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ERP – How to choose a warehousing system


Before you dash off to start looking at demonstrations of warehousing systems, it’s wise to invest some time to understand what level of system will best suit your business. This will help you to focus your efforts on evaluating software that has the appropriate level of functionality.

This will save you:

  • time during your evaluation process;
  • a disaster – if you buy a system that can’t do the job;
  • or money – if you buy a system that is overloaded with functionality that you won’t use.

Here are three basic levels of warehousing that will help you to decide what functionality you will need:

Basic Warehousing

This level is suited to organisations that have:

  • Minimum segregation of duties from a systems perspective
  • A small warehouse
  • Relatively low volume of orders (so that it is okay to process one order at a time)
  • Low level of system integration when it comes to stock control
  • Low level of computer literacy among warehouse staff (so that orders can be processed by office staff and warehouse personnel mainly work from physical paperwork generated by the system)

This is the simplest level available and doesn’t require any separate warehousing processes. All the stock within a warehouse is available to be used for various operations. Warehousing functions are embedded into the relevant documents. For example: a sales shipment might be processed from a sales order screen without having to process any warehousing function; and bins might be used to categorise stock into various physical locations without changing the overall stock availability within a warehouse.

Intermediate Warehousing

This level is suited to organisations that have:

  • Some level of segregation of duties from a systems perspective
  • A relatively large warehouse
  • Reasonable volume of orders
  • Reasonable level of system integration
  • Reasonable level of computer literacy among warehouse staff

At this level your business will be expecting functionality to meet specific needs, such as:

  • Picking: A pick document will be generated for your warehouse personnel to use in the system to ship the outbound orders.
  • Shipment: The warehouse supervisor will manage the outbound orders via a “delivery run” process. Orders will be accumulated on a warehouse shipments screen and multiple orders can be consolidated into one shipment based on freight companies’ or multiple customer orders. A large volume of orders can be processed using a warehouse shipments function.
  • Put-Away: Provision of a warehouse document for all the inbound orders.
  • Receive: Allows multiple inbound orders to be received using the same warehouse documents. Ideal when suppliers consolidate various orders into a single delivery that can be managed on a single screen.

Advanced Warehousing

This level is suited to organisations with a large volume of orders and huge warehouses with dedicated areas for various operations.

This is the model that offers the maximum level of stock control. Warehouses can be segregated into various areas dedicated to different types of operations such as: Shipping Zone; Receiving Zone; and Production Zone. Stock within these dedicated areas is not available for any other operation. A Quarantine Zone can also be created to manage the stock that needs to be validated before it is available for use. Complete Bin control is also available so that wave picking can occur and the system will suggest stock to be placed into the most effective pick path.

This creates a maximum level of segregation of duties: office staff enter the orders; the warehouse supervisor manages the warehouse documents based on orders and issues various internal warehouse instructions (Pick, Put-away, bin to bin movement etc.,) to warehouse workers; and the warehouse workers execute the pick, put-away and movement instructions.

Mobile devices can be easily integrated with this level of warehousing so that stock can be scanned and processed easily according to the instruction issued.

The more time you spend analysing your existing warehousing operation and defining your needs for the future, prior to seeking a software package and implementation partner, the better. By doing this you will be in a strong position to minimise the time needed for software selection and avoid the confusion caused by looking at options that offer too little or too much functionality for your needs.


About the Authors:

Rubina Usman is Principal Consultant and Peter Hill is the Director of Fenwick Software. Fenwick Software is based in Melbourne, Australia and is a Microsoft Dynamics NAV partner.