ERP expands alongside WMS

An enterprise resource planning (ERP) solution brings together the key transactional flows for a company—customer orders, production plans and management, distribution requirements, and financial management. But, ERP doesn’t do everything.

Though ERP’s value as a transactional backbone is well established, best-of-breed solutions continue to be a good fit for some functions. Warehouse management system (WMS) software needs are one of them, at least for some companies.

Even though many ERP vendors have developed advanced WMS as part of their suites or have acquired WMS vendors, best-of-breed WMS vendors have hardly stood still, coming out with advanced functionality for labor management, analytics, retail store operations, and improved capabilities in the warehouse execution system (WES) software layer that sits between WMS and automated materials handling systems.

The upshot is that despite all ERP can do today, ERP providers still need a strong strategy for addressing the supply chain execution needs of companies. They either have to build in advanced functions that didn’t used to be part of ERP or be very flexible in their integration. While the biggest ERP vendors have broad and deep supply chain capabilities including WMS, users can’t assume the average solution will cover all bases.

The increasing impact of e-commerce on order cycle times and labor-intensive each picking has added complexity to WMS needs, notes Marc Wulfraat, president and founder of supply chain consulting firm MWPVL International. Vendors have been forced to come up with stronger functionality in areas, like order releasing, to make best use of automation, labor management and the ability to quickly rebalance resources in a distribution center.

“If you are a manufacturer handing mostly full pallets, and there is little complexity to the operation, you can probably rely on WMS from an ERP vendor to run your warehouse,” says Wulfraat. “But as the size and complexity of a DC increases, there is a need for more labor optimization and far more flexibility to manage operations. And, with e-commerce causing operations to be drowning in one-line orders, many DCs are utilizing more automation. Once you start marching down that path, the WMS functionality provided by some ERP vendors may lack the needed capabilities.”

Advanced needs

For potential users with growing warehouse complexities, the key is to closely examine whether the WMS module in an ERP solution offers advanced functionality. If not, they need an ERP vendor who can integrate effectively, using mechanisms such as application programming interfaces (APIs).

ERP vendors point out that for many DCs, their WMS modules are a good fit. What’s more, explains Dan Kaminstein, senior product manager with ERP vendor Epicor Software, WMS from your ERP vendor takes integration worries off the table. “Our WMS software code is part of our [ERP] code rather than a separate application,” he says. “We share the same database, so it’s all directly integrated. There is no chance of data getting out of sync.”

Typically, an ERP system will hold master data on products, orders and customers, while a WMS will govern warehouse-level fulfillment processes and consumption of goods at the warehouse level. The two domains need to stay in sync so inventory levels remain accurate and replenishment to the DCs works smoothly.

ERP vendors with WMS functionality appeal to organizations that don’t want to worry about integration or separate information technology (IT) infrastructures, but the caveat is that WMS modules from ERP vendors need sufficient capabilities. Kaminstein points out that for Epicor, which takes an industry-specific approach to ERP including distributors with its Prophet 21 system, the WMS is an advanced solution.

Most WMS solutions—including modules from ERP vendors—cover fundamentals such as mobile workflows for key processes like receiving, put away and picking, while supporting radio frequency (RF)-based task execution and data collection. But additional functionality may be needed beyond generating electronic pick lists and being able to execute them with RF-based picking.

For example, says Kaminstein, the Prophet 21 WMS has a “workbench” function that allows managers or the system itself to adjust the sequence of picking activities based on multiple factors to reduce picker travel time and allow for greater productivity. The WMS also permits efficient scans of full pallets to track goods without having to scan each individual item, as well as a single scan in receiving to inbound goods sent under an advanced ship notification (ASN).

Doug Johnson, vice president of product management for ERP vendor Acumatica, agrees that ERP vendors are able to offer more than basic WMS. He points to the ability of Acumatica’s Cloud-based WMS to come up with efficient order waves for picking and run well on Android devices. Flexibility in defining units of measure supports the need to minimize scanning. The overall aim, says Johnson, is to enhance worker productivity while still ensuring tight control over order accuracy or requirements in areas like lot and serial control.

“As DC operations scale in terms of volume and picking complexity, you want to leverage some logic for efficient waves and order picking,” Johnson says. “You also want to make the system easy to use on Android devices, and make inventory control as efficient as possible by minimizing the number of scans.”

Some users, adds Johnson, may prefer a best-of-breed approach to WMS, so Acumatica leverages a set of tested APIs and maintains WMS vendor partnerships. For example, Shoebacca, an online retailer of footwear and apparel, uses Acumatica ERP integrated with WMS functionality from Acumatica partner Fusion Software. Acumatica’s APIs, says Johnson, support representational state transfer (REST) technology, which works well for Web-based systems integration.

Links to automation

One ongoing shift in the WMS market is the increasing need for WMS vendors to have some WES-level capabilities to permit the WMS to work better with warehouse automation. Some of the leading best-of-breed WMS vendors have put a focus on WES in recent years and are generally further ahead with WES capabilities than most ERP vendors. However, some ERP vendors have capabilities in their WMS solutions that allow the WMS to interoperate with automation.

Acumatica has a concept of a “virtual warehouse” within its WMS that will permit an automated system, like a mobile robotic solution, to manage in the operation as a virtual warehouse. The Acumatica WMS coordinates the upstream and downstream activities and the overall flow of work, while the robotic system manages the inventory and work in the virtual warehouse zone, he explains. “We’ll be able to help our customers take advantage of these new technologies like robotics,” Johnson says.

With Epicor’s Prophet 21 WMS, APIs communicate and sync needed processes with automated systems, whether that be robotics, an automated storage and retrieval system (AS/RS), or other forms of automation.

In fact, says Kaminstein, the WMS has been integrated with carousel-type AS/RS, and at one site for Epicor customer Radwell International, with an AutoStore automated storage and picking system from Swisslog. Radwell, a supplier and distributor of industrial automation products, uses the AutoStore system for rapid, robotic-assisted picking, with the Epicor WMS dispatching the order requirements to the system.

SAP, one of the largest ERP vendors, has offered warehouse control system (WCS) capability as part of its Extended Warehouse Management (eWM) WMS solution for years. This function, which SAP calls material flow system (MFS), allows eWM to govern the flow of work through automated systems.

According to Richard Kirker, solution owner, warehouse management at SAP, companies with highly automated warehouses will often use MFS to coordinate WMS workflows with automation in real time. This isn’t just a communication of requirements, but a real-time WCS capability that can trigger diverts and other automation movements, adds Kirker.

Though SAP users can now deploy eWM as an “embedded” function of SAP’s Cloud-based, S/4HANA ERP solution, it can also be deployed separately, under what Kirker calls a “decentralized” model. Some large eWM sites with extensive automation tend to opt for the decentralized option because it gives the local site complete control over performance, while many other users find the embedded option appealing because it streamlines costs. “With the embedded option, the main benefit is that it simplifies the IT landscape,” Kirker says.

Specialized needs

Even an ERP package with advanced WMS might benefit from a third-party application to handle certain other functions. Examples of this could include small parcel shipping software, yard management solutions, e-commerce shopping cart solutions, or electronic data interchange (EDI) solutions.

The challenge with an effective EDI solution, says Jerry Czernel, a vice president at AIM Computer Solutions, is that major original equipment manufacturers (OEM) or other large enterprises that can set EDI mandates for their supplier base will sometimes change EDI business rules or content, like labeling related to EDI transactions. This is especially true in the automotive sector, says Czernel, which AIM targets with an EDI and labeling solution that integrates with large ERP systems, like Epicor, and its own ERP package for automotive industry suppliers.

The challenge for ERP vendors and end users is that it’s time intensive to tweak EDI functionality to keep up with changing requirements, says Czernel. Some changes might be with labels related to shipments involving EDI transactions, like moving to a 2D bar code or QR code. Other changes are at the business rule level, like a change in how an OEM defines something within a purchase order, or a forecast communication.

Software vendors that specialize in EDI solutions add value by constantly incorporating new changes into the EDI software, which essentially takes that work off the table for ERP developers, and in turn, for end users, explains Czernel, especially within the automotive sector. “The work we do relieves the ERP vendors from the obligation of staying on top of changing requirements, making the changes, and ensuring they get tested in time for the effective dates,” he says. “It’s not like you develop a set of EDI functionality and it’s good for 10 years. It’s only good until an OEM like General Motors, or Honda or whomever, makes a change.”

Another EDI complexity is that different OEMs might define something like forecast dates differently, adds Czernel. One might base forecast dates around the ship date from its suppliers, while another may base it on the receive date at the assembly plant.

EDI software should reconcile or “normalize” such differences so when people in operations work with EDI, they don’t have to weed out the differences. “To service EDI in our market, you can’t treat it as a sideline,” he says. “It’s very important we normalize the way EDI works so that the end user organizations are able to correctly pick up the demand signal.”

Still, for enterprise-level transactions, and key operational applications like WMS, the appeal of ERP with extended functions is compelling. As Epicor’s Kaminstein sums up: “Many of our customers like the idea that it’s a single application. They aren’t worrying about integration to maintain or manage in any way. It reduces your risk.”

Companies mentioned in this article:

Acumatica
AIM Computer Solutions
Epicor Software
MWPVL International
SAP