Introduction Warehouse Management Systems (WMS) and associated data capture technologies are nothing new. Indeed they have been around for 30 years or more. The typical procurement and implementation model for a WMS solution has remained consistent over that period of time. But now there is another, radically new enabling technology for procuring, implementing and paying for a WMS solution, which brings WMS within the reach of organisations of all sizes and helps to break the conventional software support and maintenance/up-grade cycle. The name of this enabling technology: THE CLOUD (aka On-Demand and Software-as-a-Service or SaaS).
Whether you already have a WMS solution, especially one which is constraining your future operational development or believe that your business could benefit from one, here are some tips for considering an On-Demand WMS solution and what to look out for when you do.
Top Tip # 1: Do I need a WMS? As mentioned above, WMS has often been seen as the province of larger organisations, but if your business suffers from any of the following, then you should seriously consider deploying a Cloud-based WMS solution:
• Inability to support new requirements from your customers (smaller, more frequent orders, value-added services, ad-hoc reporting, etc.)
• Lengthy and costly stock takes or physical inventory checks
• Repeated incidence of “out of stocks” or “out of date codes”
• Picking and shipment errors to customers (both internal and external)
• Dependence on local operator knowledge as to where items are located
• Warehouse operatives spending time checking order or inventory statuses or just looking for stock
• Missing transport/loading cut-offs and/or paying for “special” transportation
• Inability to defend against customer claims of missing/wrong/out-of-date code items
2) Data Capture/warehouse technology Of course, any WMS solution you consider should support the latest data capture technologies such as Radio Frequency terminals, Voice Recognition and RF-ID. But the solution should not oblige you to use these technologies, if they are not justified by your operations, especially when starting up. A WMS solution must support paper-based operations, just as readily as other technologies, to enable you to start small and scale fast.
3) Speed to benefit Nobody deploys WMS solutions for the fun of it! As with the procurement and deployment of other enterprise solutions, there is a business case to be produced and a return on investment to be achieved, usually with 12 months. On-Demand WMS solutions are always on and ready to configure for your specific requirements. This means that the time to start productive running and therefore to obtain your budgeted operational and financial objectives is measured in weeks not months. Payback for On-Demand WMS solutions can be within 3 months or less.
4) Support for Innovation As cost is squeezed out of warehousing and supply chain operations, the mantra becomes “innovate, innovate, …!” Cloud-based WMS solutions are typically rich in switchable features and self-configuration options. This capability enables operations to experiment with new operational processes or models “on the fly”, even with a single item, customer or area of your warehouse. If the trial works and delivers the sought after benefit, keep the settings and roll them out. If it doesn’t, revert back to the previous operating process or model with a few mouse clicks and try something else.
5) No up-grades Most on-premise WMS solutions are subject to annual maintenance fees and up-grade programmes. Typically a vendor of such a solution will insist upon an up-grade to the latest version every 3 years or so. Whilst software licences have often been paid for “upfront”, there are still significant up-grade costs in the areas of professional services and training of the new features/functions, plus any hardware/operating system and/or database up-grade costs. This is not to mention the business interruption of what can be a project lasting several weeks. WMS-as-a-Service offerings are always on the latest version: of application software, as well as of operating system, database and other 3rd party software products. In other words, software upgrades become a thing of the past!
6) Business & IT scalability Software vendors often talk about “scalability”. What they neglect to tell you is that their systems and the associated investment scale in only one direction – upwards. With an On-Demand solution, you can indeed “pay as you grow”. However, if your business experiences a downturn in business volumes, either temporary – due to seasonality issues – or permanent – due to, say, loss of a customer – On-Demand WMS solutions enable downward scalability as well. In practice, this means that the increase and/or decrease in your business volumes is matched by an increase and/or decrease in the monthly fees you pay. Unusually in the technology world, what goes up can also come down!
7) Integration to external systems As with all Supply Chain Execution solutions, WMS-as-a-Service is a “slave” and requires information (item, orders, customers, vendors, carriers, etc.) to be able to operate. Granted, this data can be entered manually or by spreadsheet upload, but often this type of data is up-dated frequently and therefore needs to be interfaced seamlessly from ERP order management (OMS) and other external, 3rd party systems. Add in the requirement to integrate data capture technologies (see Tip 2 above), as well as automated Materials Handling Equipment and you have a serious integration challenge. Integration needs to be seamless and where possible supported by available standards. On-Demand WMS solutions are able to support ever more complex integration scenarios.
8) Build the network An On-Demand WMS is based on the Daddy of all networks… the Internet. As well as being radically different in the way that the solution is deployed, a Cloud warehouse system enables organisations to think in a radically different way about who uses a WMS and how. Using the inherent network features of a SaaS solution, collaboration with trading partners becomes not only a possibility but almost unavoidable. Once you broaden your horizons and way of thinking, you can:
• Eliminate timely phone calls from customer service and accounts colleagues. Provide them with read-only access to the system and they can check for themselves customer order status, goods on hand or despatched to customers in the case of disputes or claims, etc.
• Enable suppliers, 3rd party suppliers (co-packers, re-work, etc.) and even customers to have access to the system to check their own (and only their own) stock and inventory records, thus eliminating the cost and time of generating customised reports and sending them out.
• Take a couple more steps towards the nirvana of the “paperless” warehouse. Instead of printing and sending paper despatch documentation to customers, save these documents as PDF files and email them ahead of the physical shipment. Save time, resource within the warehouse and cost, especially for consumables such as printer ink and cartridges paper.
Conclusion On-Demand or WMS-as-a-Service is a reality! It exists and is being used by organisations like yours right now. So maybe it is time to give this new technology a try… and (final Top Tip) as with all Cloud solutions, you can take a Cloud-based WMS for a spin before making a commitment to purchase. Try before you buy! Watch the face of the traditional on-premise WMS salesman when you ask him or her to do that…!
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