Dealing with the complexities of the modern warehouse – where organizations must contend with demand for rapid fulfillment alongside slim margins that make inventory and supply chain management excellence essential. Many businesses have long contended with these challenges by implementing enterprise resource planning software, but warehouse-specific solutions offer a few unique advantages that set them apart.
The specific capabilities behind warehouse management systems are proving invaluable to organizations, as the market is poised for considerable growth moving forward. Zion Market Research expects the global warehouse management market to expand at a compound annual growth rate of more than 14 percent for the period of 2017 through 2022, achieving annual revenues of $3.04 billion by 2022. This rapid growth is exciting, but there are factors holding the sector back. One of those issues is the popularity of ERP solutions.
With warehouse management software on the rise, here are three reasons to consider the specialized technology in place of or to work alongside an ERP:
1. Support for the Internet of Things
The IoT is rising extremely quickly in the warehouse as connected devices give organizations an opportunity to track inventory levels, monitor assets across multiple locations and otherwise gain greater visibility into everyday operations. A Grand View Research report pointed out that use of IoT technologies as part of warehouse management systems will create a market with annual revenues of $19.06 billion by 2025.
According to the study telematics functionality – the ability to track the location of assets ranging from vehicles in your fleet to goods in the warehouse – is among the key drivers of the IoT's rise in warehouse settings.
ERP solutions are built to bring data from a variety of sources into a central platform that can be accessed by users on a variety of devices. What ERP systems are not typically designed to do, however, is support specialized process automation tasks that are unique to a given industry. Instead, an ERP focuses on broad data integration and communication. This can become problematic when the IoT needs to be embedded into specific warehouse management tasks that the software isn't built to handle.
Warehouse management systems, on the other hand, are designed specifically to handle key tasks ranging from automated picking to end-to-end fulfillment services. As such, the data integration and process automation capabilities built into warehouse management can have the same positive large-scale impact as an ERP platform while also offering the specific functionality needed to take full advantage of the IoT.
2. Process flexibility
While many ERP systems offer warehouse management capabilities, the overarching focus on big-picture business issues limits an organization's ability to refine the way data moves through the system based on their specific operational requirements. This is particularly problematic in complex warehouse settings, where localization, safety, materials handling and customer requirements all come together to influence everyday operations.
Warehouse leaders need the ability to choose the best processes for their needs at all times and not allow technology to limit their workflows. This is where dedicated warehouse management systems pay off, as they are built to offer the wide range of process configurations and data workflows that are specific to warehouse settings.
This may sound like a simple distinction, and to some extent it is. However, it means the difference of letting a useful technology dictate how you work or having flexible technology empower you to get the job done in the best way possible. The nuanced features of modern warehouse management systems provide the unique functions companies need while also offering the broad data integration that ERPs can offer.
3. Support for legacy technologies
The warehouse industry has long gotten by with specialized technologies – barcode scanners, RFID badges, etc. – that have advanced more quickly in the warehouse than they have elsewhere. These solutions often meet specific operational demands, were expensive to adopt in the first place and become difficult to replace.
The modern technology world is replacing many dedicated, specific legacy technologies with device-agnostic apps and services that organizations can use to perform similar core functions, perhaps sacrificing a few highly specific capabilities along the way. Making this shift to more modern tools can be helpful in warehouse settings that have not been able to afford more traditional solutions in the past. However, businesses that already have functional, profitable systems in place face a difficult situation.
On one hand, these legacy systems are valuable. On the other, modern ERP solutions and similar technologies are moving to support the new, device-agnostic capabilities and may not easily integrate with older options. This is another area where dedicated warehouse management systems can pay off, as vendors have an awareness of the role these legacy tools play in the industry and often design their solutions accordingly.
Moving into the future of warehouse management
For a long time, the high cost of warehouse management technologies left organizations with a difficult choice – implement an ERP that benefits the entire business and offers some warehouse management, or go with a dedicated technology that is extremely positive for the warehouse and deal with high costs.
This either-or-conversation is slipping to the wayside as cloud-based technologies become available. With the power of the cloud to simplify the end-user experience and eliminate high capital costs, warehouse management system providers are increasing ramping up their data integration functionality to bring value to more of the business. At the same time, lower entry costs make going with a warehouse management system and ERP platform possible.