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January 17, 2008 - Supply Chain Digest Newsletter
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First Thoughts by Dan Gilmore, Editor

Thinking About Warehouse Management

As some know, I took a brief turn as an industry analyst for a company called META Group (subsequently purchased by Gartner) in the late 1990s.

Gilmore Says:

" A large number of companies bought WMS systems in the 1990s from vendors that went belly-up, were acquired, were totally custom code, or otherwise went away, leaving them with working but orphan systems.."

What do you say?

Send us your comments here

I learned something very quickly – your average IT person doesn’t care all that much about Warehouse Management Systems (WMS). META Group was full of very smart technology analysts, but they generally fell right to sleep if I started discussing WMS.

Considering I took that META gig after having just completed a rather grueling WMS implementation at a large, automated “green field” DC, I was a bit disappointed in that view of WMS. Now at SCDigest, while we follow just about all of the supply chain technologies, from Network Optimization to RFID, I’ll admit to maintaining a bit of a soft spot in my heart for good ol’ WMS.

As SCDigest’s Mark Fralick has often noted, the unique need for a Warehouse Management System to tightly link the “logical world” of the software with the physical world of people, cartons and equipment dynamically moving around a distribution center is what makes WMS software development so hard for the vendors – and makes WMS implementation really different and often more challenging than almost any other software application.

WMS is also at one level among the most mature of the supply chain software applications, having first been developed roughly in the mid-1980s. Yet, it remains at the same time, one of the most dynamic, with the vendors constantly re-inventing the application space and extending it in many directions.

We cover all this and more in our latest issue of The Supply Chain Digest Letter, our hardcopy newsletter that covers a single topic in-depth. It has proven hugely popular – this month, the subject is WMS. Many of you will have already received your copy in the mail. Given the growing costs of printing and especially mailing (just FYI, it costs a lot more to mail now than to print), we can’t send it to every SCDigest electronic subscriber, nor to our growing number of international readers.

Almost as good, we always offer an electronic version, and a complete web page full of resources on each issue’s topic. If you are considering or interested in WMS, you’ll want to access the full 16-page newsletter, and visit the WMS resources page, with some of our best articles from the SCDigest archive on the topic, expert columnists, white papers, profiles of a few leading WMS vendors and more. Those resources also include our WMS TCO calculator, an Excel spreadsheet that really helps you determine the total cost of ownership between competing vendors – we’ve had many excellent comments on it since it was released in 2006.

I’ll offer some overall WMS perspective and opinion in this column as well:

  • WMS has enjoyed a recent surge, as some market factors (see next point) combined with a large number of companies replacing dated warehouse management technology have made for a healthy market. A large number of companies bought WMS systems in the 1990s from vendors that went belly-up, were acquired, were totally custom code, or otherwise went away, leaving them with working but orphan systems. At SCDigest, we’re seeing a strong level of replacement projects, as these older systems are too much to maintain or are lacking valuable modern WMS capabilities.
  • Offshoring has increased the need for WMS, as the number of import warehouses grows, as does the sheer number and size of DCs to store all that stuff. Offshoring also often leads to increased postponement activities in the distribution center, requiring more advanced WMS capabilities. eCommerce is also a factor, as almost every company  becomes a “retailer” with some level of customer-direct web business. This customer direct business also changes order profiles and DC processing. In general, distribution center activities continue to become a lot more complex.
  • Virtually every vendor now offers not just a WMS but an integrated logistics or “supply chain execution” suite. This may include some or all of the following: labor management, transportation management, slotting, yard management, order management, visibility, etc. A real key for any company looking for a new WMS is to get a good grasp early on as to what piece-parts they really need – both short and long term. They also need to remember that competing WMS vendors will generally try to define the real key to your situation as being whatever module(s) the other vendor doesn’t have.
  • The original offerings of these “integrated” suites in the early 2000s were more vision than reality, but today the integrated story is mostly true, which offers many benefits in terms of process integration, and also changes the vendor evaluation process.
  • The ERP versus best-of-breed debate still rages – more on that in a future issue of SCDigest – but to some extent the market has settled down a bit, with both camps somewhat stabilizing market shares. I will say I continue to be amazed at the absolutely silly way many companies go about this debate and decision. I heard several simply amazing stories from both friends and strangers at this year’s CSCMP conference. How can large, successful companies be so brain dead when it comes to this issue? That’s not to favor either camp, but just to say logic, fact and analysis is too often thrown out the window in the politics of the situation. And that’s a shame.

We cover all this and more in the Letter and the resource page. Have a look.

Two other quick related notes:

  • We’ll soon be announcing our “How to Select a WMS – the No Spin Zone” for 2008, which I lead along with enVista’s Jim Barnes. There is a small fee, but we offer insight on how to do this well in a way you will simply not hear anywhere else. The real deal.
  • Next week, we’ll also be announcing a new Distribution Excellence Workshop series, featuring Ken Miesemer, former director of distribution for Hershey’s, and a true subject matter expert. The first two two-day sessions will be in April in Dallas and Chicago – look for details soon.

What’s your take on the current state of the WMS market? What trends, issues or needs do you see? Any reaction to the SCDigest Letter on WMS, or the resource page? Let us know your thoughts at the Feedback button below.

Let us know your thoughts.

Want a printable version? Go to:


Dan Gilmore


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This Week’s Supply Chain News Bites – Only from SCDigest

January 17, 2008
Supply Chain Graphic of the Week - Right-to -Work States

January 17, 2008
Supply Chain by the Numbers: January 17, 2008


The second week of 2008 saw the major index averages again falling lower.

As usual, our Supply Chain and Logistics stock index produced similar results.  In the software group, Ariba was down 5.7%. In the hardware group, Zebra fell another 3%.  In the transportation and logistics group, Canadian National fell 5.1% and Union Pacific slipped 4.9%. 

See stock report.

Supply Chain InView

by: Ann Drake

A Work in Progress

Key to Effective Change is Pro-active Evaluation

The Executive View

by: Gene Tyndall

Gene Tyndall Assessing the C-Level Titles of COO and CSCO

Is there a Difference and Does it Matter?


Each Week:

-- Transportation
-- Procurement/ Sourcing
-- Manufacturing
-- Global Supply Chain
-- Distribution/Material Handling
--Trends and Issues

Read it Now

Weekly On-Target Newsletter
January 15, 2008


Q. What two companies are generally considered to have piloted the concept of Collaborative Planning, Forecasting and Replenishment (CPFR)? 

A. Click to find the answer below


Reader Question: Can Bucket Brigades Work with Mechanized Order Picking?

Reader Question: Is there a True Global RFID Standard?

See our expert answers at the links above. Share your knowledge or perspective.

Or, ask your question


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We're really behind again - bear with us. But keep the letters coming! In the next few weeks, we'll start adding feedback right on specific story pages, so you can see what others are saying.

Catching up on letters sent in late 2007 this week.

Another excellent batch of letters this week. Our Feedback of the Week is from Ronny Haraldsvik, Vice President Marketing & Industry Relations at Alien Technology, with some feedback on my summary of where we are at with RFID right now (See RFID - My Turn). Christian Clauss of IBM adds that when it comes to RFID, we need to pay more attention to EPCIS - the standard for sharing RFID data.

Coming out of our story on "Whatever Happened to PDF417?", one reader says 2D barcodes will be key for many applications for years. Jorge Vasquez of Australia asks if the concepts for customer segementation in John Gattorna's Living Supply Chains book can be applied in retail, and Ken Waldrop of Booz-Allen sees opportunities for companies to better think through manufacturing process designs.

All are good - take a look.

Give us your thoughts on this week's Supply Chain topics. As always, we’ll keep your name anonymous if required.


You make some good points in your article and it's hard to disagree with you. Yes, RFID is about more than "just the supply chain."

RFID has a wide span of applications, and is common in many areas, including the following:

* Access control: Identity badges granting access to buildings, parking lots, structures, resorts, amusement parks, and special events.
* Libraries: managing books and small items loaned to the public.
* Smart Cards: secure electronic "wallets".
* Passive Anti-Theft systems: integrated within automotive key heads to limit ignition systems to authorized owners.
*File Management: identifying, locating and managing medical, legal, insurance and other key files.
* Identifying infants, elderly or ill with ID bracelets.
* Asset management: assisting in managing capital equipment, vehicles, computer equipment.
* Toll ways: to automate toll ways through toll booths.
* Anti-counterfeiting / Brand protection: to assist in curbing market diversion, and unauthorized product.
* Containment: used to assist in product recalls, identifying lots with certain characteristics or born-on dates.

So, RFID does not need to be about one company, one supply chain. Why put all the pressure of success on Wal Mart and its 600+ suppliers? Not fair we say.

RFID is about improving access to information and assets across industries, efficiently and cost effectively. Alien has experienced a tremendous growth in the last 9-12 months, all from closed loop applications from a variety of applications.

Ronny A. Haraldsvik
Vice President
Marketing & Industry Relations
Alien Technology Corp.

More on RFID:

The thing that you are missing in Supply Chain Digest's reporting on this topic is the vital importance of EPC Information Services (EPCIS) and the EPC Network.

RFID and barcode without EPCIS is a four walls exercise only with limited ROI.  Adding EPCIS allows trading partners secretly share selected RFID, barcode, and/or other sensor events with trading partners which substantially increases ROI potential.

Dick mentions EPCIS in his interview...

The Promotions Tracking use case that Dick Cantwell mentioned clearly shows that manufacturers are very interested in understanding how their products move through the supply chain (DCs and stores) of retailers. If you can't measure it then you can not manage it.  Shared RFID and serialized barcode events allow marketers to start to visualize consumer buying behavior build the Consumer Driven Supply Network.  EPCIS will play an important role in future Demand Signal Repositories.

Christian C. Clauss            
Business Manager              
IBM WebSphere RFID Information Center (EPCIS)

On PDF417:

PDF417 and Data Matrix are "high capacity data carriers" - just like RFID. They will continue to thrive for item level coding - as a printed barcode label is a fraction of the cost of a RFID tag. The recent US DoD UID mandate to label all assets over $5K with a Data Matrix is a good example where important information about the asset,  i.e., "a portable data file" is required to be fixed to the asset for its lifetime .  

Many industries such as Automotive, Aerospace, Electronics and Pharmaceautical will continue to demand unique identification and serialization of assets, components and drugs for safety and traceability reasons. A low cost data carrier or portable data file in the form of a small Data Matrix label is the preferred choice for these Industries. That is why GS1 has recently added Data Matrix to its list of supported barcodes.  

John Gover
Blue Yonder

On Living Supply Chains:

I have been following John Gattorna's path since the launch of his excellent book "Living Supply Chains" (I attended to the launch in Melbourne, Australia). I read the book and I like it a lot. The concept of segmenting supply chain is super. My question is how can I apply this concept to a mass merchandise retail company where I cannot segment customers, my customers are all final consumers.

Jorge Vasquez
Supply Chain

Editor's Note: We have asked Dr. Gattorna for a response, which we'll publish next week.

On Kaizen or Rework:

This reminds me of my time at a large manufacturing company.  It is widely accepted that fixing a product defect in design is MUCH cheaper than fixing that same problem after launch.  It is funny that organizations don't see processes the same way that they view physical production lines.  A process follows a parallel path to fruition and it makes sense that the same rules would apply to finding defects in processes as in products.  After all, think of the ease of changing a process design - a few changes to some documentation.  However, after a process has been institutionalized through memos, training, manuals, etc., it becomes much harder to 'undo' the damage to the company.

Ken Waldrop
Booz Allen Hamilton


Q. What two companies are generally considered to have piloted the concept of Collaborative Planning, Forecasting and Replenishment (CPFR)? 

A. Wal-Mart and Warner-Lambert, starting in 1995.

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