A WMS system - how to select the supplier

According to experts, even clients who want to implement a warehouse management system meet today only because they somewhere about it heard or because a similar system functions at the competitor. And, quite often the choice is made simply, for benefit of the most "untwisted" brand or taking into account the minimum cost of WMS - the solution.

As a rule, the main arguments at such approach the following:

• All WMS - systems have identical functions as they have a general purpose. This argument is most often used by those suppliers who propose solutions of basic level, or the beginning producers. However, to speak about identical functionality of WMS is, approximately, the same as to approve about identity of all cars, being guided by the fact that their main objective – to go.
• Any system can be finished under requirements of the customer. A question only in the cost and time. How scalable platform is used for a warehouse management system? Whether is it operational focused, or universal? The known fact that universal solutions seldom are productive, and in the field of management of transactions performance – one of the major evaluation criteria.
• Performance of WMS depends only on the server. Whether always the maximum speed of the car depends only on engine displacement? The answer is obvious. And software performance, is defined not only its hardware, but also architecture, the platform, algorithms.
• The simple solution can always be replaced more difficult. This argument is one of the most widespread errors when choosing management systems. Whether you will be able, having learned to drive the car, to manage the excavator? Not always support of address storage and a possibility of issue of information on radio terminals unambiguously define WMS. There is nothing more permanent, than temporary, and most often replacement of a basic management system by more professional develops into absolutely new implementation.

In what difference?

All solutions on management of a warehouse traditionally are divided into three main types: the boxed systems having a standard set of certain functions, adaptable and custom WMS.

The boxed systems represent the software products completely ready to process of implementation at the expense of a certain volume of already ready functionality. Their main minus consists in restriction of variations of settings and also impossibility of assessment of use of the software in terms of further scaling. Perhaps, the second argument is a little applicable for the enterprise which is going to purchase such WMS for the subsequent replacement by another, but the expected risks connected with transition from one solution to another include also incompatibility in terms of the system of settings and rules that will demand to implement the new system "from scratch". The summary, the korobchny systems are suitable the small organizations for automation of warehouses with conventional and simple business processes.

Adaptable warehouse management systems, today they are most demanded as in Russia, and abroad. Similar solutions show high efficiency, as at the level of the small developing companies where the speed of adaptation to new processes plays the main role, and for large enterprises with difficult business processes where the possibility of fast configuring of a system under the available requirements means significant reduction of the implementation time and also risk minimization connected with further scaling. The main difference of the adaptable systems from boxed solutions is connected with their architecture. "Box" usually has a certain volume of functionality, ready to use, and is seldom expected adding of additional functions. The adaptable systems are under construction based on the central core (the basic module) which works as the interpreter corrected cargo handlings. If necessary, it is possible to add any additional process to such system, having described it in a transaction type and rules of merchandising. In parts or in full the open code gives additional opportunities in the form of the user expansions of functionality, it is especially relevant for commercial warehouses.

As for the management systems which are created under the order, their main task is in as much as possible to consider all features of warehouse business processes of the specific company, with complex structure of a logistics chain. The software platform which gives the chance of introduction of significant changes and additional tunings is the cornerstone of similar management systems. The main problem of a custom system lies in a possibility of further maintenance and scaling. If a system "is strongly customized", then it will be quite difficult to support them even for the producer, and the scaling option in spite of the fact that "the suit is sewed to individual measures", can be strongly limited to approach which was applied when implementing functionality.

How to select the supplier?

As for the general recommendations about the choice of the supplier of software solutions for a warehouse, about it it is possible to find a set of different articles in media. As a rule, everything comes down to the fact that it is necessary to study more carefully activity of WMS supplier company - solutions, to study results of the projects implemented by it, at an opportunity to visit one or several warehouses functioning based on a management system, etc.

In May, 2011 specialists of LogistiX company conducted survey among 100 owners of the logistic centers, distributors and manufacturing enterprises on the subject "selection terms of WMS-systems". Results showed that the criteria, most important for the customer, when choosing the software product is its reliability (40% of respondents so answered), professionalism of specialists of supplier company of warehouse management systems (28%) and also broad functionality of WMS solutions (20%).

From the stated above data it is visible that, unfortunately, seldom who thinks of features of warranty obligations. The point is that this conditions can be different. For example, one supplier issues a guarantee only for an initial distribution kit of the basic solution, the second provides a guarantee for the end product received as a result of carrying out all works provided by the project. The difference is obvious and in what pluses or minuses of two of these options for the customer, you should not explain.

Data of poll are remarkable also the fact that none of respondents noted importance of sales terms of the project on automation of intra warehouse logistics from suppliers of WMS solutions. It while this parameter, according to experts, is one of the most important. Not only the quality of the project, but also observance of the set budget depends on it.

Let's try to consider some points in more detail. For example, there is an opinion that the cost of boxed solutions is several orders less in comparison with the WMS systems developed individually under a specific warehouse. If to speak about the price of the product, then this is true. But, if it is about the realization value of all project, then the digit will be much high prices for the software product, sometimes even comparable with the cost of the complex project based on custom, more professional warehouse management system.

By the way, the price can raise if in addition to sale of the software product, to the customer services in carrying out a logistic research and development on its basis are rendered to optimal technology of work of a warehouse, selection of the corresponding equipment (from rack constructions to data collection terminals), development of technical specifications on the project. As for completion of a management system and also personnel training of a warehouse on work with the WMS solution, an after-sale service, project cost can increase by several points.

Besides, it is necessary to consider also the fact that WMS supplier companies of solutions, as well as in a case with warranty service, can provide different sales terms of the same project which in an effect affect quality and its final cost. For example, in the initial commercial offer not the full technical specifications including completions, and only parametrical setup which is not including all volume of completions can be put. Completions will go separately with indication of man-day cost (or a man-hour) and a modest addition of “T&M” (time&material) that means payment of actually performed works which volume will become known after development of technical specifications.

Choice subtleties?

If to speak about specific conditions, then, it is desirable to specify in advance whether separate work types within the project from the supplier at the fixed prices (fixed price) are carried out or they are defined depending on the spent time and the number of the specialists involved to accomplishment of a certain task (the principle - time & material). Final project cost will also depend on it.

Often the customer does not even think of this point. Upon can happen so that more than 6 people within a month will work on accomplishment of one not most difficult task during the project. As a result the customer expects one amount, and will make out him very solid bill for the rendered services absolutely for another.

In a case with the fixed price the customer foreknows how many he will cost a certain stage of work without any changes, and it is not important - one or 10 people implemented it (in fact, it is a problem of the supplier of the solution – to provide compliance of an end product to initial technical specifications). Certainly, and in case of the fixed price exceeding of the project budget is possible, but very seldom it exceeds 10% of total amount, and belongs, as a rule, to additional maintenance, or personnel training.

As for development of the technical specifications (TS), and there can be nuances to which it makes sense to pay attention:

• Whether the WMS supplier company - systems executes these works independently for 100%, or suggests to undertake their part to the staff of customer company? Depending on it, a project cost and quality can also vary. Anyway, the best option will be if terms of reference are developed by specialists from the supplier of the solution, and approval and a statement is made at the level of the commission created on the party of the customer. Besides, the best option of work is step-by-step approval of processes, and the final presentation at the end when all processes are already approved, for acquaintance of the management with the most important changes in processes and also potential project risks.
• What joins in terms of reference? Sometimes instead of terms of reference the standard functional description of a system which is not connected with the actual processes in a warehouse in any way is issued to the customer. Besides, the structure of technical specifications and the summary used by the supplier for the description of business processes deserve attention too. It is better to define at once as far as you each other understand and that it will be specifically included in the final document.

The license policy of suppliers of WMS also deserves special attention. It is important to know that at least, licenses happen different types: user and also on installation (server a core / on a cluster node, etc.). At the level of consideration of the commercial offer the classical mistake is most often made - the customer tries to compare licenses of different types.

For example, one supplier offers the server license cost, say, of 500 thousand rubles, with the cost of the license on stationary AW (the automated workplace) – 20 thousand rubles, and the mobile automated workplace – 10 thousand rubles. As a result, one warehouse from 5 stationary automated workplaces and 40 employees who work with radio terminals will cost on licensing one million rubles. The customer, in turn, without having considered that the license is granted not on installation, and on a specific automation object, after a while connects the second warehouse which costs it one million rubles even if it is in hundred meters from the main complex as the next warehouse is already other automation object.

If the customer would purchase the server license without restriction of number of jobs at once, having paid for it even 1.5 million rubles, at automation of the second warehouse he would save already 500 thousand rubles. Now try to count how many the customer if he needed to automate also the third and fourth warehouses could save. The amount will be impressive. Modern communication opportunities allow to work quite comfortably with the server even on significant removal in several hundred kilometers.

Besides, when choosing the supplier of the WMS solution, it is recommended to specify at once whether training of staff of customer company in work with a management system is provided. If such services are included into the list of works within the project, then it is necessary to learn what enters such training course and how many it lasts. An optimal variant will be if the specialized rate lasts not less than 7 - 10 days, and it includes training not only of key users of a system, but also employees who will perform maintenance (administration of WMS).

As for further technical support, and there are subtleties. For one customer the term of response to its request is at three o'clock insignificant, and for another – critical. Existence of different plans of service and also a possibility of independent support of a system in high-intensity warehouses are also essential selection terms of the supplier to which not always pay attention at the first stages. It in spite of the fact that cases when the high cost of further technical support (which enters total ownership cost) forced to change the company already purchased product are known.