What is the difference between a Warehouse Management System (WMS) and an Enterprise Resource Planning (ERP) system?

Learn more

Many companies that are in a quest of hunting new technologies to expand and reach their optimum performance levels through efficiency are confused with words, ERP system and WMS-which can be very useful for large enterprises.

To help businesses with such confusion, this post examines ERP system Vs WMS.

Let’s begin with what is an ERP system and a WMS. 

Enterprise Resource Planning (ERP) system

Coming as a modular software system, ERP is designed to streamline your entire business operations from storing data to scheduling tasks. The system can help you unify your enterprise, simplifying your complex operations including accounting and finances, sales management, customer relationship, HR management, inventory management and more. 

An ERP system has the capability of automating your entire company breaking the barriers between different departments which will instantly improve the workflow and the efficiency. Maintaining the right balance among different processes from managing your employee files to your inventory, ERP system is an end-to-end software solution that brings a better control over your entire company.

Warehouse Management System (WMS)

Specifically designed and developed to manage all the processes and operations of a warehouse, WMS can be a life savior for any business that owns a big warehouse.  From material purchasing to stock controlling to order allocation to distribution, a WMS can be held accountable for the entire operation of a warehouse.

Usually, a WMS comes with features like advanced picking management, receiving management, automate cycle counting and scheduling management, order allocation management, slot optimization, billing and invoice management, shipment management and more to deliver a comprehensive service in managing your warehouse. 

Not only with operations but a well-designed WMS will also help you in managing your warehouse related employees, which enables you to manage your warehouse with lesser time and effort.

Since now you have a clear idea of what is an ERP system and WMS, let’s compare them so you can get even a better idea of these systems.

ERP vs WMS

Simply put, a WMS is all about your warehouse. With the sole objective of increasing the efficiency of your warehouse, the system allows you to reduce the costs in the supply chain process. It’s a best–of-breed stand along software that has functionalities only for managing your warehouse.

On the other hand, ERP is a system that has the ability to manage all the operations in all the departments of your company while creating one big hub where all the information will update in real time. The main focus of an ERP system is to bring a higher efficiency and productivity to a business while simplifying the business operations through automation. And most of the ERP systems feature its own WMS system which it will integrate with the main ERP system to maintain the connection between the other departments of the business and warehouse.

Once you know the difference between an ERP system and WMS the biggest question begs is that what suits best for my business, which is why we have listed few of the pros and cons of each system.

ERP system

Pros

Cons

  • Streamline your entire business
    An ERP system can help your business grow faster, rewarding you with a list of benefits by bringing all the departments of your business under one umbrella.

  • All in one package  
    When you implement an ERP system you only need one software to run all the operations from HR file management to inventory movement tracking. This can increase the company’s efficiency and accuracy of information.

  • Flexible
    As it comes as a modular software, you have the ability to build a customized software solution just for your business depending on the business needs you have. This enables you to add more systems to your existing ERP system as your business expands.

  • Centralized data
    An ERP system centralizes all the information of your business which enables any department of your company access information right from their screen.
  • Expensive
    Implementation of an ERP system is a major investment in capital as well as in time and money.

  • Difficult to manage changing priorities
    Once you implement an ERP system, changing priorities of your business cannot be done easily.

  • Weakness in-depth performance compared to best-of-breed WMS
    In some situations, the WMS module of an ERP system might not perform well as a best-of-breed WMS. For an example, a modular WMS might not have the same ability in in-depth product tracking as a best-of-breed WMS.


WMS

Pros

Cons

  • Solely warehouse focused
    A best-of-breed WMS systems are specially designed and developed to control warehouses.

  • End-to-end warehouse management
    From receiving, picking, item locating and tracking to distribution, a WMS will help you automate all your warehouse operations.

  • Easy traceability and better visibility
    When you have all your warehouse operations automated and have the access to information with a click, it gives you a better idea about inventory movement increasing the traceability of warehouse operations.
  • Multiple databases
    In a best-of-breed WMS, there will be several data bases to store your inventory data which will not be efficient as storing data in one centralized hub.

  • Isolated
    Though the best-of-breed WMS has a better grip on Warehouse management it will be isolated from the other departments of the company.
  • Difficult in integration 
    Though you can always integrate your existing WMS with your existing ERP it might cause data loss if your WMS is not well compatible with your new ERP.


An ERP system and WMS are completely different systems developed to tackle different challenges businesses face and help with company management. While ERP system can take control of the entire business operations WMS can help you only with Inventory management. Yet both of the systems can contribute to increasing the efficiency of your business operations through automation and real time information, saving you a lot of money and time in the long term run.   

Recent Posts