The average warehouse contains personnel, vehicles, sorting equipment and lots of customer-focused processes that rely on agility, data visibility and accuracy that doesn’t compromise on safety. The right software-based warehouse management system can reduce errors and lead to a more unified and streamlined operation.
Finding and deploying the right warehouse management system (WMS) can be your company’s key to boosting productivity, process visibility, data collection abilities and accuracy in order fulfillment. Broadly speaking, it’s about optimizing and automating everything you reasonably can, for more harmonious workflows and more fleet-footed response to consumer needs and trends.
The list of advantages is long, but here’s an abridged version:
- Fewer errors in picking and stowing
- More efficient deployment of labor
- Ongoing, accurate inventory counts
- Less returned merchandise
- Automatic re-ordering and replenishment
- Highly accurate and more useful reporting
But how can warehouse managers go about choosing the right WMS for their facility? Here are the major steps you’ll have to think through, with some hints and tricks along the way for making the process a smooth one.
Step 1: Determine Your Budget and Possible ROI
You should begin thinking about a WMSOpens a new window as a tactical investment, and all tactical decisions require a cost-benefit analysis. In business terms, it’s an ROI — and it will help you determine what, precisely, you’re trying to solve and how much you’re likely to spend on system setup vs. the money it stands to save you. Work with your other decision makers in focusing on these elements in determining your possible ROI:
- How much does it cost your company per quarter to address inventory miscounts, mis-shipments and other types of errors?
- What do your labor and space cost you currently, and are there areas in your budget where poor allocation is compromising your profitability?
- What are your industry’s traceability and sourcing requirements like? Are there blind spots in your facility or supply chain a WMS could address?
How much do these sources of loss collectively cost? This is what you need to weigh against the day-one and ongoing costs of WMS software vendors. Since each vendor is different, get multiple quotes and weigh their business models against what you’re paying to remedy warehouse problems the old-fashioned way.
Some vendors distribute licenses based on a one-time purchase, while others receive monthly fees per user or even per transaction. There’s also ongoing technical support to consider and any development costs for integrating the WMS into existing or third-party systems.
As with any other major transaction, look for any hidden fees or line items with non-specific labels. If any costs are variable versus fixed, find out in advance.
Step 2: Appraise Your Infrastructure and Currently Available Tools
Generally speaking, the more moving parts involved in your process — the more “touches†on products from origin to destination — the greater your potential ROI. But to bring aboard a new WMS from a vendor you’re not necessarily familiar with is to leap-frog other steps to take first, like taking a deep dive into your current equipment, infrastructure, and WMS system with your IT team and existing vendor, if you have one.
Some warehouses have more moving parts than others, including sorting equipment, overhead cranes, conveyor systems and automation features. The right warehouse equipment can improve labor outputOpens a new window by as much as 50%.
But utilizing software that wasn’t designed for it might be a step backward. The company that outfitted your physical warehouse control systems might have a WMS solution of their own, which helps you keep more of your business “in the family†and can significantly reduce the headache of adapting your facility to work with a dissimilar WMS
Diving into your existing capabilities might unearth features you didn’t know you had, and it could help postpone a potentially costly upgrade for a few more years.
Step 3: Summarize Your Needs and Deliver a Formal Request for Information
Step three in the process involves outlining precisely what your business needs are, and how they apply to your search for a WMS and vendor. This request for information, known as an RFI, is what vendors will receive.
It’s one part quest requote and one part business summary, so they can get to know you. You might deliver this RFI to several software vendors, but each one should include no more than a few pages of information on:
- The current state of your business
- Future plans and general business direction
- Summaries of your warehouse facility or facilities and their current capabilities
The document does not need to be long-winded, but it probably will contain pertinent and specific details, such as the number of loading bays you work with, how your warehouses are set up for picking and how many packing stations you have.
As mentioned, some vendors determine the pricing based on the size of your operation and number of personnel, so including details about the number and types of users under your roofs, including administrators, equipment operators, drivers, and order pickers and packers.
At this stage, you won’t want to spend time outlining what you want your eventual WMS system to do. But what you definitely can (and should) do is include requests for information about the vendors themselves:
- Projected time frame to “go live†date
- Company details, including recent history and high-profile clients
- The number of other clients using the proposed WMS system
- Details about rates, licensing, development charges, and any additional support pricing
But who should you send these RFIs to?
Aim to solicit a response from half a dozen vendors and possibly more. You can rule out any that don’t have a lot of experience or aren’t well suited to your industry, especially if you have a specific niche with peculiar needs. Any vendors who aren’t willing to give you the names of some of their current clients are probably not worth your attention, either.
Remember that Software-as-a-Service (SaaS) warehouse management systems have advantages over systems built in-house, including a less costly barrier to entry, instant upgrades, and ongoing new features.
You’re getting a sense of how well this vendor-partnerOpens a new window will change and adapt with you in the future. And you’re getting a polished product that’s ready to work and has likely been proven in organizations like yours.
Nevertheless, with your RFIs delivered and responses and quotes in hand, you’ve arrived at your last step.
Step 4: Build Your List of Finalists
Of your initial six to ten software vendors, your list of finalists should narrow the selection to your top three. You can rule out any vendors that came in with bids over your budget, but don’t let price impact your decision overmuch at this point.
What’s far more important is the general sense of their professionalism. How easy are they to speak to and work with? If you anticipate developing custom solutions together, do they value collaboration and openness? You want a good sense of their company culture and whether it’s a good match with yours.
Ask as many detailed questions as you’d like about how their software offering addresses the specific departmental or procedural pain points you identified in your RFI document.
Make Your Selection
Arriving at a final decision will require diligence and research. You might want to visit the vendor’s office for an even more illuminating look at how they work. Naturally, you should also have looked over any reviews and testimonials and gotten in touch with previous clients, if possible, to see how their rollouts worked out.
With smart decision-making, you’ll be able to find a long-term partner who can grow as you do and deliver daily and lasting value through their software services.