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TECH TIPS BY FRIEDMAN: How To Avoid A Warehouse Management System Horror Story

A Warehouse Management System (WMS) can increase productivity and picking accuracy, which can cut costs and improve customer service. But it is very tricky to find a WMS with the right combination of truly helpful features and long-term cost savings. It is easy to spend a lot of money, when a cheaper system can produce the same savings and benefits. And often, changes to the warehouse are needed before installing a WMS or it will not produce cost savings or benefits.

This article outlines the steps a PHCP, HVACR and PVF distributor should take to avoid the pitfalls of an unfamiliar process that can result in selecting the wrong WMS, overpaying and setting it up in a way that makes things worse.

Up-Front Planning And Prep

Involve top management, because a WMS impacts customers as well as employees - even if that means a top manager has to learn something about computers and WMS.

Organize a team consisting of someone from top management, all warehouse managers and supervisors, MIS management and the people responsible for sales order entry and customer service.

Estimate growth and identify expected changes for the company as a whole and for the warehouse. A WMS must be able to handle future company and warehouse needs, as well as the obvious current ones.

Tighten warehouse procedures and controls for receiving, put away, etc., for information and product flow. Do it now. Failure to do this is the primary cause of WMS horror stories.

Determine if the main business system has the functions and data that are “expected” by a WMS, e.g., expected arrival date of a purchase order. Furthermore, the data in the business system must be very up-to-date and accurate.

Estimate long-term costs: software, education/training, bar code equipment and spares, annual support fee, etc.

Be conservative when estimating personnel reductions, personnel avoidance and other cash savings. Don't ignore the impact of non-cash benefits, such as happier customers.

Selection And Installation

Define detailed long-term WMS needs. Without such a list, it is impossible to judge whether a particular WMS contains specific needed functions and impossible to compare different systems.

Solicit written bids. Ask WMS vendors to categorically compare their software against the list and to quote all the costs involved.

Examine each vendor's bid for cost, missing features and prior experience with similar distributors. Narrow the field to two or three WMS, and then ask those vendors to demonstrate their systems. Call a few references from the vendors, and visit one or two references from each vendor.

Select the most cost-effective WMS, based on long-term cost of ownership and non-financial facts, such as the degree of software suitability (vs. the list of needs) and vendor experience.

Before taking delivery, the vendor should make any planned WMS modifications and create any programs needed to interface the WMS with the main business system. Test it all, using real data for the test, which should be conducted by the people who will be using the new WMS.

Don't skimp on user training. A WMS is so complex that the only way to learn more is to spend a lot of time in formal classes and on-site training sessions.

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For more than 40 years, Dick Friedman has been helping PHCP, HVAC and PVF supply houses prevent inventory shortages and warehouse mistakes that lose sales and customers; and helping select ERP, e-commerce and WMS systems, while avoiding the problems and pitfalls. Dick does not sell systems, software or warehouse technology. He is a certified management consultant and is objective and unbiased. Dick can be reached at 847/256-1410 for a free consultation, or visit www.GenBusCon.com for more information or to send e-mail.