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the user can expect to get, Bergoon
adds. “Some businesses don’t require
the cost, complexity, and functionality that a tier-one system provides, so
there wouldn’t be an ROI for them.
With a pallet-in, pallet-out customer,
they don’t need that, so [they might
decide to stick with] a legacy WMS.”
COMPETING DEMANDS
Turning to the question of why tra-
ditional warehouse management
systems tend to be an awkward fit
for e-commerce fulfillment oper-
tations, Marc Wulfraat, president
of the supply chain consulting firm
MWPVL International Inc., says
there are a number of factors in play.
One reason for the mismatch is technical, Wulfraat says. Traditional warehouse
management systems are designed to
plan, release, and push out one wave
at a time, a strategy that works well for
retail store distribution and even small
to midsized e-commerce environments.
However, as throughput volumes climb,
facilities often need to install automated material handling equipment, which
requires that the WMS be tightly integrated with the warehouse control system (WCS) subsystems that control the
equipment, a feature not supported by
many basic WMS products.
Another technical hurdle that prevents
traditional warehouse management
systems from meeting the demands of
e-commerce involves data exchange, says
Paul D’Arrigo, chief operating officer at
Spend Management Experts, an Atlanta-based transportation consulting firm.
D’Arrigo explains that data exchange
becomes an issue in cases where omnichannel retailers fill e-commerce and
store replenishment orders from a shared
pool of inventory, or fill online orders
from inventory at a retail store. While
those strategies can minimize operating costs, they also require companies
to maintain a single real-time accounting of their stock, so a sudden rush of
online orders doesn’t result in empty
store shelves and disappointed shoppers,
he says. A tier-one WMS can prevent that
kind of scenario by collecting sales data
through instantaneous application programming interface (API) connections or
frequent Web server calls—a significant
upgrade over the batch updates most
legacy WMS platforms provide, he says.
As the online shopping revolution
continues, more retail warehouses and
DCs will face the question of if—and
when—they should replace their legacy WMS. In the end, the decision will
come down to two overarching considerations: the nature of your business
and the needs and expectations of the
customers you serve. Or to put it another way, the best strategy for choosing
software will always be the advice your
grandfather gave you—pick the right
tool for the job.
