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Choosing the Right Warehouse Management System for Your Company

Why a WMS?

Warehousing and distribution is a tough business, built on thin margins, high volume and a model that's largely

about what happens after the sale is completed. That makes the logistics and process involved in customer

service - fulfilling the promise of right product, when and where the customer wants it - of paramount importance

in building a business. Yet without the right systems in place, offering the attention to detail and the dynamic

service necessary to deliver on this exceptional customer experience can be so expensive as to become a going-

out-of-business strategy.

But a funny thing happens with a customer-centric focus and the right infrastructure to support it: not only does

customer satisfaction and revenue increase, but efficiencies and productivity dramatically improve as well,

simultaneously lowering costs. One of the main secrets to this equation is a good Warehouse Management

System (WMS), which delivers flexible, real-time control of virtually any warehouse operation - thereby ensuring

a product is exactly where a customer expects it.

This level of control helps a company increase sales, cash flow and profitability through accurate, instant

information about inventory status. In addition to helping wholesale distributors respond more efficiently, a good

WMS solution eliminates overstock/deadstock and the need to physically close the warehouse for inventory, all of

which contributes to a better bottom line. And perhaps best of all -- a good warehouse management solution

empowers managers to make better decisions about inventory stocking, movement, and employee efficiency

because information is accurate and readily accessible.

Unfortunately, not all WMS products are created equal, and the key is to choose the right WMS to maximize

customer service and satisfaction. Without a good WMS in place, a company, its partners and most importantly

its customers are set up for failure. In fact, customers in the distribution business are notoriously fickle, impatient

and will jump ship when service levels lag. Not only could a good WMS mean a spike in customer service and

satisfaction and thus increased profitability but not having a good WMS could ultimately lead to a constant

struggle to keep a stable customer base.

Outlined in this white paper, we address what to look for when choosing a WMS.

1) Functionality

The overall functionality of a WMS solution is critical to a company's long-term business success.

A good test of functionality is to see if the WMS will be able to streamline or provide insight into a process in need

of change. For instance, if a company has a hard time quantifying employees' productivity, a good WMS solution

can track what tasks an employee has performed and where, thus giving direct visibility into efficiency and

workload.

Other advanced WMS functions that can be critical to a company's long-term business success (and are thus

important to add to the wish list) are:

Carousels - Does the WMS drive the carousel for increased productivity?

Cycle Count Planning -The WMS should provide the flexibility to check specific inventory over

specified time periods.

Front Counter- Customer-facing store staff should be able to send order requests directly to the

warehouse or build an order right from a hand-held terminal. Customers should also be able to watch the

status of their order onscreen while they wait with a good WMS.

Incident Tracking - Does the WMS effectively manage and maintain lists of warehouse issues,

ensuring incidents are correctly and quickly resolved?

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Lot Control - A WMS should determine where a product belongs physically, how long it should be

stocked, and which items should be shipped to specific customers.

Manifesting - Does the WMS streamline the entire shipping process to move more packages per day

with greater accuracy, all at a lower cost? The WMS should be compliant with multiple carriers including UPS,

FedEx and LTL Shipping.

Paperless Zone Picking - With a good WMS, specific orders can be selected, batched and sent

directly to an RF terminal user to pick for a given route or prompt for a priority order to service a will call

customer.

Replenishment - Does a WMS generate orders to keep picking bins properly stocked thus preventing

delays in order fulfillment?

Route Shipping - A WMS should accommodate trucks with regular routes, or trucks whose routes

change daily adhering to easy and dynamic stop sequences, and making deliveries efficient.

Serial Number Tracking - Does the WMS manage warranty and customer returns as well as track high

value items through the warehouse?

Slotting Optimization - A good WMS should monitor physical item velocity within a warehouse and

suggest optimal pick and put-away locations based on whether they're fast or slow moving.

Verification of Truck Loading - Does the WMS use trailer bar code labels, and verify that the loading

is accurate and complete?

Warehouse Metrics - A good WMS should have a graphical representation of employee-to-employee

performance, any transactions performed during a specific time period and branch-to-branch comparisons.

This should all be based on user-established parameters and filters.

WMS Utilities - With a WMS, users can locate, move and adjust inventory

2) Ease of Use

Ensuring a prospective WMS solution's ease of use not only improves efficiency and reduces employee training,

but also contributes to the bottom line. With a well-designed WMS, users spend less time setting up and

monitoring daily operations, and are able to quickly adapt to new requirements. New employees can also be up

and running in a matter of hours instead of weeks. And perhaps most importantly, clear navigation ensures that

all employees will be able to leverage the WMS functionality to the fullest - meaning that the new system is being

used exactly as intended.

When choosing a WMS, look for easy to follow menus and help screens that can improve usability. For example,

make sure the WMS allows for simplified data entry and creation of template reports and charts. Similarly, a

dashboard view (which automatically updates in real-time) provides users with a single location to access all of

their most critical data.

3) End-to-end Transaction Management

Managing transactions from receiving through manifesting is an essential feature to look for in a WMS. The new

system should give detailed information every step of the way, not only for every product, but also for every

warehouse floor employee. By tracking employee movement in the warehouse, one gains valuable insight into

how various activities should be staffed in the future. At a minimum, the following are some of the steps that

should be tracked:

Receiving

Putting away received goods

Order picking

Shipping

Cycle counting (inventory audits)

Any item movement

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By having further insight into every step of a transaction, a company can optimize product stocking needs and

employee efficiency to the fullest extent, therefore maximizing customer service.

4) Flexibility

The ability to scale to a company's growth and adapt to meet future requirements is essential to picking a viable,

long-term solution.

Ensuring scalability up front could mean investigating whether a WMS works with the majority of ERPs (i.e., not

just the one a business is using today but also the one it might adopt two years from now). It also could mean

investigating whether the WMS supports multiple brands and models of portable RF terminals, fork truck

mounted RF terminals, and bar code label printers, scales and scanners. Further to that point, a good WMS

should have partnerships and displayed compatibility with multiple hardware platforms and demonstrable

success with wholesale and industrial distributors of all sizes. Another good indication of future scalability can lie

in whether the WMS is built around an open architecture, making it much more likely that the system can work

with future applications and operating systems (rather than locking in a particular platform).

In short, one should carefully analyze whether the WMS will not only be the best choice for a business today, butis likely to embrace growth and changes to a business in the future.

5) Metrics to Chart Productivity

Providing clear performance metrics to better track productivity is really where the rubber meets the road for

determining ROI. A good WMS should easily create reports and charts on-demand to gain insight into warehouse

and employee efficiency. For example, a good WMS might track employee and warehouse performance in real-

time across organizational groups, allowing management to compare performance of employee sets (morning

pickers, evening pickers, receiving, etc.) and operational organizations (east division, west division, etc.).

The WMS should be able to measure performance of individual employees against standards which include both

speed and accuracy.

6) Seamless Integration with Major ERP Platforms

It is essential that a WMS is fully compatible with an existing host business system (usually an ERP) so a

company maintains the way it does business, without reinventing infrastructure, systems or procedures. When

choosing a WMS, ask if it's compatible with Activant's, Infor's, JD Edwards', MS Dynamics' and Oracle's business

solutions. In addition, a WMS vendor should be skilled at developing additional ERP integrations should it not

have existing partnerships. Flexibility is key to this point. Failure to seamlessly integrate with major ERP

platforms could result in a large amount of time and money wasted - adversely affecting ALL parts of a business.

7) Reputation and Customer Service

The vendor behind the solution is as important as the application itself, making an outstanding reputation for

implementation and support a good indicator of a top notch WMS.

When investigating solutions, ask for a list of customer references. When talking to these customers, focus on

how well the system performs. Did it meet all expectations? What kind of customer support is available and how

would the user rate the support they receive? How was the follow up?

Besides taking the customer's word, actually go out and visit multiple customer sites. See how the system

performs in a given setting (of course recognizing that one company's needs may not exactly be those of

another). If possible, make these visits without any salespeople present to ensure one is getting the full story.

8) Lowest Cost of Ownership

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Keep in mind that price is only one small part of total cost of ownership. Functionality, flexibility, integration,

scalability, ease of use, customer support and more all come into play, and weighing these factors will ensure

that the up-front purchase doesn't become much costlier over time.

In fact, an inappropriate WMS may end up never paying off - and can even end up costing the company

significantly more as good money is thrown after bad in an attempt to fix the problems with costly integration orcustomization work to fit requirements, new hardware or software, etc.

9) Commitment to Warehousing and Logistics

A final indicator can be found in the vendor's overall focus (or lack thereof) on warehousing and logistics. In many

cases, WMS solutions are available from companies that offer business solution tools spanning many industries

and requirements. This may enable those vendors to diversify their offerings, but it also restricts their day-to-day

insight into the very specific, niche field of warehouse management.

One concrete way to gauge this commitment is to track how frequently, consistently and extensively a vendor is

upgrading its WMS offering. Are they proactive in soliciting customer feedback? Are they acting to quickly take

advantage of market changes? Are theyproviding upgrades and updates free of charge?

A focus on warehousing and logistics also often translates into the ability to adapt and customize offerings to

meet specific industry requirements or scaling to meet the needs of smaller or larger clients. For example, the

offering should be just as adept at doing core things like receiving and order picking as handling comprehensive

solutions that include manifesting, paperless picking across multiple zones, truck route/stop management or

exotic lot number control.

Final Thought

Ask yourself, "What does it cost your company to provide exceptional customer service?" A solid WMS and

vendor partnership will drive substantial business benefits both in efficiencies and cost savings that come withimproving your customer service. On the other hand, the wrong WMS can actually damage customer service and

reputation while dragging down productivity as it drives up costs and frustration. The difference between the two

is really just a matter of knowing the right questions.