Consultant Says too Many Companies don't Get It Right

Some 45 years after the first real-time Warehouse Management System (WMS) was deployed in 1975 at a Del Monte DC in California (or so legend has it), this very mature software category continues to exhibit strong market interest and adoption.

There are a number of drivers behind the recent strong interest in WMS. Those include:

Supply Chain Digest Says...   Interestingly, Alpine also says some "scope creep" during the project is almost inevitable, but that "how much is solely dependent on how well the project is being run.' What do you say? Click here to send us your comments Click here to see reader feedback

• The rise of Omnichannel fulfillment, with new picking and shipping requirements

• Many companies replacing aging first generation WMS's installed many years ago

• Interest in WMS solutions in the Cloud

• Great adoption of warehouse automation, which often requires new WMS capabilities

But there can be a lot of risk around new WMS deployment, even though that is rarely reported in logistics trade media.

The main driver of that risk is very basic: if there are problems with the WMS processing and picking orders, it can mean a distribution center cannot ship and critically bill its customers.

That is going to get the CFO's attention rather quickly.

Because of that risk, it can often take companies a long time to make a selection of which WMS provider they will use. The results, says consultant Greg of Alpine Supply Chain Solutions is companies stuck in a state of "of "ready, set, delay."

Writing in the most recent issue of CSCMP's Supply Chain Quarterly magazine, Alpine offers a number of tips for getting the WMS selection process faster and better.

That includes doing your homework up front – and like the school type, it may not be much fun, but it is an essential part of the process.

"How many white papers have you absorbed? What have you done to make sure that a new WMS is even a viable option?," Alpine asks, adding "Every successful selection and implementation that I have been a part of (several dozen over the last 30-plus years) began with extensive research and due diligence.

When putting together a WMS RFI or RFP, Alpine notes there are several available on-line as a starting point, but they need to be edited to meet a company's specific needs.

"But be sure to take the time to read them and cut out anything not relevant. (In other words, do not ask vendors whether their software supports RFID/serialization/garments on hangers if you have zero intent of ever deploying those functions.)," Alpine writes, adding "And be sure to add line items that are missing and relevant."

Alpine also recommends keeping the number of WMS vendor candidates to a small group.

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"I would tell you from experience that if you initially engage more than five potential vendors, you are creating unnecessarily a whole bunch of extra work and expense," he says.

You should kick-off vendor interactions with an opportunity for them to visit a target DC for the new WMS, Alpine says. For these vendor site visits, companies should have prepared a short video or presentation about themselves, what this project represents, and a tentative timeline of dates.

Alpine also has recommendations for the other side of the equation, visits to customer sites of the WMS candidates, after having whittled the field based on the RFPs to two or three.

It is important to make sure the reference being visited understands that you are there to evaluate the vendor in all regards: software, infrastructure, and implementation, Alpine says, adding "Let them know that you want to hear pros and cons as well as words of advice."

For "scripted" demos of the various WMS options, Alpine recommends spending one full day, though noting some do less time (e.g., three hours) and some two full days.

When it comes to WMS costs, Alpine says that s a rule of thumb, companies should budget somewhere between 1.5X and 2X the prices of the license fee (in a perpetual license model) for implementation cost. Of course, that ratio no longer works in the increasingly popular Cloud-based subscription pricing models, with no upfront license costs in favor or monthly or quarterly usage fees.

Alpine also says still today, it is likely software modifications of the WMS will be required.

"How many will depend on a few factors; first and foremost being how willing are you to bend your processes and follow the vendor's guidance with regards to what they will call 'best practices,'" Alpine observes.

Interestingly, Alpine also says some "scope creep" during the project is almost inevitable, but that "how much is solely dependent on how well the project is being run.'

Netting it all out, "Choosing a new WMS can be an overwhelming and seemingly impossible task," Alpine says. "The keys to getting it right are a solid, yet flexible, long-term plan. Do your homework, and remember that one size does not fit all. There is a solution out there that will meet your goals and expectations?"

What would you add to Alpine 's recommendations on WMS? Let us know your thoughts at the Feedback section below.