WMS: Beyond the Basics
Think you know absolutely everything about your warehouse management system's capabilities? Think again.
Michael Rodgers thought he knew everything about warehouse management systems (WMS). That's not surprising, because carefully scrutinizing a full range of WMS software before making a selection is part of Rodgers' job as information systems manager at Rev-A-Shelf, a Lexington, Ky.-based maker of household organizer products.
What pleased Rodgers most about his hunt for the perfect WMS was finding a solution that was part of an overall enterprise resource planning (ERP) software line.
"Choosing a WMS within an ERP was a no-brainer for us," he says. "The capabilities are integrated as if it were one package."
As WMS solutions continue to pour into the market, users struggle to differentiate one system from another—and vendors fight to break away from the competition.
Because all WMS products serve essentially the same function—helping businesses manage moving and storing items within a warehouse—vendors are striving to hook new customers by providing added functionality and offering compatibility with other types of business software.
This has led to WMS products that perform tasks such as labor management, track products on their way to or from the warehouse, and exchange intelligence and insight with an array of ERP tools.
While WMS products made their initial mark as standalone applications, the software's growing popularity hasn't escaped the notice of ERP vendors, many of which have added warehouse management capabilities to their product lines.
Many of the ERP market's big guns, including Oracle and SAP, now offer warehouse management components that tie directly into their other offerings. Smaller ERP vendors such as Irvine, Calif.-based Epicor Software—the company Rodgers selected for Rev-A-Shelf—also offer WMS products that work hand in hand with their ERP solutions.
Many businesses seeking a WMS are blithely unaware that their ERP software provider offers these capabilities, notes Rod Winger, Epicor's director of product marketing for manufacturing and supply chain software.
"Epicor has offered a warehouse management application for more than eight years, and some users still aren't aware of that," he says.
Rodgers settled on the Epicor WMS because it met Rev-A-Shelf's needs and easily integrates with the company's other key business applications. "It didn't make sense for us to have an ERP package that doesn't tie in 100 percent with our warehouse solution," he explains.
A key concern for Rev-A-Shelf was problem resolution, and the ability to hold one vendor responsible for any operational difficulties. "I didn't want to call one company to explain the problem and then have to call another company as well," Rodgers says.
ERP vs. Best of Breed
WMS product quality can vary widely among ERP vendors, notes Steve Banker, supply chain management service director for ARC Advisory Group, a technology research firm located in Dedham, Mass. "SAP's WMS solution for the warehouse attached to the factory has better functionality than most best-of-breed solutions," he says.
But WMS shoppers often trade some product robustness for the promise of iron-clad interoperability, says Jeff Woods, a supply chain management industry analyst at Gartner, a Stamford, Conn.-based technology research firm.
"ERP vendors have reasonably good warehouse management systems, but they are not the best in the market," Woods says, noting that ERP-integrated WMS software is perhaps best suited for small businesses. "Most of the time, ERP vendors can't meet the requirements for very complicated warehouse facilities."
While many business managers view warehouse and transportation management as separate concerns, the two are closely entwined. After all, it's hard to manage warehouse inventory if you don't have insight to the stream of items coming in and going out of your facility.
That is why a growing number of WMS vendors are adding transportation management capabilities to their products, either in the form of add-on transportation management modules or built-in links to external transportation management system (TMS) products.
SAP, Oracle, Manhattan Associates, and Sterling Commerce, for example, have brought warehouse and transportation management functions together. "The solutions have a limited set of integrated functionality at this point, but combining these capabilities is definitely a trend," says Woods.
WMS/TMS integration aims to provide seamless logistics visibility. "When transportation and warehouse management systems are integrated, companies gain end-to-end views of both fixed and rolling inventory," says Ken Ramoutar, director of product marketing for Dublin, Ohio-based Sterling Commerce.
This capability allows users to reallocate inventory on the fly and meet customer needs without unnecessary disruption or additional costs generated by the need to reroute or reship items.
Sterling Commerce customer Eaton Electrical, a Pittsburgh-based electrical systems solutions and components provider, is a firm believer in WMS/transportation management integration.
The company sought to integrate its systems for several reasons.
"We were looking for increased shipment visibility, as well as additional cost-out opportunities from aggregating and consolidating shipments from a single facility," says Steve Sprecher, the company's global distribution project manager. "We also wanted to improve delivery times for our customers."
Sprecher is satisfied with the results so far. "We have achieved significant transportation mode shifts from aggregating shipments," he says. "We also put in place new transportation programs as a result of the data collection and data modeling obtained through this implementation."
Although WMS products focus on inventory movement and storage, vendors have begun offering tools to provide insight into warehouse worker productivity, which is called "labor management" or "workforce performance management."
"Not all warehouse systems have labor management capabilities, but it is a useful tool," says Greg Aimi, director of supply chain research for Boston-based AMR Research.
Actually, just about any WMS with built-in reporting functions is capable of a certain amount of labor management, says ARC's Banker. A dedicated labor management capability operates at a more granular level.
"This type of solution shows how long it should take a worker, using the best method and normal speeds, to perform a particular job—moving from one pick location to another and picking six items from the third rack from the ground, for example," he says.
RedPrairie and Manhattan Associates both offer WMS products with labor management solutions. Additionally, several WMS vendors, such as HighJump Software, provide add-on labor management capability.
"HighJump Labor Advantage compiles real-time performance data to enable companies to plan and measure labor activities throughout their distribution facility, which helps increase efficiency and reduce costs," says Chad Collins, director of product strategy for HighJump, Eden Prairie, Minn.
The product provides employee performance measurement to highlight individuals whose work consistently exceeds standards, as well as employees who need assistance.
"In addition, visibility tools provide real-time performance data versus a standard, as well as key volume indicators and employee utilization statistics, allowing users to enhance efficiency or plan improvements," Collins reports.
Yet not all WMS customers choose to take advantage of available labor management support. Michael Saitow, chief information officer of M.S. Walker, a Somerville, Mass.-based wine, spirits, and cigar importer, says his basic HighJump WMS offers all the labor management capabilities his company needs.
"We receive plenty of labor management data—relational data by employee, work type, item, and transaction time—from the system's base modules," Saitow says. "We do not yet need to benchmark key performance indictors from engineered standards."
The Bargain Basement WMS
Thanks to increasing competition and efficient technology, WMS prices are falling dramatically. Companies that sampled the WMS market a few years ago may not realize how inexpensive the technology has become.
"One big development in warehouse management is the emergence of low-cost solutions," says ARC's Banker. "A few years ago, the average license price was close to $250,000 for the software, and then companies would likely spend two to three times that amount to implement the system."
It is now possible to buy a stripped-down WMS for as little as $20,000, Banker notes. "A slightly more complex system, including the cost of implementation and hardware, is available for not much more than $100,000," he says.
Radio Beacon, for example, now targets the WMS market's low, mid and high end with three product lines, each designed to accommodate specific operational needs and budgets.
Radio Beacon Easy functions as a cost-effective system for small to medium-sized businesses; Radio Beacon Expert is a high-performance solution designed for the mid-market; and at the top is Radio Beacon Enterprise, which aims to provide multi-site, multi-warehouse support that can be customized to accommodate new automation equipment and pre-existing shipping systems.
"These solutions give users access to a system that matches both their budgets and their needs," says Carl Marin, vice president of business development for the Toronto-based company.
The possibility of spending less for high-quality warehouse management attracted RMP Athletic Locker to Radio Beacon, says John Kotarba, vice president of operations and logistics for the Mississauga, Ontario-based athletic footwear distributor.
Despite importing virtually its entire inventory from the Far East and shipping products across Canada, RMP faced the prospect of moving into a 250,000-square-foot warehouse without a comprehensive electronic management system.
Kotarba selected Radio Beacon because the firm met his company's needs and offered robust features in the right price range.
"Radio Beacon provided a value-priced solution that embraced our distinct business requirements as compared to other potential vendor offerings," he says.
Despite the lower-than-anticipated cost, the Radio Beacon system has generated significant bottom-line benefits for RMP. "We are operating at 20 percent to 30 percent more volume with 20 percent to 25 percent less manpower," says Kotarba.
The WMS also improved the company's inventory accuracy, with net variance dropping from 4 percent to .0003 percent over the course of one year. "Selecting the right WMS solution comes down to defining what you need and dealing with a reputable vendor," notes Kotarba.
A Valuable Investment
The trend toward deeper functionality and wider interoperability has led to more WMS choices than ever before. Yet it has also created a much steeper learning curve for WMS customers.
"Every vendor has its strengths, but every vendor also presents a fairly compelling set of challenges," says Gartner's Woods. "WMS users making this decision face an extremely complicated process."
The ever-expanding array of WMS products, offering varied features and capabilities, has made pre-purchase research increasingly important.
"Putting in quality time to understand your business and what you want to get out of a WMS is one of the most vital investments a company can make," says Kotarba.