Warehouse Management Systems (WMS) have become more affordable even for small to moderate sized e-commerce businesses because of subscription, cloud or Software as a Service models. That’s exciting because of their potential!
However, you still need to use a methodology to select the right system for your business with your budget. Short cut the process and you may select the wrong warehouse management system or it may cost you more than you think. Here are 13 things to consider to successfully select the best WMS system.
The Process and Requirements
1. Form a project team
Select a project manager with operations knowledge. Management should also appoint a sponsor that can help gain needed decisions from decision makers.
2. Define requirements
Here are 10 broad areas to consider. Don’t have a vendor write the requirements to save money. Your requirements document will have hundreds of points to compare vendors and systems:
- Interface to ERP or OMS
Which are standard modules versus custom interfaces? What detail data is exchanged?
- Receiving, quality assurance, put away
Is directed put away required? What tracking and reporting?
One of the major benefits to WMS is the “four walls” tracking of inventory including tracking availability; SKU usage in customer orders; returned product disposition and specialized functions.
How many levels of assembly are tracked with units and cost?
- SKU tracking
Is specialized SKU tracking required by serial number, lot tracking or expiration date?
What functions are in the base system versus add-on modules? How will it save picking time?
What business rules for multi-facility inventory and split shipment of customer orders are required?
- Visibility across supply chain
Functions include ASNs for inbound purchase orders and small parcel shipment tracking through carrier interfaces.
- Automation support
What MHE and automation interfaces/integration are required (e.g. pick to light, put to light, sortation, voice, IOS Android devices, weighing scales and scanners (overhead vs bed scanners), etc.? Will a separate WES or WCS system be required?
- Shipping systems
What functions, types of scales, carrier interfaces (e.g. small parcel, LTL) and international support is required?
- Transportation management
What functions are in the base system versus add-on modules?
- Third party fulfillment company (3PL)
If your business is a 3PL, are there functions which are important as you serve multiple clients and multiple brands of client companies? For example, rate card billing (by client, quantity of service provided and the rate). What WMS are used in 3PL?
Download our FREE WMS Tech Report - Learn how you can determine the true benefits of a WMS, and some of the high level requirements and functionality per department that you should be looking for.
3. Vendor short list
Do preliminary research for 4 or 5 qualified WMS software vendors based on function and costs. We advise against sending to dozens of vendors as you’ll lose a lot of time.
4. Write request for proposal
In addition to requirements, request pricing (e.g. licenses, services, equipment, annual support, etc). Also request the vendor’s methodology, agreements, references, etc. Gain sign off from your organization on the RFP, then send the RFP to the vendor short list.
5. Analyze vendor responses
Review responses to RFPs and select the best 2 or 3 vendors for demos. Put together scripted demos of what functions you want to see.
6. Pick preliminary finalists
Evaluate the vendor demo responses and pick the best 2 as finalists.
7. Develop scripts for reference calls and site visits
Call references -- both those provided by the vendor and others you know that use the system. Set up visits at those businesses if possible to see firsthand how the WMS is set up.
8. Final review and selection
Have the two finalists in to see further functionality, ask questions and pricing, implementation and methodology.
9. Start project planning
Before final selection, discuss the implementation methodology, changes to your product and stock location marking, determine your responsibilities, etc. Who will be your internal project manager? Don’t leave it to your vendor.
10. Return on investment
What are the areas of savings and intangibles that you can expect? The major savings we see are from better direct and indirect labor use; inventory tracking throughout the enterprise and all processes; better utilization of distribution center space through inventory management and slotting; and potential savings in support by IT of home grown systems. There are dozens of intangibles, too.
11. Legal review
Have an attorney review the various contracts including user licenses, annual support agreements, 3rd hardware/software licenses and support agreements. If you are intending to implement a subscription, cloud or Software as a Service, pay particular attention to what those services include (e.g. database backup and disaster recovery, system response time during average and peak).
12. Vendor decision matrix
Pull together all of your conclusions for functionality; references and site trips and rank the observations to select the best and second best vendor.
13. Final negotiation
Be careful what you think you can negotiate. It’s better to have thoroughly considered all the implementation management, subsystem options, interfaces and your project management than to think you can carve a big percent off of price.
These are great times to bring the power of WMS to your operations. However, it’s important to be methodical about the process, the features and the ROI to be gained.