Purchasing a Cloud-Based WMS? Get Grounded
Warehouse management systems (WMS) run the gamut from sophisticated and flexible standalone options to supply chain execution suites to enterprise resource planning tool extensions. As with many data-driven functions, cloud-based solutions have grown in prominence and mindshare. One of the biggest misconceptions, however, is that adopting a cloud solution naturally drives cost savings. But hidden costs can negate potential savings, so be sure to carefully evaluate cloud-based offerings.
One of the most compelling reasons managers consider a cloud-based WMS solution is its potential for scalability. The cloud seems to offer an almost infinite amount of room to grow and adapt as your organization's needs change. But this perceived flexibility comes with several caveats that buyers often overlook in the fine print. Here are five points to consider when purchasing a WMS:
- Data restrictions. Most contracts for cloud-based WMS solutions include restrictions that limit the amount of data that can be stored. Depending on your particular needs, this may equate to only one week's worth of data. Do you understand your needs, and know what happens if you require a larger database footprint? What is the additional cost for that extra capacity?
- Customization. Can the cloud-based WMS you are considering be customized and modified? Many solutions offer a take-it-or-leave-it platform with little flexibility for additional screens, reporting, and workflow rules.
Because multiple users need to run on a single instance of the WMS, most modifications are not possible because they risk impacting others. The result is that someone who needs a specific workflow or rule change will often be steered to the cloud offering's "single tenant" mode, which ends up being more expensive than a typical on-premise solution.
- Data ownership. If the time comes for your company to migrate from one cloud offering to another provider, how easily can you accomplish this? And what happens to the data stored in the current system? Most cloud offerings do not provide data export routines or a direct connection to the database. Don't underestimate the value of your data.
- Pricing. Although a low initial price can be enticing, many cloud-based WMS users quickly discover there are extra costs involved in using these platforms. Just how many different ways can users be charged? By database size or by network utilization? Or perhaps by CPU utilization?
- Training and support. A successful WMS deployment requires hands-on expertise and knowledge of best practices to ensure that processes get up and running smoothly. WMS platforms can be complex, causing a warehouse's operations to grind to a halt if things go wrong. Without adequate training and support, even a seemingly affordable WMS can quickly become costly.
Conducting a Grounded Review
The WMS plays a pivotal role in the supply chain, tracking the movement of products and materials within the four walls of the warehouse. Users should measure the effectiveness and cost of every WMS, including cloud-based solutions, by the same comprehensive yardstick.
Can it support warehousing needs, including receiving, adding, picking, quality control, shipping, reporting, and forecasting? Can it streamline warehouse processes and optimize product flow? Conduct a grounded review and read the fine print.