How to Budget for a New Warehouse Management System

One of the biggest challenges companies face in acquiring new warehouse management systems is how much to budget. In our experience, 50% of major systems projects are not completed within proposed budget or time frame. Companies must understand the potential costs early on to prevent finding out they can’t afford the system after spending significant time in the system selection phase.

To make matters worse, warehouse management system (WMS) vendors may paint an incomplete picture when companies ask the cost. Some vendors will only focus on the user license, but not the software services or annual maintenance costs. Companies should focus on the following nine cost categories when developing an accurate budget for replacing a software solution:

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How to Maximize The Synergy Between A New WMS, Process Change and Automation

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.

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Critical Considerations and Questions Before Signing a WMS Contract

True story. A client’s system selection team had arrived at the three best Warehouse Management Systems (WMS) for their e-commerce company. There were still open questions from the demos. The company did not have a total budget yet as costs for modifications and interfaces were not yet identified. No project planning had been discussed. The contractual agreements had not been reviewed by an attorney.

Unbeknownst to the team, the salesperson went around the team to the CFO and proposed a significant discount to sign with his company within the next few days. It also meant paying a non-refundable discount in excess of 25%. After briefly reviewing the potential discount with several senior managers, he signed the agreement and announced the decision.

A year later the implementation proved to be a disaster because the fit was not as good as the CFO had hoped it would turn out to be. After initial Go Live and the new WMS’ failure, the legacy system had to be reinstalled.

As the year end approaches, software and technology vendors will offer significant discounts in order to secure your business and book it in the current year. This is also true with many vendors at the end of each quarter. But don’t let the last-minute vendor discounts distract your company from prudent due diligence in selecting the right WMS for your business.

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How To Conduct A Post Implementation Audit of Your Recently Installed System

After months of preparation, systems customizations, file conversions, training, etc., you have just implemented your new ERP, OMS, WMS or Forecasting system. The Go Live isn’t as problem free as you’d like. What next?

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Warehouse Management System Benefits For Today's Operations

The supply chain has changed dramatically over the last 10 years in so many ways that it can be hard for some to keep up with.  Increases in freight and transportation have made these costs higher than distribution center labor in many businesses. The cost and quality of labor throughout your supply chain can be challenging.  One way to get ahead of this constantly changing landscape is using robust Warehouse Management Systems (WMS).  Whether you running an ecommerce site, retail chain  or are a manufacturer or distributor, these systems can bring increased controls to labor, inventory and transportation. 

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Seven Operational Strategies to Remain Competitive and Efficient in the Future

As you conduct strategic planning for fulfillment, what are the operational strategies you should consider to remain competitive and be efficient in the future? To consider this topic, we looked at trends that are shaping the operations in multichannel companies. Here is our list:

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Are You Holding Onto Your Order Management System Too Long?

In many cases, businesses are holding on to their installed order management system or ERP for more order management systemthan 10 years – sometimes 15+ years – if they believe they’re the right fit. On the face of it, this is sound thinking; considering the time and expense involved in implementing a new system.

Your order management system or ERP may be right for your call center, the merchandisers’ management of inventory, accounting systems and integration with your web platform. But are your fulfillment system requirements the same as they were 10-15 years ago? For many businesses, the answer is a resounding no.

Maybe you’re being too conservative by expecting incrementally greater productivity from your distribution center’s warehouse management system each year without additional functionality. In most companies, direct and indirect labor accounts for more than 50% of the total cost of fulfillment, excluding cost of shipping. People productivity in a DC is largely based on the feature/function set designed into the systems.

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New Warehouse Management System Preparedness

I was recently shopping online from a large Outdoor Specialty retailer, and at check out the shipping warehouse management systemtime was estimated to be 10-14 business days. To see the least I was shocked. All of the products were listed as being in stock and none of them were too large or heavy. I thought to myself that this was way too long in this day and age where a customer is looking for instant gratification and expecting merchandise to arrive in 3 or 4 days or at most a week if coming from one coast to the other. Having previously shopped with this retailer, I remembered that the shipping timeframe use to be about half of what they just quoted me.

Download: How to Improve Your New Systems Selection and Implementation Process

I decided to give the company a call to see why the shipping time has about double of what I expected. When I finally reached customer service they told us that the warehouse is having some huge issues in getting any product out quicker than 14 days due to a new warehouse system that they have installed. I asked about expedited shipping to get the products sooner, and I was told they cannot overnight or 2nd day air out anything either because of the new system issues. WOW!

How could a large company implement a new warehouse management system and have these types of issues? I can think of at least one answer and that is more or better testing to be sure you are ready to launch a major new system.

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Ensure a Smooth Order Management System Selection and Implementation

Warehouse Management Systems and Order Management System selection and implementation is serious business, and no one wants to make an already complex process more difficult or more costly. Over the years, F. Curtis Barry & Company has determined some principles to follow during an order management system or warehouse management system implementation project that will significantly improve the chances of success for all parties concerned. There may not be any absolute guarantees, but following these ten proven principles will definitely smooth the way for your next implementation project.

READ: 13 Information Technology Cost Reduction & Productivity Improvement Ideas

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Order Management System or Warehouse Management System Post-Implementation Audit

If you have recently implemented a new Order Management System (OMS), Enterprise Resource Planning (ERP), Warehouse Management System (WMS) or any system for that matter; are you fully utilizing the new system’s capabilities?  Companies spend large capital investments on the system as well as the time and implementation costs to install the new systems. We often see new system's functionality being underutilized.  This is true even after being live on the new system for a year or more - for a variety of reasons.  One of the best ways to assess the utilization  of the functionality for a new system is to perform a post-implementation audit.

Download: How to Improve Your New Systems Selection and Implementation Process

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