Howto avoid a Warehouse Management System horror story

Bv Dick Friedman

A WAREHOUSE Management

.Cl.System might increase productivity and picking accuracy, which could cut costs and improve customer service. But a WMS is expensive. And it's tricky to find a WMS with the right combination of helpful features and cost-justification.

It's also easy to spend a lot of money, despite the availability of cheaper systems that can produce the same savings and benefits. And often changes to the warehouse are needed before installing a WMS or it won't produce any savings or benefits.

There are steps a distributor can take to avoid selecting the wrong WMS, overpaying or setting up a system in a way that makes things worse.

tfp-Front Planning & Prep

Involve top management, because a WMS impacts customers as well as employees-even if that means a top manager has to learn something about computers and WMS.

. Organize a team consisting of someone from top management, all warehouse managers and supervisors, MIS management, and the people responsible for sales order entry and customer service.

. Estimate growth and identify expected changes for the company as a whole and for the warehouse. A WMS must be able to handle future company and warehouse needs as well as the obvious current ones.

. Tighten warehouse procedures and controls for receiving, put away, etc., and for information and product flow. Do it now. Failure to do this is the primary reason for WMS horror stories.

. Determine if the main business system has the functions and data that are "expected" by a WMS; e.g., expected arrival date of a purchase order. Furthermore, the data in the business system must be very up to date and accurate.

. Estimate long-term costs: software, education, training, bar code equipment and spares, annual support fee.

. Be conservative when estimating personnel reductions, personnel avoidance, and other cash savings. Don't ignore the impact of non-cash benefits, such as happier customers..

Selection & Installation

. Define detailed, long-term WMS needs. Without such a list it is impossible to judge whether a particular WMS contains specific needed functions-and impossible to compare different systems.

. Solicit written bids. Ask WMS vendors to categorically compare their software against the list, and to quote all the costs involved.

. Examine each vendor's bid, for cost, missing features, and prior experience with similar distributors. Narrow the field to two or three WMS, and then ask those vendors to demonstrate their systems. Call a few references of the vendors, and visit one or two references ofeach vendor.

. Select the most cost-effective WMS, based on long-term cost of ownership and non-financial facts, such as the degree of software suitability (vs. the list of needs) and vendor experience.

Before delivering the system, the vendor should make any planned WMS modifications and create any programs needed to interface the WMS with the ERP system. Test it all, using real data for the test, which should be conducted by the people who will be using the new WMS.

Don't skimp on user training. A WMS is so complex that the only way to learn more is to spend a lot of time in formal classes and on-site trainins sessions.

- Dick Friedman has 25+ years of experience helping distributors select Warehouse Management Systems. For a free consulttttion, contact him at (847) 2 56- 3260 or v ia www.ge nbu scon.com.