Achieving success with the right warehouse management system strategy

Success factor: Quick and reliable supply

Warehouses are crucial for supplying customers. A quick and reliable supply significantly contributes to customer satisfaction and is thus a critical factor for business success.

Challenge: Increasing requirements for warehouse logistics

Fast order fulfillment is becoming increasingly important for warehouse logistics. At the same time, integrating technologies for warehouse process support and automation is necessary to dynamically adapt and flexibly modify processes. Lot sizes are getting smaller, for instance in omnichannel warehouses. At the same time, the number of value-added services is steadily growing. The existing legacy warehouse management system (WMS) software – often highly individualized and proprietary due to years of updates – cannot meet these increased requirements or can only meet them with considerable effort.

Driver: Upcoming SAP S/4HANA transformation

Driven by these challenges as well as an upcoming SAP S/4HANA transformation, many businesses in manufacturing and retail are currently questioning their existing legacy IT stack of applications, databases, and infrastructure. The top priority for warehousing remains to implement a future-ready WMS.

Functional requirements: an end-to-end WMS strategy

The functional requirements of a WMS can change significantly depending on the size, complexity, and industry-specific warehouse management process requirements. In addition to functional requirements, the WMS strategy must also consider non-functional aspects such as integration requirements, scalability, usability, and serviceability.

4 key questions for defining a WMS strategy

1. Make or buy?

Some customers have developed their own warehousing software solutions or have highly personalized standardized software for their individual needs. Should these solutions continue to be developed, maintained, and operated in-house in the future? Or is an established market solution better?

Many customers choose to buy a solution because they want to return to established standards and do not regard WMS development and operation as the core task of their business. Other customers prefer developing their own solution, which shows that this question has to be answered individually. In a current project, 4flow evaluated a customer’s in-house WMS solution for its modularity, functionality, performance, availability, and security – in short, whether or not the solution was ready for the future. In this case, the professionalism of the in-house solution and the highly specific requirements of the customer led to a “make” decision.

2. Which standardization strategy should be pursued across the whole business?

Many customers have a globally distributed and heterogenous warehouse network that are partially operated by external service providers. Some warehouses are manual, and some are automated; others have simple replenishment systems or are complex omnichannel warehouses.

Is it possible to operate all warehouses that have largely similar products, services, and processes with one WMS? Or is a template approach that offers quickly implementable solutions for simple, small, and manual warehouses as well as more comprehensive solutions for complex, large and automated warehouses the better choice? 4flow was able to successfully design and precisely define a two-template strategy approach (basic and advanced) for a large global retailer. This resulted in optimal support for efficient delivery. Synergies were effectively used during the roll-out and then implemented in later operations.

3. Which WMS provider is best for my business?

Needless to say, the right WMS strategy depends on individual requirements. To provide some orientation, the following table provides an overview of the various WMS providers in each category. (Note: The providers mentioned in the figure are examples and not preferred solutions.)