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Supply Chain News: Warehouse Management Systems in the Cloud Finally Starting to Gain Real Traction


Performance Issue Concerns Can be Addressed with Cloud Architecture, Native Integrations wit Materials Handling, Voice, RF and More, Expert Says

March 29, 2016
SCDigest Editorial Staff

Cloud-based supply chain software has really started to gain traction, especially in such areas as Transportation Management Systems (TMS) and Global Trade Management (GTM) solutions, though the wave is impacting every area of software.

What is driving this overall interest in the Cloud? A variety of factors, including:

Reduction in Internal IT Resources to Manage the Application in a Cloud Deployment: Most of this work is taken on by the "hoster" for database maintenance, system tuning, etc.

Supply Chain Digest Says...

In their supply chain predictions for 2016, the analysts at Gartner stated that "By 2020, over 90% of spending on supply chain execution systems will be for Cloud-based solutions."

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More Rapid Deployments: This often reduces implementation costs and accelerates "time to value," and increasingly important consideration.

Lower Upfront Costs: With Cloud, the cost model often moves from a large upfront license payment and then annual software maintenance fees to low upfront costs paired with a subscription type model, usually based in part on the level of "transactions" processed, however they are defined. With TMS, for example, a transaction may be equal to a shipment. This "pay as you go" model is attractive to many companies.

Easier Upgrade Path: With Cloud deployments, the software provider often takes care of regularly upgrading system capabilities, whereas the cost and pain of upgrading on-premise solutions often means companies go many years stuck on the same version of their installed software.

Of course, Cloud-based software is no panacea. Depending on the application and deployment model, there may be little opportunity to "tailor" the Cloud-based software to meet individual company needs. Some also believe in the end companies actually wind up paying more over time under the subscription model - though SCDigest has a recommended approach to that issue. (See Calculating the Costs of On-Demand vs Traditional Supply Chain Software.)

WMS Has Been Late to the Cloud Party

One of the oldest of all supply chain software applications, Warehouse Management Systems (WMS) have been relatively late to move to the Cloud. Why this has been the situation, and why the time may be now for Cloud WMS, was theme of a recent Videocast on our Supply Chain Television Channel, featuring SCDigest editor Dan Gilmore and Dinesh Dongre, VP of Product Strategy at Softeon.

An on-demand version of this excellent broadcast can be found here: Now is the Time for WMS in the Cloud.

In the first section of the Videocast. Gilmore reviewed the key factors in why to date most WMS implementations continue to be "on-premise" deployments. Those factors include:

The Largest WMS Providers were Slow to Embrace the Cloud: Because these leaders (both ERP and best-of-breed) were slow to push the Cloud for WMS - and in some cases are still reluctant to do so - it naturally slowed the development of the WMS Cloud market. Behind this reluctance in some cases was the challenge any software company has, especially if it is a public company, in navigating the financial transition from large upfront license payments to a subscription pricing model, which can lead to big hits in the short to medium term to the bottom line.

Early Cloud-based WMS Solutions Lacked Rich Functionality: Given this scenario, a fair number of Cloud-specific WMS providers began to bring solutions to market. While without the legacy of on-premise solutions these vendors at least had a path to a financial model that worked, in many cases they were lacking in total functionality, being more appropriate for smaller DCs with less complex operational requirements.

This obviously limited their appeal to many companies.

Concerns about Performance Issues: Warehouse Management Systems are unlike any other in the supply chain, given the requirement to sync physical operations in real-time with the logical world of the software.

On top of that, many DCs use supporting technology such as wireless Radio Frequency terminals, Voice systems and of course materials handling systems such as carton sortation.

(Article Continues Below)



All of these sub-systems require high levels of system responsiveness and indeed, even with on-premise WMS deployments there are sometimes issues with such response times. The concerns are obviously magnified with a potential Cloud WMS deployment.

Are such concerns valid? It is certainly an issue to explore in depth, Gilmore agreed, but noted that public internet networks continue to improve, often to the point of being equal to or superior to a company's own internal networks.

What's more, dedicated, high speed "T1" connections continue to drop price, to the point that for any decent size operation looking for increased Internet connection speeds they will be a very minor cost in terms of the overall operating budget.

Softeon's Dongre also noted that there are a number of things WMS providers can do to enhance Cloud-based performance.

First, he said integration with things like material handling systems and Voice at the "native" level of the equipment can make a big difference in performance, whether the WMS is on-premise or in the Cloud.

"The more you "abstract those integrations and move away from the native support that the equipment provider offers, the less is the opportunity to benefit from what the equipment is capable of in terms of performance," Dongre said.

He noted, for example, that he has seen situations where a conveyor capable of operating say at 400 cases per minute is forced to operate at just 250 cases per minute because of responsiveness issues caused by a non-native approach to integration.

When it comes to the Cloud, Dongre says the physical distance from where the WMS is being hosted and the number of "hops" to get to the DC from that hosting point can contribute to some latency issues.

But fortunately, if the WMS is built using Service Oriented Architecture (SOA) principles, which in great summary involves creating large number of "components" that encapsulate specific WMS functionalities, then this offers flexibility in deploying the WMS to maximize performance of the areas that need very fast response times.

The components that manage integration with materials handling or Voice/RF systems "can be hosted at multiple levels across the network," Dongre says.

"We have the opportunity to deploy those components in the Cloud, but if performance is a concern or there is a requirement for that component to be close to the equipment, then we have the ability to have a localized component that is deployed at the DC location, and then seamlessly works with the "back end," so to speak," Dongre said.

He added that Softeon has customers, for example, that are using Voice software that is running completely in the Cloud, while some customers in Latin America - where network performance is more of an issue - choose to take the approach of a locally installed Voice component, while the rest of the WMS runs in the Cloud.

Below is an excerpt from the full Videocast, in which Dongre briefly discusses these approaches to maximizing WMS Cloud performance.

Maximizing Performance of Cloud WMS for Materials Handling, Voice, RF and More


At the end of the day, Dongre says Softeon has a number of very large companies with complex DC operations running on Cloud WMS, and that while access speeds to the Cloud need to be evaluated, "I don't see of an environment where having the WMS or other extended WMS features in the Cloud should be a constraint for any situation."

In their supply chain predictions for 2016, the analysts at Gartner stated that "By 2020, over 90% of spending on supply chain execution systems will be for Cloud-based solutions."

WMS is certainly part of that Supply Chain Execution landscape, so Gartner at least believes Cloud WMS is indeed coming - and soon.

Again, the full, very informative Videocast can be found here: Now is the Time for WMS in the Cloud

What do you think of this discussion on Cloud WMS? Is it ready for prime time? What are your concerns? Let us know your thoughts at the Feedback section below.


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