Warehouse management via ERP can work for a company for a surprisingly long time. Orders are sent out, stocks are sitting and the team can manage without a separate WMS. However, as orders grow, the same situations start to return. Receiving takes longer, warehouse workers look for goods based on their own experience, incorrectly picked items end up in returns and seasonal peaks increase the demands on the entire team. At that point, it is no longer just a matter of the warehouse recording stocks. The company needs to know whether the current management method can withstand further growth or whether it makes sense to take over the warehouse into the WMS.
In such a situation, ERP continues to hold what it is supposed to hold: orders, documents, accounting links and stock levels. But in the warehouse, from a certain point on, something else starts to decide. How quickly the goods are received, where they are stored, how the warehouse worker behaves during picking and when any errors are caught. This is where the difference between a warehouse that is registered in the system and a warehouse that is managed by the system becomes apparent.
The main differences between warehouse management in ERP and WMS
The fundamental difference between the two systems is that ERP records the status of the warehouse, while WMS actively manages the warehouse.
WMS assigns work to warehouse workers, guides them to the goods via the shortest route (based on an individual and optimized mathematical algorithm), and as soon as they reach the goods, they scan the goods' barcode and the reader confirms that they have the correct item - thus the system reduces the risk of goods being mixed up. But what exactly is the difference between the ERP warehouse module and the WMS warehouse system?
Another benefit that WMS brings over ERP is advanced addressing of goods. While many warehouse modules in ERP allow basic addressing, i.e. assigning goods to warehouse positions, WMS goes a step further. For example, when storing , it automatically determines the appropriate compartments according to the type of goods - it recommends storing large and heavy items on the lower shelves, fast-moving goods as close to shipping as possible, and so on.
This is followed by another benefit of WMS, namely simpler goods receipt. When receiving, the warehouse worker simply reads the code of the goods, or possibly the entire pallet, and the WMS automatically directs it to the optimal location in the warehouse according to the selected storage strategy (e.g. FIFO).
When does it make sense to switch to WMS?
Both ERP and WMS are systems that can be used across various types of companies with warehouses. It doesn't matter if you run an e-shop with clothing, a wholesaler or you produce parts for industry. While WMS was previously associated mainly with larger companies, today, thanks to more affordable cloud options, it is also gaining ground in medium and smaller operations.
The decision to switch to a WMS is therefore not primarily based on the size of the company, but on what the warehouse needs to handle.
A certain type of limit will typically start recurring in a warehouse in three situations:
- warehouse workers spend a long time looking for goods,
- there are more returns and errors that only become apparent later in the process,
- During peak hours, the warehouse cannot handle a large number of orders.
At such a moment, it is no longer just a matter of the warehouse keeping records of inventory. It begins to become clear that the company needs to more precisely manage the movement of goods, the work of warehouse workers, and the continuity of individual steps so that work in the warehouse is not fragmented.
But that doesn't mean it should abandon ERP. ERP remains the foundation. WMS is added as another layer that takes over warehouse management where records alone are no longer enough.
In practice, this means that the LOKiA WMS warehouse system connects to ERP, e-shop and carriers. You connect the systems using a standardized API interface, thanks to which they can exchange data with each other. Orders flow from ERP to WMS, the warehouse is managed in WMS and data on the movement of goods, orders and receipts is returned back to ERP. This way, the company does not have to rebuild the entire environment, but gains more precise management of receipt, storage, picking, packaging, continuous inventory and shipping. This is how, for example, the connection of our LOKiA WMS solution with the Pohoda accounting system or the connection with ABRA Flexibee works.
For example, after deploying LOKiA WMS, order processing at Ovečkárna accelerated fivefold, the error rate dropped to almost zero, and the warehouse now handles over 2,500 orders per day. On a record day, it even processed more than 11,000 orders.
What to clarify before switching to WMS
What's more important is what you expect from the change, how much it will cost you, and how quickly it can pay off. It makes sense to set measurable goals in advance, such as:
- reduce order processing time,
- manage seasonal peaks by training temporary workers within 10 minutes,
- reduce the number of complaints and returns,
- increase the volume that the same team can handle,
- reduce the warehouse's dependence on the experience of a few people.
It is precisely based on these points that the return on the change can be assessed. Not just according to the price of the system, but according to what will be faster, what will be more precise, and where the warehouse will no longer rely on manual coordination and the experience of individuals.
When deciding whether you can still get by with an ERP module or whether you need a WMS, it makes sense to look at the scope and complexity of warehouse operations. That is, how much of the decision-making is still handled by the system and how much is left to the experience of people in the warehouse. Don't forget to also look at ROI, i.e. return on investment. In this regard, the cloud version of WMS is more interesting for many companies, because it does not require such a high initial investment as an on-premise solution.
If you are dealing with growth and a greater demand for warehouse management today, LOKiA WMS is the ideal first warehouse system to complement your existing ERP. It will help you refine warehouse processes, handle higher order volumes with less error, speed up inventory and gain a better overview of what is really happening in the warehouse. Without replacing your ERP and without unnecessarily complicated implementation. LOKiA will grow with your business and, thanks to more than 30 modules, adapt to how your warehouse and needs develop.
If you want to see how LOKiA WMS works in practice, leave us a contact here and get a free, non-binding consultation and demonstration of the system.
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