Many discussions are occurring that reflect the need to upgrade systems, but companies remain reluctant to abandon their legacy systems. Meanwhile, a modern warehouse management system (WMS) deploys cloud-based capabilities to overcome small challenges that would present significant hurdles for legacy updates. Instead of going it blindly, supply chain leaders need to understand the limits of legacy WMS and how cloud-based WMS is poised to force legacy systems into retreat through maximized ROI.
The Limits of Legacy WMS and Terminal-Based Systems
Traditional systems were designed to handle a specific company’s needs, and they were built on the premise of managing larger pallets and cases, not the small orders that have flooded the industry in the age of e-commerce. Critical limits of traditional systems include:
- Lack of real-time data visibility.
- Inability to apply data through advanced analytics.
- Poor insight into how warehousing relates to overall supply chain management.
- On-premise solutions that were designed to serve a single location.
- Data siloes that hinder the ability to consider omnichannel needs.
The Digital Supply Chain: The Landscape, Trends, Types, and the Application in Supply Chain Management
Cloud-Based WMS Is the New Kid on the Block
Cloud-based systems only first came into the conversation in 2010. Microsoft and major IT companies had already developed cloud-computing capabilities, but it was still years before the technology had emerged in supply chain systems. As companies realized the benefits of an off-site IT infrastructure, the value of a cloud-based system became clear. Unfortunately, the technology is still a scary prospect for companies that are under the ever-approaching hammer of Amazon. As explained by Supply Chain Brain, three different variables affect the implementation of cloud-driven systems, including:
- Deployment model. The method in which systems are deployed such as deploying it on-premise, within the cloud, or through a combined approach.
- Pricing models. This reflects the different payment models available for cloud-based WMS, such as software-as-a-service (SaaS), managed service, and upfront license costs that depend on the deployment model.
- Hybrid solutions. Since a modern system may have varying characteristics of both variables 1 and 2, it can lead to some confusion. Furthermore, each variation may affect customer service, vendor support, and more.
Yet, there is a clear opportunity for advancement, putting new systems in place that perform the same functions at a lower cost and with fewer risks than legacy platforms.
Benefits of Cloud-Driven Systems in the Warehouse
A cloud-driven system offers several advantages over legacy platforms. While a company may have developed a robust legacy platform to suit their exact needs, the likelihood that the system will survive is minimal. The next technological innovation is around the corner, and the simplest change in the market could upend legacy functions. For example, Walmart’s recent mandate for blockchain’s use in fresh produce supply chains only hints at the future; blockchain is coming. Fortunately, cloud-based technologies are incredibly compatible with newer systems and services, juxtaposed against the limits of a traditional, legacy platform. Using a cloud-based system also offers wide-ranging benefits including:
- Broad scalability.
- Turnkey visibility.
- Increased traceability.
- Compatible with most systems.
- Off-the-shelf solutions designed to replace complex legacy functions.
- Ability to modify, even though modification may increase implementation costs.
- Remote access.
Cloud-Driven Solutions Overcome the Obstacles of Traditional Systems
Cloud-driven WMS is the next frontier for effective supply chain management. Cloud-computing lowers the cost of maintaining your WMS, and it allows for rapid use and deployment of new systems. Although your organization may have spent millions refining its legacy platforms over the years, you may save money by switching to a cloud-based system sooner rather than later. The modern warehouse and supply chain are built on cloud-driven solutions. Ensure your organization has the processes in place to enable cloud-based technologies.