How to avoid a Warehouse Management System horror story
by Dick Friedman
A Warehouse Management System (WMS) can increase warehouse productivity and accuracy, which can cut costs and improve customer service. But it’s very tricky to find a WMS with the right combination of helpful features and long-term cost. It’s easy to spend a lot of money when a less expensive system can produce the same savings and benefits. Often, changes to a warehouse are needed before installing a WMS, or it won’t produce anticipated savings or benefits.
This article outlines the steps a distributor should take to avoid the pitfalls of an unfamiliar process that can result in selecting the wrong WMS, overpaying and setting it up in a way that makes things worse.
Up-front planning and prep
Involve top management, because a WMS impacts customers as well as employees — even if that means a top manager has to learn something about computers and WMS.
Organize a team consisting of someone from top management, all warehouse managers and supervisors, MIS management and the people responsible for sales order entry and customer service.
Estimate growth and identify expected changes for the company as a whole and for the warehouse. A WMS must be able to handle future company and warehouse needs as well as the obvious current ones.
Tighten warehouse procedures and controls for receiving, put away, and so on, for information and product-flow. Do it now. Failure to do this is the primary reason for WMS horror stories.
Determine if the main business system has the functions and data that are expected by a WMS (for example, expected arrival date of a purchase order). Furthermore, the data in the business system must be very up to date and accurate.
Estimate long term costs: software, education/training, bar code equipment and spares, annual support fee.
Be conservative when estimating personnel reductions, personnel avoidance and other cash savings. Don't ignore the impact of non-cash benefits, such as happier customers.
Selection and installation
Define detailed long-term WMS needs. Without such a list, it is impossible to judge whether a particular WMS contains specific needed functions and impossible to compare different systems.
Solicit written bids. Ask WMS vendors to categorically compare their software against the list and to quote all the costs involved.
Examine each vendor’s bid for cost, missing features and prior experience with similar distributors. Narrow the field to two or three WMS, and then ask those vendors to demonstrate their systems. Call a few references of the vendors, and visit one or two references of each vendor.
Select the most cost-effective WMS, based on long-term cost of ownership and non-financial facts such as the degree of software suitability (versus the list of needs) and vendor experience.
Before delivering the system, the vendor should make any planned WMS modifications and create any programs needed to interface the WMS with the ERP system. Test it all, using real data for the test, which should be conducted by the people who will be using the new WMS.
Don’t skimp on user training. A WMS is so complex that the only way to learn more is to spend a lot of time in formal classes and on-site training sessions.
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Dick Friedman is a recognized expert on WMS and warehouse technologies for fastener, tool, industrial and MROP distributors. With 30-plus years of experience helping distributors, his firm DOES NOT SELL WMS or warehouse technologies. Dick makes unbiased, objective recommendations about getting a WMS. Where a WMS will be worthwhile, he helps select a cost-effective WMS and negotiate a contract with specific performance guarantees. Call (847) 256-3260 for a FREE consultation, or visit www.GenBusCon.com for more information or to send e-mail. |
This article originally appeared in the January/February 2009 issue of Progressive Distributor. Copyright 2009.
