With an increasing trend toward outsourcing manufacturing (in many cases to the East), and a growing customer expectation for prompt and professional service, traditional manufacturing companies are concentrating more on importing, warehousing and distributing their product ranges.
This has led to organisations upgrading their distribution facilities, investing in modern warehouse equipment and warehouse management software (WMS) solutions. Unfortunately there have been a number of ‘casualty’ implementations where the selected WMS solution either falls short on key functionality or fails to integrate seamlessly with the client’s ERP system.
It is important to understand that the strategic competitive advantage objective must drive the need to automate the warehouse and distribution process. Once companies understand the strategic objectives, a situational assessment of the current challenges will most likely define the need for change.
When selecting a WMS, certain essential evaluation areas should be considered:
Operational consulting A key differentiator between WMS software resellers is the extent to which they consider current operational constrains. Professional WMS resellers should give specialist advice regarding the general warehouse layout and other operational areas such as receiving, cross-docking, pickfaces and bulk bins, dispatch and more. Operational constraints need to be addressed and rectified prior to the WMS implementation phase of the project.
Wms functionality fit for requirements It is vital that companies prepare a WMS software functionality checklist based on essential business requirements, and that the software reseller should be required to respond to being short-listed. Companies must ensure that there is a good fit between the WMS software offering and the business requirements.
ERP vendors’ endorsement of resellers Most ERP systems cover day-to-day business very well, and traditionally are strong in finance and manufacturing control. Basic inventory control is covered but typically ERP systems do not drive the warehouse optimisation efficiencies on an hour-by-hour basis. This is where the best-of-breed WMS systems play a huge role in optimising warehousing operations. ERP vendors have created an API E.net business object layer that facilitates third party software products to seamlessly integrate into the core ERP product. Always ask your ERP vendor which best-of breed WMS solutions to consider.
ERP integration Seamless integration to the ERP is one of the most critical factors in any WMS selection process. Only consider a WMS that has already been integrated into the ERP system and investigate any sites at which the WMS reseller claims that this has been achieved. Two classes of WMS include: international WMS packages that are rich in functionality but have little or no experience in integrating the system into an ERP system; smaller WMS packages that have a certain level of integration with the core ERP system but are not rich in functionality. Companies must select WMS products that are both rich in functionality (good business requirement fit) and are seamlessly integrated into the ERP system (built specifically for the ERP system). Many WMS packages have failed because their separate databases are built in such a manner that they can be placed out of synchronisation with the ERP system. Data integrity then becomes an issue. Best of breed WMS packages have an essential balance report that shows any inventory variances between the ERP and the WMS.
Standard plug and play software Companies must identify a standard WMS product with off-the-shelf functionality that is a >98 percent fit to their business. WMS resellers need to be upfront with prospective clients regarding the fit of their products. If development is required, this must be quoted for up front, built into the project plan and this extra functionality must be tested and signed off prior to installation commencing.
Product and company sustainability This is more than merely a software procurement decision. See this as a business partnership over the years to come. Establish the reseller’s historical performance, current stability and longer-term prospects.
General look and feel of the software The WMS product’s look and feel is important. Remember that every inventory transaction will be conducted on a wireless scanner or a PC front-end. One must consider how easily the current warehouse staff will adapt to this software. Establish the amount of research and development time that has been invested in the WMS system, and consider its architecture.
Company’s implementation methodology Successful WMS implementations must be based on sound project management methodologies. Companies must examine how the WMS resellers will go about implementing the system. Seek historical performance data and endorsements.
Implementation time It is important to agree to a project plan up front, showing milestone activities and deadline dates. Implementations that drag on will be sapping on the client’s team. Typically, a leading WMS reseller would take eight weeks to implement an end-to-end medium-sized warehouse, with a large implementation lasting no more than 12 weeks. Companies need to ensure that WMS resellers plan to have adequate resources on-site during the stock-take period and into the next few weeks to support and handhold staff as the systems bed down.
Number of companies running the software Companies should ask WMS resellers for a list of all clients (with contact names) running their WMS software. Ensure that some of these are contacted to record important ‘on-the-level’ feedback. At least two of these companies should be visited to witness the WMS in operation. Ascertain how many companies within the same industry are running the WMS reseller’s software successfully. At least one of the sites should be running the same version of ERP solution.
Local support Request an insight into the WMS reseller’s support contracts and obtain an understanding of monthly costs. An initial support contract for the first 12 months of the contract would be advisable. Request WMS resellers to explain how support calls are managed and whether there is the ability to rate calls on a 1-to-5 scale once the call is closed.
Knowledge of Erp and business requirements WMS resellers should be specialists not only in ERP systems but also in supply chain management to provide strong business partner support. The WMS environment is a specialised field and WMS resellers must be required to give a brief explanation of their experience.
Costs It is essential to insist on a fixed price project. Many software resellers work on a time and materials basis that carries no risk for the reseller and the project invariably ends up over budget.
Business risk Business risk must be managed throughout the project, including the appointment of project sponsors at IT director and operations director level. The WMS reseller must ensure that all WMS operators have attended formal training and on-the-job training in a real test environment. It is however the company’s responsibility to ensure competency assessments are done on every operator prior to go-live, and the company must ensure that the correct calibre persons are appointed to key WMS positions.
It is imperative to consider these 14 WMS selection criteria, and applying them will make all the difference in ensuring a successful WMS implementation from the start.
Contributed by: Ben Jurgens, Director, Datascope Consulting