In our experience, more than 50% of the time, major fulfillment center projects such as WMS and automation are not implemented on time and within budget. Major changes to processing merchandise and order fulfillment often do not reach planned production goals (e.g. orders processed per day) for months after initial implementation.
Simply installing a WMS system by layering it on top of existing processes with no change is a waste of money and time unless the processes are streamlined to work in concert with each other. In their own right, each brings its own value to your business. When you add new automation or technology to the mix, the project becomes more complex. Yet it is the synergy of all three together that delivers the maximum benefits.
Synergy is the benefit that results when two or more activities or systems work together. Total benefit is larger than what can be gained independently without regard to the other. It is the hand and glove integration of the three that is crucial to gaining the maximum benefits. This sounds like a no-brainer, but it isn’t because the three entities are almost always designed, developed and marketed by three different companies. Using vendor and other outside resources, your staff will have to plan and manage the implementations.
How do you get the maximum increase in productivity that they are expected to produce? To gain the synergy, here are 11 considerations:
1. Total design and separate implementations.
Design the new fulfillment environment taking into account how the WMS, process changes and automation will fit together and what benefits will be gained. But if possible, plan and execute independent implementations. Many times, decisions are made to simultaneously install new WMS, automation and technology in a new fulfillment facility. That is the most difficult and long term implementation. There may be no good alternatives to doing so, but determine if there are viable options. Can the WMS be installed in the existing facility first – then in the new facility? Each of these projects – WMS, new processes and adding automation – are three significant projects which take attention and competing staff resources. Can they be implemented separately to ease start up problems?
2. Select the WMS which gives you the most benefit, future flexibility, function and scalability.
Installing a full function WMS is the first step in increasing productivity and establishes a foundation to build on. WMS and automation companies will have preferred partners. Don’t assume that’s always the best choice for your e-commerce company. For sure, the interfaces and integrations they develop are often of considerable value. However, we recommend selecting the WMS that best fits your company size, functionality required, operates on the IT platform and model (i.e. on-premise versus cloud) and has a total cost of ownership that is acceptable.
3. Understand and streamline the new processes in conjunction with the WMS.
As we said earlier, simply layering a WMS on existing processes doesn’t translate to more efficiency. Review in detail the processes supported by staff and how they will interface with the proposed WMS. As you conduct WMS demos, make sure to demo the processes in total first with a minimum of questions and interruptions. You don’t want participants’ questions to get the vendor’s presenter off track. New processes may look more elongated and involved than they may actually be. From the demos, strive to understand the process changes that will be necessary. Major changes often happen building product master files; receiving and inbound freight; put away and replenishment options; picking options and technology; managing fulfillment workloads; reporting productivity and returns processing to name a few.
4. Consider changes in organizational responsibilities.
As part of these projects, consider changes in organizational responsibilities. For example, consider the product master file. Will the file be maintained by product merchants, purchasing staff or inventory control? If you choose to start using a cubic dimensional measurement system, where in the process is this performed and updated? Recognize that implementing new processes and systems will challenge existing responsibilities and territories. Who in the organization will recommend the best options for changes and be sure they are developed and implemented?
5. Supplement your team with vendor consulting professionals.
In the proposal phase, vendor consulting professionals may be available “free” to provide studies which help justify and close the deal. Professional services in the implementation will often become as much as 50% of the costs of implementation, charged out at $1,500 to $2,000 per day depending on their role and expertise. The focus should be on the total project and its ROI rather than a component such as equipment cost or consulting.
6. Involve key employees in all decisions.
The earlier you involve key employees in major projects such as these, the better the chance of getting their buy-in and ultimately achieving successful outcomes. Involvement over time helps them get acclimated to the changes you are considering. Another benefit is they will be more attuned to how current work is performed.
7. Help staff make the transition.
We find that every organization has to have time to absorb new systems, processes and tools for doing work. No matter the training, this takes time to absorb the change. Not to denigrate warehouse staff, but some management teams lack the prior experience with the new WMS and technologies to get the maximum benefit early on. It will take them much longer to get up to speed.
8. Plan for productivity loss.
One of the hardest points to deal with is getting management to understand and accept temporarily lower productivity during the start-up period and the first few months after Go Live. Be realistic about how long it will take for the organization’s productivity to reach the expected new goals. In checking out a vendor’s references, ask the clients you interview what their experience has been in meeting budget and productivity goals. We find many companies will tell you their experience and what they would do differently.
9. Fine tune the new fulfillment environment automation post implementation.
No implementation is perfect. Build tasks into the project plan to audit the implementation and make proposed changes. These may range from more training for certain people or departments; fine tuning material handling, automation or technology; and workflow adjustments to increase productivity and reduce backlogs.
10. Establish realistic project plans, schedules and estimates.
Each implementation is a major project in its own right, which is why you should determine if you can execute these projects independently. They will each require detail project management, staff resources and time required to implement.
11. Consider using a fulfillment consultant to supplement staff.
Use consultants to complement your organization’s skill sets and to work through the process changes; recommend organizational changes; develop and manage the project plan, schedule and report status and advise on budget performance.
Gaining the synergy of process changes, WMS, automation and technology means realistic detail design and implementation for the outcomes that will achieve the ROI management expects.