A few posts back, I asked, "Where is that last dime?"

Now, as I’m starting a new WMS upgrade / implementation project, the question is even more timely and critical to the success of this particular project.

So here’s the background:

This company has been using one of the more well-known "Best of Breed" (or BoB) SCM software packages (see Tom’s recent post on ERP vs. BoB) since the early 2000s.

The package has been highly modified over the past several years to accommodate incremental improvements in business processes. During this time, the company also added many reports to assist in four wall DC visibility.

Fortunately, since the original implementation, the software supplier has taken great strides in increasing the core functionality of its WMS so that some (hopefully many) of the enhancements and additional reports may be able to be retired.

With that said, why is it such a challenge to continue to find other ways to lower the Total Cost of Ownership (TCO)?

Also, did I mention that this company outsources its fulfillment to a logistics service provider?

To begin with, these guys are well known for operating on very slim margins. And, they are already using engineered labor standards and performance incentives, which drive costs down and increase service levels. Not a very target-rich environment – all of the low hanging fruit has already been picked.

Here is the plan:

This is not a "find and replace" type WMS upgrade. There is very heavy integration with other systems (ERP, TMS, LMS) and homegrown reporting tools. So I intend to carefully weigh the integration alternatives, which include:

• Decoupling external systems – What can be brought into the core application and what additional integration (or re-integration) may be eliminated, along with the staff required to support those external solutions?
• Automation of reports, queries, and other output files – What business critical reports require human intervention or manipulation and can they be automated?
• New technology integration – Are there opportunities where the integration of new supply chain information technologies (e.g., voice picking, etc.) can provide a payback with either improved service level, inventory accuracy, or reduction in labor cost?
• Host order profile – Are there opportunities to work with customers to change order line quantities prior to download to the WMS that could result in more efficient picking (e.g., round up/round down to layer quantities to reduce less efficient case picking)?

Where else can I look? I’d like to know.

-- David Meyers

Photo credit: wildxplorer

Tags: wms, total cost of ownership