31 October 2021 Why communication between the two systems (ERP and WMS) is essential to ensure optimal operational performance and efficient management. Integration between ERP and WMS The enterprise resource planning system (ERP), or management system as it is more commonly known, is the backbone of any company, automating business processes, enabling the flow of information between functional areas, and ensuring compliance with the obligations inherent to any company (accounting, financial, personnel, etc.). Among the most well-known are SAP, Oracle, Team System, Fatture in Cloud, Atelier, Zucchetti, Passepartout, etc. Although ERP systems are of great importance for business management, these software do not include robust logistics management functionalities. In general, the ERP has basic stock-related features, such as balance control, inbound and outbound, but it lacks sufficient resources when there are advanced warehouse demands, and it does not have tools to optimize logistics resources. This is why companies are increasingly investing in exclusive warehouse systems (WMS) that control and automate all intralogistics processes. When the two systems work together, the result is the complete optimization of the supply chain and cost savings. However, it is crucial that this integration is done well, hence the importance of having expert and reliable suppliers. Integration between ERP and WMS is the key to warehouse automation We can say that a WMS system adds more sophisticated warehouse functionalities compared to those offered by an ERP system. This allows organizations to continuously monitor the progress of products as they enter and leave the warehouse; keep track of the receipt, storage, and handling of goods; and use real-time intelligence to optimize business resources. The advanced technology of WMS allows companies to respond to market pressures and provide increasingly shorter delivery times. The system speeds up all processes of a logistics operation, being designed to ensure greater accuracy and lower costs. However, the warehouse is not an island: other departments such as Production, Purchasing, and Sales need access to inventory data to make decisions. This means that if a company has a WMS system, it must also have an ERP system capable of communicating directly and integrally. Ideally, the flow starts with the ERP, passes through the WMS, and ends with the ERP. And for this to happen in the best way, it is necessary that the two systems are perfectly integrated. The importance of good integration starts when the WMS is installed in the warehouse, as in most cases, the failure rate of projects is caused by poor integration between the two systems. How does the integration between ERP and WMS happen? Among the most applied models of integration between ERP and WMS are API and Web Service. Besides these, integration can occur through text files or databases. API The API is the most used format today due to its technological advances. It is a set of programming schemas that allow communication between two different programs that use different operational languages. System providers often offer their own APIs to help companies connect ERP to other platforms. However, the company can also choose to use a third-party API or its own interface. The API acts as an intermediary between the ERP and the other system: it receives data from one platform, interprets and standardizes it, and sends it to the other application with a “readable” language compatible with the system’s specifications. Through the API, it is possible to access the information registered in the ERP in the WMS and vice versa. In the case of the API, data transfer usually occurs via Json (JavaScript Object), but there are other options. Web Service It is an interface designed to communicate via the network, meaning it is an API that uses the network to transmit data from one system to another. One of the most used communication forms is XML/Data Set, but data transfer can also occur via SOAP and REST. Database In this type of integration, communication occurs directly from one system to another through a database; however, in this model, business rules are often not validated. Choosing this technology, it is best to have an intermediate database between the two systems, even with different languages, but with data writing and reading operating according to the rules agreed upon during the integration design phase. The advantages of ERP and WMS integration If the ERP and WMS systems are fully integrated, you will be able to: • Leverage the best that each system can offer within your competencies; • Eliminate parallel controls such as spreadsheets and emails; • Eliminate manual processes; • Achieve the speed and agility your company needs to be competitive in the market; • Provide management with the real-time information needed for decision-making; • Convey the reliability of warehouse information to the commercial team (Sales and Purchasing); • Allow your customer service team to keep customers informed; • Properly comply with business rules; • Improve the speed and accuracy of billing. That’s why integration between WMS and ERP is crucial for your company to gain all the above-mentioned benefits and many other advantages, ensuring complete business control, from the administrative part to the logistics part. What is the best integration model to use? There is no superior model to another, but the one that best suits the architecture the company already uses. Before integration takes place, the company’s WMS teams and IT providers should meet to discuss together the best model to implement. The recommended thing is to look for WMS providers that are in tune with new technologies and that evolve the level of integration based on ERP innovations. After deciding on the model to adopt, the work of developing the communication interfaces begins, which, once completed, must undergo massive unit and integrated tests to ensure perfect integration between the systems. The success of any integration project starts with a good planning and data collection phase, followed by quality testing. Why integrate ERP with WMS? We have already talked about the advantages of integration, but now let’s go into more detail about what happens when the two systems work connected. When the integration is complete and well-executed at 100%, updates that occur in the ERP and affect the WMS are automatically transmitted. For example, if a change to a customer’s address is made in the ERP, this new information is sent to the WMS, which needs the data to manage the fulfillment of an order. Conversely, if a Purchasing department staff member needs to know what the available stock of a specific product is by accessing the ERP, the WMS is the source of the information, displaying not only the warehouse balance but also its positions, batches, expiration dates, and possible segregations, such as expired and damaged products. Another situation where integration is very useful is when a company uses the services of a logistics operator. In this case, integrating your ERP into the third-party WMS, you can access real-time information. Since the WMS has all the necessary records to know who performed which process, for how long, and how many positions were used, this information can be used by the ERP to calculate the overall logistics cost. We can say that every time the ERP asks and the WMS responds, it is possible to create automatic services that request information from the WMS so that data communication between the two systems occurs in real-time. In short, we can say that the WMS and ERP continuously exchange information about inventory, what has been picked, what has been billed, and what has been delivered. In fact, the two systems must form a single process, starting from the ERP, passing through the WMS, and returning to the ERP. Remember: the more information each sector of the company has, the better the company will function as a whole. How to avoid problems in the integration between ERP and WMS The first and most important tip is: choose a serious WMS provider who understands the importance of integration and takes the time to do it. The WMS company must have a team of competent professionals with integration experience. Additionally, it is essential that there is involvement between your company’s team and the supplier’s team during the construction of the interfaces. Finally, do not forget to do good planning and all the necessary tests to ensure perfect integration. All this will ensure the success of your project. Having the best WMS solution and prioritizing full integration with your ERP, you will enjoy all the benefits of technology to achieve logistical efficiency and business growth! ERP and WMS Integration: How It Works, Benefits, and Considerations Deagor WMS per ecommerce può aiutarti!