Understanding The Difference Between ERP And WMS

If you’re working in a supply chain, you must be familiar with the terms like Enterprise Resource Planning (ERP) and Warehouse Management System (WMS). But for those who are new, these two entities might be very confusing. In fact, there’s quite a lot of misconception about ERP and WMS even in the supply chain management industry. Although many of the present day ERP systems also come with the WMS integration, the two entities are entirely different.

Through this blog, we try to give you a closer look at “what these systems really are and how they work.” Later on, we’ll talk about whether these two systems should work unanimously or separately. So, first things first.

Also read Choosing The Right ERP Software For Your Business.

Enterprise Resource Planning (ERP)

ERP is a business management software that streamlines the business operations of an organization and help them keep a track of all the business activities. An ERP software is a coalition of several individual Enterprise software modules that work together to maintain a perfect balance between different business processes such as Inventory control, product planning, accounting and distribution. All these ERP software modules are purchased separately based on the requirements of a company. This is because each module focuses on a particular field of operations. Some most common ERP modules are:

• Product Planning

• Material Purchasing and Management

• Inventory Control

• Sales and Distribution

• HR Management

• Accounting and

• Finance

The basic goal of an ERP system is to create a centralized business model wherein all the business related information is segregated into different groups that are interconnected in order to maintain a steady flow of data throughout the organization.

Warehouse Management System (WMS)

In contrast to ERP, WMS is an inventory tracking software which monitors the movement of raw materials stored in a warehouse. In the same way as ERP, the Warehouse Management System facilitates the management of warehouse related tasks in a centralized way. For instance, a WMS software can be very helpful in tracking the inventory level of warehouse. In this way, if any new item is added or removed, the system will be aware of that. The same thing will be updated in the system in a matter of seconds so that the warehouse workers and business officials would know how to optimize the existing resources. A WMS system can either be used as a standalone solution for all the warehouse related affairs or it can be integrated with an ERP system to improve the overall efficiency.

Compared to their traditional counterparts, the modern day WMS systems are quite complex in structure and being data-intensive, they produce massive amounts of data on daily basis. So unless you have a dedicated ERP module for handling such enormous data, you need more manpower to handle the warehouse operations. That’s why most of the present day ERP systems are integrated with WMS to make the business operations fast, smooth and way more efficient.

So all in all, WMS can be a part of ERP but the two should never be considered the same thing. ERP governs the entire business of an organization through a series of modules while WMS only deals with the warehouse related errands.