Connecting warehouse data with production and business systems

Most likely you have an ERP system running your business, which may consist of many modules including, for example, customer relationship management (CRM), inventory systems, scheduling, ledgers, track-and-trace functionality and possibly some sort of warehouse management system (WMS). Depending on your needs or the timing of your software purchases, you may also have a shop floor or MES (manufacturing execution system) and a standalone WMS—which may or may not be connected to your ERP system. Often one role of a shop floor or MES is to act as a relay or connection point between the ERP and WMS. In case of a non-automated shop floor where there is no MES, there is a good chance that the ERP system connects with an independent WMS or has some built-in WMS functionality.

Our focus is to look at the connection between production/business (MES)/ERP systems and the WMS and understand how they function together to keep you abreast of ingredient shortages, customer/consumer issues and potential recalls due to a quality/food safety issue.

Getting to know the lay of the land…or cloud

Like the pharmaceutical industry, food and beverage is highly regulated, which means a well connected facility—business, production and warehouse—is a given because track and trace and electronic records are a requisite. Most ERP and production management software suppliers understand a tight connection to warehouse activities is more important than just knowing there is enough inventory to cover the next production run. In several cases, these suppliers provide specialized WMS offerings to meet food industry requirements. Most ERP applications are so modular that they can be tailored to any-sized food and beverage processor.

NetSuite WMS Mobile App — Oracle NetSuite WMS App helps businesses keep track of wave picking, tally scans, cart put-away, label printing and more through tablets and smartphones. Screenshot courtesy of Oracle NetSuite

Warehouse personnel using CAT Squared’s WMS running on wireless handheld devices, can input product data via barcodes or get pertinent data about products stored in the warehouse. Photo courtesy of CAT Squared

Many ERP/MES/WMS suppliers today offer both on-site and cloud-based systems, and both approaches have their unique advantages and disadvantages, which we won’t cover at length here. Suffice it to say, cloud-based systems require a smaller hardware investment, but could potentially suffer from internet outages, while on-site systems tend to be more expensive to maintain, but they keep on running should the internet go down. For more on this subject, see “IIoT and the Cloud,” a Food Engineering web exclusive.

One benefit of a cloud-based application is that it works everywhere on most any device and is configurable specific to a user’s needs. “Oracle NetSuite is a complete cloud-based business management suite that covers all aspects of the business from CRM, commerce and financials to inventory, manufacturing, order management and WMS,” says Gavin Davidson, industry product manager. “We also offer a number of mobile applications that run on the same platform: MES, quality, WMS and packing station. The breadth of our solutions allows customers to gain complete visibility and control into their business operations and provides them the ability to automate business processes across the entire suite.”

Speaking of cloud-based systems, Plex Systems is an early cloud pioneer, delivering completely cloud-native solutions for ERP, production/manufacturing execution, and warehouse operations. According to Jim Bresler, director of product management, food & beverage, Plex has been able to achieve cloud uptimes of 99.997%, which works out to about 15 to 20 minutes of downtime per year—probably better than your electric utility service.

Cloud-based software is sometimes thought to have security issues, but Bresler says Plex has achieved top security ratings (securityscorecard.com “A” rating). Being cloud-native, the software is browser-based, but also offers a mobile app scanning solution for both production and warehousing, which runs on iOS, Android, and Windows devices.

CAT Squared’s systems are hardware agnostic, but typically utilize industrial PCs on the plant floor and mobile handheld devices to perform WMS functions such as configuration. These devices interact with on-premises or cloud-based application and database servers. Photo courtesy of CAT Squared

Food-industry specific applications

“There are few industries in which achieving tight synchronization between production and warehousing matter more than in food and beverage manufacturing,” says Jack Payne, Aptean director of solutions consulting, food and beverage. While having different, specialized systems can drive functional benefits, it can often come at the cost of tightly linking production and warehousing operations in real time. “That’s why we have taken the approach of ensuring that Aptean Food and Beverage ERP includes both highly specialized food and beverage production functionality and built-in warehousing capabilities,” says Payne.

Real-time synchronization of master data (customers and products) and transactional data (inventory, lots, shelf life) between an ERP solution and a WMS solution is often very challenging to achieve, says Payne. Without this synchronization, the sales department could promise inventory that has already been shipped to someone else, and the planning staff could either over-produce or under-produce supply to fulfill demand, leading to short shipping customers or potential expired product.

In the food and beverage industry, the need for complete traceability from supplier and supplier lots to customers and customer shipments, and integration of the two systems can put this mandatory requirement at risk. That is why having a specialized food and beverage ERP system that includes warehousing and distribution capabilities rather than two separate systems is ideal, says Payne.

Aptean’s Food and Beverage ERP can synchronize the WMS with production and business systems to get a handle on what the cost will be to make a particular batch, based on fluctuating prices of ingredients and manufacturing costs. Screenshot courtesy of Aptean

“Our IFS Cloud single platform solution seamlessly connects all industry specific products and capabilities required by food and beverage manufacturers,” says Andrew Burton, global industry director - manufacturing at IFS. IFS Cloud is configurable, and the modules IFS users choose can be deployed either in the cloud or on-premise. Capabilities include not just production and warehousing operations, but also the ability to integrate all aspects of the day-to-day running of a business. IFS Cloud offers solutions for CRM/marketing, demand planning, production, warehousing, asset and service management, and includes specific functionality around shelf life, expiration, etc.—all of which are crucial to the industry.

Infor provides industry cloud solutions specifically designed for food and beverage manufacturers and distributors, says Marcel Koks, industry strategy director food & beverage. Most processors opt for a public cloud deployment, but an on-premises system is a possibility as well. Depending on the needs and current application landscape of a client, the solution can be composed of Infor ERP with its embedded WMS capabilities or extended with the advanced Infor WMS. Regardless the choice for ERP, WMS or both, the solution comes with an integration layer, called Infor OS, to synchronize ERP, WMS and WES (warehouse execution system). The integration makes use of REST APIs.

REST APIs (application programming interfaces) provide a flexible, lightweight way to integrate applications, and have emerged as the most common method for connecting components in micro-services architectures, according to IBM. A REST API is an API that conforms to the design principles of the REST, or representational state transfer architectural style. [1]

Sage X3 is an enterprise-wide blend of applications that addresses the unique and specialized needs of food and beverage manufacturers, says Mike Edgett, director of product marketing. The functionality of X3 covers the critical components of F&B companies, such as formula management, lot control and tracking, allergen management, quality management, regulatory compliance, batch processing, quality assurance, scheduling, warehouse mobility, inventory management and expiration control. These functions together synchronize manufacturing and the warehouse to ensure the best raw materials are available at the right time while controlling overall costs.

While CAT Squared doesn’t have a dedicated ERP system, it does have MES and WMS systems. “CAT Squared’s solutions are specifically designed for the food and beverage industry and include comprehensive modules for both production and warehousing,” says Karen Lambert, Sr., WMS software engineer. When CAT Squared’s MES and WMS are both implemented for a company, the need to interface information between the two is inherently eliminated, as the modules seamlessly work together as one comprehensive, tightly integrated system sharing the same database.

Oracle NetSuite Dashboard shows Warehouse Manager’s functionality, which includes shipping/receiving of orders, transactions, reports, inventory lookup, pack orders, and a KPI meter. Screenshot courtesy of Oracle NetSuite

When the MES or WMS is independently implemented, CAT Squared offers full integration capabilities for communicating data from, or to, the plant floor or warehouse. A dedicated integration team would also work with the user and third party to map data, perform a gap analysis and apply any needed customizations.

“CAT Squared’s systems are hardware agnostic, but we typically utilize industrial PCs on the plant floor and mobile handheld devices to perform WMS functions,” adds Lambert. “These devices interact with on-premises or cloud-based application and database servers.”

MES: A natural link between ERP and WMS

“Normally ERP is the system of record for the master data, purchase orders, production orders and sales orders,” says Jerry Beaston, Infor product manager WMS. ERP is also controlling the planned dates and times of these transactions. Planned material receipts, ASNs (advance shipment notice), picking orders for material to production, ASNs for outgoing products from production and picking orders for sales orders are sent to WMS, which is executing these.

The main objective of a WMS is to provide the necessary tools to control and optimize the storage and movement of inventory in a way that maximizes efficiency and minimizes cost, adds Lambert. Receiving, put-away, picking, shipping, cycle counting, reporting and interfacing capabilities are all primary components of a WMS.

While an ERP system can link to a WMS, Lambert says the linking should be the job of a MES if a WMS is already in place. Most major ERP systems provide interfacing capabilities needed to interface with plant-floor MES; however, linking production inputs and outputs to WMS systems is typically an MES function, utilizing native or third-party interfaces to provide necessary data to the ERP.

“There are few industries in which achieving tight synchronization between production and warehousing matter more than in food and beverage manufacturing.”

— Jack Payne, Aptean director of solutions consulting, Food and Beverage

However, most WMSs are really designed for distribution of goods and warehousing operations. “In our experience, food and beverage companies that try to pair a WMS/WES (warehouse execution system) solution to/with an ERP have done this specifically for finished goods and customer distribution,” says Aptean’s Payne. Most WMSs are designed for managing finished goods rather than being designed to manage sending materials to production and then receiving finished products back. Forcing this type of function typically results in breaking the traceability chain into two halves: supplier receipts to production and finished goods to customers.

When the MES and WMS are separate systems, both are equally involved in the exchange of data by interfaces between the systems and/or the ERP, says Lambert. Transfer-of-ownership for the inventory is typically initiated by the system that currently “owns” the inventory, and the completion of the transfer must be acknowledged by the receiver. A WMS should have interfacing capabilities for both incoming and outgoing inventory between the warehouse and the plant floor.

Integrating ERP and WMS: Ideas differ

One of the issues with segmenting solutions is that in a lot of modern businesses, the barriers between warehouses and production facilities are becoming increasingly blurred, says Oracle’s Davidson. Because of this, having an ERP platform with WMS and production capabilities embedded, or tightly integrated, is of the utmost importance.

However, IFS’ Burton says just synching WMS and ERP functionality is problematic. “Our view is that these should not be synched since this can create data integrity issues, and it is much easier when part of the same solution.” Key capabilities for a solution should include:

Purchase order receipts
Issue materials
Inventory location moves
Cycle counting—perpetual auditing—incorporating shelf-life management
Label/barcode printing
Packing—handling units

Oracle NetSuite Pack Station feature simplifies and increases the efficiency and accuracy of the packing process. Screenshot courtesy of Oracle NetSuite

The main objective is to drive efficiency in the warehouse subject to the quality, customer and regulatory constraints, says Edgett. There are many considerations that that must be made at the receipt of raw materials. Does it need to be quarantined for a quality check? Does it need a lot number? Does the stock need to be refrigerated? Does the stock need to be isolated for allergen, regulatory or religious reasons? An integrated WMS and ERP will address these considerations automatically.

More complex and granular functions can occur on the WMS level, and summaries of that data can be sent through integration to the ERP, says Lambert. Depending on the data requirements of the ERP, integration can be loosely coupled (more summarized) or tightly coupled (more granular). The ERP typically handles data such as the master vendor, customer, and order information, while the WMS handles the granular level of receipts, consumptions, and shipments of the inventory.

Regardless of whether a single system covers the production and warehouse operations, or an MES is integrated with a WMS, the need is the same: Seamless handling of all the production and warehousing operations, and the interactions between them, says Plex’s Bresler. Plex offers a full, integrated ERP solution including both production and warehousing, but also supports integration to standalone WMSs with a full suite of APIs, either from the Plex ERP system, or from a standalone Plex MES solution. To provide the greatest user value, the integration between production and WMS systems must be tight and real time—meaning integrations between MES and WMS systems must be built with care and detailed participation from implementers of both systems to make sure all business processes are handled smoothly and with robust error handling.

Recalls: What system does what?

Recalls—mock or the real thing—are the ultimate system test. So what roles do ERP, MESs and WMSs play when a recall is staged?

Depending on the capabilities, either the WMS or ERP could start a recall, says Plex’s Bresler. However, only the ERP system will have the full genealogy from raw component through WIP to finished goods.

WMS/WES solutions enable the recording of batch movement throughout the recall process, says IFS’s Burton. ERP solutions provide data, which can all be found in one place, providing businesses with the understanding of what needs to be recalled and consumers with the ability to see where the product came from.

In addition, the ERP platform might have CRM capabilities that could identify the potential of a recall based on customer feedback, complaints etc.—and once the need for a recall has been identified, the ERP should be able to provide a list of customers and products that need to be recalled, says Oracle’s Davidson.

The ERP should be the solution for managing traceability and product recall, as well as for performing mock recalls for customers and food safety certification, says Aptean’s Payne. The ERP is the solution that has the complete record from supplier and supplier lots to customer shipments and invoices. For those companies that have elected to use a WMS solution in the warehouse, it is imperative that the integration and synchronization provide the ERP solution with all the necessary warehouse transactions to maintain full traceability and recall.

The WMS system should maintain granular traceability from a vendor lot as well as a production lot perspective, perhaps even down to case serialization, says Lambert. In conjunction with the production systems, the WMS should be able to maintain traceability from material receipt through inventory, production, and shipping. While ERP systems can also maintain traceability at a lot level, a WMS or MES system is typically used as the system of record. The ERP system could be used as well for shipping and customer information.

Finally, for product at the retailers, a call list can be generated from the ERP’s traceability module to contact them, says Sage’s Edgett. Returned Material Authorizations (RMAs) are created with instructions, so when the product is returned, warehouse personnel will know where to stock and what QC status it should be. On the back end, all credits and replacement products are processed.