Why a Homegrown WMS Must Be Replaced with a Modern, Enterprise WMS
The rise of the warehouse management system (WMS) was a breakthrough for businesses. The use of the homegrown WMS was the first introduction of automation into supply chain management. Initially, companies that developed a homegrown WMS have been able to refine their operations to stay competitive by updating and changing their applications in-house. Over time, however, the digital revolution has put companies using these homegrown systems at risk as the availability of development resources to update and maintain the aging applications is reduced.
Homegrown WMS Comes with Many Challenges
Potential impacts from a WMS implementation includes the benefit, one of many, of reduced freight spend, which is the result of carriers that know when freight will ship and can move inbound freight into your facility faster, lowering carriers’ overhead expenses. The only way to truly view all the problems and potential improvements through a WMS implementation is to look at every possible aspect of warehouse management and the product life cycle. These benefits are realized through the ongoing modification of a homegrown WMS, but they rapidly lose their value as the internal team struggles to develop the homegrown WMS to keep up with the more modern, enterprise WMS on the market today. As explained by Mike O’Brien of Multichannel Merchant, the usefulness of a homegrown WMS becomes antiquated within six months.
A homegrown WMS may also lack the capacity and capabilities necessary to stay competitive with Big Box Retailers and e-commerce giants. Homegrown solutions are built for a brick-and-mortar supply chain, but the rise of e-commerce and the omnichannel supply chain requires a more robust, integrated and capable platform.
Driving Forces/Indicators Your Company Needs a Modern, Enterprise WMS
As supply chains have grown increasingly reliant upon each other and connected, homegrown WMS solutions may be ineffective to meet basic needs. Product SKU proliferation and an increasing number of touch points in the supply chain have left companies unable to stay competitive with homegrown solutions. At the very least, companies still using homegrown solutions find themselves faced with the constant need to add new features and develop new processes within the WMS, increasing costs. Some of the driving forces for investment into a new, vendor-developed WMS include:
- Need to fill more orders and manage a diverse product selection.
- Higher costs to develop and maintain the existing, homegrown WMS than purchasing one from a vendor.
- Lower costs associated with new WMS implementation through cloud-based technology.
- Greater complexity of supply chain partners requiring standardized systems and compliance measures by small and mid-sized businesses (SMB).
- Reduced order cycle times.
- Increase need for more rapid completion of order processing and workflows.
- Changes in picking strategies to complete more pick tickets and handle orders from multiple channels.
- Ongoing process optimization.
- Ability to interface with automated picking technologies.
- Handling a higher volume of smaller shipments for processing, specifically parcels.
That’s only a fraction of the reasons a company may opt to abandon homegrown WMS platforms. Using an in-house platform can have a negative impact on customer service and abilities as well, including:
- Greater carrying cost of inventory.
- Higher incidence of inaccurate orders.
- Poor performance and adherence to B2B standards, notes Michael Badwi of SC Junction.
- Increased product price points to make up for lost efficiency.
- Inability to track products and shipments and lacking visibility throughout the organization.
- Failure to recognize incidents involving fraud or unethical practices among B2B partners, customers, and suppliers.
- Decreased diversity in the product selection.
- Inability to offer an omnichannel experience to customers.
Start Planning Your WMS Replacement Now
Warehouse managers should start focusing on how they can replace their homegrown WMS with a newer, more advanced system. Although investing in a new WMS will require a higher upfront investment, its long-term savings could outweigh such costs. Warehouse managers that abandon in-house systems can eliminate the burden of maintaining the system and developing new functions within it. Also, new system implementation means ensuring compatibility with new systems as they are released by third-party vendors, such as HighJump, JDA, and Manhattan Associates. Warehouse managers that are ready to get started with investing in a new WMS should consider employing the services of a third-party integrator, like Veridian.
Veridian, a Manhattan Associates, HighJump, and JDA warehouse management system implementation company, can help you realize your supply chain success. Fill out the contact information below in order to schedule a consultation call with one of our supply chain professionals.