The Supply Chain Information Technology blog

I got a couple of emails recently pitching HighJump’s report, WMS in the Cloud, Real World Business Option or Just Fluff. HighJump has its sights firmly set on cloud computing as a key component of its sales and marketing strategy for its Warehouse Advantage WMS product.

So it shouldn’t be a surprise that the report outlined reasons why moving to the cloud for WMS functionality may make sense for some organizations. The reasons given were sound and familiar to anyone following cloud computing – lower capital investment, reduced impact on IT resources and faster implementation times.

However, HighJump’s pursuit of WMS opportunities in the cloud isn’t unique. RedPrairie reached for the WMS cloud last year through its acquisition of SmartTurn, but SmarTurn is a pure multi-tenant SaaS solution. It is only sold on a subscription basis where customers pay a monthly fee for usage. Its functionality and features appeal to small to modest size operations with limited complexity.

This is not a market segment that RedPrairie’s flagship WMS product can effectively address. HighJump is offering its Warehouse Advantage product on a hosted basis; users will pay a subscription fee to access a unique instance of the application in a remote data center. And HighJump will continue to sell Warehouse Advantage as a traditional on-premise, licensed basis.

So HighJump is effectively becoming the software vendor version of a brick and motor fashion retailer that has decided to open an ecommerce channel.

Offering a hosted solution means HighJump can reach customers that will not or are hesitant to buy an on-premise solution, but it also means that its existing customer pool now has a choice in deployment models. It will be interesting to see how HighJump factors this choice into how it prices, supports and markets both models.

A multi-channel retailer can anticipate that a substantial portion of its customer base will use both channels. I don’t think that this assumption holds true for software vendors looking to sell the same application on a hosted and on-premise basis.

I haven’t seen a quote from HighJump for its WMS cloud option, but I have seen quotes from other vendors offering the same package on both hosted and on-premise terms. While these vendors don’t break down the components that go into their hosted pricing, you can see the elements by comparing the hosted price to on-premise license fees and maintenance costs.

Of course, the vendor needs to cover hardware acquisition and operating costs in its subscription fee. However, they also appear to recoup the license fee over a three- to four- year period, as well as cover the maintenance contract element of their on-premise pricing model.

Depending on the subscription fee, a customer who utilizes the WMS for eight years might end up paying double for license usage for hosted services over an on-premise approach. The latter requires an upfront capital investment for licenses, while the former is spread out as an annual expense.

Still, 2x is a heavy premium for avoiding a capital investment. Maintenance may seem a wash for both options over the eight year period, but an on-premise customer can always choose to go off of maintenance at some point during the system’s lifecycle. I doubt the hosted customer will have this choice.

WMS vendor hosting services also cover IT infrastructure and operating expenses. These costs and associated headaches are hardly inconsequential for top-tier WMS solutions. You can always turn to another third party for IT hosting services, though there is comfort in having a single source provide and support both the application and the hardware.

I don’t think there are any WMS bargains to be found in the cloud if you only look at the proposition from a license, maintenance and hardware fees perspective. This doesn’t mean that I don’t think HighJump and other vendors can’t generate significant business with their hosted services.

I think success in the cloud will boil down to the value adds that a vendor can provide through a hosting model.

There should be a synergy between providing the application and hosting IT services that go beyond the data center. Any WMS vendor who can exploit this synergy by making the implementation process and ongoing WMS operations more effective and less costly for the customer will really have something.

If they can’t look beyond annual subscription fee and hardware infrastructure, then their hosting options may only be viewed as a method to hook customers into an annual revenue stream.

So what is your take on WMS in the Cloud? Is it for real or merely fluff?

-- Tom

Photo Credit: Fractal_Artist 

Tags: cloud computing, warehousing, wms

We welcome Susan Evans back to the SCIT Blog, now, as a regular contributor. Thank you, Susan, for joining us on this blog.

-- SCIT Team

After 20 years in supply chain and logistics technology and working with many shippers, distributors and logistics service providers, I still find it interesting how different companies approach the process of dock/appointment scheduling.

Is it a warehouse process or a transportation process? Does it depend on inbound or outbound and who is managing which? Can the company’s current or legacy systems drive this?

Today, many warehouses, distributors, retailers and other facilities around the world remain challenged with manual processes when trying to schedule arrival and departure of carriers.

This is most painful when there are hundreds of trucks arriving for pick-up and delivery to a single facility each day. And companies that are turning to logistics technology are asking about the capabilities of dock scheduling and are eager to move away from the use of phones, emails, spreadsheets and the dreaded whiteboard.

With these hurdles, it is obvious that dock management is key to on-time deliveries – from the starting point to the end destination.

Depending on the scale of operation, many companies and distributors will schedule a specific delivery time or timeframe, along with a specific docking bay, for both the loading and unloading of goods. Some even offer dedicated dock doors to either carriers or product type due to proximity of unloading/loading to perhaps the cool storage area.

Also, the manner in which the driver receives notification of his or her assigned dock can vary. It could be a phone call or an e-mail, or it could be pre-assigned in the form of a document, note, or other hardcopy. In some instances, they don't create any schedules or assign specific docks, and it is on a first-come, first-served basis, defined by the gate keeper and dock manager on radios.

Companies with growing deliveries and truckloads departing are looking to technology to assist with this time-consuming process. The interesting component that some are looking at is as an extension of a Transport Management System, others as an extension of Warehouse Management System and then some as a completely stand alone application.

So what are the advantages of the systems approach to dock scheduling?

Running Dock Scheduling from the WMS: The main consideration is labor productivity coordination in the warehouse and making sure you have the proper staffing, as well as the correct material handling equipment at the docks to manage unloading and putaway, in addition to loading. The WMS can also factor in the best dock location to minimize travel during the putaway process.

Running Dock Scheduling from the TMS: This provides a more seamless communication with carriers to schedule or to assign appointments. Online systems support self scheduling by shipper, carrier or LSP. And it allows for reminder functionality, attaching Bill of Lading or other paperwork to the appointment schedule to continue to streamline communications and reduce administration time.

Stand-alone Applications: These applications may take on not only scheduling of dock doors but a more comprehensive set of functionality of yard management, including the management of empty trailers and full trailers around the yard to optimize dock activity when waiting on drivers to load.

Functionality varies among dock-scheduling providers. Standard features found across many providers include:

• Driver/supplier online self-scheduling
• Automated e-mail and text message reminders
• Record-keeping and reporting
• Internal scheduling option that may include urgent deliveries and rescheduling
• Event management and alerting functions

Multiple parties in the supply chain reap the benefits:

• Drivers reduce waiting time
• Dock staff is available when needed
• Administrative and clerical efforts to manage dock activities are reduced
• Demurrage and reefer fuel charges are more effectively managed

When considering a dock-scheduling solution, here are a few of components to consider:

• Where the critical requirements are (warehouse centric, transportation centric, both)
• Integration with other applications
• License vs. SaaS solution

Let me know how you are handling dock scheduling.

-- Susan

Photo Credit: lululemon athletica

Tags: shipping, logistics service providers, distribution centers

Using advanced shipping notifications (ASNs) in the warehouse may be old news for some, but there are others who are still building their knowledge on this topic. So, while thinking about what I would like to share with you on the blog this week, I thought this would be a good topic for beginners, and some of our readers who are seasoned ASN users may want to share their thoughts as well.

Tags: wms, asn, breaking in

A few weeks ago on the SCIT Perspectives Blog David Meyers asked the question, "Where do you pick from when all the low hanging fruit is gone?"

This question stems from a WMS upgrade project that David is involved with which is actively seeking to reduce costs even though the operation is already running relatively lean. One potential area under consideration is new technologies – including Voice picking.

Having followed Voice Recognition for years, I believe it is a natural candidate for many WMS upgrade and implementation projects. Its hands-free, heads-up user interface gives it a definite edge over RF terminals. And I appreciate the value it can bring to other activities like cycle counting, replenishments, and putaways.

I’m not saying that it is a fit for every operation and every activity. But I believe it is worthy of becoming a mainstream data collection technology for the warehouse floor.

For mainstream technology, functional fit and usability are not the only criteria – integration and cost play a critical role. The integration landscape has matured with most top-tier and many mid-tier WMS vendors offering direct interfaces to Voice solutions.

As I am a voice technology consultant, I pointed out in a recent Tompkins white paper, Voice-Enabling Your SAP Warehouse, SAP WM/EWM users have a variety of approaches available for integrating Voice within their facilities. There are more application providers and hardware vendors chasing the Voice marketplace. More choice drives lower cost points making the technology even more attractive.

So is Voice ready for prime time? I definitely think so.

Is it there yet? I’m not so sure.

Based on what I hear and see, more and more DC operations are actively pursuing or considering implementing Voice.

However, I still hear a lot of folks saying that they’ll get around to it but not right now. I also know of some enterprises that are pursuing a new WMS implementation or upgrade who view it as a Phase 2 or beyond consideration. So it still hasn’t reached the same acceptance level as RF.

Some of this hesitation is due to critical mass. People feel more comfortable with the technology when they personally know other sites that employ it.

Also, I think some WMS vendors and integrators contribute to this condition. They may actively pitch Voice during the sales cycle. But their implementation folks may view it as another set of tasks on a project plan that is already overcrowded.

Anyone who has been involved in a WMS implementation can appreciate that sometimes it is best to walk on Day 1 and leave the running for Day 2 or beyond. However, I can’t point to any mid-to-large size DC implementing a new WMS that is waiting for Phase 2 or 3 to roll out RF.

Waiting until Day 2 or beyond may not be the conservative bet anymore. If the technology is mature enough to be mainstream, then waiting just leaves the benefits – which can be considerable – to a vague future date.

Installing Voice on Day 2 in an operation that went live, with RF or paper, can be more costly and time consuming than doing it in the original implementation.

Once again, I’m not saying Voice is right for every operation. It may even make sense to wait rather than include it in any specific implementation or upgrade plan. But I think it deserves the same level of Day 1 consideration given to RF, pick-to-light and other commonly employed warehouse management systems and technologies.

Am I overly optimistic in my assessment? Do you think Voice is ready for prime time? If not, what do you see as the barriers?

--Tom

Tags:

It’s no secret that Tompkins Associates is a proponent of warehouse control systems. In fact, we have our own WCS that we provide to our integration clients: Tompkins Warehouse Control System.

I bring this up, because a recent client meeting reminded me of how a WCS can open up visibility into warehouse operations. This particular client is using our WCS to implement a multi-phase material handling equipment upgrade. The warehouse management systems' (WMS) interface to the WCS are expected to remain fixed while the MHE changes.

During the meeting, we finished the interface review and moved into a discussion of our operational data screens. As I finished a review of our standard screens, I asked the client team for input on any custom screens or reports that they might need to help them manage the DC. After a period of silence, they answered, "We will have to get back to you on that, since our current controls don’t provide us any data!"

It was a light-bulb-over-the-head, paradigm-shifting moment. Our client team realized that they now had the opportunity to "know what they didn’t know" (i.e., get visibility into productivity and throughput data to help them identify trouble spots and optimize their warehousing and distribution operations).

A WCS provides two important advantages over a traditional WMS/MHE controls integration:

The first advantage is that it hides the complexity of MHE interface details from the WMS. In essence, the WCS provides a uniform interface of data items to the WMS while dealing with the physical interface to the MHE. This was the feature that drove our client to select a WCS for their multi-phase warehouse upgrade program.

The second advantage of a WCS is that it provides real-time data to allow users to manage their MHE and warehouse operations. Although this feature can be provided by traditional controls, it is often overlooked. This operational data visibility is a powerful advantage to any organization (like our client in the story above) that has been struggling with an older low-to-zero information MHE controls system.

Tompkins has plenty of good company in regards to touting the advantage of using warehouse control systems in modern DCs. I recently came across an article that shows how Ikea uses a WCS to support uniform practices across its network of DCs. The article, linked here (http://logisticsviewpoints.com/2009/09/03/ikea-overcomes-warehouse-control-systems-islands-of-automation/), is worth reading for a complementary perspective on the topic.

The advantages of a WCS feed into a topic that is the essence of this blog: the topic of supply chain visibility. Any DC is an important link in the data chain that comprises supply chain visibility (or is in fact the origination point of the supply chain).

Warehouse Control Systems are an important tool not only to manage the DC, but to link the data within the DC to the overall supply-chain IT infrastructure. A well-implemented WCS begins supply chain visibility right in your own DC.

-- Paul

Tags: wms, mhe, integration