30 Sep
Do you know how do ERP, PIM, WMS and OMS work with Shopify?
Businesses are complicated. No matter what product or service you provide, you’ve got a lot to keep track of your Shopify store, and that’s before you even begin to consider how your website relates to all the aspects of your business.
Things can become even more confusing through the constant use of abbreviations like OMS, ERP, WMS, and PIM. Just what do all these combinations of letters mean, and how do they relate to how you can use your website to integrate all the different parts of your business?
Let’s take a look at what these various terms for integrated systems can address as part of your business, utilizing a CMS driven website with ecommerce as a use case:
What’s a PIM?
A PIM is a Product Information Manager. It contains all the information in an organisation about the product catalogue, including inventory levels. This information can then be synced to multiple sources via an API. It’s separate to the commerce platform/cart e.g. Shopify or Magento, because often, merchants need to store more data than those platforms have fields for. This is also the case because that information often needs to be synced to many places and within different formats, which a PIM can cater for. A PIM may even be used for something called a ‘catalogue’ too, which is basically an e-commerce site printed in book format.
Beyond fields, a PIM may also support internationalisation in the sense that products can be inputted in different languages with respect to local customs. A PIM will also allow you to optimize your product information for different channels. A good example is the title field on a product, which you might want to optimize differently for different platforms. For example, you might want to include your brand name in the title for Amazon, but not on your own website. A PIM will let you easily manage this in one place.
PIM provides a middleware solution that takes your ERP data, combines it with the media, descriptive information, and marketing copy you’ve created, and places it in front of your customers, integrating your website with your day to day operations and ensuring consistency in all product-related communication that your customers see. In this use case, much of the detailed product information such as web descriptions, images, etc., would be stored and edited within the PIM and be pushed into the CMS/ecommerce tools.
What do you store in a PIM?
Titles (different versions for different channels, for SEO, etc.), descriptions, categories, SKUs (Stock Keeping Units), images, prices, inventory levels.
When would you use a PIM with Shopify?
Shopify stores your product catalogue, so initially you might wonder how a PIM fits with Shopify. A PIM would be beneficial if:
- You have a large catalogue that combines information from multiple sources
- and you sell on multiple channels and need one source of truth
- You have multiple Shopify stores and want to sync products between them
What’s an ERP system?
An ERP (Enterprise Resource Planning) system is used to plan a company’s core operations, such as manufacturing, logistics and finance. Some common ERP modules are for CRM, Accounting, HR, Manufacturing, Order Processing, Supply Chain.
Really though, ERPs are built first for finance teams. And since finance is at the heart of a business, if a business has an ERP system, it is the heart of the company.
An ERP normally eliminates masses of spreadsheets, legacy systems and sometimes even paper systems too. In e-commerce, it normally includes modules for manufacturing info, a CRM, order management, reconciliation with finance and accounting, warehouse and inventory management and a reporting suite on top of all of that.
In many cases, ecommerce websites create and fulfill web orders through the ecommerce tools themselves. This, however, usually requires a manual entry into a back end system such as an ERP to actually fulfill the orders and ship them to the end customer. This is where a seamless integration between your ecommerce website and your ERP’s Application Programming Interface (API) layer saves time and money.
When would you use an ERP with Shopify?
Larger businesses that have multiple channels and/or are operating in multiple regions will often have an ERP to consolidate operational information, especially information that needs to be reconciled with financials.
ERPs are often the ‘source of truth’ for businesses that have been around a while and that have seen many website front-ends. So it’s often a constant that is hard to migrate away from as it touches so many critical business functions.
What are the benefits of ERP?
Benefits of an ERP system include
- Efficiency/cost saving
- Easier reporting
- Better compliance
- Scale
- Better end customer experience
What’s an OMS?
An Order Management System (OMS) is used to track all orders, across all channels in a business. That might include orders from a brand’s online store, retail shop, and phone-order channels. The OMS will track the orders, inventory levels and fulfillment statuses of each order. An OMS will often help with fulfillment tasks too e.g. printing labels, picking orders. Users of an OMS include customer service teams and fulfillment teams e.g. your warehouse or 3PLs.
A good OMS should support all your channels, geographies and warehouses. Integrating this with the other systems in your architecture is key. If you’re selling online, you’ll be using an OMS already:
- It could be a module in that e-commerce system you’re using, such as Shopify or Magento.
- It could be a module in your ERP system e.g. SAP.
- It could be an external system like Manhattan Omni, Skubana
Normally, you’ll use an external system if you’re selling through multiple channels, such as marketplaces, DTC, in-store retail. Platforms like Shopify can often handle this, but not always.
What sort of functions does an OMS handle?
When an order comes in, you have to issue a receipt. You also need to store the order until it can be fulfilled, and keep track of the order status. You also need to decrement product inventory (and increment for returns). If you’re drop-shipping, you need to hook in to those systems to let them know about new orders. And at the end of the day, you need to report on what exactly has happened. And often, you need to do all of that at scale. That’s what an OMS does.
What about 3PL?
An OMS is great at keeping organised when it comes to logistics… so can connect back into your 3PL for sending orders through for picking, packing and shipping.
What do you store in an OMS?
Incoming orders, inventory levels, warehouse locations, picking and packing instructions.
When would you use an OMS with Shopify?
If you want to consolidate orders across multiple channels or storefronts and direct them to multiple fulfillment routes, an OMS makes sense.
What’s a WMS?
At a certain scale, you’ll need to handle your own fulfillment from a distribution centre and get really clever with this. But where does this fit into your IT?
The answer is a WMS (or rather, a Warehouse Management System). This keeps track of all your warehouse operations. It starts with goods in (think trucks unloading palettes), then put away (where do the fork lifts put those goods?), then, when orders come in, the WMS works out the most efficient picking route for your pickers. A WMS keeps an audit trail as good flow, in and out of the warehouse. WMSes also handle reverse logistics (returns) too.
A WMS will be linked to barcode scanning hardware used by warehouse staff. This speeds up product unloading, picking and packing, and crucially reduces errors. A WMS will help you optimize your warehouse beyond the basics e.g. making sure barcodes are facing outwards, grouping bestsellers together near the base station/boxing area.
A warehouse management system (WMS) is software designed to optimize operational processes in a warehouse. By implementing a WMS you have full visibility into real-time inventory levels and storage, staff productivity, demand forecasting, and order fulfillment workflows within a warehouse.
Moreover, Warehouse management systems are important as they eliminate manual processes and guesswork and instead streamline processes that save time and provide a more accurate snapshot of what’s going on inside a facility without needing to conduct continuous warehouse audits.
5 essential warehouse management processes
Warehouse management is one facet of supply chain management. It affects retail order fulfillment, storage, inventory management, shipping, and distribution. Having an all-in-one solution lets you see what’s happening across different functions of the warehouse in real-time such as inventory being received, orders being packed, shipments being labeled, and any other movement of goods.
1. Inventory tracking
It is monitoring stock levels so you know which SKUs you have in your warehouse and the exact locations in which you store them, or if they are in transit from a manufacturer or en route to a store.
Moreover, Inventory management lets you know how much product is ready to be shipped if a customer ordered an item now, as well as when you should order more based on projected volume.
As you grow, you will likely turn inventory over quicker, expand into new locations, and increase your product lines. This makes inventory accuracy and tracking all the more important.
2. Picking and packing
Picking and packing are two core functions performed in a warehouse. A warehouse management system should generate pick lists for each picker to retrieve items in the most efficient way. This may include zone picking, wave picking, or batch picking.
For each new order, the picker will receive a packing slip of the items ordered and storage locations at the warehouse. The picker will collect the ordered products from their respective locations.
Once an order is picked, it is handed off to a packer, who is responsible for securely placing the items in a box or poly mailer, adding in any needed packing materials, and putting a shipping label on it.
3. Receiving and stowing
Any warehousing operation must be able to receive inventory or freight from trucks at loading docks and then stow them away in a storage location. A warehouse management system will need to be able to scan in each new box received with the inventory quantities it has.
Then, it will be brought to its short-term or long-term inventory storage location, where it will be scanned again. Warehouse management software should provide clear instructions for each user so they know how to receive, unpack, retrieve, pick, pack, and ship inventory.
4. Shipping
Based on the delivery options and shipping services you offer to customers, shipping carriers like DHL, USPS, FedEx, and UPS will pick up orders from the warehouse to ship packages to their next destination.
Once the order ships, your warehouse management system should be able to automatically send ecommerce order tracking information back to your store so your customers can track their shipments.
5. Reporting
A warehouse management system should provide out-of-the-box operational and inventory reports across the warehouse. This may include accuracy in fulfilling orders (total mis-picks, mis-packs, etc.), total orders fulfilled by the hour to measure efficiency of staff, orders shipped on time, and much more.
There are also reports relating to people’s operations including inventory forecasting to understand labor management and staffing needs. With a warehouse management tracking system you can quickly find out which employees have completed safety training, and those who have licenses and certifications to operate certain equipment, and other regulatory requirements you must meet to operate a safe warehouse.
What’s the difference between these systems?
The difference between an ERP and a PIM
An ERP has a broader scope than a PIM so is usually bigger, more sophisticated and expensive software. A PIM normally has more specific fields when it comes to products e.g. more fields for SEO and for different channels. PIM support for your e-commerce platform might be more out of the box, such as an app in the Shopify App Store.
ERP integrations tend to be more custom because of the sheer number of configurations. An PIM may utilize a feed from the ERP system to populate basic product content.
The difference between an ERP and an OMS
In theory, an ERP can be configured to handle OMS-like functions, such as storing, routing and reporting on orders. But an OMS is a more specific software that’s especially designed for order management.
ERPs are general back-office software solutions that handle HR, accounting, supply chain, manufacturing, wholesale and so on. With that said, an OMS can be an add-on to an ERP, and can handle those e-commerce and retail needs better than a general purpose system, whilst feeding back logistical and accounting information to the ERP.
The difference between a PIM and an OMS
A PIM stores product information, quite like a database of your catalogue. An OMS stores order information, giving a list of which customers have ordered which products. Normally, products are matched between systems using their SKUs.
Wrap up
The combination of an ERP, PIM, OMS, WMS and e-commerce platform constitutes your architecture or ‘tech stack’. It is, however, unlikely that you’ll have all of these systems in place.
An ERP often combines multiple functions, but because they’re generally not e-commerce specific, they aren’t always suited to particular tasks for which a PIM or OMS might be better.