Automation: Voice or WMS
The benefits of implementing a warehouse management system have been well documented over the years. A WMS brings discipline to processes that leads to more accurate inventories, more efficient work flows and better utilization of space.
But like the old saying about exercise, there’s no gain without pain. Rightly or wrongly, companies view a WMS implementation as risky, costly and painful. It’s one of the reasons most companies keep their WMS in place for a decade or longer, even when that system is no longer meeting all of a company’s needs.
Ian Hobkirk, managing director of Commonwealth Supply Chain Advisors, has noticed a trend among clients that are implementing workarounds to extend the life of a legacy WMS. “We have four or five large clients right now that are doing small voice implementations to get some basic functionality that a modern WMS can support like cluster picking,” Hobkirk says. “Each has a legacy WMS that isn’t very flexible. They would rather install a workaround than upgrade their WMS.”
When Hobkirk probed his clients, their reasons for avoiding a WMS upgrade were consistent. “There is a stigma about WMS projects,” he says. “They fear the cost of a new WMS and they don’t want to write custom code to perpetuate a legacy WMS. Voice projects, on the other hand, were easier to sell internally as something that’s easy to do, provides targeted benefits and won’t tie up a lot of IT resources or cost a fortune.”
What then is driving companies to replace supply chain software? Hobkirk put that question to 11 different companies in one-on-one interviews. He also compiled material from 17 other projects his firm has executed over the last four years. He presented his findings last month at the Material Handling Industry spring meetings.
Demographically, more than half of the respondents were large companies; 57% were in retail or wholesale distribution while 43% were manufacturers. Half were companies that already have a moderately robust WMS in place; the other 50% have little or no WMS capabilities.
Here’s what those companies had to say.
Hobkirk first asked what was driving companies to consider an upgrade or new WMS. While the answers varied according to whether a company already had a WMS in place, the drivers were familiar. Companies that already had a WMS wanted to drive more efficiencies through voice directed warehousing, slotting, labor management, more sophisticated pick processes, task interleaving, wave planning and/or cartonization. Companies with little or no WMS capabilities were focused on the basics of real-time transaction confirmation, more sophisticated pick processes, directed put-away, receiving improvements, slotting and improved integration to materials handling equipment.
Stronger ERP-based WMS offerings were also driving some companies to consider a WMS project, especially among companies with little or no WMS capabilities. Of those with a best-of-breed WMS in place, only 15% were considering an ERP-based solution.
The respondents clearly realized the benefits of a WMS system. That led Hobkirk to ask the next question: “Despite all of these compelling reasons to act, why aren’t more companies lining up for a new WMS?”
The answer, he says, is that “most companies fear that the implementation will be so painful that they will forego the functionality and technical benefit of a new system.” Instead of implementing a new WMS, he adds, “many companies are deploying voice to achieve functionality that is going to be too hard to get through WMS alone, leverage a warehouse control system in some instances or living with the problems.”
As one e-commerce distributor told Hobkirk, “It’s hard to justify a several-million-dollar spend and the headaches that go with WMS implementations for a limited amount of incremental functionality.”
Was Hobkirk surprised by the survey results? “What surprises me is that the WMS world hasn’t found a way to take advantage of this trend,” Hobkirk says. “The industry leaders should be able to provide a light version of their solution that bolts onto an existing WMS and replicates what the voice guys are doing.”
As to takeaways, Hobkirk says there are two lessons to be learned. “If you want a new WMS and you want it to come in on time and on budget, you have to find the right implementation partner. That’s really important,” he says. “If the budget and timetable still scares you, look to voice. There are voice providers that are building robust functionality into their solutions and there are end user companies that have pulled it off.”