Weighing up IT options
June 1st 2010

The dilemma of dedicated WMS versus existing ERP system continues to provoke debate but does the choice need to be contentious, asks Steven Hargreaves, group product director, Solarsoft

Most enterprise resource planning (ERP) applications already offer basic warehouse management capabilities, so the IT manager's preference is often to work with what's there, even if this means additional spending on an older and possibly outdated system.

The alternative is to install a specialist warehouse management system (WMS) that will directly support the operations manager's plans for improved work practices. The challenge, however, is persuading the IT department to approve and support yet another software application.

Longer term, a new ERP system could be an option. But when owners are anxious to see quick results, the decision often comes down to this: buy best-ofbreed, or make-do and mend.

Focus on simplicity There is an obvious appeal to keeping the IT portfolio simple and working with fewer technology providers but there are commercial risks if systems are not up to the job.

ERP's strength is in the robust integration of transactions across business functions.Modern ERP systems provide comprehensive management for operations from sales and purchases to inventory keeping and financial control.

Manufacturing and shipping may be handled too but many general-purpose ERP systems have limited support for operations outside the back office.

For the warehouse manager, then, the ERP route can be restrictive. Off-the-shelf, ERP software typically lacks the task allocation and scheduling logic needed to optimise movements.

Nor will it handle the advanced barcode scanning, voice-picking or integrated weighing and packing systems that can deliver 20- 40% gains in productivity.

This presents a strong argument for going against the grain, and investing tactically in a best-of-breed warehouse application.

With a specialist solution, operations management will be fully empowered to deliver deeper, wider-reaching efficiencies.

From an IT perspective, this doesn't have to be bad news.

Having one big application handle every aspect of a business sounds like the simplest possible IT strategy. But the fact is, the bigger a system gets, the harder and more expensive it is to deploy changes. This can be a major challenge for the IT manager who has to juggle demands for change and stability. By contrast, departmental solutions carry a smaller up-front investment, and can be deployed faster with less upheaval and risk.

When the core systems of a business are not fundamentally broken, there is often a good case for leaving well alone and introducing some diversity into the IT portfolio.

Joined up thinking Choosing the right system is important, however. A warehouse management system must share master data with the core ERP platform. It is important to ensure that any new investment works with the open internet standards that allow systems to be integrated easily. Then by following a joined up strategy, companies can deploy the specialist features they need to make their operations more competitive without compromising the integrity of core ERP functions.

For example, allocating inventory to bin locations and scheduling pick face replenishment are operational decisions that have no impact in the back office. A WMS can manage these functions and add new optimisations independently of the backlog of enhancements scheduled for the ERP system.

Serial number tracking is another such capability. Again, a WMS can automate stock picking and identification processes while providing the batch traceability demanded by strict supplier or regulatory requirements. This ability can be layered over the basic inventory management facilities of a legacy ERP system.

Newer innovations such as voice-directed picking, which frees up both hands for handling goods, can yield a step change in productivity. A modern WMS can provide a cost-effective hub for integrating new warehouse equipment.

As the tough economic conditions persist, these practical innovations are the vital means by which distribution and logistics companies can accelerate operations, do more with the same or fewer staff and add more value without driving up costs.

Putting the customer first In a buyers'market, businesses must compete on quality of service as well as price. Building a name for fulfilling orders on time, every time depends on accurate stock-checking, efficient picking and seamless packing and despatch. The cost of mis-picks and returns handling is huge, damaging reputation and margins.

Targeted investment in warehouse technology can all but eliminate manual handling errors and is an essential tool for improving service and profitability.

Many businesses will find that a dedicated WMS provides the optimal approach, removing the call for their ERP software to be upgraded or modified. Commercially, this means a faster return in investment from a smaller up-front cost. ERP users will benefit too from a system that is more stable because it no longer needs to be re-engineered.

As with many technology dilemmas, there is an element of horses for courses. For a simple stockroom, 'ERP on a gun'may suffice. But, for a growing business in a competitive market, the ability to exploit every opportunity to move goods faster is essential. Innovations like merged picking rooms and hands-free technology are driving performance in warehouse operations and IT managers need to respond by putting the needs of the business and the customer ahead of simplistic IT strategies.

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