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

WMS is purely in inventory control, shipping and receiving to order fulfillment. Its support the day to day activities in tracking the inventory levels and stocks level. While ERP is an application ia a broad set of activities such as planning, purchasing, inventory, sales, marketing , finance and human resources. This is module helps the business to collect, store, manage and interpret the data on the systems.

Warehousing is one activity in the chain of supplies; ERP is for integration of all activities in chain of supplies.

 

Warehouse Management Software is defined as “a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, putaway and picking. The systems also direct and optimize stock putaway based on real-time information about the status of bin utilization. WMS typically lacks accounting, contact management and other functionality associated with an ERP system – thus WMS typically integrates with an ERP system.

What begins to become confusing is that many ERP systems also contain various levels of inventory management and some warehouse management features. For example, an ERP system may be able to track inventory locations but a distinction may be in the ERP software’s ability to make warehouse layout recommendations. If your business requires inventory management along with accounting, order entry and contact management, chances are you are looking for ERP software. If, instead, you require warehouse layout planning or in-depth product tracking with RFIDs you require warehouse management software. Many ERP systems can accommodate WMS features such as bar code scanning and warehouse shipping.

One thing to be wary of is the added cost of WMS. Warehouse management software can be several times more expensive than ERP software and is usually only required for larger businesses with substantial warehouses. A proper ERP system should be able to accommodate most inventory requirements including basic warehouse management at a far more affordable price. The “Amazons” and “eBays” of the world most certainly require WMS, however, many small and medium businesses will find that a modern ERP system provides all the functionality they require.

The scope of WMS is limited to warehouse only while the ERP is a multifaceted system having different modules for different departments.

A Warehouse Management System (WMS) is mainly used to manage the movement and storage of inventory. It tracks the movement of each inventory item such as the item being picked, packed, shipped and received. The key differentiated between ERP and WMS is that WMS systems provide intelligence on optimizing inventory based on real-time information. Reports can be generated to indicate the optimal location for each item to be placed based on historical data and trends. In addition, WMS are often standalone systems, requiring other modules like accounting and customer relationship management.

 

On the other hand, Enterprise Resource Planning (ERP) software automates business processes across all departments of a business including accounting, inventory management, and customer relationship management. The main purpose of ERP software is to facilitate the flow of information between all functional areas. ERP software has many of the same capabilities as WMS software such as tracking the process of inventory items - picked, packed, and shipped. It's important to know that ERP software is an integrated all-in-one solution - it's not necessary or recommended to have other systems working in conjunction with ERP software. Often times, it becomes counter-productive to have multiple software applications managing your operations. Having multiple applications will decrease productivity and efficiency through duplicate entries - and don't forget re-keying errors. Mainly saved times.

This is a very important to understand the difference between Warehouse Management System (WMS) and Enterprise Resource Planning (ERP) system.

Today's ERP systems have tightly integrated WMS systems, but the earlier version of ERP systems had a limited participation for WMS. This is the reason many companies installed a latest version of WMS software separately to manage their warehouse activities.

An advanced system takes into account the data of the product, status, lot, dates, dimensions, location, area, region, owner and inventory details. For this function, WMS determines which would be the best location to store the recently received product. But in ERP package such flexibility is not supported to determine the proper location. We have to be careful while selecting an ERP system with all these functions and must be evaluate thoroughly before implementing it.

An effective ERP package gives the possibility to assign tasks automatically to the staff using rules and parameters previously defined. An intelligently integrated WMS module in an ERP system can give directions to the workers in an organized way.

Agree with the answer of Mr. Farooq Ahmed. 

agree with all expert answers

 

Thanks

Mr. Imran covered the question .

WMS and ERP both are highly demanded System in warehouse industries. both system have plus point and also negative. if we consider about warehouse, WMS is better then ERP to operate warehouse system. WMS is quite fast and accurate comparing to ERP. in ERP we can not track user and performance but in WMS we can track user activities and performance too. WMS is quite easy to understand and to perform. ERP system have more paper work comparing to WMS. eg to move or transfer goods from one location to another location using WMS is very fast and easy in other hand ERP need much long process comparing to WMS. those goods which have expiry can not indicate expiry date under ERP system in other hand WMS have many option lot number, batch number, product date, expiry date, wight, notification( we can make notification option for getting low stock position or after pick for cycle count ) etc.  But both system are excellent.

ERP is enterprise resource planning this software can use in warehouses core business WMS made for warehouse management and it is more suitable to use in warehouses

Being in the industry for some time, I always get this question from the clients. And my answer is always an ERP system works at the document level. WMS is more of a process-oriented application to cater the day to day activities of Warehouse tracking, monitoring,  and fulfillment.

 

When ERP + WMS is implemented, ERP works as the Master system and WMS works as a subsystem.