From SCDigest's On-Target E-Magazine
- Nov. 3, 2015 -
Supply Chain News: The 10 Drivers of a New WMS
From Rapid Unit Growth to New Omnichannel Fulfillment Requirements, May be Time to See if You Need a New Warehouse Management System
SCDigest Editorial Staff
Warehouse Management System (WMS) implementations can be challenging, and so no company looks to make such a technology move unless it has real problems with its existing system or a very strong ROI from upgrading its current technology. (See 10 Keys to a Smoother, Happier Warehouse Management System Implementation.)
SCDigest Says: |
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If distribution costs are rising, the advanced
capabilities of today's WMS software can often move that cost curve in
the downward direction. |
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What Do You Say?
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But there must be a lot of that going around. Analyst Dwight Klappich, who covers the WMS space for Gartner, tells SCDigest he continues to field many calls from clients considering selection of a new WMS.
There are in fact a wide number of potential factors that driver companies to look for a new WMS solution, which we have handily grouped into 10 different logistics scenarious below.
So, SCDigest says you might need a new WMS if....
You are Experiencing Rapid Growth: As companies expand, especially midsize companies that are growing at very high rates, order fulfillment can quickly become an issue. While logistics costs are usually rising faster than sales for companies in this situation, as distribution processes become increasingly inefficient, the even more critical issue is often customer service.
High growth companies reach a point where they can no longer fulfill orders predictably without a new infusion of technology in the DC.
You are Opening a New DC: Obviously, if you are opening a new distribution facility, that building will need some kind of WMS to help operate it. Because of that, the new building offers an opportunity to consider whether it is time to look at a potential new WMS provider versus whatever system is the incumbent solution at other company facilities. This would be doubly true if the new DC will operate significantly differently, for example in terms of automation, versus existing DCs.
You are Making Significant Logistics Strategy Changes: Sometimes, a company's business or distribution strategies change in such a way that its existing WMS or other distribution center technology simply is not sufficient for the job.
One example is a merger or acquisition, in which a combined distribution operation emerges with significantly different requirements. Other examples might be moving from plant-based distribution to a consolidated "mixing center" approach, significant changes in distribution channel requirements or an increase in value-added service requirements/ postponement in the DC.
The key question: Can your current WMS really well support these new logistics/supply chain strategies? The DC shouldn't be the limiting factor, as one major industrial and consumer products company found out several years back when its network strategy temporarily failed when the current WMS couldn't support the great increase in cross dock requirements.
You have or are Consolidating Facilities: The ebb and flow of business always means some companies are consolidating distribution facilities. In general, we see an overall trend towards fewer, larger DCs. That trend really picked up during the recession, as dropping volumes and the interest in reducing inventories led to many DC consolidations, and is being somewhat reversed in the face of ecommerce, but can still often be a factor. If the combined DC is larger, it may present savings opportunities in such areas as task interleaving and other advanced capabilities that can justify a new WMS where it might not be so for smaller facilities.
You Want to Significantly Increase DC Automation: Many
companies are looking at really ramping up their levels of automation
in the DC to reduce costs, increase throughput from an existing DC,
and/or to alleviate labor headaches and other issues. In those cases, a
home-grown or second-tier WMS technology is rarely up to the task.
(Distribution/Materials Handling Story Continues Below
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