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The Future of the WMS in the Cloud and Beyond

What About the Cloud?

With warehouse management systems (WMS) now being offered, dare I say, primarily as a cloud solution, how does that impact it as a solution?

Clearly, the adoption of WMS cloud solutions has accelerated.  In the last 5 or 6 years, software vendors in the warehousing and distribution space have done a tremendous job of dispelling the notion that cloud solutions are not suitable for automated environments.  This was previously a drawback because latency issues often precluded achievement of the millisecond response times required between automation and a supporting WMS.  Improved software architecture and the availability of high bandwidth internet have addressed this issue.

Also, cloud solutions are no longer the ‘lite’ WMS versions they previously were.  In fact, cloud WMS solutions tend to be more feature rich now.  Why? Because a key benefit of cloud solutions is that upgrades and new features and functions can be automatically downloaded to ensure that users are always on the latest version.  Compare this to on-premise solutions that languish and stagnate without regular attention.

What is important to understand when considering a cloud solution?

  • Software vendors still struggle to provide a value proposition to address the often higher long-term costs associated with cloud deployments.
    • When optional costs (such as hosted services, managed services and upgrades) are included, on-premise long-term costs are comparable to – and may sometimes exceed – those associated with cloud.
    • Companies must assess the internal value they would place on these optional costs
  • IT strategy is often the deciding factor when choosing the cloud option:
    • Some companies have decided to reduce capital investments in IT infrastructure and pursue a cloud application strategy for key business systems.
    • Companies with smaller IT organizations often benefit – at a cost – from cloud deployments with software vendors being responsible for system maintenance.
    • Data security, i.e., leveraging the resources of a cloud service provider to protect sensitive data can be a key benefit.
  • Companies select on-premise deployments when:
    • Software upgrades are not desired and keeping a system in place 5 years or longer is acceptable.
    • IT resource bandwidth is available to manage and maintain an additional system.
    • The necessary IT infrastructure is in place to host the application including failover/disaster recovery capacity.

What’s Next for WMS Cloud Solutions?

Warehouse management systems are efficient at supporting multiple sites with a single deployment instance.  They are able to manage operations at each site independently while still leveraging shared databases and interfaces.  One instance can be maintained ensuring that all sites have the latest software patches and are running the same version.

Interconnectivity is great within one’s own operation and network.  However, there are still challenges accessing and sharing critical data outside the network to supply chain partners using other systems.

Looking forward, when considering all supply chain partners, there are opportunities for warehouse management systems from different vendors to work together more effectively; for example, by providing visibility throughout the supply chain; or even by streamlining the process for a vendor to automatically generate a receiving ASN when preparing an outbound shipment.  This is challenging when you are looking across a supply chain with multiple WMS of varying ages and capabilities.  Third party software options to bridge these gaps are available and do provide moderate improvement.  Also, Control Tower capabilities look very promising in this regard.

Control Towers provide centralized synchronization of data flows accessible by dashboards that allow logistics managers to manage high levels of complexity and take actionable steps real-time.

WMS’s are great repositories of data.  That data – SKU, inventory, staffing, expected receipts, order demand, etc. – form the nucleus of the ‘big data’ needed to provide value to the Control Tower concept.  The WMS as a data source is invaluable.  Companies, now more than ever, have software tools that can connect multiple systems and process ‘big data’ in near real time.

Control Towers are not just about visibility.  Visibility is core but control towers as a concept offer much more.  We find that many companies focus on the visibility aspect solely and fail to grasp the true opportunity.  When properly designed, control towers provide an opportunity to take appropriate action while considering multiple inputs a company’s entire supply chain.

Also, of some concern to us is that some companies are not considering the organizational changes needed to support a control tower.  Having enterprise visibility by connecting multiple systems is one thing; but how do we effectively structure the organization to act on the information provided?  Having the right stakeholders properly involved and represented is key.  This involves making sure that the relevant parts of the organization are integrated, core functions for each integrated service are properly defined and a clear chain of command firmly is established.

Two final takeaways:

  1. Companies must consider cost, IT strategy and system architecture concerns to determine how to best utilize cloud solutions in their software landscape.
  2. The WMS still sits at the center of the distribution universe because it is critical for integrating automation, serves as a solid data repository and the foundation for an enterprise-wide Control Tower.

 
—Howard Turner, St. Onge Company
 
 

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