Getting Through the Process

Steve Hunyar – Chief Solutions Office/EDGE

Whether it’s for personal use of for a business system, finding the right software package can be daunting. For business, there may be several departments involved, each having specific requirements or needs.  When it comes to choosing a WMS provider, the operations personnel are looking at how to make their lives easier.  I.T. Professionals are looking at how to connect the new software to their business system, with all the security and platform considerations.  And of course, owners and C-Level execs look at the bottom line – a cost/benefit analysis and how the new system will ensure timely and accurate product delivery to increase competitiveness, while simultaneously cutting costs.

In addition to the usual considerations when evaluating a WMS provider such as cost, how long the vendor has been in business, number of sites deployed, customer references, etc., below is a list of the top 8 criteria when choosing a WMS provider.  These are NOT in any specific order.

1. WMS – ERP -vs- Best of Breed Solutions

The generations long debate continues.  As a business that distributes product from your warehouse, should you use best of breed warehousing software solutions, or the warehouse modules that come with your financial software system?

Many Financial software providers offer a warehousing module – sometimes for free.  They do so in an attempt to have sole control over their customers and their supply chains.

And free, is always an enticing lure.  They’ll tell you that you are avoiding the extra direct costs of more software – and additional integration services. 

Yet – that age-old adage still applies – you get what you pay for.  While the ERP module may seem a less costly alternative, how much more efficiency would you gain from using a best-of-breed solution? 

The big picture is simple.  The best of breed solutions provide magnitudes more functionality and much higher levels of order accuracy.  They do a better job optimizing your warehouse processes, and in the long run, they save you more time and money.  For example, the WMS providers’ sole products is the WMS software – that is their business.  They put all their best ideas (and their customers’ best idea) into their product. It’s their only focus.

In this ultra competitive world of omni-channel B2B and B2C distribution, is the warehouse module of your business system good enough – and will it grow with you at the pace you need?

Ask yourself one final question.  If the ERP companies did a good job with warehouse management, wouldn’t the best-of-breed software companies be out of business?  Financial systems are no better at managing a warehouse than warehouse systems are at handling payroll.

2. Be Solutions Oriented

Who/what does you vendor bring to the table?  From a top-down level, a WMS is part of a total solution.  If you intend to make the investment of time and money into a WMS, you should consider this as an opportunity to look at your entire operation.  Software can certainly be the heartbeat to your new system by managing your operations, however, are your operations optimized in the first place?  Consider a vendor who brings multiple entities to the table – a group of material handling and supply chain specialists who can work together to provide a comprehensive solution.

3. Discovery

I cannot stress this enough…the single most critical step in your selection and implementation process is Discovery.  Your vendor needs to perform a Discovery session involving all your key personnel (operations, I.T., management, your local material handling supplier, etc.).  Discovery should take no more than 2 solid days of effort.  The purpose is to ensure the new system will provide the solutions your business requires and equally important, to eliminate the unknowns prior to deploying the WMS. 

To properly perform Discovery, the vendor needs full comprehension of your existing operations in order to develop an “As-Is” model.  A detailed walk through of your warehouse should accomplish that objective.

Once your vendor understands your “As-Is” operations, they should be able to provide a recommendation on each “To-Be” operation, and in many cases provide several options to choose from on how to best tackle your warehouse flow. 

From the Discovery session, a ‘Document of Understanding’ (DoU) should be developed in 3-5 business days.  You wouldn’t build a house without a proper set of specs; why would you do it any differently with software?  As a result, the DoU should provide you with the following:

  1. Operational Considerations – Verbiage and flow charts on each specific process in the warehouse from Receiving through Shipping and beyond.
  2. Licensing – quantity and types.  We will discuss types later.
  3. Architecture – computer & network architectures, as well as, any new operational equipment.
  4. Connectivity – how it will specifically connect to your host business system, including file design and the communication pipelines.
  5. Hardware – a list of all the hardware that will be required for the proposed solution.
  6. Final Cost – all increases/decreases in scope from the original proposal that impact cost should be itemized.
  7. Modifications – Details of any custom software provided – scope and time to deliver.
  8. Schedule – Time to deploy from the date of the purchase order to the time they turn over the system to you.

Depending on the scope of your system, the DoU can range from simple to complex.  A full warehouse distribution system with automation may require a lengthy write-up, particularly if there are other parties involved, such as warehouse automation equipment providers.  I have authored DoUs that are 20 pages for a simple system, and up to 80 pages for complex automated solutions.

The bottom line, the Discovery session is pivotal to a successful implementation.  Fundamentally, you need to know exactly what you are getting, and the vendors need to know exactly what they are providing.

Lastly, Discovery can be done as a separate contract.  Do not engage a WMS company that insists on the opposite.

4. ROI & Payback

Make certain the WMS provider provides you with a Return-on-Investment (ROI) analysis that includes the payback period.  As a rule-of-thumb, the payback period for a WMS should be about 1 year, and no more than 18 months.  If you intend to invest in warehouse automation, expect that payback period to increase.

Once you have passed that payback period threshold, enjoy the monies saved.

5. Guarantees

Based on the results of the Discovery session and the delivery of the DoU, the WMS vendor should provide you with a guarantee of performance.  For example, the licensing costs may be refunded if they cannot provide the system they promised.  Get a written guarantee.

6. Technology

What operating systems and databases are being used at the computer workstations and servers, the network levels, etc.  Are they off-the-shelf open systems?  Can the vendor work with your company’s standard database?  Is their system client/server, app server based, or an hybrid?

Does the WMS vendor provide different options such as Radio Frequency Bar Code Scanning, tablets, voice data management for your operations?  What are the operating systems of these devices?

If you are considering warehouse automation, does the WMS include a Warehouse Control System (WCS), or does the vendor need to bring-in a third party middleware solution to drive the automation?  Less software partners and less middleware is preferable for obvious reasons.

7. Licensing

How are the vendor’s software licenses sold?  Are they by the number of users, workstations, or a combination?  Are the licenses recurring or non-recurring?  Is it a Software As A Service (SAAS) model for which you pay monthly?  Of course, you will need to look at short-term versus long-term costs to determine which is best for you.

8. Service – Post Implementation

What are your service needs? Most end-users get by just fine with simple 5 days/8 hours service from the WMS provider.  A few require 7/24 or a hybrid level of service between the two.  Does the vendor provide the option you require?

What does the vendor include with their annual service?  Are upgrades included? 

Has the vendor ever sunsetted a product, stopped supporting the operating system or platforms and left clients high and dry?  I have seen this more than once. 

Another point of contention might be if your solution includes automated equipment, who is the primary point of contact?  In most cases, if something stops working, the WMS providers get the initial call, regardless of whether or not the problem is software.  Will your WMS vendor charge you more if they are required to diagnose a problem that is not their software?  They should not.  They should be your first line of defense and have the capabilities necessary to diagnose the automation they control.

Every company has different needs/takes on how to manage their warehouses.  It is critical that you do not use a one-size-fits-all package and invest in a properly designed system.  The time you put in upfront choosing the right WMS provider and solution will save you countless hours in the future.

Now that you know what to look for and how to hold your WMS providers accountable to design, deployment, and service criteria, go purchase that WMS and enjoy your new solution.