Essential Considerations for Selecting Warehousing Solution

Written by Kelvin Lim Chok Boon, DLSM

by Kelvin Lim Chok Boon, DLSM

Warehousing plays an important and strategic role in the supply chain. Nowadays, many companies choose to adopt the Warehouse Management System (WMS) to optimize their warehousing process. Selecting the right WMS can bring down the initial investment cost and avoid high maintenance/upkeep cost.

Warehouse management software
Image taken from https://medium.com/@seo.peerbits/warehouse-management-software-inventory-management-system-wms-solution-967ea95ad640

The main warehouse operationsare inbound and outbound. They include goodsreceipt, put away, stock and inventory management, stock count, picking, packing, labelling, shipping, cross docking, and drop shipping. WMS is a software applicationthat helps to control and support routine operations in a warehouse.There are many WMS solutions available on the market, including the four basic types below that are widely used.

Standalone WMS

Standalone WMS mainly focuses on the warehouse management process. It promises low upfront and upkeep cost. Most of them can be used with the existing on-premise system of a company, however, it has less functions compared to an integrated warehouse management solution.

WMS as a Part of ERP System

ERP is a modular architecture-based, powerful all-in-one solution. WMS modules can be integrated as a part of ERP and when integrated together, they are considered the most comprehensive one and offer robust execution and scalability to the supply chain. ERP is suitable from small-medium to large companies due to its modular feature. Nevertheless, other than WMS module, there are other modules can be used as a part oftheERP in order to make your solution more scalable and cost-effective.

E-commerce with WMS

WMS is utilised by numerous popular ecommerce softwares across the globe like Anchanto, Woocommerce and Shopify.In addition,it is synchronizable with online marketplace and other e-commerce platforms, making it a perfect choice for start-up companies. Usually,most of them are charged with a monthly subscription fee.

Industry Solutions WMS

This type of warehousing solution includes specific WMS that cater for industrial processes and requirements. For example, logistics service provider, automotive, food and beverage and etc. What attracts the companies the most is that it is customizable according to a particular industry to provide customers with an out-of-the-box system. It is undoubtedly the best choice for small or medium-sized enterprises (SMEs), but one will always require support from the provider due to its highly customized industry configuration.

Platform to host WMS

Another consideration is selecting a suitable platform for your Warehousing solution. The 4 most popular platformsto host a system are: desktop computer, cloud sever, on-premise and hybrid solution.

  1. Desktop computer is a legacy platform to install a WMS as it can save a lot of initial cost, however this type of setup cannot be accessed remotely.
  2. A cloud server, on the other hand, is provided and maintained by the provider. Thanks to its great accessibility, WMS is immediately available at your fingertips, anytime and anywhere as long as you have a PC or mobile device with you. However it requires high dependency on network connection. Besides, there are potential data security issues such as possible cloud threats.
  3. Under on-premise solution, the system installation is deployed on in-house server hardware, hence enabling other computers to access it anytime, anywhere just like a cloud server. The security and the full control of this solutionare the reasons why many companies select this solution. But it requires IT employee to maintain the server from time to time.
  4. Hybrid solution is the latest solution. Basically, it incorporates cloud and on-premise solutions, therefore allowing server and system connection between the cloud-based and existing local systems. By embracing this platform, you can enjoy high-level security because you are free to use an external SAAS warehouse solution, at the same time keeping all the sensitive data using the internal server. With greater benefit comes greater cost. This type of setup isn’t cheap. Plus, there are complex management requirements.

WMS Selection Considerations

First of all, narrow down the choices to at least 3 WMS providers based on your specific process. Bear in mind that you must make sure that the provider is based in the same country with you. Next, send them your requirements and the detailed overview of your current process. The provider who replies to you within 24hours would be the first choice as the fast response is the first criteria to select the provider.

Warehouse Process Optimizations Capability

The implementation of WMS is proven to be effective indriving employee’s satisfaction strategically as it improves scheduling in daily warehousing operations. With accurate scheduling to prioritize tasks that are critical, last minute job can be avoided. Furthermore, bycomputerizing some of the processes on WMS can reduce time spent on paperwork. Its systematic workflow gives transparency in the processes that allow the employees deliver their tasks smoothly on time.

With improved processes will also improve sales service and increase customer satisfaction. The future impact of a WMS will be on how you run your distribution center and its associated processes including freight management, space-savings, automations and real time reporting.

WMS also enables warehouses to adopt new technologies in automation, transport management, labour management, robotics and etc. Although the analytic capabilities and machine-learning potential is not yet fully actualized however it is a great opportunity for warehouse process optimization in future and most importantly is to bring in new business and sales revenue.

Total cost of ownership

Total cost is the most important factor in choosing a WMS, but there are many factors that come into consideration when making your final decision. A warehouse management solution may have a lower initial cost, but you should never ignore the long-term maintenance and upkeep cost as your business grows and develops.

Post Go-Live support

Most of the providers are able to provide a great and satisfactory service when you are in the initial implementation stages, but the nightmare usually comes after the system go-live when there are no updates, no support and no opportunities to make new improvements on the system. Thus, you have to ensure the provider has local based support with a dedicated and responsible support team.

Conclusion

Companies should choose a warehousing solution carefully in regard to their specific industrial needs and customer demand. Nevertheless, the best solution is to develop and design a customised system rather than acquiring a ready-made system as there is no 100% ideal solutions on the market. Unless you have an unlimited budget, always remember that your goal is to cover as much of the process as possible. If you fully understand the specificity of your warehousing process before committing to a solution, then you will be able to make the right choice.

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References

Alexey Kutsenko (2020). “5 Factors to Consider When Choosing a Warehousing Solution”. Retrieved from https://www.dotactiv.com/blog/warehousing-solution#/,accessed 07/12/2020

Anne Lim Yang Hong,DLSM. (2019). “Effective Warehousing for Inbound and Outbound Operations”. Retrieved from SIPMM: https://sipmm.edu.sg/effective-warehousing-inbound-outbound-operations-2, accessed 05/12/2020.

IQMS (2016). “What is a warehouse management system?” Retrieved from https://erpblog.iqms.com/what-is-warehouse-management-system/, accessed 05/12/2020.

Jules (2018). “What is a warehouse management system?” Retrieved from https://www.easyship.com/blog/what-is-a-warehouse-management-system,accessed 05/12/2020.

Lai Chee Long,DLSM. (2019). Retrieved from  https://sipmm.edu.sg/key-considerations-effective-ecommerce-fulfilmen ,accessed 05/12/2020.

Michael Badwi. (2020). “How A Wms Can Extend Your Warehouse Capabilities”. Retrieved from https://www.scjunction.com/blog/how-a-wms-extends-warehouse-capabilities, accessed 08/12/2020.

Vitaly Eremeev , et.al. (2017). “Ultimate WMS implementation guide for SME”. Retrieved from https://ventor.tech/warehouse-management/ultimate-wms-implementation-guide-for-sme, accessed 05/12/2020.

About the Author: Kelvin Lim Chok Boon has more than 10 years as a warehouse and transportation manager, supervising day-to-day integrated logistics operations of the company.He is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). Kelvin completed the Diploma in Logistics and Supply Management (DLSM) on December 2020 at SIPMM Institute.

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