For businesses that deal in third-party logistics (3PL), WMS software (Warehouse Management System) plays a key role in their operations. Unfortunately, it’s not always easy to pick the right one. There are several different types of warehouse management systems, and a huge number of options within each of these categories. In order to make an informed decision, you’ve got to understand what the options are, why they differ and which is best suited for your company.
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When you break it down, there are basically three types of WMS systems for 3PL businesses. These are standalone warehouse management, supply chain execution modules and integrated ERP (enterprise resource planning) systems. It should be noted that the functions and features of each are largely the same; it’s the package and style of delivery that differs.
Getting to Grips with the Basic
The various types of warehouse management software offers a huge range of benefits. It helps users reduce their operating expenses by cutting labor and space waste. With WMS software, businesses can take control of inventory. It becomes easier to perform cycle counts, track shipments and monitor expiration dates, among other things. It improves inventory visibility through barcoding, serial numbers and RFID tagging features that keep inventory organized.
WMS helps users optimize their inventory transportation both internally and externally through inventory tracking functionality. There are also tools for optimizing receiving, putaway, slotting, picking, packing and shipping duties.
WMS offers a tool or module to tackle any aspect of warehouse systems, and each come with their own pros and cons.
Types of Warehouse Management Systems
So now let’s dive into the main 3 types of warehouse management systems:
1. Standalone WMS
Standalone systems are bought for their warehouse management features and nothing else. These types of warehousing systems can be combined with existing or future solutions, but it’s sold as a specialized product without further supply chain functions. Some vendors offer a handful of basic transportation management tools, however, the focus is on best-of-breed WMS.
Best-of-breed can be thought of as selective breeding – it only includes the best, most important features of all the potential warehouse management system modules. For WMS, this typically consists of inventory management and warehouse operations. Users of standalone WMS should expect expiration date tracking, barcode scanning, cycle counting, slotting, putaway, receiving, picking, packing and shipping.
As warehousing management systems go, standalone WMS is the most basic. It’s often included as one of the types of inventory management systems as it can be applied to many industries beyond warehouse management. This makes it an ideal solution for SMBs or businesses that don’t have much budget for software. It doesn’t incorporate any other steps of the logistics chain and may not integrate as well with other kinds of business software as some of the following types of warehouse management systems.
2. Supply Chain Modules
When considering different types of WMS systems, you might think about them as a subcategory of supply chain management (SCM). Supply chain management software has a broad scope – it helps users manage everything from vendor relationships to business processes to risk assessment. It focuses on automating tasks like inventory management, material sourcing and product cycles.
Choosing this type of warehouse management system requires investing in supply chain planning applications that also offer warehousing features. It’s a common route, as it gives 3PL businesses the chance to explore the many benefits of SCM. Combining WMS with other applications is a good way to ensure there’s plenty of cohesion between different parts of the business. It supports holistic management of the whole supply chain, while standalone solutions cover warehousing only.
If you’re going to opt for this route, it’s important to minimize overlaps within your existing software. For example, if you already use fleet management, inventory management and warehouse management software solutions, you could potentially combine them all into a single SCM platform. Another way to avoid overlap is to choose an SCM that is easily integrated with other business software like payroll and ERP software – which brings us to the next option for WMS.
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3. Integrated with ERP
ERP is a powerful software solution that combines the capabilities of many other systems. It offers most of the core applications that make 3PL processes go smoothly: from supply chain planning, accounting, customer relationship management, human resources and more. ERP is a good option for businesses looking to upgrade their software solutions on a larger scale. This is an excellent move for enterprises looking to get a competitive edge and improve their ROI. They are specialized systems that offer robust supply chain execution and scalability.
Integrated ERP systems can offer warehouse management features, but it’s not a core function of ERP. Keep that in mind when shopping for ERP software. Make sure the solution you choose provides features for warehouse management ahead of time.
This type of warehouse management system also comes with a heftier price tag – think of it as the jack of all trades of software. Because of this broad scope, ERP can replace a host of other software applications and centralize your operations into a single interface. If you’re dissatisfied with other software solutions you currently utilize or want to consolidate them into a single system (and payment!) then ERP may be the best option for you.
WMS as a supply chain module and as an integration with ERP are different from standalone systems because they provide warehouse management as part of a tool with broader capabilities. So the first decision to make is whether you want to invest in a specialized WMS, or whether you’d benefit more from a combined product. The answer depends on the size and goals of your business.