2020 and 2021 have put tremendous strain on the global supply chain, and experts indicate things will not return to normal for at least two to three more years. In addition to supply chain disruptions, consumer shopping habits have shifted significantly. It has been estimated that under normal conditions it would have taken ten years for the market to shift this significantly to e-commerce. What does that have to do with WMS ROI?
Rapidly changing logistics has led many companies to purchase warehouse management systems (WMS), either for the first time or as an update to an outdated WMS. If you are considering what a new WMS could do for your business, it’s likely you will do an ROI analysis before selecting a solution. Most modern Warehouse Management Systems will help you optimize labor, inventory and capacity, which can improve operations tremendously. In addition to key functional capabilities, you need to look carefully at:
- How a WMS meets your needs today and into the future
- How easily you can pivot to make changes to your system as your operations change
- How long it takes to get the solution up and running
- Capabilities and availability of your internal IT and operations staff
- Total cost of ownership when you consider modifications, maintenance costs, and upgrades.
To get a clear picture of WMS ROI, add these three key criteria into your decision set:
Companies have been thrown supply chain curve balls at every turn, and having flexible systems gives you the power to shift gears and turn challenges into opportunities. Supply issues, labor shortages, high cost of transportation, strict requirements from vendors and customers, and unrelenting consumer demand for fast delivery have pushed many companies past their current distribution capabilities. Companies with inflexible systems are often stuck.
How can a new WMS help you address those challenges? Your warehouse is the center pin for distribution, and a modern, flexible WMS solution will optimize processes, enable you to quickly adapt to changes in your supply chain and ready to handle any situation. Does your current system give you the ability to shift gears and create new processes quickly? Or do you have to turn to an outside vendor or IT experts to request expensive and slow-moving modifications to your systems?
First, it is important to distinguish between customization and configurability. While both concepts allow the WMS to be personalized to your business requirements, a CUSTOMIZED WMS requires many more hours of coding, implementation, training, resources, and it costs more – mostly driven by the high labor costs of software engineers. Plus, customizations take you away from the standard product. These modifications to standard product will affect maintenance costs and future upgrades – both will be considerably more expensive than running the standard solution.
A CONFIGURABLE WMS is driven by data and simple scripting and is easy to tailor to your business needs due to a flexible, rules-based platform. And as your business changes, Warehouse Managers and internal staff can make reconfigurations, saving precious time and money over turning to a WMS vendor for expensive and time-consuming modifications. When you configure, you can pivot faster to adapt to changes in your business.
The result: a CUSTOMIZED WMS costs more, takes longer, and creates challenges for the future.
Businesses at every level have plans to grow and, therefore, should select a WMS that not only meets your needs now but will also meet them well into the future. And how you grow is different for every company – growth might mean adding new distribution centers; or adding robotics and automation; or moving to a new micro-fulfillment or other new distribution model. The right WMS will help your business grow exponentially and should be capable of rapid scalability and integration with every part of your operation.
Next Steps: WMS ROI Analysis
These three Factors are only the starting point for selecting the right WMS for your business. For additional resources, check out the WMS ROI Calculator on our website, or contact us for more information on how Made4net can help solve your distribution challenges and walk you through an ROI assessment for your business. We provide best-in-class, cloud-based supply chain execution and warehouse management solutions for organizations of all sizes to improve the speed and efficiency of their supply chain.