Top 6 Factors for Selecting and Implementing a WMS
Whether you are installing a WMS for the first time, or upgrading your system, this advice will guide you through successful selection and implementation.
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Evidence of a poorly conceived and managed warehouse management system (WMS) implementation sometimes is so apparent that passersby on the street notice it, says Marc Wulfraat, president and founder of MWPVL International, a supply chain consulting firm based in Quebec.
"Forty trucks lined up down the road trying to get into a warehouse is a sign of a bad WMS installation," he says. "When things aren't working right, or the system's down, the trucks have to wait. And that costs money."
Warehouse management systems are software applications that allow for centralized management of warehouse operations. They track inventory in real time and are designed to improve warehouse efficiency and effectiveness while providing managers and others with increased visibility.
A WMS can be a critical—even necessary—tool for many companies operating warehouses, but attempting to take a step forward can lead to two steps back if companies don't take the proper due diligence during implementation.
"Warehouse management systems are often in place for 15 years or more," says Simon Tunstall, principal research analyst focused on WMS with Gartner Inc., a research and advisory company headquartered in Stamford, Connecticut. "They are very much a strategic investment, and not a solution you can install and then change out in a few years. It's a big change and companies need to be thinking long term and big picture."
Wulfraat compares a WMS to a calculator: "If you're running a warehouse with inventory, then a WMS is a basic tool," he notes. A WMS improves movement of materials and products, increases accuracy and timeliness, enhances tracking and reporting, provides flexibility, improves order fulfillment, and strengthens control, among other benefits.
The value of a WMS is too great to pass up, agrees Randy Bradley, Ph.D., assistant professor of information systems and supply chain management at the University of Tennessee. Companies that avoid adopting a WMS will fall further and further behind, until eventually they will be unable to meet the expectations of their partners and consumers, he warns. Soon, those companies will scramble to catch up.
"That leads to rash decisions around adopting a solution," Bradley says. "And rash solutions lead to premature endings."
For companies looking to adopt a WMS for the first time, or to change systems, here are six key points to consider during selection and implementation.
1. Usability. The usability of a WMS should be of paramount importance when considering systems, especially if your organization has an aging warehouse workforce who lack technology skills.
"Ask if the system is person-centric," Tunstall says. "Make sure it doesn't make simple tasks more complex, which could increase training time. This is true not only for warehouse workers, but also for managers. If it's hard for them to use, then they will not be able to get a good visual on warehouse operations—how teams are deployed and whether operations are effective."
Once a company chooses a WMS, even a user-friendly system, they may not swiftly adopt it. "It's important to take the time to teach workers how the new system is different than their old way of operating," says Curt Barry, chairman of F. Curtis Barry & Company, a Virginia-based operations and fulfillment consultancy for the multichannel industry.
2. Complexity of operations. Warehouse operations vary widely among organizations, and it's essential that companies ensure that any WMS they select has the capabilities to keep up with their particular demands. A high throughput, multichannel operation with multiple picking types, variable demand, and hundreds of thousands of SKUs, for example, requires a robust WMS.
Companies should be aware of any unique aspects of their operations, knowing that WMS vendors might not have developed their systems with an organization's specific processes or needs in mind. "Some activities are truly niche," Tunstall says. "It's important to challenge your internal teams to work with WMS vendors to identify those activities."
A "vanilla" WMS should be suitable for about 70 percent of companies, Wulfraat says, but the other 30 percent with more complex operations will demand a more robust system. For instance, it will be important for some companies to know if a WMS vendor can support high-performance, high-transaction volume processing.
"As soon as a company starts to move more than 50,000 order lines a day, they are getting into more of a high-performance requirement," he says. "The underlying technology that the software has been developed with may or may not support high-volume transaction processing."
3. Speed kills. No error creates more problems for a WMS implementation than moving too fast. "Rushing the process is a big mistake," Wulfraat says. "Companies decide they need to have a system installed by a certain date, and that deadline forces them to rush."
In some cases, an organization's leadership has committed to spending hundreds of thousands of dollars on a WMS and expects to see results. "They want to get it done and want to see the benefits," Barry says. "So an important part of the implemetation project is managing expectations."
It should take four to six months to choose a system, and six to 12 months to implement it. Otherwise, an organization is likely to be unprepared for the shift in their operations. Widespread delays, disorganization, and discontent are likely to follow. "Rushed implementations are almost always unmitigated disasters," Wulfraat says.
Even when managed expertly, implementing a new WMS often might not lead to clear-cut benefits at the start. Organizations need to take time to feel out the new system and identify and solve issues that arise. Patience is key. "It takes time to make it a highly productive environment," Barry says.
4. Don't ignore the data. Companies can be complacent about their own responsibilities, such as issues surrounding data, with the introduction of a WMS. No matter how great a WMS, it will not mean much if a company has shortcomings in the way it handles the key sources of data the WMS runs on.
"Mastering data management is extremely important," Bradley says. "What's the quality of that data? Do you have mechanisms in place to make sure data quality continues to improve? The quality of your data will be paramount to the value that you're going to be able to derive from these solutions."
5. The role of cost. Bradley says he is hesitant to work with companies that start with price or return-on-investment as the most important factor in a WMS selection. Both are worth considering, he says, but often are emphasized more than they should be.
"Technology here is not a driver; it's an enabler," Bradley says. "It allows you to do some things better that will help your bottom line but those benefits are indirect rather than direct. With a WMS, it's not a good idea to focus on the financial metric."
Tunstall agrees that putting too much emphasis on cost "can go badly" for companies wading through the WMS marketplace. "It's quite an isolated thing to look at," he says. Controlling and managing costs is important, but focusing on the strategic business case for a WMS is more important.
Cost can also be misleading. The upfront price of the WMS is one cost, but the subscription for the system and the servicing of it is another. Initial cost and total cost will be very different. In recent years, the cost barrier has become less formidable for smaller and mid-sized organizations, Barry says, with the rise of cloud-based platforms.
6. Consider the future. Because a WMS typically is a long-term commitment, Bradley warns against falling into the trap of picking one based only on what your company needs at the moment because that moment will swiftly pass.
"Think about the customer you'll be serving five to 10 years from now," Bradley says. "The supply chain that most of us have inherited was the brainchild of those who came before us. We need to look at solutions that not only address our current needs, but also have the ability to allow us to grow and meet those needs that are coming down the road, so that we can capitalize on them."
The idea is not to try to guess where technology is headed but to consider where the needs of your customers and the demands on your business appear destined to go.
"You have to think about what's on the next horizon even though you're living in this one," Bradley says. "You have to anticipate it. Those organizations that are thinking about the next 10 to 15 years are not going to be caught off guard by change."