Do You Really Need to Replace Your WMS?

This is an excerpt of the original article. It was written for the March-April 2014 edition of Supply Chain Management Review. The full article is available to current subscribers.

March-April 2014

Retailers and distributors alike have attempted to solve their inventory challenges by using forecasting tools to determine what to buy and when to buy it. A better approach is to change the flow of inventory by reducing cycle times, more effective inventory positioning, and synchronizing supply chains based on the variability of demand.

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Picture this: One day, you see your neighbor Bob carrying in a bunch of packages that UPS has just delivered to his house. Bob has always been a bit of an odd fellow. For one thing, he’s the only person you know who still heats his house with coal. One cold morning, he’s outside shoveling coal into an ancient hopper before the sun comes up. When you ask him what all the packages are for, he explains that it is so expensive and risky to replace his coal heating system, that he’s purchased a bunch of space heaters, electric blankets, and cashmere scarves to keep his family warm through the winter.

Sound a little crazy? Perhaps. But the situation is analogous to something that has been occurring in American distribution centers for years as companies go to great lengths to avoid replacing their aging warehouse management software (WMS) systems.

Structural changes to supply chains and demand patterns over the last two decades have created a host of new process requirements for distribution centers. Many companies’ WMS systems have failed to keep abreast of these new requirements, creating operational inefficiencies that eat away at corporate profits. Despite the benefits of upgrading to more modern supply chain software, many firms have resisted the call, and instead have sought less expansive solutions to address their needs. However, several technological advances, which have roots in the 1990s, have finally come of age and are offering alternatives to wholesale platform replacements.

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