Making the Warehouse Part of the Team
Enterprise resource planning (ERP) system suppliers are known for offering tightly integrated software suites for back-office functions like order management and financials, but until fairly recently, they haven’t been known as leading vendors of warehouse management system (WMS) software.
That has changed, however, as the biggest ERP vendors have steadily built up their WMS and other supply chain execution (SCE) software offerings and sales.
Now, not only do the biggest ERP vendors who often sell to large enterprises offer advanced WMS, but a few industry specific vendors like The Systems House, Inc. that focus on small- to medium-sized enterprises (SMEs) are also enhancing WMS.
That’s quite a change from the WMS capability SME-focused ERP vendors used to offer, says Dwight Klappich, a research vice president with Gartner.
Until relatively recently, WMS modules from SME-focused ERP vendors tended to be little more than “bin locating systems” with some bar coding support, says Klappich. This allows users to locate inventory in a storeroom or on a rack in a warehouse, generate a pick list and execute a pick, but typically lacks the type of system-directed picking common to more advanced WMS, as well as rules for wave planning and wave picking.
Now this situation has changed, says Klappich. Today, the major ERP vendors have advanced WMS and many extended SCE capabilities. Additionally, a few SME-focused ERP vendors now offer WMS modules that go well beyond bin locating.
Klappich likens the ERP vendors’ improved WMS competency to how automakers have increased the quality of sound systems in new cars. A few consumers today might still opt for custom car audio, but the majority of new car buyers can usually find a factory audio option that meets their needs. “In general, the major ERP vendors are going to offer supply chain execution that perhaps is not full best-of-breed in all areas, but that is good enough for the vast majority of companies,” says Klappich.
But just where is the cut-off point between basic warehouse execution and an advanced WMS, and what might draw a SME to an advanced WMS in the first place? The answers to those type of questions require a closer examination of the WMS function sets SME-focused ERP vendors are offering and also hinge on the complexity profile of the SME organization looking for a WMS solution.
“It’s not just about size, but complexity,” says Klappich. “You could be a mid-sized electrical parts distributor, but have complicated warehouse requirements because distribution is your business. So, you might be a $200-million-a-year company, but need an advanced WMS.”
WMS can be assessed under a five-level stratification model spanning from simple bin tracking solutions at level one to advanced WMS with extended capabilities at levels four and five, says Klappich.
At level five, the WMS also needs proven interfaces to automated materials handling systems and a track record for success in highly automated facilities. The larger best-of-breed vendors, such as Manhattan Associates, JDA and HighJump, are on the highest strata, while SME-focused ERP vendors were generally once at the lower two levels.
But today exceptions to where ERP vendors lie on this stratification abound, notes Klappich, with a select few mid-market ERP players having enhanced their WMS solutions up to a solid level three or higher. At levels three and above, says Klappich, WMS includes features such as system-directed picking and putaway, extended rules and features for wave management, and support for methods such as batch picking and crossdocking. The more advanced WMS at levels four and five also have capabilities such as slotting optimization and task interleaving, as well as proven interfaces to automated materials handling equipment.
The MDS-Nx WMS Modules allow for level 5 capabilities.
The MDS-Nx WMS Modules allow for level 5 capabilities.
The integration factor
For many mid-sized companies with distribution centers, a WMS from an ERP vendor may fit the bill, The main advantage ERP vendors can boast to prospects is that their WMS offerings are already integrated with the ERP solution. While consulting services may be needed to properly configure the vendor’s WMS to a DC’s specific processes, the work of integrating ERP’s order and inventory data schemes with WMS already has been done by the ERP vendor.
Your company has everything under one roof, and it’s all working off the same database which takes away the integration issues and it also simplifies who to turn for support.
The bigger picture
ERP vendors such as TSH also offer e-commerce modules that integrate with ERP and from there to WMS functions. For some companies, part of the appeal of getting WMS from an ERP vendor is that they can also get an e-commerce platform from the ERP vendor. As the move to omni-channel fulfillment intensifies, this bundling will help ERP vendors and int turn their clients.
With the whole omni-channel world we are moving toward, there are many interactions happening, and many touch points in terms of where goods need to move. And as that complexity increases, the benefits of having all of these functions together within a single architecture—e-commerce, ERP, and warehouse execution—gets multiplied.
As you look at what your warehouse needs are, make sure to take a look at what is needed now and what the future needs are. The MDS-Nx System with it's integrated WMS offers features and functionality at level 5 but allow you to start a a level 1 and move at your own pace are your companies and your companies' needs grow.
For more information on TSH or MDS call The Systems House, Inc. at 1-800- MDS-5556. Or send a message to firstname.lastname@example.org
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