Why cloud-based Software as a Service WMS could be just what you need …
A growing business needs systems it can depend on. In the beginning this might be your own grey matter and some good old pen and paper. But as your business grows so does the information you need to record, store and share. You can’t just rely on paperwork any more, and you quickly run out of space to house the files! So computerisation comes next.
The ever-reliable spreadsheet has saved countless businesses from paper oblivion. But they can only take you so far before you need to look at professionally developed IT solutions. Whichever part of your business they’re for you’re likely to find a bewilderingly large choice and have many questions.
When looking at systems for warehouse operations the right step needs careful thought. Do you look at specialist WMS products from proven suppliers or seek the advice of an accounts system vendor? Logically, specialist WMS providers should have the right experience, yet their implied costs seem inappropriate for a smaller scale operation. An accounts provider may know of something that will work for you. Is that a simpler and cheaper way to get what you need?
Most likely not. One reason specialist WMS vendors exist is that they specialise! So this may answer the main question about the direction you take. With rare exceptions, it’s hard to find a high quality WMS from an accounts or ERP provider. Which doesn’t mean their other products aren’t great, but they don’t specialise in warehouse operation. And for reasons mentioned later the cost advantage they had in the past no longer really exists.
Back to the specialist vendors then. The costs and timescales for their products seem to confirm the impression of a focus on the high end of the market. Their ideal customers are probably large companies with deep pockets who can spend big, and continue doing so for support and maintenance. This is largely true, and because of the breadth of such systems the implementation process is usually lengthy. For a larger company an exercise that could take up to a year may not be detrimental, but for a smaller business it would be catastrophic.
Of course there are some WMS vendors who recognise the smaller company’s need for WMS but few have got this right so far. Various hybrid offerings are available but these tend to be cut down versions of larger systems which can take as long to implement as the systems they’ve evolved from. As a result they remain unsuited to the small business for practical reasons if not also financial ones.
As for financial implications one clear deterrent to smaller logistics operators is a large capital outlay that their business volumes (and margins) don’t justify. As most purchase models involve exactly that this could exclude solutions from the large majority of WMS vendors. For this reason smaller businesses need an alternative. This alternative is likely to be a purpose-designed small business WMS, hosted in the cloud and offered as a Software as a Service (SaaS) product.
At first glance this might not appear new. SaaS WMS products have been around for some time. But look closer and the technology behind some isn’t always what it seems. Some vendors have sought to join the cloud bandwagon on the cheap by producing web front-ends for systems based on older technology and marketing them as ‘cloud hosted’. So it’s important when evaluating a cloud solution to know that the technology incorporates the latest web developments.
So what does an ideal warehouse solution for smaller operators look like? Clearly the SaaS cost model will find favour with less cash-rich businesses. The benefits of a solution you can afford easily from operating expenditure are evident. And this has greater appeal if the vendor offers no minimum contract to reduce risk further, coupled with low upfront take-on costs.
But the product must be the right one. Not just for the technology but also its functionality. It should be a standard solution that’s flexible enough for smaller operators to model their business around. Ideally it should be developed by a company with proven market knowledge and embody best-practice warehouse functionality. And the simplicity of set-up the smaller operator needs should be integral to the product’s design, making it easy to implement, learn and use.