By Roberto Michel
June 01, 2015
Enterprise resources 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, 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 of the ERP vendors 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 types 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.”