The use of a warehouse management system (WMS) offers critical benefits to retailers and supply chains. These benefits range from efficient and effective labor management to minimized paperwork. At the same time, the cost to implement a WMS is lower than ever, says Brian Barry of Multichannel Merchant. However, not all WMS platforms and vendors are equal, so supply chain leaders should know how to select a WMS without lost time and effort.
The project team oversees the entire process of reviewing available vendor solutions and planning the implementation. The project manager must also have consent to make purchasing decisions on behalf of shareholders. Depending on your organization, this may also be known as the change management team.
When determining how to select a WMS, establishing minimum requirements that meet your organization’s needs must be the top priority. According to Inbound Logistics, each WMS may contain hundreds of talking points, ranging from inbound freight management to customer service. Take the time to create an extensive list of all requirements for your WMS. At the same time, determine the costs associated with each requirement noted. This will help your organization determine the return on investment for a WMS, and when applied against specific vendors, project managers can make an accurate prediction on when ROI will turn positive.
The next step is simple. Request information from vendors that meet available criteria. It is best to keep your vendor list as broad as possible at this point, focusing on one or two of the most important aspects within your requirements list to select a pool of vendors.
This is where the process becomes complicated. Evaluate each vendor’s development and advancement capabilities. Each vendor chosen should meet the minimum requirements within your requirements document, but requirements are subject to change. In other words, your minimum needs may not reflect those of tomorrow, so always consider the vendor’s ongoing development of the WMS.
Your shortlist of vendors refers to the top 6 to 10 software vendors. While this may seem like too many vendors to manage, it is best to avoid limiting your organization to fewer than five vendors until after you know exactly what each vendor will charge.
Submitting requests for proposal will allow vendors to review your systems and needs, developing a cost model and in turn, plan for implementation. This is the best way to evaluate vendors in greater detail during the process.
Some vendors may offer customized demonstrations to show a company exactly how its solution can improve operations. Some older, smaller vendors may only provide generic demonstrations that are limited in scope and scale, and are available online to any supply chain professional. Those that offer a customized demo should be given extra consideration.
The final two vendors are determined after completing all demonstrations and returning to your ROI calculations. These vendors should be the best of the best, and their services and solutions will be similar.
Review all legal documents, as well as legal responsibilities and rights associated with each vendor and use of that vendor’s solution. It is essential to conduct a legal review outside of the project team. This will eliminate any bias that may have developed for or against a given vendor in the course of selection.
The final decision is largely based on the results of the legal review. If any legal issue arises during that review, it is ideal to select the other vendor. Some legal issues may not necessarily warrant abandoning a specific vendor, particularly if the ROI is significantly higher.
Even when your organization has selected a vendor, remember the power of negotiation. For this reason, it is best to leave the other vendor not initially chosen alone for a brief time and proceed with the selected vendor. In the event of unforeseen issues or concerns with the selected vendor, this offers the benefit of a way to “pick back up” if the negotiations fail.
Knowing how to select a WMS is not rocket science, but it does require care and attention to detail. Organizations that follow these steps to choose a WMS can reduce total cost of ownership, avoid unnecessary delays, and ensure the preferred vendor fulfills their promises. Of course, the complexity of the process represents a risk, and it may be wise to work with an expert who specializes in assessing multiple vendors during the selection process.
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