Is it really any less costly and complex to add a BOB component compared to undertaking an entirely new wholesale distribution ERP system built around a strong warehouse management system? First, consider that part of the value equation is that you’re getting a new state of the art ERP system, one undoubtedly far surpassing your legacy system in collaboration with vendors and customers, in compliance with increased regulation and in managing multiple locations and business units.

ERP Software

BOB Warehouse Management System Pros and Cons (Part 2)

The tradeoff comes down to the challenge of integrating standalone warehouse management software into your existing ERP system versus a new deployment of an ERP system pre-integrated with a warehouse solution.  As events occur in either system, alerts and communication must flow automatically from the warehouse and across the supply chain to ensure that there is just “one version of the truth”.  As inventory arrives, is stored or shipped from the warehouse,  the warehouse management portion must be able to update the ERP inventory in real time. And when the ERP system generates pick orders to fill incoming orders, the warehouse system must respond. The challenge is to achieve the level of synchronization for these handshakes to come off without a hitch. If the two systems have separate databases, concerns are exacerbated. And even if data synchronization is achieved, standardizing best practices and business rules across the enterprise is another problem all together.

Most companies leaning towards a standalone warehouse management solution cite cost savings as a primary consideration. Ironically, the opposite may be the case. Separate applications can double many costs, such as maintenance, support, integration and upgrades. If applications such as business intelligence are important, will you be required to add separate BI applications for each axis of the system?

Maintenance and support are ongoing costs that you might end up paying for twice with a standalone system. And these costs might go higher when you add in the complexity of synchronizing the two systems. Then there’s the inevitable (and probably at least partially justifiable) finger pointing when you have two service providers working on one system. When issues arise, whom will you turn to first?

Then there’s the issue of future proofing. The average ERP implementation has a lifespan of 5 to 7 years. How many more years does your current system have left before you’ll be undertaking a new ERP system implementation anyway? When that day comes, your investment in integrating warehouse management software into your legacy ERP system becomes a lost cost.

Written by :

Don Cooper