How to choose a Warehouse Management System

OrderFlow founder and MD, Charlie Armor, suggests how to go about selecting a new WMS supplier.

When your warehouse operations are a key part of your business choosing a new WMS is a critical decision with long term implications. It’s tempting to simply go through a tickbox exercise that compares the number of features offered by different platforms and then make a choice based on price. In my experience this is how many businesses go about selecting their first WMS provider but unless your warehouse operations are very simple this approach rarely ends well, when they outgrow their current platform companies take far longer to select the next system that replaces it.

Almost by definition, any service provider that offers lots of features at a budget price will not expect to spend time with you to make sure their system is really tailored to you. That’s fine if your business only needs basic warehouse and order processing functionality. However, if your requirements are more complex or if you expect your business to grow and change you will need a system with the flexibility to meet those changing needs. It’s worth taking some time to really evaluate what different suppliers can offer and to spend some time doing the ‘due diligence’ that should save you making a very expensive mistake.

The choice is not just about the different WMS platforms that are on offer, equally important is the ongoing support that is available from each supplier. If your business is complex you need to be sure that your supplier is happy to work with you to continually refine and adjust the service you use.

Below are some suggestions about how to go about choosing a WMS supplier. It’s not a full-blown tender process but it does take time and effort to work through. It also assumes that you’ve already outgrown an entry-level system so already have an insight into the current operations you need the new platform to support.

Be clear about what you need in the short term and when this might change

Although the decision is not just about features, in the early stages of your discussions it does make sense to be clear about the ‘must-have’ elements that are essential to you, but which might not be standard in all the systems you consider. Don’t focus on technical features but on the business requirements the new platform has to support.

An example might be:

• ability to support both a manufacturing plant and finished goods warehouse and to track stock movements between the two
• must integrate with our MRP platform
• must be able to track raw material product batches through the manufacturing process and out to customers
• must be able to fulfill both trade and consumer orders efficiently
• support the processes required to outsource the manufacture of bespoke products if/when we decide to do this

or

• integration with multiple eCommerce and carrier platforms
• cross-docking of incoming just-in-time stock deliveries with multi-line orders
• support for kitting of composite products against a bill of materials
• support efficient picking of multiline orders across separate pick faces if/when we decide to put in a mezzanine floor

Focus on the more unusual elements of your requirement that you suspect may be harder for some systems to support. Once you have a list of the areas that are particularly important to you it’s time to start calling potential suppliers. Explain what you’re looking for and ask for a demo of their platform, mentioning the particular areas that you want to focus on.

It’s unrealistic to expect that you will be able to assess the suitability of a WMS platform in a remote demo. The systems you are shown will probably all look pretty similar, the real value in the exercise comes when you start to talk about the detail of your requirements and you have an opportunity to assess the supplier’s willingness to engage with your specific requirements and to talk about how their platform can be configured to meet your particular needs. If a potential supplier glosses over the complexity of your requirement or suggests that there is one approach that works for all their customers, alarm bells should ring.

Do the ‘due diligence’

Selecting a new WMS supplier is a strategic decision that will have a long term impact on your business so it’s worth taking the time to research the suppliers on your shortlist. Once it’s clear to them that you are a serious prospect in the final stages of your decision making most suppliers will be happy to provide a few introductions to their existing customers. Users in the same sector as you may be unwilling to invite you onto their site but if they have a good working relationship with the supplier they should be happy to talk to you over the phone for five minutes. Ask to talk to existing users who are similar to your own business in size and complexity and also to one or two who have more complex requirements that have changed over time. Ask about the initial implementation, how their use of the system has evolved and the support they have received as their business has changed. Ask them to be frank about the supplier’s shortcomings or what, in an ideal world, they would like to change.

It’s worth asking around among your industry contacts, if you’re a member of the UKWA or other trade bodies it’s worth attending their events and taking the opportunity to quiz other members about who they work with.

If integration with other systems is going to be a significant part of the implementation arrange ensure that the technical leads responsible for the other platforms has an opportunity to talk to the supplier and is happy with their proposed approach to the integration. The supplier should be willing to discuss integration options and answer any questions your technical leads may have.

It’s also worth taking a careful look at the rate at which the platform you’re considering is being developed. You should expect to see a steady stream of enhancements that are available to all customers as a matter of routine. Ask the supplier to send you a summary of the significant enhancements made in the last three years. You need to know that their platform is being actively developed in the areas that are relevant to your business.

Make sure you’re clear about what is being promised

Early on in your conversations with a supplier it’s important that they explain the process they will follow to capture and document your requirements. If you need to support complex workflows you need to be very clear about the detail of how the new system will work before you sign a contract.

At OrderFlow we do this by coming onsite for at least two days and going through an exhaustive discovery process with you before then writing a detailed report. The report describes how OrderFlow would be configured to support all the key warehouse and fulfilment operations. Once these processes are agreed we then provide a project timeline and estimated cost. Examples of the sort of critical points that get identified and agreed at this point are below:

• How will OrderFlow reflect your business rules for dealing with damaged, unwanted or unrecognized items received in an incoming delivery?
• What is the process for handling a short pick (i.e. do you want the all your pickers to be able to make realtime stock adjustments or should a short pick prompt a supervisor to make a stock check before making a stock adjustment if required, should the user be directed to an alternative pick location where one is available?)
• What process will be used to deal with stock that is nearing it’s usable shelflife?
• What slotting logic will be used to determine the target locations for stock putaway to picking faces or bulk locations, is there any product or category specific logic?

Our own discovery process is a chargeable exercise, it gives our prospective customers a clear definition of what we will deliver, what it will cost and how long the implementation is going to take before they commit to signing a contract. A supplier who provides detailed costs without first really understanding what you require is either wilfully ignoring the complexity of your business or expecting you to accept additional charges that you’ll only learn about after the contract is signed.

Check the small print

Ask to see a draft contract early on in the process rather than leaving it until the last minute. An easily understood plain-English contract is always good but there are also a number of things that are particularly relevant to contracts for a long term service contract like a WMS platform.

Think about the different ways in which your business is likely to change and how it might impact your licence fee:

• What would be the impact of opening a second warehouse or doubling the number of users on the system?
• Would introducing support for lot tracking and perishable products affect the monthly licence fee?
• Is there any transactional element to the pricing that would impact our charges if our order volumes change?

Lastly, look carefully at the contract duration. Does the supplier insist on tying you into a twelve month contract and what are the arrangements for ending the contract if you decide to part ways. Signing a contract should be the start of a relationship that lasts for years but it makes sense to plan for the possibility that things don’t work out. The extent to which a supplier makes it easy for you to leave reflects their confidence that they will be able to keep you happy. In particular make sure you will have access to all your data in a format that allows you to import the key business data into another platform. Most importantly make sure that you have the ability to transition your contract to a rolling monthly arrangement at any point, so that you are not faced with a cliff-edge deadline when planning to migrate away from the supplier.

Choosing the new WMS provider that is right for your business shouldn’t be a leap of faith, there’s a lot you can do to ensure you are making an informed decision. However it does take time and if you can there’s real value in starting the process well before you actually plan to make a change. We understand it’s a big decision and are always happy to talk to potential customers who are in the early stages of researching options but who may be one or two years away from actually needing to make a move.