ERP and WMS
ERP (Enterprise Resource Planning) is a business automation strategy that optimizes the planning and management of external and internal resources, and allows you to create a unified information environment on the basis of the enterprise, in which employees (even remote departments) can interact simultaneously and effectively. ERP-system is the software that implements this strategy. Today the most popular ERP-systems on our market are 1C, Microsoft, Galaktika, SAP and Oracle.
WMS (Warehouse Management System) is a warehouse logistics automation system designed to optimize warehouse processes.
Both ERP and WMS systems are implemented to automate certain processes of an organization. Thus, they are designed to optimize the operation of the enterprise and make the overall business more profitable.
ERP is a software package focused on the management and control of all enterprise resources. It is the best solution for the whole production, and is especially relevant for large companies with many employees and departments.
WMS is designed exclusively for the warehouse. It contains a whole range of options for warehouse management, which you can work with immediately after installing the software.
ERP has a predominantly modular structure, and a separate module is responsible for the warehouse. WMS is a separate program, but as a module it can be successfully integrated with ERP-system.
Another difference is embedded directly in the name:
WMS-system manages resources (users), while in the ERP concept users work in the system.
WMS and ERP have different functionality. WMS-system performs tasks in real time, it does everything itself with minimal involvement of personnel, the scenarios of operations are prescribed in advance, and the mechanisms of warehouse processes are worked out. ERP-system receives the result by the results of operations in WMS or warehouse module.
Archiving in each system occurs at different intervals: in WMS it is on average once every 10 minutes, and for ERP it is enough 1-2 times a day.
What is an ERP system
ERP-system is a software product that allows to optimize the activities of representatives of different specializations. It has a complex architecture, but the system is applicable to almost any business area.
This system concentrates all data on the results of optimization of different processes (financing, labor management, management, distribution, etc.), thus building a unique information space. Important data can be stored and processed for several years.
What the ERP system consists of
It distinguishes CRM for external interactions and PLM for internal cycles.
ERP-system has a special “architecture”:
- platform (core and basic functionality), only developers can work with the platform code;
- database (management of critical information);
- modules (components that can be connected to the system if necessary, but generally work separately).
Benefits of a modular ERP system
Modular structure is a characteristic feature of an ERP system. Modules are subdivided into:
- internal use modules – used by company employees, CRM (client-company);
- external modules – clients, partners, product users;
- connectors – a ready link for communication with third-party applications. Their purpose is data exchange.
The advantage of such a system is that modules can be connected/disconnected painlessly.
An ERP system is a kind of constructor, consisting of a core and a set of modules that can be connected depending on the needs of the business, and in a short time and with virtually no problems in the integration process. And now about the advantages:
- User-friendliness – there is no unbreakable connection between modules, as the boundaries of each module are clearly marked; if you disconnect some (unnecessary at this time), the rest will continue to work in the usual mode.
- ERP-system is unique in that it requires almost no modifications and additional writing of program code to expand the field of activity. For this purpose, modules have been created that implement almost all options necessary for enterprise automation.
What is the ERP system used for?
An ERP system is multifunctional due to its complexity and multi-component nature. It allows scaling the business in line with its growth, there is a possibility of virtual construction of subdivisions, it is possible to constantly monitor the work of personnel. But the main purpose of ERP implementation at an enterprise is a unified database that pulls up information from all the company’s divisions, thanks to which optimal communication between different departments is possible, and the percentage of errors generated by the human factor can be reduced.
How do you know it’s time for ERP
It is important for a company to keep track of the slightest changes in market conditions and consumer preferences.
Business is growing, processes are becoming more complex, and integration between programs cannot cope with urgent tasks – ERP is needed.
- Human resource is unnecessarily wasted on mundane operations and processes that can be automated.
- Delays in getting timely information to make immediate decisions.
- A multitude of programs and products within the system that interact poorly or inefficiently with each other, making communication between departments difficult.
- No off-site information processing function.
Classification, types, structure of the concept of modern
ERP-platform
Modern ERP systems include 3 levels:
- Database;
- various applications;
- graphical interface.
As for the classification, the most complete looks like this:
- by purpose: general and industry-specific;
- by type of organization: private, hybrid, public;
- by place of information storage: cloud (external servers) and internal (a certain server, information from which is not copied);
- by architecture: unified (one-piece) and modular;
- by license type: open source and proprietary (“private”, proprietary).
Implementation features
First of all, you should turn to highly qualified specialists with a clear understanding of business processes – you can’t create and implement an ERP system by yourself. There are two options here: a ready-made platform and a more expensive option – to order an individual project.
It should also be understood that ERP is not a universal program for all occasions for any business. It is necessary to understand what you need it for, subjective decision making is inadmissible here.
ERP-platform is quite expensive, so soberly assess your desires, needs and capabilities. The system should bring additional profit or save time and labor of personnel, but not reduce income.
The installation and implementation should be monitored by the management.
Negative sides of implementing such a system
Implementation of an ERP-system is not a quick and rather difficult process, often there are difficulties in its mastering by the staff.
- The need to install powerful expensive equipment (reliability of the server part is not discussed, because in case of power failure or other force majeure, the optimal work of the entire company is jeopardized).
- You need a well-designed security system, on which you will also have to spend a lot of resources; due to the peculiarities of the system, the access level of each department or even an individual employee must be different.
ERP requires frequent updates of processes due to the wide functionality, and this can stall the work of individual departments. In addition, system updates are “tied” to legislation.
To summarize, we can say that WMS and ERP are completely different systems, customized for specific tasks. And just as you should not expect ERP functions from a WMS system, you should not expect correct processing of warehouse-type tasks from an ERP. And, firstly, when choosing a solution for warehouse optimization, you should look at the systems from such angles as:
- architecture and performance (since ERP and WMS belong to different classes of systems)
- cost-effectiveness of implementing a module or a full automation system
- experience of the developer and expertise of the ERP team and the WMS provider’s team in warehouse logistics
- functionality of the solution and coverage of tasks at the current stage, and taking into account business and RC development
- cost and usability of the system
Only after a comprehensive assessment of these aspects can be analyzed, and come to a decision that will be the most optimal for the company and the warehouse as a whole.
