TMS vs. WMS: Who’s running the show?

It’s always interesting to hear how companies think about their supply chains, particularly when it comes to the connection between the WMS (warehouse management system) and the TMS (transport management system). Which one should be the overriding process? Should we optimize our warehouse and order picking, or should we optimize the transport chain and customer delivery?

The WMS can oftentimes provide major savings when it comes to capital tied up in inventories as well as inventory turnover rate. But when it comes to distribution to customers, it’s more about providing a high service level and making sure customers get their deliveries right on time – not a day too soon or late. In this case, it’s actually more interesting to look at the process from the end, or from the customer’s perspective.

Taking the customer perspective

If I were to have the customer’s requirements as the point of departure while ensuring the right level of service, then I need to have flexibility and capacity in both my TMS and WMS to plan the process backwards. This means that the optimization and planning starts in the TMS, which then provides information to the WMS on what needs to be picked and when.

How many systems can actually do this? Not many as far as I know. This is due to the fact that it’s usually the WMS that controls the entire planning process from both a cost and service perspective, regardless of whether it’s the most optimized method or not.

In my opinion, this way of thinking needs to be revised because companies can greatly benefit from allowing TMS to be the steering principle for both inbound and outbound transports. Only then will we have truly designed a process from the customer’s point of view.

Lena Ridström