Like most aspects of supply chain management (SCM), implementing a warehouse management system (WMS) not only changes your IT architecture, it can revolutionize your distribution system. So you better have a carefully considered WMS plan and a rigorous process for overseeing the WMS project.
To Steve Banker, a longtime WMS expert and service director for supply chain management at ARC Advisory Group, WMS best practices are synonymous with project-management best practices. And much of his advice is the same given for most complex IT projects.
"The first thing is building a business case," Banker said. He recommends highlighting the many costs associated with botched or delayed shipments and demonstrating how the WMS plan can avoid them while improving inventory accuracy. Savings in just those two areas might justify the expense of the WMS software. "Often, companies that don't have a WMS have out-the-door accuracy of 92 or 93 percent," Banker said, but some with WMS software exceed 99 percent. Make sure your executives know.
Decide exactly what you want to accomplish in your warehouse, and pick the tool that does just enough. If you're concerned about worker productivity, for example, you'll probably need WMS software with a labor-management module for tracking hours and balancing workloads, but it might be overkill if inventory management is your real Achilles heel.
Implementers must ask themselves a question, Banker said: "Am I going for a quick payback, or am I going for an ROI -- and those are not necessarily the same thing." A major project that also involves material-handling equipment, perhaps automated by warehouse control system (WCS) software that must be integrated with the WMS, can take five years to show a return, but its net payoff can be higher than that of a less risky, fast-paying WMS project.
"The first hurdle is to figure out how much risk you are willing to take," Banker said. Material handling systems tend to come with greater risk because they are less adaptable to change.
Banker recommends assigning a certified WMS project manager who is familiar with formal project-management methodologies to make sure the WMS software rolls out on schedule. "The complexity of high-end, best-of-breed WMS should not be understated," he said, adding that upgrades can be tricky for all but the simplest WMS. What's more, because most WMS are rules-based, substantial customization is often necessary.
About the author: Freelancer David Essex has covered information technology for BYTE, Computerworld, PC World, and numerous other publications and web sites.