When businesses are seeking inventory management software, the terms Warehouse Management System (WMS) and Enterprise Resource Planning (ERP) software is often used interchangeably. But they are different.
Warehouse Management System (WMS) controls the movement and storage of goods within the warehouse and the processes of the associated transactions including picking and shipping, optimising stock using real time information. A WMS system needs support from other additional software, whereas ERP is an all-in-one solution.
Enterprise Resource Planning (ERP) is a business management software that integrates and automates business processes across all departments. Purchases, sales, marketing, services, inventory and financial management. Many ERP software will have WHS functionality but on a much smaller scale. ERP systems don’t allow for inventory optimisation based on real-time information and they can’t generate reports based on historical trends and data that identify the best location for each stock item.
Many smaller businesses do not require true WMS functionality as many ERP solutions have built-in warehouse management functionality that is suffice. Businesses with large warehouses and a high volume of daily orders with multiple storage locations are best served with a WMS.