There are many WMS providers out there and the decision of which to go with can be daunting, however is often made based on scope, size, and cost plus growth expectation.
As a rough guide you can get a basic stockholding system for £5k to £40k, a fully functioning integrated WMS for a Small to Medium Enterprise for between £40k to £200k and a larger ERP add on WMS or scaled specialist system from £200k to £5 million+. These are examples and do not include differentiation based on delivery, backup, full implementation and training.
One reason for the variance in costs between suppliers is that very few are like for like, many talk about “out of the box”; however in real terms because of localised configuration and integration as well as training this is rarely practical. The variance is also accentuated because of delivery methods, which could be cloud or physical servers. For some businesses they like the idea of hosting their own servers so connection and security practicalities are controlled by themselves and reduce external reliance, others like to externalise as much as they can which can lower costs.
I would suggest all of the factors below need consideration.
A: Long-term planning.
WMS is a long-term commitment; operationally it will fit you and ideally you should fit it, make sure that from the outset you consider your long-term plan. If you turn over less than £1million and only pick 100 orders per day you can get away with something basic. If however that’s your position but you expect/hope to grow to £10 million and pick 1000+ orders per day then your needs should reflect that.
In simple terms if your future may benefit from automation then it’s probably best to buy a WMS capable of integrating (the best option for this would be a system that also has WCS which can control and take information from automation). Always plan for your vision of the future in the WMS you choose.
B: Cost benefit.
Make sure you understand the real cost to benefit. Ask your chosen WMS providers to illustrate suggested gains from the system – both current and future. Honest figures you receive from them should give insight which will help in your selection.
C: Providers pedigree?
As there are many WMS providers out there some may not be fit for purpose.
Make sure you get a list of some real businesses that use them and where possible visit at least one. While doing reference visits make sure you ask the site what they honestly think.
Case studies are good but remember the business will only ever provide one of their successes. Always do research.
D: Platform, does this fit with your IT strategy?
There are advocates of both cloud and sited WMS systems. Advocates of sited will tell you cloud is only as good as your connectivity and that if your external pipe drops you will be left without operational usage. They will also point to security and the ability for VPN. You can manage it internally with your own staff and policies.
Advocates of cloud based will tell you it’s cheaper as storage space can be shared reducing costs, available more when out of the office, as well as leaving the responsibility to load patches to someone external. They will also point to internet speeds becoming better.
Both versions are perfectly plausible and consider your strategy and which would suit you better. I would look at providers from both sides of this.
E: What can you afford?
Some providers will have different versions that you can turn on functionality or bespoke elements as you grow. This allows start-up cost to be lower but as soon as you start to grow it becomes more expensive. Ask about upgrade costs, bespoke elements that you may need in the future upfront so you understand the true/ full potential costs.
Cheap systems are cheap for a reason. Expensive systems should only be expensive if you get value. Ask for a full breakdown of why the cost is what it is; for example if you pay £5k for a system and implementation and they say it’s going to take them 100 days to configure implement, train and have go-live then that would mean they are costing their staff at £50 per day and making nothing on the software or anything else, they won’t stay in business. If you pay £100k for a system and they say it is 200 days it’s much more likely I would believe that.
If you can only afford a fixed budget be honest with providers from the outset.
It’s rare that you won’t run multiple systems; for example ERP, Traffic Management, MIS, spreadsheets, basic databases etc. They will all manage their part, however some may benefit from linking to the WMS.
G: What are support costs, infrastructure, training and implementation?
Do you own the system after buying it or will it be software as a service? This is your decision and every business has different drivers. With SAAS you spread the cost over the full life of the product, with up front you will own the software and pay ongoing support.
Training is critical. You wouldn’t expect somebody to drive a forklift without the right training and this is the same.
H: New technologies.
Most systems will work with voice picking, RFI tech etc. However not every business would need or benefit from that technology. Ask the question of your provider if there is potential if you move/ use that technology to integrate now or in the future.