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From SCDigest's On-Target E-Magazine

- Sept. 15, 2014 -

Supply Chain News: Key Trends in Warehouse Management System Market Part 1

Current Trends Featured in Big Ideas Videocast on Present and Future of WMS

SCDigest Editorial Staff

Warehouse Management Systems represent about the most mature area of any category of supply chain software, with the first real-time WMS solutions being deployed in the mid-1970s, some 40 years ago.

Yet, the WMS market remains vibrant, selling well in general and with vendors managing to keep re-inventing the category.

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One key impact of this platform trend, Gilmore noted, is that it complicates the WMS selection and buying process.

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That idea was among the key themes of the recent "Big Ideas" Videocast on "The Present and Future of Warehouse Management Systems." The Big Ideas Videocast Series is a partnership between our Supply Chain Television Channel and CSCMP to deliver an on-going series of outstanding broadcasts on the top supply chain and logistics issues of the day.

This WMS-focused Videocast actually kicked off the Big Ideas series, which will continue into next year.

The broadcast featured SCDigest editor Dan Gilmore, who has significant WMS experience, including implementing WMS systems many years ago, and Dinesh Dongre, VP of product strategy at Softeon, a leading provider of WMS and other supply chain software solutions.

The first portion of the broadcast focused on key trends in the WMS market. Gilmore suggested the following top trends"

Massive Consolidation of Vendors: The past decade saw a tremendous amount of consolidation in the WMS space. That has led to a number of at least reasonably well-known WMS providers to be swallowed up by others. Most notable in recent years was supply chain planning company JDA Software merging with RedPrairie in late 2012 and retaining the JDA name to create a planning and execution software giant.

Just a few months ago, WMS provider Accellos - which focused more on smaller companies - acquired HighJump Software, which provides WMS solutions to middle-tier and some larger companies, continuing the consolidation trend (the combined company is keeping the HighJump name).

Overall, that has meant fewer WMS alternatives for companies, though between the WMS offerings of ERP providers, best of breed offerings from Manhattan Associates, JDA, Software, HighJump and a few others, and a small new generation of Cloud-focused providers such as Snap Fulfill and Logfire, there are still a good number of options for companies interested in WMS.

WMS as a Platform: The trend started more than a decade ago, when providers moved beyond just WMS offerings to "supply chain execution suites," which included solution modules such as transportation management, labor management, supply chain visibility and more.

However, the true integration between those modules was often lacking much depth. More recently, leading WMS providers have or are building up a technology platform upon which all their solutions will work, with the same user interface, technology foundation, database and more across their entire suites.

This will enable much deeper levels of integration between modules, and the creation of custom processes and "workflows" between various solution modules without custom code, as well as the ability to easily add new modules into an existing implementation via plugging in to the platform.

(Distribution/Materials Handling Story Continues Below )

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These technology advances will obviously make it easy for companies to have an integrated solution across many logistics and even supply chain planning areas, versus the disjointed technology approach most companies still operate under today.

Gartner analyst Dwight Klappich calls this new state of affairs "supply chain execution convergence," which he defines as companies adopting "an SCE application strategy and platform to model, orchestrate and synchronize end-to-end logistics processes. SCE convergence is where SCE functional silos are broken down, and business processes span, optimize and synchronize across traditional functional silos."

Gartner found that the inability to "synchronize end-to-end processes" was the second ranked barrier to supply chain success, and Klappich says supply chain conversion strategies can address this obstacle. He adds that "Leading-edge SCM organizations are beginning to break down application boundaries to drive greater levels of value."

One key impact of this platform trend, Gilmore noted, is that it complicates the WMS selection and buying process.

"The question becomes, are you acquiring a WMS, or a supply chain execution platform?" Gilmore noted. He says that key issues also arise about what solutions in the platform are in or out of scope, and that companies often don't make these decisions firmly or early in the process, leading to later uncertainty.

The platform issue also makes evaluation and selection of a vendor more complicated, Gilmore said, because now you have to script and evaluate complete processes across modules, which is really not done very often today, in part because it extends the time needed for the evaluation. But it is the right way to do the evaluation, he says.

Softeon's Dongre sees some real advantage to companies from a well-integrated SCE platform technology, though acknowledging some of the challenges.

"The platform approach does require companies to anticipate what the business is going to need down the road, as you're not going to implement the whole platform at the start," Dongre noted.

However, he said a huge benefit of a platform strategy is that it will reduce the cost of implementing new functionality in future years, making it more likely a company will be able to add such new capabilities because the barriers to doing so will be lower.

"That way, you can incrementally invest in the capabilities, but significantly support growing business needs over time," he said.

The excellent full Big Ideas Videocast can be viewed here on demand: The Present and Future of Warehouse Management Systems

SCDigest will continue with more of the WMS trends identified in the broadcast next week.

What are your thoughts on integrated supply chain execution platforms? How does it impact vendor selection and system adoption, if at all? Let us know your thoughts at the Feedback button (email) or section (web form) below.

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