Warehouse management systems (WMS) represent a key supply chain toolset which can be utilized to help optimize logistics functions.
WMS’s primary activities involve
• Processing routine warehouse transactions
• Co-ordinate the flow and storage of materials within the warehouse
• Optimize locations (for putaway and picking)
While there are many associated benefits of WMS many companies remain cautious about investing in implementing WMS. There is various reasons behind this which include
More people rather than software
There is a misnomer that rather than invest in a WMS an alternative is to employ more staff (which are typically at the low end of the corporate pay scale) – throwing people at the job is considred quicker and easier and when contrasted with a software implementation less likely to fail. However this approach fails to address optimization improvements that data systems can bring.
Inhouse vs Buy it in
Many companies attempt to use low cost 3rd party applications or more frequently endevour to build
in-house applications that attempt to manage key activities usually related to WMS systems. This can be considered to be more cost effective however this often fails to assess the risks involved with utilizing in house development teams. Once again this method can fail to capitalize on the key optimization opportunities available with a full fledged WMS system.
Integration woes
It is imperative, for WMS deployment to be a success, that implementation includes seamless integration with existing corporate (often legacy) systems. Many organizations are fearful of this and suspect rather than simply deploying a WMS whole scale system changes will be required, especially where they may be relying on legacy ERP applications which will then result in far greater capital outlay.
Lack of strategy
While WMS usage has undoubtedly grown one issue that is impacting the growth of implementation is a lack of defined business strategy and long term business planning. Organizations are often unaware of both the key logistics functions and the ROI opportunities that WMS can offer and can remain locked in to a low technology base in the Logistics function due to a lack of strategy
A lack of understanding regarding ROI can be a key barrier. Long-terms benefits can appear a mystery and concerns about complexity and their application within smaller warehouse sizes can inhibit decision-making. For some, achieving benchmarked levels of warehouse performance is a lower priority to delivering improvements in other areas of the supply chain (for example procurement) and as a result WMS doesn’t achieve senior buy in and projects don’t get launched.
Fear of failure
For some the key reason that WMS are not deployed is fear that the system will not work. Fears over inability to process and ship orders can significantly inhibit green lighting WMS projects. Where processes are not broken (and need to be repaired) concerns over failure in the logistics function which can bring an organization to its knees can result in a cautious approach to WMS implementation.
The real picture
Warehouse Management Systems can be an undoubted success. Software companies can provide comprehensive and effective solutions that deliver best practice, compliancy and ROI. Most solution providers will help manage the change management aspect (which many businesses remain fearful of) through normal consulting routes
There are many benefits relating to WMS from efficiency to accuracy and WMS can offer intangible benefits also. However, as with any software solution, deployment and implementation require careful consideration of a number of factors including requirements, complexity of process, required results and how the WMS will be deployed through utilizing well planned phased inclusive approach.
Warehouse Management Systems (WMS) are typically software solutions whose primary purpose are to co-ordinate and administer the storage and movement of products and materials within a company’s warehouse and related processes.
What does a Warehouse Management System (WMS) do?
Whilst most WMS will have a broad range of related functionality this typically includes tools that help with:
Stock picking,
Inventory control,
Label printing,
Returns,
Cycle counting,
Some WMS systems will go beyond the physical warehouse and extend functionality to
Yard management,
Transport,
Labor (i.e. Timecards)
Key Benefits of Warehouse Management Systems
WMS can provide numerous benefits including
Faster goods movement,
Better management information,
Reducing errors
Reduced levels of data entry
Optimization of storage locations,
Improved planning
WMS can help facilitate automation and are often coupled with other solutions such as RFID and warehouse control systems that manage materials-handling.
For the businesses that utilize products incorporating shelf life (of life expiry dates) WMS can help in prioritizing dispatch of appropriate goods, eliminating errors and reducing material scrappage due to life expiry.
WMS Solution Providers
Though there is a wide variety of Warehouse Management Solutions which predominantly come from 3rd party companies that specialize in WMS, there are some packages, provided by ERP vendors, that come as a bolt on to ERP software (SAP for example). Most systems will offer some level of integration into other software including existing legacy products).
While bolt on ERP software modules are popular well known providers like RedPrairie and Infor have competed well with the large ERP vendors and have been successful in sectors such as FMCG and 3PL organizations with their products commonplace in many companies around the globe.
Many WMS systems do not rely solely on traditional use of desktop computers with systems available through PDA’s or other mobile devices. This can offer various benefits both in management information (real time tracking for example) and of course in the nature of warehouse tasks which are not typically desk bound.
WMS in SME’s
Whilst WMS are often prominent in large organizations Small businesses have been slow to implement the solutions. High volume (high number of SKU’s) and complex warehouse operations tend to benefit most from WMS where smaller organizations cannot capitalize on the benefits (due to scale) and also typically experience issues in interfacing (or funding the implementation) with other software packages such as Finance and procurement packages.
Many SME’s have looked at the cost of such systems and compared that to typically cheap labor rates coupled with relatively simple process and cannot justify the capital expenditure.
WMS costs are typically a mixture of software ,WMS hardware and implementation. As with any software deployment, ROI is realized over time. How much time will typically depend on the size of the organization and its complexity of operations prior to the WMS being deployed.
One WMS fits all
Many warehouse systems are customizable and can be tailored to suit the business sector they are deployed in and its common to find WMS in many industries from manufacturing, pharmaceuticals through to distribution and retail organizations.