What Are the Business Drivers of an Investment in WMS?
In the age of eCommerce, the importance of customer experiences has become paramount. Customers expect free shipping, faster delivery, better service, and superior product quality. At the same time, Warehouse Managers face pressure to increase return on investment, maintain competitive advantage, and support corporate scalability, reports Datex.
Why Are Existing WMS Solutions Falling Short?
The digital supply chain systems led many Warehouse Managers to invest in a WMS early on, but problems are starting to arise. Most robust WMS solutions of the year 2000 may be incompatible with the needs and demand for modern eCommerce. Tax laws are evolving, and emerging markets are disrupting existing process standardization. Understanding the challenges with existing WMS solutions is essential to developing solutions. Common problems with existing WMS solutions can lead to major setbacks for meeting growing customer and company demands. As explained by Michael Badwi of SC Junction, these may include:
- Increased carrying costs and poor inventory accuracy.
- Inefficient labor management and strain on labor resources.
- Poor design of facilities and sub-par bin location optimization practices.
Unfortunately, existing WMS solutions have also been incapable of handling the rapid changes necessary to enable scalability with eCommerce.
eCommerce and the Driving Forces of New Investment in WMS Solutions
Most of the driving forces for investment in WMS can be categorized as a need for visibility, identification of a known problem, or the inherited use of new WMS modules of add-ons, says Shane Starr of ExploreWMS.com. Painting the business needs with such broad brushes can have an adverse effect on the efficacy of the business case for new investment. Driving forces of WMS change, reports Modern Materials Handling, include:
- Technical obsolescence. Other systems may simply be incapable of integrating with newer technologies, like augmented reality, robotics, and more.
- Demand for omnichannel capabilities. As the world has moved toward omnichannel supply chains, the ability to integrate systems between traditionally isolated channels will require upgrades to existing . This investment in WMS will be key to success.
- Labor management needs. Increased demand on warehouses has a direct bearing on labor management, so a modern WMS should be able to handle both orders and labor management.
- End-to-end visibility. Part of the demand for investment in WMS solutions goes back to achieving end-to-end visibility. Systems across multiple transportation service providers, vendors, suppliers of raw materials, business-to-business resellers, and consumer-based systems will need to communicate, so investment in any solutions may be less costly than attempting to modify existing solutions.
How to Build the Business Case for Investment
Warehouse Managers must develop a comprehensive business case for all investments in WMS solutions and capabilities, reports iCepts.com, The business case must use data and include these critical areas of focus:
- Weaknesses within existing systems.
- Potential ROI of new investments.
- Increased efficiency projections.
- Number of orders fulfilled through a new system.
- Impact on customer service.
- Impact on brand value.
Kickstart Your Investment Planning and Selection Now
A WMS investment represents one of the most significant investments for modern warehouses. Taking the right steps and best practices during system selection and implementation can net significant returns, but failure to understand the business case for investing in a WMS and how its driving forces interact can leave Warehouse Managers faced with lackluster shareholder support for investment in WMS. As a result, it may be more appropriate to consider outsourcing the WMS selection and implementation processes to a third-party integrator, like Veridian. Contact Veridian by calling 1-770-225-1750 or completing the online contact form below.
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.