Commentary: Challenging the warehouse management system implementation paradigm
Warehouse management systems have come a long way from the 1980s and 1990s. So why are so many companies still asking for customizations? Here's the case for no modifications in WMS implementations.
The warehouse management system (WMS) market in the United States is fairly mature, with many companies on their second, third, or fourth system. The software has come a long way from the custom-written systems developed in the 1980s and '90s that often took well over a year to get up and running, were prone to bugs, and caused integration nightmares. Much sleep was lost by information technology (IT) and operations staff when a go-live was imminent, worried that the cutover might cause bottlenecks in their shipments or, even worse, shut down their distribution center entirely.
It only makes sense that these complex, robust systems would evolve over time. Many of the "best of breed" providers now offer WMS software that, while still able to handle complex operations, are easier to use and often are web-based and mobile-friendly. Features that were once custom-developed to meet the need of a specific client or industry are now part of the standard software and accessible to all users as part of the base system. Even so, many companies have not recognized these changes and instead are still trying to implement WMS in the same way that they have for years.
Implementations—the old-fashioned way
Historically, the complex nature of WMS software meant that a lot of technical expertise was needed just to implement the software successfully—let alone make any customizations that might be necessary to fit a company's functional requirements. Implementations were often long, expensive, and painful. They would be measured in years rather than in months. Furthermore, the systems were not user-friendly, consisting of green screens and basic commands that were not intuitive. As a result, the software required extensive training that was often tedious and time-consuming. Finally, to meet the individual needs of a distribution operation, the software was usually heavily modified and custom-coded.
Even at that time, it was recognized that customization wasn't always a good idea. The software was typically customized to meet the existing processes, but the processes it was automating were not always the most efficient way to do things. Companies expected software to be a magic wand that would instantly make them more productive, efficient, and profitable. But in hindsight, managers often realized they should have fine-tuned their processes to align with best practices first before they customized the software. Furthermore, highly modified WMS software required even more training and led to even longer implementation timeframes.
Still, having a WMS was a far cry from handling operations with paper. Once a system was configured and working properly, it provided a great deal of information to aid in decision making, helped end users increase efficiency and productivity, and reduced costs.
New approach to implementation: no modification
WMS software and implementation processes have come a long way in the past couple of decades. Warehouse management systems now include best practice processes for most industries and functional requirements. In fact, they've gotten so good that if your process requires a modification, you really need to spend the time to dig deep and ask yourself if your way is truly better and necessary, or if you would benefit from changing your process. Software is also written differently and is more configurable, which means features can be turned on or off within the system based on a company's industry and requirements.
Still, many companies today continue to choose to write modifications to the software rather than change their processes to match the software's built-in best practices approach. Perhaps this is because of a "this is the way we've always done it" mentality or because the company hasn't taken the time to research the benefits of changing processes to match best practices. And sometimes consulting companies even encourage modifications because it means more billable work for them. However, many problems arise when you modify the code of software, including higher total cost of ownership, longer implementation timeframes, integration integrity issues, increased fees for support and maintenance, and limited ability to upgrade and adopt new features as new versions of the software are released.
While implementing a WMS with no modifications would have been out of the question 10 years ago, it is a very real option for most companies today. In fact, it should be the expectation and starting point, rather than assuming from the beginning that there must be system modifications. For example, most of our clients who are upgrading to a new WMS are now choosing to reduce their modifications by 80 to 100 percent and have seen many benefits to this no-modification approach. The upgrades on average cost only25 percent of their original implementation, and they are saving an average of 30 percent on maintenance costs.
Additionally, a no-modification WMS implementation can be up and running in three to nine months, versus one-year and longer for more modified systems. To understand why, let's look at a simple modification that might take five to 10 days of development and unit testing, plus another week or two of acceptance testing and rework. This modification would also require time and resources to update documentation, training materials, and standard operating procedures. And if that piece of functionality needs to share information with other systems, such as an enterprise resource planning (ERP), transportation management system (TMS), or labor management solution, then you need to modify the integration with those systems, potentially impacting the integrity of those systems. Additionally, any modifications can have an impact on the existing adjacent code within the WMS. All this adds up quickly to significant cost, time, and integrity issues, and this example is based on only one straight-forward modification. And the increased costs continue—most WMS vendors charge an extra 15 percent of the cost of the modification annually for maintenance costs.
Getting started
If you are interested in implementing a WMS with the goal of no modifications, start by an analyzing your current operations and processes with a partner who has distribution expertise and deep knowledge of the WMS features, functions, and capabilities. Together you will explore each functional need you have alongside the WMS standard functionality and discuss how the software and processes meet and how processes might be tweaked to match the WMS best practices. For some companies, modifying WMS software may make sense but only if the costs associated with modification are less than the long-term cost savings for such modification.
Based on our experience, we believe that for the vast majority of companies, the no-modification approach advocated here is most beneficial. It is easier to install, can be up and running faster, costs less, and provides a smoother upgrade path so you can more easily take advantage of new features as they are released. No modifications also mean that you are raising the standard of your operational processes to be in line with best practices; the ones that the software is based on at the start. This alone will provide efficiencies for your operations that may not have been previously realized.
The first full day of CSCMP’s EDGE 2024 conference ended with the telling of a great American story.
Author and entrepreneur Fawn Weaver explained how she stumbled across the little-known story of Nathan “Nearest” Green and, in deciding to tell that story, launched the fastest-growing and most award-winning whiskey brand of the past five years—and how she also became the first African American woman to lead a major spirits company.
Weaver is CEO of Uncle Nearest Premium Whiskey, a company she founded in 2016 and that is part of her larger private investment business, Grant Sidney, Inc. Weaver told the story of Uncle Nearest—as Nathan Green was known in his hometown of Lynchburg, Tenn.—to Agile Business Media & Events Chairman Mitch MacDonald, in a keynote interview Monday afternoon.
As it turns out, Green—who was born into slavery and freed after the Civil War—was the first master distiller for the Jack Daniel’s Whiskey brand. His story was well-known among the local descendants of both Daniel and Green, but a mystery in the larger world of bourbon and a missing piece of American history and culture. Through extensive research and interviews with descendants of the Daniel and Green families, Weaver discovered what she describes as a positive American story.
“I believed it was a story of love, honor, and respect,” she told MacDonald during the interview. “I believed it was a great American story.”
Weaver told the story in her best-selling book, Love & Whiskey: The Remarkable True Story of Jack Daniel, His Master Distiller Nearest Green, and the Improbable Rise of Uncle Nearest, and has channeled it into an even larger story with the founding of the brand. Today, Uncle Nearest Premium Whiskey is made at a 323-acre distillery in Shelbyville, Tenn.—the first distillery in U.S. history to commemorate an African American and the only major distillery in the world owned and operated by a Black person.
Weaver and MacDonald's wide-ranging discussion covered the barriers Weaver encountered in bringing the brand to life, her vision for where it’s headed, and her take on the supply chain—which she said she views as both a necessary cost of doing business and an opportunity.
“[It’s] an opportunity if you can move quickly,” she said, emphasizing a recent project to fast-track a new Uncle Nearest product in which collaborating with the company’s supply chain partners was vital.
Uncle Nearest Premium Whiskey has earned more than 600 awards, including “World’s Best” by Whisky Magazine two years in a row, the “Double Gold” by San Francisco World Spirits Competition, and Wine Enthusiast’s “Spirit Brand of the Year.”
CSCMP’s EDGE 2024 runs through Wednesday, October 2, at the Gaylord Opryland Hotel & Convention Center in Nashville.
Miquel Serracanta of EAE Business School, Mark Baxa of CSCMP, and Sebastian Jarzebowski of Kozminski University sign an agreement making Kozminski University the newest CSCMP Academic Enterprise Member.
The Council of Supply Chain Management Professionals (CSCMP) and Kozminski University, a business school based in Warsaw, Poland, inked a deal on Sunday night, making Kozminski CSCMP’s newest Academic Enterprise Member.
This three-year collaborative membership will involve Kozminski using CSCMP educational content in its undergraduate supply chain program. As a result, Kozminski’s graduates will leave the program not only with a bachelor’s degree from the school but also certified through CSCMP’s SCPro certification program.
“This partnership emphasizes the global reach of CSCMP’s certification program and its applicability worldwide,” said Mark Baxa, CSCMP’s president and CEO.
Kozminski University’s Academic Director of Logistics and Supply Chain Management Sebastian Jarzebowki was on hand to sign the agreement at the CSCMP EDGE Conference in Nashville, Tennessee. Jarzebowski said that his students will benefit not only from receiving a globally recognized certification but also from joining a network of supply chain professionals.
Kozminski University joins the EAE Business School in Barcelona and the Rome Business School in the CSCMP Academic Enterprise Program. Baxa sees the membership program as a growth platform for the industry association not only in Europe but also worldwide.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.
Container imports at U.S. ports are seeing another busy month as retailers and manufacturers hustle to get their orders into the country ahead of a potential labor strike that could stop operations at East Coast and Gulf Coast ports as soon as October 1.
Less than two weeks from now, the existing contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance covering East and Gulf Coast ports is set to expire. With negotiations hung up on issues like wages and automation, the ILA has threatened to put its 85,000 members on strike if a new contract is not reached by then, prompting business groups like the National Retail Federation (NRF) to call for both sides to reach an agreement.
But until such an agreement is reached, importers are playing it safe and accelerating their plans. “Import levels are being impacted by concerns about the potential East and Gulf Coast port strike,” Hackett Associates Founder Ben Hackett said in a release. “This has caused some cargo owners to bring forward shipments, bumping up June-through-September imports. In addition, some importers are weighing the decision to bring forward some goods, particularly from China, that could be impacted by rising tariffs following the election.”
The stakes are high, since a potential strike would come at a sensitive time when businesses are already facing other global supply chain disruptions, according to FourKites’ Mike DeAngelis, senior director of international solutions. “We're facing a perfect storm — with the Red Sea disruptions preventing normal access to the Suez Canal and the Panama Canal’s still-reduced capacity, an ILA strike would effectively choke off major arteries of global trade,” DeAngelis said in a statement.
Although West Coast and Canadian ports would see a surge in traffic if the strike occurs, they cannot absorb all the volume from the East and Gulf Coast ports. And the influx of freight there could cause weeks, if not months-long backlogs, even after the strikes end, reshaping shipping patterns well into 2025, DeAngelis said.
With an eye on those consequences, importers are also looking at more creative contingency plans, such as turning to air freight, west coast ports, or intermodal combinations of rail and truck modes, according to less than truckload (LTL) carrier Averitt Express.
“While some importers and exporters have already rerouted shipments to West Coast ports or delayed shipping altogether, there are still significant volumes of cargo en route to the East and Gulf Coast ports that cannot be rerouted. Unfortunately, once cargo is on a vessel, it becomes virtually impossible to change its destination, leaving shippers with limited options for those shipments,” Averitt said in a release.
However, one silver lining for coping with a potential strike is that prevailing global supply chain turbulence has already prompted many U.S. companies to stock up for bad weather, said Christian Roeloffs, co-founder and CEO of Container xChange.
"While the threat of strikes looms large, it’s important to note that U.S. inventories are currently strong due to the pulling forward of orders earlier this year to avoid existing disruptions. This stockpile will act as an essential buffer, mitigating the risk of container rates spiking dramatically due to the strikes,” Roeloffs said.
In addition, forecasts for a fairly modest winter peak shopping season could take the edge off the impact of a strike. “With no significant signs of peak season demand strengthening, these strikes might not have as intense an impact as historically seen. However, the overall impact will largely depend on the duration of the strikes, with prolonged disruptions having the potential to intensify the implications for supply chains, leading to more pronounced bottlenecks and greater challenges in container availability, " he said.