From SCDigest's On-Target E-Magazine
- April 23, 2013 -
Supply Chain News: Is Cloud-Based WMS Ready for Prime Time?
WMS was Late to the Cloud Game, but that is Changing; Key Considerations for Making the Decision on Cloud or On-Premise
SCDigest Editorial Staff
Warehouse Management Systems (WMS) have been somewhat late joining the "Cloud" party, but that has certainly started to change. Just how ready is Cloud-based WMS for prime time performance?
Interest and adoption of Cloud-based Warehouse Management has certainly been much slower than in areas such as Transportation Management Systems (TMS), supply chain visibility solutions, global trade management, and some other categories, probably about on par with Cloud-based supply chain planning, which has also been slow to evolve.
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This is due to several factors. First, WMS simply is not as "clean" an implementation as many other categories of supply chain software. There are wireless RF devices, bar code printers, perhaps material handling automation, a Warehouse Control System (WCS), etc that have to be installed locally. A TMS user doesn't really need anything more than a PC with internet connectivity to use a Cloud-based TMS. WMS, however, is connected to these various local sub-systems, so to an extent the benefits of Cloud deployment are perhaps muddied a bit - or at minimum users may have thought of it that way.
That leads to the second obstacle of sorts, and that is response time. RF or Voice devices, material handling equipment, etc. generally require sub-second response for operational effectiveness. There were concerns among many that a Cloud-based WMS delivery over the internet would be too slow or variable versus a locally deployed solution.
Finally, similar to TMS, the early Cloud-based WMS solutions simply didn't have the functionality needed for larger, more complex distribution centers. So, Cloud-based solutions were only adopted by smaller, simpler DCs or warehouses A good example of that were the target customers for a company called SmartTurn, whose Cloud-based WMS was focused on smaller distribution centers or "uncontrolled' inventory stocking points. (SmartTurn was later acquired by RedPrairie, which in turn recently merged with JDA Software and is now known by the JDA name).
However, the WMS market is now starting to change, and with it interest in Cloud-based solutions. What's driving the change? First, most of the more recognized WMS solutions now offer Cloud-based deployments - even if they may still favor traditional, on-premise solutions.
Second, a new generation of WMS vendors that built Cloud solutions from the get-go such as Snapfulfill and LogFire, among others, have come to market with more robust Cloud-based solutions suitable for complex distribution centers. Accellos has moved its WMS offering to the Cloud.
Key Considerations
That changing solution landscape doesn't yet mean Cloud-solutions are right for every company by any means.
Below are key things that must be considered when evaluating a Cloud WMS solution.
What are You Really Trying to Achieve? Is a company's potential interest in a Cloud WMS focused on a different pricing model (subscription pricing versus upfront license costs), a different deployment model, some of both, something else? It is surprising how often companies do not have a good handle on the answers to those questions when they begin to consider Cloud WMS.
It is critical to be clear about the objectives a company is trying to achieve. Be aware that most established WMS companies, for example, will license the software on a subscription basis, rather than an upfront payment (though you may have to ask really hard to get that answer). Conversely, most WMS companies will "host" the software for a customer even if the purchase is on a traditional license payment.
What Will be the Deployment Environment? Related to the point above, is the deployment plan or basic need for a new WMS to connect smaller facilities, such as manufacturing warehouses, that are not supported by a real WMS currently? Or is it a plan to take a different approach to traditional, more complex DCs or a new facility? The answer to that question will narrow the WMS candidate pool - big "tier 1" WMS solutions probably aren't right for the smaller facilities, and the more basic Cloud WMS solutions for smaller facilities won't meet the needs of many larger DCs.
Softeon, a provider of both traditionally deployed WMS solutions and more recently a Cloud version, has taken an interesting approach to this issue by releasing its Cloud product based on the exact same platform and data model as its core WMS product. It starts with a strong but limited set of capabilities in the Cloud product, but at the outset or over time companies can simply add other functionality that they need in pieces, all the way up deploying to the full blown WMS. This approach enables that advancement with no data migration issues or costs. (See Cool New Supply Chain Product of the Month for January, 2013.)
Another issue that may arise for deployments at smaller facilities is the level of IT support they will receive, both initially and over time. If that support is going to be very limited, this puts a premium on systems that are very easy to understand and configure, as managers there may be largely on their own.
(Distribution/Materials Handling Story Continues Below
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Some but not all Cloud vendors are also placing a sort of middleware at the DC to manage some of the sub-second requirements locally. 
