ERP: one central information system
In this article we describe the complete application landscape of various organizations. This includes companies with an ERP system as well as companies that use a Best-of-Breed solution. Many large organizations use an Enterprise Resource Planning (ERP) system. An ERP ensures automatic handling of logistical, administrative and financial business processes by placing them in one company-wide information and management system. This system is the software center of the organization, with which all connected systems must communicate. A system such as a WMS or a TMS is often purchased in addition to the ERP, if there are processes that require specialized software. The systems are then linked by means of links (interfaces) and they communicate with each other. The interfaces between an ERP and the WMS have already been explained in a previously published article.
Best-of-Breed: each to his own specialty
From the market, a Best-of-Breed is an increasingly common solution to replace the ERP. Interfacing, the linking of software packages, is becoming increasingly simple. This makes it possible for Best-of-Breed to be a frequently chosen strategy. This creates an environment in which specialist packages are linked to each other. For example, an environment is created in which a Product Information Management system is responsible for article master data, a Transport Management System for transport planning and a Warehouse Management System for optimisation in the warehouse. We discuss these options in the environments below. In addition, we provide examples of all application landscapes. Not all described software packages are required for every organisation.
8 different application landscapes
Below are the 8 application landscapes we will cover in this blog.
Starting / medium-sized webshop
A webshop can start with the software on which the webshop runs, in combination with a small accounting package. The leading package is the webshop software, most of it happens there and there are no further extensive systems. The webshop is responsible for articles and orders, but also the stock. When the logistics operation becomes an important part of the company, a WMS can be considered. Order picking techniques, cross-dock possibilities, fine-meshed storage and separation between pick and bulk locations can be reasons to invest in this and thus further professionalize the back of the webshop. In that case, a webshop ends up with the landscape below.
Large webshop
In a large webshop, additional systems can be added. In order to keep the rapid growth under control, it is conceivable that an ERP system is introduced. In that case, the webshop software package, such as Magento, can talk directly to the WMS, exclusively via the ERP or a combination of the two. The ERP can be leading in articles, orders and/or purchases, but this can also be partly with the webshop. When the WMS is connected, it will become leading in the stock. Purchases are also passed on to the WMS to be compared with actual incoming goods upon receipt.
The feedback from the WMS to the ERP can be limited to the stock, but can also be expanded with a storage confirmation or a Track & Trace upon dispatch. This last message is also regularly fed back directly to the webshop software package, without the intervention of the ERP. The ERP can also only request the transaction values from the webshop, where the WMS benefits from the orders and articles that are passed on. An ERP often wants to know how many articles have been sold, but this is rarely done at order level. There are many different possibilities.
Wholesale
For many wholesalers, a major change is underway. Where previously the B2B channel was served, supplying shops, the consumer is also increasingly being approached directly. For example, we now see that webshop software is not an odd one out among wholesalers. Certainly because within this sector a B2B webshop can be used to allow business customers to place their orders. Product Information Management (PIM) software is also a frequently recurring system within the application landscape of wholesalers. PIM software provides information about the products that are being supplied. PIM has purchase prices, sales prices and scales, but also sizes and colours of articles.
Starting LDV
A logistics service provider (LDV) or also called third party logistics (3PL) does not have its own articles and performs logistics services for third parties. As a result, a PIM system is not relevant. For a logistics service provider, the WMS is a must: logistics is the core business of the company. New customers with their own stock and order sources can be connected to the WMS by means of interfaces, but are not part of the application landscape. When the accounting is linked to the WMS, logistics services can be invoiced to the customer. This is done on the basis of the input, storage and output rates entered in the WMS.
Large LDV
A large logistics service provider, whether this is delivery to consumers (B2C) or business customers (B2B), links to external packages for orders and possibly articles. An ERP or WMS can be used for this. The WMS keeps track of incoming, outgoing and outgoing rates and calculates the invoices, but will not send them itself. If the service provider uses an ERP for invoicing logistics services, the ERP must be linked to the WMS.
LDV with own transport
At a logistics service provider with its own transport, we often see a Transport Management System (TMS) and a route planning package. The TMS is needed for invoicing journeys and calling up (sub)contractors and determining which car will drive which journey, journey planning takes into account loading and unloading times of customers. If the service provider does not have to settle journey prices because only external transport is used, then only the journey planning is used.
Retail chain
A retail chain always has Point of Sale (POS) software available. In practice, this is also called a cash register system. However, a POS system can do much more than it used to and we are doing the name an injustice: a POS also shows customer data, sales statistics and stock information. POS can be set up simply, with only the registration of sales, but is also regularly expanded by retail chains into a real ERP.
The combination with the accounting package is often simple: this package knows how much money is there, the POS what is in the stores. Large retail chains also often use an ERP: The only question is whether the ERP or the POS will be leading. The WMS will be fed by the POS or the ERP in a Multichannel strategy.
Production company
A production environment is logistically slightly more complex than the usual environments. A production company usually has either an ERP with a lot of customization within a production module, or a production package expanded into a real ERP. These two options are combined in the image below. In addition to this system, production companies also regularly use a PIM to record all varieties of raw materials, components and semi-finished products.
Conclusion
The above examples only show a few possible application landscapes. Depending on the environment, the complexity and the variation in flows, there may be more or fewer systems present. There is no ‘good landscape’: almost every organization has unique processes which in turn ensures its own design of the landscape. This article may help you in broad terms in determining the future of your application landscape.