ERP warehouse module add-on or WMS?
Do ERP warehouse modules have enough functionality? Or will a WMS provide better management of your supply chain?
When your warehouse operation reaches a certain size or volume of orders, managing it using spreadsheets becomes untenable. It’s at this stage that specialist warehouse software can help make things more efficient.
Broadly, there are two ways a supply chain business can use IT to manage its warehousing. Since most companies will already be using financial software or an enterprise resource planning (ERP) system, they may choose to use that provider’s add-on warehousing module. These can come as part of the standard software, as an optional module or as part of an upgraded version of the basic software.
The second method is to implement a separate, best-of-breed warehouse management system (WMS) that integrates with your ERP or financial software. These systems do a lot more than the add-on modules, providing more comprehensive warehouse management functionality.
Each choice has its own place. You need to select the route that is right for your particular situation and dependent on your company’s needs.
To help you decide which course to take, we look at the different approaches along with their advantages and drawbacks. We also explore four specific financial and ERP software providers and compare their add-on warehouse modules with the best-of-breed WMS solution, Körber WMS.
Comparison of ERP warehouse modules with warehouse management systems (WMS).
ERP warehouse add-on modules.
Central to the entire technology ecosystem, ERP software runs across your whole business. It offers a comprehensive solution that automates and streamlines business processes, provides insight into your company and integrates with other business software to manage your operation efficiently.
Based on a single, shared database of information for your entire company, your ERP is a powerful, real-time tool. At its core, it manages the financial aspects of the business, but systems vary in functionality. Most ERPs have additional capabilities for managing supply chain operations, such as sales and customer management, purchasing and stock control, business intelligence and analytics, marketing automation, human resources, ecommerce and manufacturing. As a tool, it is key to enhancing visibility, productivity and profitability.
Originally, ERPs were designed to be installed on-premises – on your local servers. These days, cloud-based solutions are the norm. Vendors offer comprehensive platforms and solutions on a SaaS basis, which you can access remotely through internet-enabled devices. Your data is stored securely in the cloud.
Some ERPs have basic stock management functionality. But for most, if you have more complex warehouse needs, you need to upgrade your software or buy an add-on module. Again, the features vary by provider, but will often cover additional aspects such as: advanced stock management, batch and serial traceability, receiving, putaway, replenishment and support for various picking strategies.
Here, we will look at the warehouse management add-ons for these four key ERPs: Sage, Oracle NetSuite, Microsoft Dynamics 365 and SAP.
Warehouse management systems (WMSs).
A WMS is specialist software that manages activities across your warehouse. It directs the entire warehouse and its operational processes – receipt, putaway, stock management and tracking, labour management, picking, fulfilment, shipping, despatch and returns.
A WMS integrates with other business applications. The key system it connects with is your ERP, to update order information, customer records, invoice details and to synchronise stock data.
It can also integrate with your Warehouse Control System (WCS), which directs your machinery and automation, including carousels, conveyors, automated storage and retrieval system (ASRS), voice and light picking technology, and robotic equipment.
A WMS will also link with your Transport Management System (TMS) for outbound logistics. And finally, it can integrate with other specialist systems, like planning and forecasting, allowing for more sophisticated stock optimisation.
Our favoured WMS is Körber WMS. It is a fully featured system, with sophisticated functionality that expertly handles complex workflows. It brings cost savings, improved efficiency and greater productivity to your warehouse operation.
How do they compare?
What is the difference between ERP and WMS?
Warehouse add-on modules for ERP systems have less functionality than a full WMS. Replete with more features, a WMS is capable of better optimising your warehouse processes and streamlining your workflows – especially for any warehouse that has non-standard workflows or one with more complex operations.
A WMS will vastly improve order fulfilment, manage your workforce more effectively, and provide accurate and live stock data. Together, these enhance productivity, reduce your costs and give rise to a more efficient warehouse.
With the added functionality though, there comes a greater cost. Deploying a WMS requires a careful consideration of the costs versus the savings to be made. There will be upfront software and implementation costs, plus ongoing licence fees. These need to be weighed against the savings that you will get with fewer errors, enhanced productivity, optimised workload management, reduced stock holding, increased sales volumes, better stock accuracy and improved customer service.
Körber assessed the results that its customers were achieving. These figures represent the average, benchmark cost savings that typical Korber WMS users see:
- Reduced labour costs by 20-30% thanks to greater productivity using a lower headcount.
- Reduced stock holding and have around 20% less money tied up in stock.
- Stock can be located 50-100% faster.
- Warehouse space savings of around 15% with system guided putaway.
With insight into the return on investment you can achieve, it’s clear that in many cases, the savings that a WMS makes will outweigh the costs of implementing it. Some businesses can achieve a return on their investment in just months.
Functionality of ERP warehouse modules.
This section looks more closely at the functionality of selected ERP supply chain software.
Sage.
Sage is a popular accounting package, often used by businesses from the time they start up. Companies will then typically upgrade to more advanced versions as they grow. For businesses that have grown beyond “small”, there are three relevant business management packages. These are Sage Intacct, Sage 200 and Sage X3.
Sage Intacct Inventory Management.
Sage Intacct is a cloud-based financial and accounting package. It can be extended using additional modules that enhance its functionality. Additional modules include purchasing, project accounting inventory management and revenue recognition. The inventory management module tracks and manages stock and can be used for warehouses across multiple locations. It has features for receiving, transferring and shipping stock, as well as for kitting.
Sage 200.
Sage 200 is aimed at companies turning over £1-20 million, or typically with 10 to 200 employees. There is a Standard version that has essential stock capabilities and a Professional version with more customisable features. There is no additional inventory management module for Sage 200. Instead, each version comes with inherent warehouse and stock features that include: stock management, serial and batch number control, stock monitoring and traceability, drop shipping, multi-location management of replenishment, sales, reporting and stock takes.
Sage X3 Inventory Management.
Sage X3 is an ERP designed for established businesses. It also has standard supply chain management capabilities. The included features for stock management and warehousing are: multiple warehouse management, stock movements and transactions, real-time inventory monitoring, product data and multiple units of measure, location management, stock balances, replenishment, inter-site transfers, lot tracking and traceability, returns, stock enquiries and allocations, RF data acquisition, and access via mobile app.
NetSuite WMS.
NetSuite is a cloud-based ERP from Oracle. It is a popular ERP system, used by more than 31,000 businesses across the world. It is entirely updated in the background – with major updates twice a year and ongoing bug fixes and maintenance.
As a NetSuite user, you get some simple stock management functionality as standard with the native ERP package. This includes stock for multiple locations, bin tracking and cycle counting, plus mobile directed putaway and picking.
NetSuite WMS features.
The optional NetSuite WMS module adds more features, as follows:
- user defined putaway and picking strategies
- directed putaway/picking
- wave management
- dynamic replenishment
- automated cycle counting
- advanced shipping notice (ASN) handling
- kitting
- mobile radio frequency (RF) barcode scanning
- task management
- returns authorisation receipt
Dynamics 365 Supply Chain Management.
Dynamics 365 is an ERP system from Microsoft that was launched in 2016. Microsoft products are familiar and well-liked by millions of people around the world.
There are more than 20 optional apps that make up Dynamics 365, including for finance, sales, marketing, commerce, HR, project management, small businesses and more. They are priced separately and offered on a monthly subscription basis. You can add apps individually by user.
Dynamics 365 warehousing features.
The Supply Chain Management app has a specific Warehouse Management module. Some warehouse features also come as part of the Finance app. The warehouse features offered across both of these include:
- supports source documents for sales orders, returns, transfer orders
- flexible, inbound and outbound material workflow support based on queries
- control of location stock limits and volumetrics
- stock properties controlled by stock status
- batch and serial item support
- various item receiving capabilities
- multiple picking strategies
- ASN receiving
- pallet/container types
- system-directed work sequencing
- advanced counting capabilities
- label printing and routing with Zebra ZPL support
- manual and automatic stock movement
- worker management
- wave processing
- manual packing and automatic containerisation
- cluster picking
- slotting
- simple cross docking
- replenishment strategies with priorities-based configurations
- Android mobile application with voice picking, barcode scanning and automated cycle counting
SAP Extended Warehouse Management.
SAP has a number of ERP solutions, including SAP Business ByDesign, SAP Business One and SAP S/4HANA Cloud.
Each of these ERP products has varying degrees of stock and warehouse management functionality. But SAP Extended Warehouse Management (EWM) adds many more features, providing extra warehouse management and control.
SAP Extended Warehouse Management features.
SAP EWM can be deployed either on-premises or in the cloud. Its added features include:
- ASN receiving and validation
- receipt and dock management
- putaway determination – to bin level
- internal routing and movement tracking
- deconsolidation of receipts for sorting and packing before putaway
- returns management
- receipt directly from production
- in-warehouse transportation management
- stock management
- stock processes and record verification
- slotting, replenishment, rearrangement, and stock consolidation
- kitting
- automated warehouse billing
- opportunistic and planned cross-docking
- units of measure management
- labour planning and management
- packaging specification
- batch, serial and catch weight management
- dock appointment scheduling
- yard management
- quality management
- picking from goods receipt
- order creation
- wave management
- optimal route and picking bin determination
- optimal work assignment
- picking management
- packing management
- staging and loading management
- direct outbound delivery
- production supply
- production staging and consumption
- supports multichannel fulfilment and distribution
- analytics
- mobile app for smartphones
Key functions of Körber WMS.
Körber WMS is a full-featured warehouse management system. It integrates with all the ERP systems we’ve looked at above to provide far more sophisticated warehouse and stock management functionality.
Many ERP warehouse management add-ons are focused solely on stock management, tracking stock, analysing movements and so on. But they have fewer warehouse features, like those that optimise picking or replenishment processes, for example. With a WMS like Korber WMS, the full range of warehouse functionality is available. It meets often quite complex warehousing and stock requirements, allowing you to truly optimise workflows, reduce costs and optimise your warehouse efficiency, productivity and profitability.
Korber WMS has a comprehensive range of standard, out-of-box functionality. But it is highly customisable and extensible, allowing you to tailor workflows and processes for more complex needs.
Stock accuracy.
Your stock levels will always be accurate and up to date, especially if you choose to use RF technology, which delivers a high level of stock accuracy. It streamlines tracking and eliminates manual data entry, a key point when human error can occur.
Customers of ours have quickly achieved more than 99 per cent accuracy and have eliminated annual stock takes. With cycle counting, errors are eliminated and any discrepancies are quickly identified and can be swiftly investigated and remedied.
Advanced picking.
Korber WMS can use a number of different picking strategies, giving you lots of flexibility to implement the best method that will get your orders out as quickly as possible.
The warehouse add-on modules for ERP systems will typically determine picking paths based on location codes, sorting them into the most effective path. But with Korber WMS, you can create other picking strategies. These advanced picking rules give you more options to create even greater efficiency in your warehouse. Aside from standard, discrete picking, you can take advantage of batch picking, zone picking, wave picking or waveless picking. You can even execute stock strategies like FIFO/FILO/LIFO/LILO and optimise your pick paths according to your own needs.
Putaway.
The putaway logic used in WMS software is more advanced than you find with ERP add-on modules.
With ERP warehouse modules, you can typically only manage one primary putaway location for each SKU. But with Korber WMS, you can define and create your own rules that will maximise the use of your available warehouse space. You can commingle products or segment your stock across separate warehouse zones. This might allow you to stock more SKUs, or to carry greater volumes of products, better placing you to meet customer demand.
Slotting.
Another feature that is often only included in WMS solutions is slotting. This optimises the storage of goods in your warehouse. The feature locates your faster-moving products in the most accessible areas and places slower-moving ones more out of the way. This speeds up putaway, replenishment and picking operations.
The feature in Korber WMS functions with only a minimum of information and you can select your own slotting strategy.
Task management.
With extensive work prioritisation and task interleaving capabilities, a best-of-breed WMS software solution is superior to ERP add-on modules. By reducing unnecessary movements in the warehouse, human effort is spared and orders go out faster.
Various warehouse tasks can be combined and are automated by the WMS. A worker may combine an order pick with a putaway task in one trip, for example. Where bin locations are close, this will be faster than separating the two tasks into separate trips. In some warehouses it is more efficient to combine picking and packing into one task, done at the same time, by the same operative. Other tasks can be combined, such as replenishment, stock transfer and cycle counting.
Few ERP warehouse add-ons have prioritisation functionality or task interleaving.
Traceability and serialisation.
Some products like food and drink or pharmaceuticals are subject to exacting usage timeframes or have regulatory requirements that mean they must be traceable through the supply chain. If you supply these products, batch and lot traceability features are vital so you can address any issues with your produce or goods.
WMS solutions provide batch and product traceability that allows you to quickly track products back through the supply chain. You can track stock using lot control as well as dynamically tracking other item attributes, including expiration date, serial number, lot number, batch number and so on. Korber WMS handles up to nine different attributes and you can select one or more of these when locating stock. You can easily pinpoint an out-of-date product or the origin of a manufacturing problem and then inform the relevant partners within your supply chain.
Using serialisation, you can create unique serial numbers for your goods. This helps address counterfeiting and provides another method of tracking products before they arrive, while they are in your warehouse and after they leave. Full serialisation lets you track individual items in granular detail and provides enhanced recall management and quality control options.
Each unique serial number encodes the history of the item, from the time it was manufactured, then received by you, through to the delivery to distributors, retailers and finally the end customer.
ERP add-on modules do not always have traceability and serialisation features – or may only have basic functionality.
Multi-level container management.
One feature of Korber WMS, multi-level container management, lets you deliver to customers using multiple units of measure. As you can provide item-level container details, you can provide advanced shipping notification (ASN) information to your customers. ERP warehouse add-on modules do not usually support this amount of detail, only providing single-level container management, and often only at pallet level too.
Other advanced features.
Many other features that you get as standard in WMS solutions like Korber WMS are not seen in ERP module add-ons. You can also integrate advanced automated tools that lower costs and reduce errors, delivering better efficiency. This advanced functionality includes dock scheduling, dock/berth scheduling, yard management, transport and load optimisation and less than truckload (LTL) shipping.
Superior functionality and positive business impact.
For a small distribution operation with only basic warehousing processes and needs, an ERP add-on module may be sufficient.
But businesses of all sizes come to us having looked at implementing their current ERP provider’s add-on WMS module. Typically, they have discovered that these types of add-ons do not offer the full functionality to meet their ambitious growth plans. Instead, they choose to implement Korber WMS for its superior functionality and excellent return on investment. Even those with under 10 warehouse staff find that a dedicated WMS will improve their productivity and efficiency.
If you want to maximise your profitability using a WMS, then you need the advanced functionality that will propel your business forward to meet its operational KPIs and financial objectives. A solution that lacks the functionality to meet your customers’ needs will not help you to succeed.
In carefully defining your business and operational needs and evaluating your options, you will likely find that only a WMS will have the features to facilitate the superior level of warehouse management that will give you long-term competitive advantage and performative success.
A specialist WMS solution brings positive impacts for distribution businesses. With greater accuracy, better productivity and reduced costs, using a WMS will bring enhanced efficiency and profitability to your warehouse operation.
Read more here: The ERP warehouse module vs. best-of-breed WMS