DC Velocity - April 2013

Manhattan or RedPrairie to be a certified
systems integrator. Because it is expensive
to develop the resources and to pay this
fee, most services firms can only afford to
do this with one or two software
firms. As such, it is important for
the company to realize that the
system selection process will
most likely be heavily skewed
toward the WMS firm that the
integrator is paying to be a part-
ner with.”
And it’s not just software.

Many times, integrators also have alliances with equipment vendors, which might even include financial arrangements that could tilt the balance in a given supplier’s favor. Wulfraat notes that this is particularly important to keep in mind if your company is asking the integrator for a fixed-bid turnkey quotation that includes both the services and equipment. That’s because unless the client instructs otherwise, an integrator will likely obtain the equipment from vendors that provide financial incentives, Wulfraat warns.

2Find out what past clients have to say. Background checks are a key part of the due diligence process. But don’t just ask the integrator for references, says Steve Martyn, chief strategic officer of Invata Intralogistics, a systems design and integration firm. Instead, ask for the names of the integrator’s last seven clients. Then contact each of those companies and ask whether the integrator completed their projects on schedule and whether the project ran into any obstacles.

Before contacting past clients, though, Martyn advises managers to get some background information on their projects from the integrator. As for what to ask for, he suggests obtaining the written functional specification documents for any project similar to the one being planned. Those documents should outline goals and objectives of the project with specifics regarding equipment, engineering, controls, interfaces and software requirements. The document should also list the precise areas of responsibility for the integrator and the software vendors.

At the same time, the logistics manager should be looking to make sure the integrator has relevant industry experience. “Once your expectations are defined, SIs [systems integra-tors] being considered should include demonstrable experi-

ence in your industry or like industries,” says Robert
Nilsson, vice president and general manager of software and
supply chain intelligence at systems integrator Dematic. “For
example, if you make frozen pies, a company with experi-
ence in handling frozen pizza will probably do the trick.”
Donald Derewecki, senior business consultant at the
transportation engineering and design firm TranSystems,
has one other tip for managers conducting background
checks. When reviewing the candidate’s past projects, he
says, look for evidence of creativity in deployment. An inte-
grator’s past work should show a range of design solutions
tailored to the individual customers’ requirements, he says.
“You don’t want to only see scaled-up or -down versions of
the same operations design.”

3Get the résumés of project staff. In addition to conduct- ing reference checks, logistics managers should ask to see the names and résumés of the people who will be assigned to their integration project. “For a large-scale WMS implementation project, I would want to know exactly who will be on my project and what their billable rates will be,” says Wulfraat.

In the course of their investigation, companies may find that many of the staffers assigned to them aren’t actually employees of the systems integration firm but instead are independent contractors. Wulfraat doesn’t see that as cause for concern. “Independent contractors usually are transparent to the end customer because they carry a card and appear the same as employees,” he says. “Sometimes companies ask to have this spelled out, but I don’t think that it’s overly important since many of the best and most experienced people will be independents that work consistently for the same firm. Sometimes this is for tax purposes; other times it is because these people just want to be independent.”

4Look for a partner who will be in it for the long haul. Finally, when selecting a systems integrator, Nilsson urges logistics managers to evaluate the prospective supplier the same way you’d evaluate a personal investment. He recommends that managers ask such questions as: Is the integrator consistently profitable? Has the firm grown or shrunk relative to peers in the market?

As much as a logistics manager should strive for the best possible deal, he says, a company should pick an integrator who will be a partner who can “grow, invest, develop, and maintain” the infrastructure put in place in the distribution center.