Expert Insight: Supply Chain InView
By Chad Collins

Vice President of Marketing and Strategy, HighJump Software

Date: April 1, 2010

Supply Chain Comment: Can Best of Breed WMS Solutions be Lowest Cost of Ownership?

 

Best Of Breed Solutions May Result In Lowering Long Term Costs

I spent some time recently with a HighJump Software customer who is considering further expansion of HighJump WMS solutions in their distribution centers. The customer is undertaking a massive ERP program that will allow the ERP system to be the IT backbone of their worldwide operations. They are also evaluating WMS solutions from this ERP provider.

In a meeting with senior IT leaders of this organization, I explained that I was highly confident the outcome of their pending due diligence regarding total cost of ownership (TCO). I contend that a best of breed solution will result in lower long term costs for this IT organization. Here are a few things that make me confident in my position:

Best in Class Functionality

While ERP-based WMS solutions have advanced significantly, they are limited to the “classical” warehouse operations including receiving, put-away, inventory control, picking and loading. Supply chain best practices such as labor management, slotting management, advanced wave planning, and last mile delivery are not traditionally supported with ERP WMS solutions. This means that when supply chain operations teams demand these capabilities, IT organizations are forced to address them with expensive customizations or bolt-on solutions with multiple integration touch points.
 

Upgrades

A WMS solution typically has a 10 year lifespan. In this lifespan a WMS could be upgraded five times. ERP upgrades are generally more expensive to upgrade because of the interdependencies between modules and re-application of source code customizations. Additionally, corporate IT governance and change management processes often make it difficult to upgrade a single module. Therefore the business users may be forced to wait for new features because of dependencies on modules that have nothing to do with distribution and logistics. 

 

Adaptability Tools


If your organization views distribution as a source of competitive advantage, then ERP-based WMS could be problematic. By definition, a competitive advantage must be unique to the organization. Business processes available in commercial off-the-shelf software packages (like ERP) therefore cannot contain business processes that are sources of competitive advantage.


To really ensure you have the flexibility to maintain and create further sources of advantage in your distribution operations, your supply chain logistics software must have the ability to create processes that are unique to your business.

Final Thoughts


We have a unique approach that allows customers to define unique workflows that does not involve any source code modifications. I am not aware of any ERP based WMS solutions with a similar architecture. Without this architecture it can be very expensive for IT organization to deliver these workflow changes.

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profile About the Author

Chad Collins joined HighJump Software in 2002 and has more than 12 years of experience using technology to deliver innovative supply chain solutions. As HighJump Software's Director of Product Strategy, he led the strategic product direction and product management for the entire supply execution product suite. Prior to HighJump Software, he was in the supply chain practice of Cap Gemini Ernst and Young Consulting, where he managed supply chain technology projects for the world's leading manufacturers. Mr. Collins holds a Bachelor of Science degree in electrical and computer engineering from Marquette University and an MBA in supply chain management from the University of Minnesota's Carlson School of Management. 

 
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Collins Says:


To...ensure...flexibility to maintain and create further sources of advantage in your distribution operations, your supply chain logistics software must have the ability to create processes that are unique to your business.


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