WMS Vendors

Greetings from 35,000 feet! I am on my way to the west coast for meetings with another prospective HighJump warehouse management system (WMS) customer. This visit will likely be consistent with several meetings recently with large companies who are looking to standardize their WMS platform and move away from homegrown systems. This sounds like a fairly straightforward proposition…until you get into the details.

In each of my meetings, the company has strong feelings that their current homegrown WMS system provides them a true source of competitive advantage. It is not that the system contains “industry best practices”; these homegrown systems enable distribution processes that are actually sources of differentiation from competition. The processes and the systems supporting them are years in the making and unique to each business. By definition, many of these competitive advantages will not be found in traditional commercial off the shelf software – they are proprietary, confidential, and not available to everyone in a given industry.

These companies are pursuing commercial software as a means to reduce IT complexity and reduce total cost of ownership – common objectives of a WMS standardization initiative. However, there is reluctance to proceed based on the sources of competitive differentiation these companies have with their homegrown systems. In the traditional enterprise software approach, these companies will be forced to purchase commercial software, pay exorbitant fees for customizing it to enable their competitive advantage processes, pay exorbitant fees to upgrade (or elect to stay on old technology), and risk that their technology vendor will think their practices are so great that they should be put in the next version of the “standard package” (thus making the competitive advantage available to everyone).

HighJump offers a unique approach.

HighJump’s Supply Chain Advantage suite is architected with an expectation that you will want to enable business processes that are sources of advantage on our technology stack. It is HighJump’s philosophy that 80% of supply chain practices are not sources of differentiation and should be covered by industry supply chain best practices enabled with standard product. However, we also expect that there are 20% of your supply chain processes that are potential sources of competitive advantage. For this 20%, we provide a flexible workflow architecture that allows end users to modify the workflows in the product to support their sources of competitive advantage.

This presents a “best of both worlds” value proposition for our customers. Customers moving off homegrown systems get the benefits of commercial software (new releases containing technology and functionality updates, a worldwide product support organization, and technology partner that will stand by them in the long term) with the flexibility to support their business processes that are sources of competitive advantage.

Related Resources:

HighJump Adaptability Datasheet
GM2 Video: 3PL achieves supply chain success using the HighJump Software warehouse management system (WMS) 

HighJump Upgrade Video

The second question asked what technologies would be most talked about at the show. While this is a difficult question to answer because of the many different types of vendors at the show, I will try to sum it up. In the supply chain logistics software industry there was a definite interest in SaaS or "in the cloud" solutions and how they are evolving. In fact, HighJump Software just announced the launch of HighJump WMS in the Cloud.   And while I didn't get a chance to spend a whole lot of time in the material handling areas, there was a continued focus on automating every part of the warehouse to make it most efficient.

Finally what changes have been brought about by the economic conditions? The biggest change I saw was questions being asked much more about upfront cost rather than ROI because of the challenge of getting capital expenditures approved. Everyone seems pretty reluctant to call the recession over, but all signs seem to be pointing up.

With cloud computing, the WMS vendor hosts the software application and hardware infrastructure. The customer accesses the WMS via a Web browser. Cloud-based solutions are becoming a more common alternative to on-premise software as businesses seek ways to reduce IT requirements and simplify maintenance and upgrades. Because all system infrastructure is based in an off-site, secure data center, cloud solutions also eliminate up-front capital expense and reduce the risk and time required by on-premise implementations. HighJump WMS in the cloud is ideal for growing businesses because the Amazon.com cloud is elastic and scalable; more power and storage is available as demand changes or the business expands. One simple monthly subscription covers maintenance, upgrades and support.

Read the press release.

Many new phrases have become part of our everyday lingo as a result of the recession. One of my favorites is "Shovel Ready" It’s not nearly as cryptic or technical as "TARP" aka, Toxic Asset Relief Program, but it’s catchy! It’s a term that was used by President Obama in a Dec 7^th airing of Meet the Press when he talked about the kinds of projects that the stimulus bill would help most. It wasn’t long after that when we began to hear every local politician use the term on the nightly news! Congress made the term quasi official when it incorporated the spirit of the phrase in legislation that provided stimulus money to construction projects that could be started within 90 days of receiving the funds. Meaning only those projects that had already completed the necessary preparatory tasks  before the project could actually begin.  Being an system implementation project manager, I’ve developed affection for the term! 

Not all projects require a ‘shovel’ in the toolbox of things needed to get the job done, but all projects do indeed require a period of preparation before executing them.  So, I ask… is your WMS - Warehouse Management System implementation project "shovel ready"? Perhaps you’ve just purchased a new WMS system to replace a technologically outdated one or to replace a paper based system.  Either way, there are many things you can/should do to prepare for this life changing event!  One of the more fruitful yet least desirable tasks in preparing a warehouse for a new system is general housekeeping! 

• Got inventory that is aged or obsolete still gathering dust on your shelves? Write it off, toss it, donate it, recycle it, return it to the vendor, but by all means get rid of it! Got the same item located in seven different locations around the warehouse? Consolidate it to as few locations as practical.  
• How about inventory sitting at the ends of the aisles, or on the  office supply racks, or sitting on the floor of someone’s office? (really, I’ve seen this). Move it to where it should be - even if that means out the back door! 
• How about old torn and faded shelf/bin labels that are now unused residue of a re-slotting project? Get the goof-off out and remove them, as it’s likely you’ll be doing some bin re-labeling as part of your WMS Management System implementation.  
• Got any racking, shelving, material handling equipment like wobbly carts in need of repair? Do yourself a favor and include repairs as part of your ‘shovel ready’ preparations - it’ll be a visible demonstration of management’s commitment to change.
• Then there’s the data scrubbing task.  Everybody has ‘junk’ in their item files – discontinued or obsolete items, duplicate items, and even non-existent items! Have your IT folks clean the data ‘house’ before you convert. 

I could go on, but you get the idea. A ‘shovel ready’ WMS implementation will go a long way in smoothing the often bumpy road to a successful transition.

As the war rages between best-of-breed ISVs such as ourselves and the ERP companies, a key battle is always how the two systems communicate?  I have heard many corporate CIOs dictate to their team that they will deploy the ERP’s WMS because it is “pre-integrated.”  While this is more or less true depending on the ERP company, it is also true for companies such as ourselves that also have pre-built integration to many of the leading ERP solutions. In addition you don’t run the risk of ending up in ‘vendor hell’ (a topic for another day).

The question that one of our readers asked (we do listen and appreciate the feedback) was:  how do you typically interface to various ERP systems?  I don’t have the space to dive deep into the technical minutia, but let’s cover the basics.  While there is other optional information the ERP generally must pass down to a WMS solutions:  item master information, inbound ASNs, sale orders, kits, etc.  The WMS in turn passes up:  receipt information, shipped orders, inventory adjustments and inventory snapshots. 

This information can be passed any number of ways.  In the past flat-file interfaces and table based interfaces were common.  While these are still the right choices depending on the system requirements we are seeing more and more XML interfaces and companies leveraging our SOA architecture for web-services communications.  There is no wrong answer if you can move the information back-and-forth but for our pre-built integration we build according to the ERP preferred transport protocol.  Rather than relying on a 3^rd party EAI solution, we build the interfaces directly to ensure optimal performance for high through-put facilities.

The next time your CIO pushes a unilateral strategy take the time to explore if there are any real differences in the integrations and speak to Ray Wang at Forrester Research about getting trapped in ‘vendor hell’.

As an avid Minnesota Timberwolves fan I was very excited when we exercised the demon of Kevin McHale from the organization.  While I know he had his heart in the right place, the organization could not move forward as long as he had some connection with the team.  This change is complemented by the Timberwolves adding Ricky Rubio and Jonny Flynn in last night’s draft.  These new players should provide a solid core along with Big Al and Kevin Love to hopefully challenge the Western super powers in the years to come.

The past several years there has been little to cheer about, but that did not mean we should completely start over.  We had some good pieces to the puzzle and needed to complement them rather than completely start from scratch. 

This is an approach more companies should consider with their supply chain logistics software.  Too often companies go with a big-bang approach that completely rips out existing WMS Solutions and discards several processes that were of strategic importance.  This causes them to spend more money to duplicate what they already had to take advantage of new capabilities in the latest release.  A well architected software product should allow for step-wise changes that allow you to keep the key pieces of functionality you have configured but augment them with the latest R&D efforts from your supply chain vendor.  HighJump Software merge tools allows customer to take new workflows from the latest release and deploy to a customer environment with little or no impact on the other existing workflows.  In addition to a quick time to value, the risk of these step-wise changes is substantially easier to manage.

If you don’t know which processes are your Al Jefferson or Kevin Love, I suggest you take the time to understand what is really strategic and leads to differentiation within your current application stack. Then look to add other processes in a step-wise fashion to build a championship supply chain.

I was talking with a friend the other day and the topic of Facebook came up. This friend had joined Facebook but become disengaged quickly saying he just didn’t “get it.” Rather than embracing the technology, engaging with friends and trying to figure out why millions of people are flocking to social networking, he threw his hands in the error in disgust. It reminded me of my grandmother trying to program the VCR “back in the day.” My friend is inflexible, unable to change, and unable to support the new process of communication. 

Many warehouse management systems suffer from these same challenges – inflexible, unable to change and unable to support new communication processes.

Many enterprises implemented WMS Warehouse Management Systems in the late 1990’s and early 2000’s to support their growing operations. While the initial value and return on investment of these systems has been achieved, the current state of these systems is a concern for many IT and supply chain executives.

Changing the system to meet new operational needs.

Your distribution and supply chain operations are probably significantly different than when you initially deployed your WMS warehouse management system. Product mix changes, increases in volumes, changes in material handling equipment and new distribution strategies can have significant impact on warehouse operations. Many warehouse management systems provide you with just two options to address these business changes: pay the software vendor to the customize the software for your new process, or develop a workaround outside of the system. Neither approach is optimal. Obtaining approval for software change orders is increasingly challenging as IT organizations are forced to look at every opportunity for cost reduction. Enabling processes with system workarounds results in quality issues which impact customer satisfaction.   Many companies operating aging WMS technologies suffer from these challenges.

Relatively high total cost of ownership.

It is widely known that WMS warehouse management systems are one of the most customized software applications in the enterprise. This is especially true of warehouse management systems implemented five to ten years ago. Not only are many companies dependent on the vendor to make ongoing system changes, the cost of system upgrades is extraordinarily high. Relative to other enterprise applications, aging WMS platforms have high upgrade costs because source code modifications must be reapplied to future versions. This is often a risky process which includes significant consulting hours from the software vendor. Additionally, WMS warehouse management systems purchased five to 10 years ago was significantly more expensive than WMS warehouse management systems purchased today. Because annual maintenance and support fees are typically based on a percentage of the license fees, many enterprises with aging WMS technologies are paying significantly higher fees than enterprises who recently implemented modern technology platforms. It just doesn’t make sense, why should you pay more for an older platform that doesn’t fit your business?

Uncertainty about your vendor’s strategy for the product line.

Many WMS Warehouse Management Systems implemented five to ten years ago were provided by vendors who are no longer market leaders in WMS. Many of these vendors have been acquired by financially focused firms who collect software maintenance and support fees without re-investing in product development and customer service. In many cases, it is unclear how long the vendor will provide software updates and technical support on these product lines. Each time there is an ownership change with these software vendors, the viability of the product line you use is called into question. Can you trust your distribution operations to a software vendor with questionable long term viability?

Do you have these symptoms of an aging WMS?

It is possible to move from aging WMS platforms to modern technology platforms with a simplified upgrade path. In many cases the annual cost of the new software is equal to the current costs of the aging platform. 

I will not replace my friend because he is aging, but you might want to consider replacing your aging WMS!

 
Image via Flickr user kid_entropy

Recently I have had some events that again have me wondering why companies continually trust their complex, high volume distribution operations to ERP-based WMS Warehouse Management Systems. Allow me to describe these events…

1. I spoke with a large HighJump Software customer who told me the CIO had been pushing for a global deployment of an ERP system across all functions including distribution operations, but had been stalled by business owners who were concerned about the distraction and cost relative to the value.
2. I spoke with a prospective HighJump customer who has spent millions of dollars and multiple years attempting to implement an ERP based inventory WMS system. They have finally conceded that their distribution operations are too complex for an ERP solution and are turning to a best of breed solution.
3. I attended a panel discussion of users of an ERP based WMS Warehouse Management System. Presumably, these were the “flagship” customers because the panel was chosen by the ERP vendor. Customers openly complained about the performance of the system which they attributed to an inventory model that was not suited for distribution operations and a transactional model that was financially-focused rather than distribution-focused.

I would urge anyone considering the implementation of an ERP based WMS Warehouse Management System to consider these factors before finalizing their strategy to move forward with an ERP based WMS Warehouse Management System provider.

The Integration Myth

It is commonly perceived that integration between a WMS Warehouse Management System and other business systems will be easier if both systems are packaged as a suite. The truth is that most ERP WMS solutions have an API-based interface between the WMS Warehouse Management System and the rest of the business applications. In many cases best of breed WMS Warehouse Management Systems have packaged integrations that utilize the same API-based interface as the ERP WMS. While many of the ERP interfaces are “hard coded,” a best of breed WMS Warehouse Management System often provides integration tools (like HighJump Software’s Advantage Link module) which allow data mappings to change based on specific business requirements. It is important to understand the details of the interface approach before assuming that cost will be less and functionality will be greater with a “suite” solution.

The Transaction Models Are Different

During my time as a consultant, I implemented ERP systems and best of breed supply chain systems. There is a fundamental difference in how these systems are architected. Supply chain systems start with a practitioner’s view of the business problem. Screens and workflows are suited toward the needs of people who are supply chain professionals. ERP systems have an accountant’s view of the business problem. Nearly all transactions that occur in an ERP solution tie to a general ledger transaction. Often this accounting-centric view results in business processes that are not optimized for the supply chain.  

For more information on Best of Breed vs. ERP WMS, please read HighJump Software's Special Report on the topic.

If you read any publication about application software, you will hear the term SaaS (software as a service). As the momentum for SaaS builds you might expect all supply chain logistics software to be offered in a SaaS model. Does that make sense? As with many good ideas, the hype builds so that people think the solution can be used to address any kind of problem, but this can result in the proverbial square peg for a round hole. SaaS is already proven in CRM and makes a lot of sense for Transportation Management solutions since you get a network effect by already having several carriers integrated. However, one of the core tenants of SaaS is a multi-tenant architecture with everyone running on the same software. This typically results in more simplistic less configurable applications. 

Could the SaaS approach work for WMS solutions? I have visited several warehouses and they are all different physical configurations. Even within the same company each warehouse has a unique configuration of dock doors, shelving, material handling, workers skill-sets, and space requirements. This uniqueness generally drives unique business process flows to optimize the flow of goods into and out of the warehouse. While some vendors have started offering WMS solutions in a SaaS model I believe it will be very challenging to manage the heterogeneity of requirements that are inherent in many companies’ distribution operations yet adhere to the core tenants of SaaS. While the time may come, SaaS is still the square peg to solve the WMS round hole.   

About 24 months ago at our midyear sales meeting I unveiled HighJump’s strategy to more aggressively target logistics service providers with our supply chain management software solutions.  The reaction from the sales team was mixed.  Logistics service providers are notoriously highly variable sales processes because the system purchase is typically tied to the acquisition of a new client for the logistics service provider.  The market data supported our strategy.  Use of logistics service providers is increasing worldwide as more companies outsource all or a portion of their logistics capabilities.

Times have changed.  The sales team now loves this strategy as logistics service providers are turning to HighJump Software for their supply chain logistics software.  The most recent logistics service provider to select HighJump is Cresent, a leading logistics outsourcing partner for a number of consumer goods companies.  Read the HighJump news release regarding Cresent.

HighJump WMS Warehouse Management System will automate many of Crescent’s previously manual warehouse processes and optimize the movement of goods throughout Crescent’s distribution centers, boosting productivity and inventory accuracy. The system will also enable the company to meet customer traceability requirements for batch and lot code tracking. Crescent will also be able to interface to customer ERP systems, a requirement that often previously hindered new business wins. The company will utilize HighJump’s Manufacturing Execution System Software in its co-packing operations, where it assembles product multipacks and builds product displays.

Why are so many logistics service providers turning to HighJump Software for their supply chain logistics software?  Here are few of the contributing factors.

Billing Management
HighJump Billing Management helps ensure maximum revenue and minimal billing cycle time by enabling activity-based billing of each client according to their distinct attributes. Appropriate charges are automatically generated for storage of goods and any other services you perform as a logistics services provider.
HighJump Billing Management’s capabilities extend far beyond billing and reporting. This comprehensive solution can also help make your business more attractive to current and potential clients by enabling you to offer more value-added services, superior inventory control and overall cost reduction—making you stand out in a commoditized logistics marketplace.

Dynamic Inventory Attribute Tracking
Logistics Service Providers have complexities of handling a variety of products with complex tracking requirements.  The same facility may manage perishable products that require best before date tracking, apparel that requires style color size tracking, and electronic products that require serial tracking.  With HighJump WMS Solutions all these attributes can be tracked in the same inventory model.  In fact, as the logistics service provider encounters uncommon data tracking requirements they can configure the solution to track these inventory item attributes.  Additionally any of these attributes can be shared with end clients through inventory visibility portals.

Integrated Transportation Management
Many logistics service providers in traditional public warehousing or in contract warehousing are branching into managed transportation services.  HighJump Software provides a transportation management solution used by many logistics service providers and is fully integrated with WMS warehouse management system.  The TMS support management of buy-side and sell-side contract rates allowing a logistics service provider to manage rates for contract carriers and separate rates for the price they sell the transportation service to their end client.

Flexibility to Meet the Changing Needs of Clients
The most important business differentiator for a logistics service provider is flexibility.  Existing clients frequently have new requirements and winning new business often requires changes to the operations and supporting systems.  HighJump has developed an out-of-the-box rules based architecture to allow logistics service providers to create unique rules that influence how a process works in the warehouse.  The rules can then be assigned to a client, an item, a vendor, or any attribute within the WMS warehouse management system.  Additionally if a standard rule cannot meet the specified requirement, a new rule may be created using Advantage Architect, HighJump’s workflow management adaptability tool.