In the past it was relatively easy to tell the difference between the tiers of warehouse management software capabilities. The larger more expensive products offered significantly more functionality and scalability than the other smaller versions. That appears to be changing as we speak. As we help clients look for a warehouse management systems for their operation, the process of culling down the list of potential vendors to consider is becoming more confusing.

Before, a larger company usually migrated to a larger vendor while the smaller companies moved to smaller systems. Recently, vendors seem to be morphing into a more homogenous mix of feature/function. Almost all of the warehouse management system vendors we have run into have full functioning systems. The chief difference we see today is that many seem to have specialized in a particular market segment such as retailing, manufacturing, or third party fulfillment among others. This specialization has caused the development of functionality to reflect the specific requirements of that particular industry type.

Most warehouse management software packages today cover the basics of a warehouse operation.  Some of the more sophisticated versions offer a wider selection of features than their smaller competitors. It is more important today than ever to develop a detailed requirement document that can be used to evaluate your warehouse management system options. The devil is in the detail never applied more than to the selection of a warehouse management system. Without a detailed description of what your business requires, all of the possible solutions can look the same.

One approach we have used successfully in the past is to try to find a warehouse management system product that has been utilized successfully in another business with a very similar business model to yours. There will not be another exactly like you, but finding someone with similarities goes a long way toward selecting a list of potential products with a track record in your particular vertical market.

If you can find a few vendors who have successfully installed their warehouse management systems in a business with similarities to yours, you will increase the likelihood of a successful install in your company. Although that cannot be the only factor used to select a vendor, it goes a long way to making sure you find the right fit for you.

Call us at 804-740-8743 and let’s talk about how we can help you with your warehouse management system project.

However, for an important decision on a system that will manage your business and income, I am amazed at how many small to mid-size companies base their system selection on a word of mouth recommendations, a 2 to 3 hour Webex demo and a commitment from a vendor that the functionality will be delivered in a 2 to 3 month time period.  If you are one of the few fortunate ones where this has worked for you then my hat is off to you but for the majority, this easy path is a mistake.

I worked with a company a year ago on a separate project and at that time they had begun looking for a new systems solution.  I offered assistance to help them with their requirements and search but they opted to pursue the systems search on their own.  In a chance meeting I ran into them recently and asked how the system implementation had gone.  To my surprise it hadn’t.  The vendor they selected based on a couple of Webex demos and few short meetings couldn’t meet their functionality demands.  After 9 months of effort the project was abandoned.  The company’s owner came up to me and said “you know, everything you warned us about how we were approaching the project and the risk involved turned out to be true.  I wish we had taken the time to listen to you and used your expertise.  The money that we would have spent with you would have been well worth it”.  Unfortunately the company lost a full year’s worth of time and of course the expense that goes with it.

Lessons Learned.  Taking the easy path on systems has never worked for me in the past.  It inevitably causes heartache and pain down the road.  Selecting e-commerce, order management, warehouse management and enterprise resource planning systems takes time and due diligence.  It all starts with an analysis of your current business, developing requirements and knowledge of the software vendors.  When it is time to search and select a system and you’ve come to that fork in the road, take a hard look at which path to take.  How about your company, have you taken the easy path only to have the project fail?

Tocky Lawrence is a Vice President with F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking.

Operations that still try to manually record data and enter information manually risk the inevitable error in the input issue. It is too easy to write down the wrong information or to make errors in data entry and to rely on a manual process to gain inventory and activity accuracy. In addition to accuracy concerns, those warehouses who do not employ bar code technology miss out on potential productivity gains.

It is not necessary to totally revamp your processes and replace all manual operations with bar code scanning technology. I would suggest you identify those areas where the maximum benefit can be obtained and focus on these areas initially. You can always expand the application of this technology later as the justification presents itself.

It is possible to include real-time bar code scanning updates to warehouse transactions or to queue up transactions and utilize a batch upload process. You can select either method based on the function being studied and the need or benefit of utilizing real time updates.

Bar codes can be used throughout the operation. They are utilized in the following areas in many warehouses.

Receiving – bar codes at the unit, carton, and pallet level are used to record product movement throughout the receiving process. In addition, document bar codes can reduce manual and clerical time required to receive product.

Put Away – scanning bar codes on products from receiving and the location where that product is placed in the warehouse provides accurate inventory location tracking, which is a fundamental necessity of a well run operation.

Replenishment – by scanning product out of a reserve location and into a pick slot, accurate and potentially real time information is available for the picking process.

Picking – the use of scanning while picking confirms that the right product is being picked. In addition, those operations using a form of cart/bin picking utilize bar codes to confirm that product is placed with the right order.

Packing – the use of scanning to pack verify orders increases the order accuracy level to avoid shipping mistakes.

Shipping –some level of scanning is used in most operations to sort and manifest packed orders.

Returns – bar coded return documents and product bar codes can be used to accurately and quickly process returns and issue appropriate customer credits.

Cycle Counting – by using bar codes on cartons or pallets and warehouse locations, the cycle counting process becomes very efficient.

Productivity Tracking – by using bar codes to track activities and associating these activities to individuals through a sign on process or through scanning employee bar codes, it is possible to track and record what each individual has accomplished.

I am sure there are many other uses of bar code scanning in the warehouse. But these may trigger some thoughts about your warehouse as to where this technology could be applied.

Let F. Curtis Barry & Company assist you in finding the right bar code system and develop the strategy on how to effectively use bar coding in your warehouse and operations.

Bob Betke is vice president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in warehouse and distribution, warehouse management systems, order management systems, call center, inventory management, and benchmarking; Learn more online at: http://www.fcbco.com

1. When considering replacing your software application, ask yourself the following questions during the due diligence process:

• What applications will be considered, and what functions are required?
• What are the major milestones and time frames necessary to complete the project?
• What’s the total cost of ownership necessary to complete the project?

2. When asking a vendor to submit a formal proposal, include all the vital information necessary to receive a detailed proposal. For example, in the case of an order management system, vital information includes, among other things:

• Peak and average figures for the number of concurrent users;
• Order volumes by month, with the peak week;
• Average lines and units per order; and the
• Number of customer records.

This information isn’t only necessary in identifying the licensing, but also the proper sizing for application and database servers.

3. Analyze the vendor proposal painstakingly. For items such as training and implementation services, understand the number of days being proposed and what roles or tasks will be performed by the vendor. Be careful of terminology like “the normal training days are X” or “the standard project management days are X.” Make sure the “typical” or “standard” days are sufficient for your project.

4. Understand the vendors’ license maintenance and support plans and when payment is due. Many vendors charge these fees once the application is delivered. Some maintenance plans can be as high as 20 percent of the MSRP or originally proposed license fees.

5. From an application licensing perspective, review the pricing model and any optional modules that may be necessary to support the functionality within your business. If the vendor is supplying the hardware for the application and database servers, be certain the hardware is sufficient and budgeted for, including the necessary hardware upgrades if optional modules are added later or if the licensing forces the hardware into major upgrades.

6. For program modifications or integrations to other software applications, provide functional specifications for the vendor to submit a formal proposal. While the vendor responses may only be estimates, the more detailed the specifications, the better a vendor can estimate the expenses. Don’t wait until after the project is approved to get these expenses.

7. So far these expenses have focused on vendors’ costs and haven’t addressed planning for internal expenses. Be careful, because internal expenses are usually less budgeted for and can lead to project overruns very quickly.

Travel expenses are one example of internal expenses to potentially budget for. It’s often necessary to travel to and from vendors’ facilities, as well as travel expenses for the vendor to be on-site. These expenses can be as high as 15 percent to 18 percent of the total services for the project. Be aware, some vendors charge a travel fee if the travel is over a certain number of hours or they charge cost plus 2 percent to 3 percent.

Other internal expenses to consider budgeting for include:

• an increase in payroll or overtime to complete the project;
• the hiring of temporary labor or outside resources, such as consultants or programmers; and
• upgrades to other network hardware or the rewiring of the internal network.

Formalize a full budget before proceeding, being sure to build in sufficient dollars for items such as services, programming and training that may not have been sufficiently budgeted for by the vendor. By clearly defining your budget, you can avoid being one of the 49 percent who exceed their IT budgets.