( This article is excerpted from the complimentary report Ten Signs It’s Time to Automate Your Warehouse with WMS, available for download here. )
In part one of this series, we discussed the 10 signs that it’s time to automate your warehouse. In part two, we looked at WMS implementation risks and how to minimize them. Here in the third and final article of the series, we look at WMS solution attributes that can help accelerate implementation, as well as expected improvements from implementing WMS, and some ideas on how to get started while reducing risk, implementation time, and disruption.
Attributes of a WMS Solution That Accelerate Implementation, Reduce Risk
There are several attributes to look for in a WMS solution that can help accelerate implementation, enable a more agile and incremental approach, reducing risk in the process. These include:
- Cloud-based systems – True SaaS system1 eliminates the upfront capital costs of buying hardware and finding data center space to house it. Even if you go with a third-party hosting firm to house your server, running traditional licensed software entails the need to get your hardware or virtual servers set up and configured, and load/configure/administer the OS, database, and other supporting software. A true SaaS system does not eliminate the need to configure and administer the application itself2 (users, data, process configurations, integrations, etc.), but drastically reduces or eliminates the underlying system administration needed.
- Industry-specific blueprints — Some vendors offer industry-specific blueprints that leverage proven best practices and process for specific industries. Done right, these can go a long way to cut short the implementation time. The business does not have to spend time figuring out how to configure the system and how to set up processes and screens, since the solution provider has done the lion’s share of that work upfront. An example is NetSuite’s SuiteSuccess program, which includes industry templates for wholesale distribution, and soon for manufacturing and other industries.
- Pre-integration with your ERP system — Just because a solution provider sells both an ERP system and a WMS doesn’t mean they are necessarily well integrated.3 A WMS that is natively built on the ERP platform often offers the tightest integration. Many best-of-breed WMS systems are pre-integrated with major ERP systems as well, though the completeness of that integration varies a lot.
- Simple configuration and customization — For an agile approach to work, a system must be easy to evolve over time, so that a business can incrementally improve their performance and use of the system. The ability to easily and rapidly configure and customize a solution, in a way that is guaranteed to survive future releases and upgrades, is a key required element for an agile approach.
- Agile implementation programs — Some WMS solution providers have agile or rapid implementation programs, designed to get business up and running quickly, within a bounded period of time. For example, the SuiteSuccess program mentioned above promises implementation within 100 days.
- Modern UI/UX — Successful solution providers have spent inordinate efforts to make their system easy and intuitive to use. This ease-of-use can dramatically reduce the system training needed, as well as make it easier to get new employees up to speed in the future.
Taken altogether, a solution with these characteristics can meaningfully accelerate and de-risk the implementation process.
A Foundation for Growth
A company that currently uses paper-based, manual methods in their warehouse can realize profound benefits by properly implementing a WMS. Different benchmark studies have shown differing ranges4 of improvements. Here are some typical results from some benchmark studies of improvements that can be expected when moving from a manual system to a WMS system:
- 10%-15% improvements in inventory accuracy
- 10X reduction in picking errors
- 10% or greater improvements in perfect order rates
- 5% or greater improvements in on-time shipments
- 20%-25% increase in labor efficiency (reduction in labor cost per unit of work)
- 20%-25% or greater increases in throughput and capacity utilization
- Reduction of 0.5% to 1.5% of revenue in total logistics cost
The reductions in errors and improvement in on-time delivery and perfect order rates have knock-on effects in creating higher customer satisfaction and reduced returns and chargebacks. The increases in efficiency and throughput can be game changers for a facility that is bursting at the seams. If moving to a WMS system keeps a company from being forced to move to a larger space and hire more people, enabling them to sustain their growth using the facility and staff they already have, then the WMS system may be viewed as a strategic asset with a large immediate payback, both monetarily and in avoidance of disruption. Finally, beyond the cost savings in the warehouse itself, these improvements can decrease other elements of total logistics costs — less expediting, fewer returns, fewer shipping errors, more economical shipments, decreased paperwork costs, and more. For businesses suffering from some of the ‘ten signs’ mentioned above (page 1), the ROI for moving to a WMS can be substantial.
Getting Started
Getting started on the journey to implementing a WMS does not have to be painful. Here are some ideas on how to get started while reducing risk, implementation time, and disruption:
- Do a self-assessment of the ten signs and decide if it is time to consider implementing a WMS.
- Find and retain an unbiased warehouse/distribution center expert5 with experience implementing WMS systems in your industry, to act as your guide and advocate. Ideally they will have expertise in all angles, such as assessing warehouse/DC layout and flow, WMS solution selection, change management, warehouse best practices and metrics, data and integration, and agile implementation.
- Create your internal team, with clear roles and responsibilities, making sure to engage with employees early and often.
- Define your high-level goals and roadmap, and a minimum viable implementation to get started.
- Create a simple plan of what you are trying to accomplish, including measurable improvements, sequence, and timeframe.
- Evaluate and select a WMS solution.
- Take care to get change management right, continuously communicating with workers, allocating adequate resources to the project, doing thorough testing, and providing sufficient training.
- Use the early success of your first implementation to fund further expansion and improvements, as warranted.
If your warehouse operations are running smoothly, you probably don’t need to ‘fix what ain’t broken.’ However, if you are suffering from some of the ten issues described above, then it’s time to act. Postponing implementation of a good WMS is postponing the fixing of problems that are sapping your profits and the morale of your workers. Done right, implementing a WMS may be the best move you can make. Now is the time to start!
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1 A true SaaS system is architected to run in a single multi-tenant instance, provides a frequent flow of new functionality (typically once a quarter or more frequently), guarantees that properly done integrations and customizations are future-proof and will survive upgrades, and allows much customization to be done via configuration. — Return to article text above 2 Some SaaS solution providers offer a managed service to manage and administer your application for you. — Return to article text above
3 Some ERP vendors have several different ERP offerings, accumulated over time, as well as multiple WMS offerings. So, it is important to do your due diligence about the level of pre-integration. — Return to article text above
4 One of the challenges is that there are many ways to measure the same metric. As an example, on-time delivery may refer to delivery to the customer on the requested date, or on a mutually agreed date, or shipping from the warehouse on a planned date. Further, some may define it as delivered anytime on the agreed date, or any time before the agreed time on that date, or within 2 hours or 1 hour or 30 minutes of an agreed time. There are countless ways companies measure the same thing. A good piece on warehouse metrics is WERC’s DC Measures 2015, which includes several pages of guidance on how to measure warehouse performance. — Return to article text above
5 Some of the WMS solution providers have considerable industry expertise and programs to engage early in the process. They won’t be unbiased about system choice, but still may be able to give you valuable insights and guidance throughout the design and implementation process. — Return to article text above
To view other articles from this issue of the brief, click here.