60 seconds with... Steve Banker, ARC Advisory Group
Anyone who has followed the warehouse management system (WMS) industry has probably talked with Steve Banker, a supply chain analyst with ARC Advisory Group.
Staff -- Modern Materials Handling, 5/1/2009
Anyone who has followed the warehouse management system (WMS) industry has probably talked with Steve Banker, a supply chain analyst with ARC Advisory Group. His annual report on the size of the WMS market is a must-read. Modern wondered how a one-time assistant professor with a PhD in speech communications came to study the supply chain.
Modern: What led you to make the switch from academia to analyzing the supply chain?
Banker: I was teaching at the Penn State branch in Altoona and doing research into political campaigns. I began to think that might be a more interesting way to make a living, so I went back to get an MBA. There, I discovered that business strategy was every bit as interesting as political strategy. Meanwhile, I met someone who brought me into ARC in the supply chain area and I never looked back.
Modern: Why is WMS so important to warehousing and distribution today?
Banker: It's important to different companies for different reasons. If you're a company without real time insight into your inventory, you can put in a low-cost WMS that will take you from 92% to 99% accuracy with a payback of less than a year. It's costly to ship the wrong goods to a customer; it's costly to take an order because you think you have the inventory when you don't. It's more costly to deal with disputes over orders than people realize. When you're talking about a more complicated solution, the payback is all in labor productivity.
Modern: What's the most significant change you've seen in the industry?
Banker: If you're looking at a 10-year bucket, the major change is that WMS vendors went from being WMS vendors to supply chain execution vendors. The top players have WMS, TMS and a layer of logic that floats above the WMS to make decisions across the network. In the last five years, the biggest change has been at the auto-ID level. We've gone from working with bar code scanning to scanning and voice recognition and RFID.
Modern: Where do you think the industry is going next?
Banker: The talk about service-oriented architecture and flexibility and adaptability is becoming more than just rhetoric. The next stage WMS is going to be about creating a solution with the right logic to support automation and to better simulate what a warehouse can do, whether you're talking about a person picking or automation. Whatever makes the most sense, we'll be able to snap those pieces together.
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