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Why Manufacturers Need an ERP with Built-In WMS Functionality for Direct-to-Consumer Shipping


July 13, 2021
4 MIN READ
Vinculum
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Any wholesale or D2C company relies on Enterprise Resource Planning (ERP) systems to automate business processes and share information between departments. But most ERP systems lack robust capabilities for executing supply chains. In most cases, ERP solutions focus on related but critical inventory-management features such as tracking products for picking, packing, and shipping. Several Direct-to-Customer (D2C) organizations invest in a warehouse management system to stay in control of all aspects of their inventory through automation and digitization.

In the supply chain, both ERP and WMS aim to help businesses utilize their resources more efficiently. You can access reports based on real-time data both on-premises and from the cloud. The price of each system and module is different – ranging from a few thousand to hundreds of thousands of dollars. The functionality of ERP software is limited compared to a complete WMS; however, small-medium companies often use the software as their sole warehouse management tool.

By integrating a WMS into an ERP system, a warehouse management system can provide more sophisticated functionality. Through a warehouse monitoring system, an organization can track the progress of products as they go in, out, and through the warehouse, keep receipts, storage, and movement of goods under control; and improve product location and shelf life with real-time data.

Although the warehouse may appear as an island in the company, data in the warehouse is vital to other departments, including manufacturing, purchasing, and customer service. In other words, if a D2C has a WMS system, the ERP system will also need to be able to communicate directly and seamlessly with it.

In addition to your Warehouse Management System (WMS), you will need software for Enterprise Resource Planning (ERP) as well. According to Oracle’s research, 49% of companies that use ERP systems have increased productivity, while 95% have improved their business processes as a whole. Even though each serves its purpose, what happens when you combine their core functions? Does it affect the logistics of your company?

Is one approach better than the other for D2C?

The problem is that most third-party WMS applications are only interfaced with their ERP solution rather than being seamlessly integrated. As a result, the two databases, or even separate servers, are used to run each key, and the data is manually transferred using middleware or batch exports/imports. As a result, the data becomes more complex, and data duplication increases. Also, it would help if you must custom your interface development at further expense. With two different sets of inventory data, departments cannot obtain a single version of reality.

ERPs are a complete package but lack the sophisticated inventory management features needed by businesses. Furthermore, older ERP packages may lack WMS-specific features. A WMS framework can boost the warehouse transactions of organizations. Nevertheless, WMS are not standalone solutions; they require additional modules such as Customer Relationship Management (CRM), development, HR management, and accounting to ensure their smooth operation. Despite being considered an ERP subset, you cannot operate with only one of them, as both compliment one another.

Are the differences between an integrated and interfaced ERP platform that has both WMS and ERP integrated so great? That depends on whether a D2C company is concerned about ensuring the production and shipping of orders on time and its importance. If you don’t closely integrate your ERP and WMS systems, you’ll be unable to:

  • Be competitive in today’s market by achieving the speed and agility your business needs.
  • Providing information that helps management make informed decisions in real-time.
  • Make sure your business can deliver on promises made by your sales team.
  • Maintain an open line of communication with your customers.
  • Accordance with delivery and non-delivery updates.
  • Integrate customer-centric picking strategies such as shelf-life based on customer demand and first expired, first-out (FEFO) stock rotation.
  • Automate transactions to eliminate manual processes.
  • Expedite and improve the billing process.

Benefits of D2C Integration

Having a fully integrated system allows D2Cs to streamline, maintain transparency, and control their business processes end-to-end to have end-to-end visibility, control, and efficiency. Physical warehouse space and employees’ time can be maximized by optimally organizing goods. Furthermore, D2Cs can provide the rest of the business with a single source of fact-based information that empowers it to make reliable and fact-based decisions.

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