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About the Author

Gana Govind
President
Softeon


Softeon is a leading provider of supply chain and logistics software, including WMS, TMS, labor management, inventory management, forecasting and replenishment, distributed order management, and more.


Supply Chain Comment

By Gana Govind , President, Softeon

April 10, 2014



The Barriers to Warehouse Management in the Cloud are Falling


WMS has been Slow to the Cloud, but the Dynamic has Changed



Cloud-based software is clearly taking a growing share of the supply chain technology market.

The benefits of software in the Cloud are becoming well understood. They include lower implementation costs and faster time-to-value, avoiding a large upfront capital investment in a software license, the ability to "try before you buy," easy and potentially automatic software upgrades, and portability, enabling companies to easily access functionality wherever it is needed in the enterprise.

In some sectors of the supply chain software market, notably transportation management, Cloud-based systems have seen rapid adoption. But Warehouse Management Systems (WMS) have notably been late to the Cloud party.

Govind Says:

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Remember that a Cloud-based deployment dramatically if not completely reduces the need for on-going IT support for general system maintenance, database tuning, etc., that is needed in traditional deployments.
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Why is that? The market has seen relatively slow penetration of Cloud WMS for a variety of reasons, some real, some more perceptual. The leading barriers to Cloud WMS include the following:

The largest WMS providers have been slow to embrace Cloud offerings: The largest WMS providers, both "best-of-breed" and ERP, have had to date tepid support at best for Cloud-based solutions. Therefore, the provider "push" for Cloud WMS has been limited, limiting adoption.

Are the financial models of some of these companies that depend heavily on large professional services revenues a key factor in their tepid Cloud support? One has to suspect the answer to that is Yes.

Cloud-focused WMS solutions have had limited functionality: While the largest players have been slow to the Cloud, naturally some new providers have emerged that are focusing on Cloud WMS exclusively. But as with most supply chain software built for the Cloud from the ground up, functionality in these Cloud solutions has been limited, and usually not sufficient for larger, more complex warehouses.

Concerns about system response time: A Warehouse Management System is different than most other supply chain applications relative to the need for constant, real-time communications. Delays of even just one or two seconds can cause real operational issues in areas such as RF or Voice communications, or cartons moving on conveyor systems.
The perception, encouraged at times from the largest WMS providers, is that Cloud-based systems are likely to result in such communication delays and lead to operational problems – adding fear, uncertainty and doubt in many companies about a Cloud WMS.

Lack of IT Resources: Even though the technical set up and application delivery for WMS in the Cloud is generally orders of magnitude easier than for traditional deployments, IT resources, always in short supply, are still often required to perform the functional set up and configuration of the WMS. This has in some cases served as a barrier to gaining more operational control for some smaller and medium sized operations that could benefit from a "lite" approach to WMS, but where the lack of IT resources in the end preclude implementing even a Cloud-based WMS.

Together, these barriers have unquestionably slowed the market progress of WMS in the Cloud, in comparison to other areas of supply chain software and in terms of adoption rates versus fit/need in the market.

The Barriers to Cloud WMS have Fallen

Let's consider recent changes in the WMS market. Now, robust, tier 1 Warehouse Management Systems in the Cloud have come to market, changing industry dynamics dramatically. Companies no longer have to trade-off between the advantages of Cloud and a lack of sophisticated Cloud WMS solutions. Available Cloud WMS solutions today can successfully manage and optimize the same complex DCs as any traditionally deployed system.

Second, today response time concerns are in fact a false issue, for a variety of reasons.

Internet speeds continue to improve, and are today quite sufficient for many operations, and often better than the speeds realized in internal corporate networks. Additionally, leading Cloud WMS providers are smartly leverage advanced web-based techniques to optimized data communications and thus response times. For example, by using browser-based technology on radio frequency terminals, that traffic and hence response time can be substantially improved versus the same communications using traditional terminal emulation approaches.

That said, for high volume DCs, it may be advantageous to put a local server in a facility that uses "agents" that focus on nothing but optimizing data communications for such areas as material handling communications or high volume label printing. Softeon's experience is that using this approach almost always delivers more than adequate response times.

If all that is not enough, costs for high speed T1 communication lines continue to fall. Softeon's experience is that if you have such volumes that a T1 line is a good idea to endure rapid response times, then the extra costs for that line ($600-800 per month) are relatively minor and easily affordable.

Finally, the IT resource issue for Cloud-based deployment is a real challenge, and is clearly preventing some companies from deploying WMS in smaller and mid-sized DC operations that could benefit from such WMS lite technology support.

The answer of course cannot be hoping for more IT support. It will not be available. Instead, the answer should be configuration tools - think of it as powerful "wizards" - that walk operational managers through every step of setting up the system successfully. The goal should be for IT resources to only be required for WMS integration to order management and other enterprise systems - and done once, that integration is easily be repeated for additional facilities.

And remember that a Cloud-based deployment dramatically if not completely reduces the need for on-going IT support for general system maintenance, database tuning, etc., that is needed in traditional deployments.

The Botton Line: WMS in the Cloud may not be for everyone, and you should look for vendors that can deploy both in the Cloud and with traditional, on-site solutions. But the barriers to Cloud-based WMS adoption have clearly faded substantially.



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