurate staff performance capabilities where time taken per activity can be monitored and used for capacity planning.

A WMS is so much more than simply scanning stock in and out of the warehouse system.  It can and does, closely fit the system functionality to actual operations on the floor.  It provides all the checks and balances necessary to guarantee that ops continue to run effectively and measures utilisation of labour and key assets such as forklifts.

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Contributed by: Steve Mallaby, CEO, Cquential Solutions