If you are considering a WMS solution for your growing business, make sure you’re asking yourself the right question.
Many smaller and growing e-commerce businesses see having a warehouse and managing physical stock as a necessarily evil. The chances are their business began with a great idea, or some passionate interest on the part of the founder, which is unlikely to have been in warehouse management! But every developing business soon comes to realise that managing stock and fulfilling customers orders efficiently is critical to growth and development.
That may lead to consideration of a WMS system, possibly after trying less appropriate software at first, so then it’s a case of evaluating the kind of solution the business needs. A view people sometimes take is that a WMS needs to be kept in-house so the business can “own” the process, or to allay concerns about data protection. Both can be valid reasons, but should not necessarily override key business objectives. Previously, with few alternatives this thinking would steer the business to select a traditional on-premise system. But the extra burden this places on in-house resource and investment would make it prohibitive to all but the most well-funded of start-ups.
Another, possibly misguided position is when a business makes a decision in the belief that their stock handling operation is so unique that it can only be met by a heavily tailored, or even bespoke solution. That decision can be an expensive one. In practice, through terminology may vary, most businesses have broadly similar requirements in warehouse practice even if they make or sell completely different types of product. From a warehouse management perspective, a pair of shoes in a box is no different to a book or a bottle of gin.
Established WMS vendors now tend to be experts in their field and, realistically, there’s not much in terms of handling practice they haven’t seen before. The chances are that their systems, whether traditional or cloud-based, will already support the common, key warehouse processes and much more besides. They can probably offer solutions for most businesses, so the question is then how quickly or simply those solutions can be delivered.
This is where newer cloud-based solutions come into focus. The better ones support all core warehouse processes as standard and so can be introduced quickly into almost any warehouse operation. They are hosted in the cloud and accessed by any browser-based PC, tablet or smartphone, so customers can log on from anywhere to use the application, with their own data secure and segregated. This offers advantages over traditional systems which are often restricted to on-premise access only. Moreover, because the core application is cloud hosted, much of the cost and complexity of on-site infrastructure is unnecessary. It follows then that the simpler cloud-based solution, free of configuration and installation overheads, should be more economical.
Another big advantage is the speed and simplicity of implementation. Most warehouses only need the key information on products and physical locations to get started, which can be transferred electronically or uploaded in a common file format. In some cases therefore, the system can be working in a few days after minimal training, representing a major step forward for the business. Extra functionality already available in the application can be introduced when required and the open API integration offered by cloud-based WMS means the system will work with a range of existing applications used by the business like ecommerce, CRM or carrier management.
The ease of implementation and minimal configuration inherent to cloud-based WMS creates a radically different pricing model. Software as a service is usually provided based on cost-per-user, transaction volume, data storage or other scalable basis, with shorter term contracts than for higher investment on-premise solutions. This makes them more affordable, especially for businesses wishing to minimise capital investment and maximise cash flow.
Another significant advantage of a cloud-based system is the way it is upgraded. There is in effect just one entity of the underlying application in the cloud, running ‘multi-tenanted’ with the customer data segregated and secured. This means that any upgrades and enhancements to the application are available to all users once released into the live environment. In other words, everyone has access to the latest and most advanced version and the cost of upgrades is effectively shared across the user base.
This does mean there is minimal scope for bespoke configuration beyond that supported by the core application, but this can also be seen as an advantage. With a traditional system users have to anticipate requirements before system deployment, which may need much development, testing and expense up front before achieving a stable solution on day one. By then the client’s business needs can have changed, while the vendor’s core package may also have developed to be at variance with the implemented system. Either way, it becomes a game of catch-up that can reduce the business’s access to best-in-class functionality.
So perhaps the question about WMS for the growing businesses needs to be carefully phrased. Is it: “Should we opt for large capital investment and manage the pitfalls of a traditional on-premise solution to gain a few extra benefits?” or “Shall we start reducing costs and improving productivity and accuracy with a cost-effective, cloud-based WMS that can be up and running in a few weeks? You decide!