Your inventory accuracy is hit and miss, manual processes slow down your operations, and visibility into your warehouse operations is low. These and other issues may signal that it’s time for a new warehouse management system (WMS). And while benefits are significant, making a switch can be daunting due to potential challenges. 

One effective strategy? Consult with seasoned experts who will help you determine if the challenges are worth the benefits and even what system is best for your complex situation. Before you go down that road, let’s dive into the realities of WMS implementation and what you need to know to smooth the process. 

Cost vs. ROI

Although the return on investment (ROI) that comes with WMS implementation can be very large, these projects are often deferred for as long as possible due to a number of factors. A primary concern for many companies is the cost of licensing and/or subscription fees, which can lead to “sticker shock” during the selection process. These fees often include an initial investment followed by annual payments that may be fixed or variable, depending on the contract terms. Pricing is generally derived from the size of an organization, the number of estimated transactions, and how many users will be using the system. 

In addition to software fees, these projects often include additional expenses for hardware and the mobile device management (MDM) software that enables users to transact with the WMS. Hardware costs typically include the units, peripherals such as straps and arms, ongoing warranties and maintenance, and spare parts/batteries. The cost of these devices has dropped considerably compared to legacy RF guns, but it’s still a consideration that gets overlooked during initial project assessments.  

While the upfront and ongoing costs of WMS implementation can be considerable, it’s important to consider these investments in light of the substantial efficiencies and cost savings they can deliver over time, ultimately driving a significant ROI for the organization. 

Avoiding Blind Spots and Creating a Plan

Another major consideration when implementing a WMS is integrating other applications with the WMS. In addition to a host system or ERP, this may include item master software, demand planning systems, order management systems, labor management systems, and transportation management systems. Integration to these applications are vital, as they provide the WMS with necessary inputs such as purchase orders, advanced shipment notifications, item attribute updates, and sales orders. 

The integration process, however, is often one of the more difficult challenges. It requires substantial development resources to create the code that extracts data from one source to another. Moreover, in many cases, the data from one source will need to be transformed based on certain conditional logic identified during the technical design phase. Because most companies do not possess the in-house capabilities to handle these tasks effectively, this process poses the risk of becoming a potential point of failure in the implementation process. 

Developing a comprehensive integration plan can mitigate these risks. The plan should address the technical aspects and include a strategy for using external expertise to fill gaps in internal capabilities. This approach will ensure that the WMS integration enhances operational efficiency without becoming a bottleneck in the system’s overall performance.

Defining and Understanding Current State

One impediment to a successful WMS implementation is the lack of internal technical and/or functional knowledge required to build, implement, and test the new system. Projects such as these require input from not only the IT teams but also the operational experts. Companies tend to build project teams using personnel who are also meant to support day-to-day operations. This dual responsibility can lead to competing priorities that can hinder project progress due to time constraints and limited manpower. Addressing this challenge may involve engaging outside resources, which, while increasing the overall cost, can provide the necessary expertise to keep the project on track.

In addition to the above, systems like these have a tendency to be over-engineered.  Modifications and customizations to the out-of-the-box software come at a considerable cost and could add risk to the organization. Many companies have a difficult time with operational changes; they often don’t understand best practices and what is required to efficiently run their distribution operation. This resistance to change can lead to a “this is what we’ve always done” mentality, making it very difficult for people to embrace change. 

Without properly assessing actual requirements, many organizations tend to replicate rather than optimize their existing processes. Therefore, the WMS selection process is critical to determine the capabilities and scalability of a particular solution. Decision makers must consider whether the customer needs a high-priced, best-of-breed solution to meet their needs or if they can save some money and time with a mid-tier solution that won’t require much customization out of the box. A strategic approach aligns with operational requirements and also mitigates unnecessary expenditures and complexities.

The Bottom Line: How To Implement Successfully

When selecting and implementing a WMS solution, careful consideration and extensive project assessments are crucial. These assessments significantly contribute to a successful implementation and can reduce complexity and cost. Without them, customers typically go in blind and ultimately get frustrated due to project overruns or longer-than-expected implementation times. 

One way to minimize these challenges is by partnering with an experienced advisory team for an initial 6-8 week time period. This collaboration could drastically reduce the overall cost as well as provide customers with more realistic expectations. A prime example of this is Summit Advisory Team’s Phase Zero approach. This preparatory phase provides assessments of operational requirements and determines any gaps between future and current states. The Phase Zero approach helps supply chain leaders differentiate between actual needs and “nice to haves,” helps identify potential changes in a company’s IT infrastructure, and answers critical questions such as the following: Is the current infrastructure capable of integrating with the new systems? Is the infrastructure scalable enough to handle future growth projections? Will the new system help us accomplish our goals? What quantifiable metrics can be used to determine success?

Finally, the most important factor in a successful WMS implementation is the project team. The project team should consist of the internal customer resources or subject matter experts, the WMS vendor, and external advisors or integrators. Each party plays a critical role in the day-to-day progress of the project, addressing key preliminary questions about what needs to be accomplished, why it’s necessary, the implementation timeline, and the roles and responsibilities of all involved. Diving in and not knowing everything and everyone involved often leads to inefficiencies and frustration.

Expanding the Scope Beyond Traditional WMS Capabilities

Considering the rapid evolution of warehouse technologies, it’s also good to discuss how upgrading a WMS facilitates the integration of automated solutions. Many legacy solutions lack the capability to integrate with modern technologies such as collaborative robots (Cobots), automated storage systems such as Autostore, or sorting solutions like Opex. An updated WMS can be a gateway to implementing these advanced automated solutions, enhancing efficiency and scalability. 

Leveraging the expertise of external consultants like Summit Advisory Team, who have substantial experience integrating a variety of technological solutions, ensure you’ll be equipped with a holistic, future-proof infrastructure. Successful WMS implementation will lay a robust foundation for continual growth and innovation for your company’s supply chain operations.