Warehouse Management Systems: The Essential New Developments

The Logistics Business has extensive expertise of Warehouse Management Systems (WMS), check out our offering in assisting your WMS Specification, Selection and Implementation.

We’re experiencing something of a unique period in Warehouse Management System development. The major Warehouse Management System suppliers have stabilised their software over recent years and are not developing anything ground-breaking in terms of innovative features and yet it is not as if there is no more development to do.

Instead, suppliers who have traditionally been focused on the Warehouse Management System as their core business solution are now extending their reach through other parts of the supply chain. The major innovation is outside the four walls of the warehouse rather than inside it; we see an increasing number of suppliers offering linked supply chain platforms which have the capability to share information and data in real-time at all points; from raw materials purchasing and inventory, through delivery, warehousing, store and delivery to customer. These supply chain solutions enable closer understanding of stock and supply throughout the company, advancing the picture from the previous, warehouse centric view. This change in focus is adding to the lack of Warehouse Management System innovation. Development teams are having to split their best resources across a multitude of different supply chain areas. Whereas Warehouse Management System development is nearing saturation point and therefore innovation is challenging, bringing new ideas to other parts of the supply chain is relatively easy. Company development budgets remain the same or may even have increased as a percentage but now cover a far wider scope in order to continue to attract new business.

Warehouse Management Systems - The Logistics Business UK

Where we do see Warehouse Management System specific innovation it is focussed in two key areas; platform and hardware technology. Recent years have seen the rise in alternative methods to install and manage the software itself, introducing both ‘light’ versions of the system and more recently, ‘cloud’ or ‘software-as-a-service’ options, where the software and its technical management are included within a rental type scheme. Cloud and SAAS solutions have obvious appeal to smaller companies who have limited or no technical resource to manage system administration tasks.  They also don’t involve a high one-off investment, which in the past has been off-putting to smaller organisations.  As shopping habits continue to move towards internet ordering and fulfilment, relatively small organisations are able to compete, achieving the high level of stock accuracy that is essential for on-line customer satisfaction by deploying an advanced solution for minimal initial outlay. Although providing the most benefit to start-up operations and smaller organisations, this option is also a consideration for larger enterprises. However, for these cloud solutions to flourish the Warehouse Management System user community have to convince themselves that the risks of outage or downtime have been mitigated – this is still seen as a high risk at this relatively early stage, especially with ever increasing customer expectations and the ability to post negative feedback to a global audience when a delivery is delayed.

Having identified that the cost and timescales involved with a ‘large’ system implementation, Warehouse Management System suppliers have also spent time developing ‘light’ versions of their system. This is an area where different approaches have been taken; simply reducing the functionality of the core solution offering, letting users choose which modules are required and letting them piece together their solution, or actually developing a completely new solution that runs on an alternative (usually Windows based) operating system. As these solutions have a lower cost than the full systems, they have been of particular interest to small and medium scale established companies who have always understood the benefit of a Warehouse Management System but have previously not been able to tackle the cost of implementation and on-going licence fees. These differences in approach are interesting in that some offer the customer the opportunity to upgrade to a full solution as and when the business requirement dictates.

We have also seen subtle system innovation introduced to better support home shopping fulfilment and other multi-channel operations, such as advanced packing bench functionality and delivery rate shopping to aid the selection of the most cost effective carrier. However, because base Warehouse Management System solutions now contain extensive features which are parameterised to enable flexibility without customisation, the warehouse is experiencing less dynamic modernisation than at any point in the past 25 years. It could be that the parameterisation of solutions is being relied on too heavily, rather than developing appropriate software – most modern solutions still struggle to be able to match customer demands for the increasingly complex order release and pick processing required to support customer rather than store orders. This area is still crying out for well designed functionality; however suppliers continue to push back onto existing parameterised options and anticipate that the customer’s process will need to be compromised rather than match the software with the customer requirement.

User demands have calmed too, in general Warehouse Management System customers are stabilising, maybe introducing new technology such as mobile and voice units to enhance their picking and movement activities rather than to revolutionise them.  Remaining on an upgrade path is now more desirable than ever before – modifications to support innovative processes and therefore generate a competitive edge over the competition are generally no longer as big a factor as they had been in the past.  It has become accepted that the software in its own right is not going to make too big a difference to the customer base, especially if the development requires fundamental database redesign.

It was only to be expected that the Warehouse Management System landscape would level out over time; from a technology perspective it becomes more difficult to continually add diverse functionality into an existing system without contravening the current core processing rules.  Therefore with difficult integration logic decisions to be made we are only seeing the introduction of new initiatives which add significant benefit to existing customers and would be expected to persuade new ones.

However, there are still areas where the modern Warehouse Management System comes up short compared to the demands of some users; over recent years we have seen Warehouse Management System suppliers backing away from automation integration projects. Whereas in the past they would chase projects which involved a degree of automation, offering to control logic for high bays and other relatively simple equipment, this is no longer the case. It is likely that this strategy change is a result of the higher levels of complexity and integration within automated warehouses which require bespoke rather than off the shelf solutions, meaning that these are the projects that cause them the most problems. These projects cannot be catered for by parameterisation alone, and therefore require dedicated development that is unlikely to be of any use to the vast majority of their other customers.  Whilst this development effort would be charged, the trend towards reducing risk by implementing ‘vanilla’ software is more apparent than ever.  It used to be the customer who wanted to remain close to base, now we see that the suppliers are also demanding this within the implementation design phase. Staying close to the base package also reduces complexities for system upgrades, another area where Warehouse Management System suppliers have changed tack over recent years.

Another problem for users is that whereas in the past customers would have been advised to try to remain within three to five versions of the most current major software release, control in this area is now focussing customers to remain far closer to the latest release, in an effort to avoid large modifications to the base solution. Without significant enhancements to the core package, users will question the need to upgrade; therefore simple, low cost upgrades have to be introduced, again supporting a solution that encourages parameterisation rather than customisation.

With Warehouse Management System suppliers and customers all now working across a similar level of technology and process, in reality we may never see the same level of advancement that we have experienced during the past two decades.