Executive Briefings

Best of Breed vs. ERP in the Warehouse

The battle between enterprise and stand-alone applications continues. Patti Satterfield, vice president of marketing and business development with Fortna, outlines some of the considerations companies need to take into account before choosing between the two.

A best-of-breed application, or one that's provided by an enterprise resource planning (ERP) vendor: which way to go? The decision, says Satterfield, can have major ramifications for a company's efficiency and financial stability. The lifetime of a warehouse management system (WMS), whether  homegrown or purchased from an ERP provider, is in the range of five to eight years. When it comes time to make a change, companies need to step back, examine all of the business drivers and conduct comparative analyses from the standpoint of return on investment.

The exercise should involve a diverse team of individuals, Satterfield says. She strongly suggests the participation of decision-makers from the chief operating officer level on down, including the financial side of the house. Technological expertise is vital as well; the chief information officer "would be a great person to be involved."

Most companies already have some kind of WMS in place, she says, but even a packaged application can be so customized as to resemble a home-grown system. Others might have opted for the WMS module of a larger enterprise package, even if the functionality of that tool is somewhat less than what's available from stand-alone models. Finally, there are those that have built perfectly workable systems from scratch.

The ultimate decision will depend to a great extent on the complexity of a company's operations. Those with "straightforward, vanilla distribution or supply-chain requirements" might find that an ERP-based application handles warehouse functions adequately. For those with multi-channel distribution needs, or specialized requirements such as direct-to-consumer shipping, a best-of-breed application might be more suitable.

And who should make the decision? There's a constant struggle between considerations of cost and functionality. A chief information or financial officer is likely to prefer a centralized system with relatively limited features. The line-of-business manager, if given the final say, will typically opt for an application with additional bells and whistles that are suited to that individual's task. Whatever the final decision, Satterfield says, it must be the result of a careful, multi-discipline analysis that reflects the realities of the company's specific operation - and profitability.

To view this video interview in its entirety, click here.

A best-of-breed application, or one that's provided by an enterprise resource planning (ERP) vendor: which way to go? The decision, says Satterfield, can have major ramifications for a company's efficiency and financial stability. The lifetime of a warehouse management system (WMS), whether  homegrown or purchased from an ERP provider, is in the range of five to eight years. When it comes time to make a change, companies need to step back, examine all of the business drivers and conduct comparative analyses from the standpoint of return on investment.

The exercise should involve a diverse team of individuals, Satterfield says. She strongly suggests the participation of decision-makers from the chief operating officer level on down, including the financial side of the house. Technological expertise is vital as well; the chief information officer "would be a great person to be involved."

Most companies already have some kind of WMS in place, she says, but even a packaged application can be so customized as to resemble a home-grown system. Others might have opted for the WMS module of a larger enterprise package, even if the functionality of that tool is somewhat less than what's available from stand-alone models. Finally, there are those that have built perfectly workable systems from scratch.

The ultimate decision will depend to a great extent on the complexity of a company's operations. Those with "straightforward, vanilla distribution or supply-chain requirements" might find that an ERP-based application handles warehouse functions adequately. For those with multi-channel distribution needs, or specialized requirements such as direct-to-consumer shipping, a best-of-breed application might be more suitable.

And who should make the decision? There's a constant struggle between considerations of cost and functionality. A chief information or financial officer is likely to prefer a centralized system with relatively limited features. The line-of-business manager, if given the final say, will typically opt for an application with additional bells and whistles that are suited to that individual's task. Whatever the final decision, Satterfield says, it must be the result of a careful, multi-discipline analysis that reflects the realities of the company's specific operation - and profitability.

To view this video interview in its entirety, click here.