Over the years I’ve worked with numerous customers to transform their supply chain through Warehouse Management System (WMS) implementations. Every business is unique in terms of requirements and challenges faced but they all share a common goal: quality customer service. Lately, the WMS market has grown with multiple solution provider offerings including large on premise packaged platforms and modern cloud based solutions. This article will focus on the key benefits and lessons learned by businesses with large scale platform WMS and modern cloud WMS solutions.
Not to be mistaken for a software selection comparison, I will briefly look at a few key areas and provide my observations partnering with companies using legacy platform and modern cloud warehouse management systems.
Essential infrastructure is already built in the cloud allowing businesses to typically achieve quicker implementation times. Companies without a strong internal IT presence can focus more on operations without the stress of server related issues and system troubleshooting. Businesses who don’t have time as a luxury prefer a Cloud WMS solution; clients can go live with a cloud WMS as early as 1-2 months. Large traditional platform solutions require more time especially if they are designed and implemented with other solutions such as transportation or order management systems. Projects can typically run 6 months – 2 years.
Total Cost of Ownership (TCO)
For businesses with a traditional platform WMS, the associated cost includes license fees, hardware, and services for installing and maintaining the software. In addition, clients rely on upgrading to a newer software version to access new and improved functionality to keep up with the everchanging market. Issues are fixed through code patches and delivery notices but enhancements to the base product to meet business requirements come at a price.
Businesses with a cloud-based WMS reap the benefit of updates. Think of it as the app store update on your cell phone or tablet. You get the latest code for bug fixes and performance improvements without digging into your pockets. Generally, cloud-based solutions have a lower TCO (Total Cost of ownership) with no upgrade fees and lower operational costs. Over a time span you save money on hardware, software and modifications with cloud technology. It is common to see the SaaS (software as a service) model in this cloud WMS space. Centrally hosted applications are shared by multiple customers over the internet. The cost of the application covers the costs of the software and continuous infrastructure/operational costs. For people who transition to the cloud, funds that were used to maintain and upkeep costly hardware can be allocated in other vital business areas.
Who is in Control?
Let’s face it, software issues happen, and no WMS is perfect. The ability to understand the root cause of an issue or perform work arounds is necessary for short and long-term resolutions. Large WMS platforms provide clients the ability to access databases, analyze logs and do back-end updates on their own. Cloud software vendors typically require clients to request back-end updates and clients don’t have access to logs. The inability to self-sufficiently troubleshoot on demand can be a burden for businesses and take longer to resolve.
Speaking of issues, a traditional large WMS tend to have more functionality primarily since they’ve been thoroughly tested and enhanced by customer issues or concerns. From a product issue point of view traditional platforms are more stable, utilized by more businesses over a longer time. The blossom of the cloud is still developing and hasn’t endured through multiple verticals yet so unforeseen issues are more pertinent. Though issues may be more pertinent from my experience, a cloud vendor was able to migrate fixes for tasking issues to multiple client sites simultaneously. About a year ago I recall an allocation issue with a large-scale platform application. Deployments to multiple environments were inconsistent, one environment worked while another client had to go through multiple redeployments for the same fix.
Companies looking for stability from an “in the future” angle may go with a cloud approach in this new technology age. Cloud based solutions are built with integration in mind, where on premise systems require more support and resources to integrate with other third-party supply chain solutions or enterprise resource planning systems. Cloud solutions can deliver real time reporting and alerts on data such as inventory levels or order processing which is beneficial to warehouse managers. The ability to scale and quickly react for market change conditions (ex: holiday peak seasons) may be less of a drain for businesses with a cloud strategy. Traditional platform WMS are prone to have more environment downtime/restarts for system maintenance which can affect shipping product out on time. I recall a client with a large platform solution faced system performance issues due to a ramp up so frequent application bounces were necessary to address the problem. My implementation experience with the cloud was completely different, the vendor scaled the application to resolve ramp up issues in minutes.
What Really Matters?
A well-designed WMS with the right functionality to fit your supply chain is one of the most significant investments for DC’s. At the end of the day, it is important to do a thorough supply chain assessment and understand the future direction of your business. Some providers still push on-premise large WMS solutions and recently cloud warehouse management solutions have become more popular primarily to lower TCO and faster implementation cycles. Whether you are considering a traditional platform upgrade or new cloud WMS, consider leveraging supply chain specialist with the knowledge and implementation experience to make sure your WMS performance is optimized to achieve your business goals.