Long viewed as a hidden value-add, the portability of a bolt-on warehouse management system (WMS) is worth examining in greater detail. A bolt-on WMS actually carries more portability and flexibility than most people initially realize. Too often, distributors shopping for business software are told the best place for their existing WMS is the trash can.
Raise your hand if you’ve ever heard of or experienced a nightmare software implementation involving the changing of a company’s enterprise resource planning (ERP) system. If your hand is up, you’re not alone. In fact, ERP projects have high failure rates and nearly half of all ERP implementations fail the first time around.
No matter the size of the company, one of the most complex projects a business will take on is buying and implementing an ERP system. For industrial distributors, whether or not an ERP’s WMS features are the very best fit for your warehouse operations continues to be a top concern. If you’re exploring this type of transition for your business – even if you’ve already invested a fair amount of money into your current WMS or aren’t sure what you should be focusing on – now is a prime time to evaluate current warehouse operations and understand how to best position your business for the future.
Why Now? Heads are Already in the Cloud
What makes this an especially timely topic right now is the industry’s push to the cloud. According to the 2020 MHI Annual Industry Report, “Embracing the Digital Mindset: Connecting Data, Talent and Technology in Digital Supply Chains,” advancements involving cloud computing and storage top the list of technologies that are having a dramatic business impact on supply chains and the people who run them. In fact, MHI’s research found 59% of supply chain and manufacturing professionals have already adopted cloud technology – a trend projected to reach 90% in the next five years.
One of the main reasons industrial distributors switch ERP providers is because their current system isn't built for the way their business operates. But even if a distributor chooses to stay with the same vendor, migrating to a cloud-based ERP is still a considerable undertaking.
Warehouses and distribution centers using a best-of-breed, bolt-on WMS that are planning to migrate should understand that a switch doesn’t have to mean pulling the plug. But for distributors who haven’t considered this type of WMS it’s an opportunity to evaluate their warehouse material handling and distribution needs to better understand which solution makes the most sense.
Key Considerations Before Making a Change
Despite all the benefits of portability, bolt-on WMS implementations are not without their occasional challenges. As such, it’s important to figure out where you’re at with your current WMS and what you need to do next to move forward.
For example, are you thinking of switching from on-premise WMS to the cloud? If so, let’s start by taking a look at some of the key considerations to explore before making the decision to move to the cloud. Here are some important questions to ask:
- Are you looking at a single or multi-tenant cloud offering?
- What are the pros and cons as it relates to managing your warehouse operations?
- For what size warehouse operation is a cloud offering simply “good enough?”
- Will a cloud offering give you the flexibility and competitive advantage you need?
- What is the cloud subscription costing you each month?
- What cloud subscription price increases should you expect going forward?
Maybe you’re dealing with a homegrown WMS that you’ve built from the ground-up to fit your specific needs, and you’re looking to expand on that. If this is the case, you should evaluate the following before making a change:
- Is the user documentation and core architecture easily understood by others coming into the business?
- How is this homegrown WMS maintained?
- How will you attract the best software development talent to expand your WMS as your business requirements change?
- What is it costing you to manage the WMS internally where domain expertise is scarce?
Protecting and Maximizing Your WMS Investment
Question for the floor: if your state-of-the-art WMS is doing its job in the warehouse, then why would you get rid of it? Rather than cast aside your WMS, consider how you can protect and leverage the investment you’ve already made. Some additional considerations here should include:
- An existing WMS, if deployed for any length of time, should be familiar to warehouse workers, easy to use, and easy to master.
- The bolt-on WMS isolates your physical inventory, so you know it’s real vs. wishfully thinking that the built in ERP values are always right.
- Your existing bolt-on WMS comes with (hopefully) domain expertise from the vendor.
- Your existing WMS no doubt has had many enhancements that have been added, to support your specific business processes, which hopefully translates into a better experience for your customers.
We’ve seen, for example, companies go weeks without invoicing or shipping product to customers, all relating to bungled ERP implementations. A bolt-on WMS allows customer orders and purchase orders to keep flowing. This means little or no disruption on the warehouse floor and no negative impact to the warehouse. In other words, your workers can leave on a Friday afternoon and come back in on Monday morning to business as usual.
Build for Tomorrow, Always
It’s not uncommon to see second generation business owners who are receptive to well-meaning and innovative technology changes within their organizations. While this is encouraging to see, it's still important to leverage a scalable investment. The alternative could very well result in losing reliable features and functionality, likely resulting in a whole new set of business challenges.
Adding intelligence to existing material handling is another reason to stay with your best-of-breed WMS or to make sure that you’re looking at a WMS that compliments your company’s goals and objectives for growth. Carousels, vertical lifts, conveyors, robots, and dimensioning equipment are making their way into more and more warehouses and distribution centers. Before going down that path, be sure you’ve carefully evaluated your needs and considered your options so that you can proceed with integration confidently and ensure you’re optimizing inventory movement.
From putaway and picking speeds to shipping throughput, you’ll want your material handling investment to sync with your WMS to boost efficiency in your warehouse and maximize worker productivity. For this reason, the true benefits of a bolt-on WMS and the flexibility it affords – as it relates to cloud vs. on-premise integrations, and potential (or imminent) new ERP implementations – cannot be understated.
No matter what stage you’re at with your WMS, the most important decision you can make is understanding how it will position your business for future success and help you overcome any setbacks.
Eric Allais is president and CEO of PathGuide Technologies Inc., a provider of warehouse management systems for distributors. He has over 30 years of experience in marketing, product management and sector analysis in the automated data collection industry, including warehouse management practices in wholesale distribution.