There was a time when warehouses were simpler and easier to manage. Simplicity gave way to complexity when supply chains went global and supply chain automation opportunities became prevalent. Now, the strong demand for e-commerce, SKU proliferation, and supporting systems enable warehouses to rival the size of a large shopping mall. At the same time, the lines dividing system functions have blurred. Functions traditionally left solely under the realm of a warehouse management system (WMS), such as inventory management, are no longer distinct from those of warehouse control systems (WCS). Likewise, traditional WCS functions, like machine control integration, may be included in some WMS offerings. As the distinction between systems becomes less apparent, a new breed of systems called warehouse execution systems (WES), is attempting to take the center stage as a hybrid solution. They serve a new purpose in offering the capabilities of both a WCS and WMS, as well as a means of enabling the continued growth for supply chains.
A traditional WMS was designed to handle minimal order volume, operate within a single warehouse, and rely on manual order entry, status updating, and even reverse logistics. As Veridian’s Co-Founder and Managing Partner, Jason Rosing, said to Supply Chain 24/7:
“In the age of Amazon, handling all e-commerce orders in a single warehouse is impractical, and it will result in lost opportunities.
Streamlining returns is an integral part of developing an omnichannel warehouse, and, with up to 30% of all e-commerce purchases returned, warehouse managers must include returns capabilities in existing warehouses.
This reduces logistics spending, but in standard warehouses, this also implies a 30% increase in workload without a corresponding increase in revenue.
Therefore, an omnichannel warehouse is the only solution.”
That gives rise to the next problem with traditional system use; they lack the wide functionality needed for modern warehouse efficiency and operation.
The biggest challenge in today’s warehouse IT topics derives from the confusion of multiple system options. While a WMS was used as the overarching solution, the WCS interfaced with machines. The WMS promoted slotting optimization, inventory management, procurement, and order management functions, among much more. Then WES evolved to offer a blending between WMS and WCS functions. Now, the traditional WCS and WES can be heavily customized to offer functions comparable to a WMS. Some companies have sought to use a combined WES to act as the system of record for WMS functions and offer the same functions of a WCS and traditional WMS. Yet, even the best WES does not yet rise to the full potential of a WMS or vice versa in the purview of a WCS.
Unfortunately, trying to replace a WMS with a limited-scope WES or WCS could result in disaster, and companies should avoid trying to circumvent a WMS when a true WMS is essential. As explained by DC Velocity:
“At the same time, these companies should guard against trying to force the WCS or WES system to manage functions that lie outside of the system’s prescribed design. Instead, they should seek out sensible opportunities where the WCS or WES can manage functionality and take some of the load off the WMS (but not serve as a substitute for that WMS). In other words, acquire a bona fide WMS and then let each system do what it does best.”
With so much detail behind modern, combined functions, it can be difficult to select the best system. It is harder to discern the choices, and every vendor claims their solution is the biggest and best. Leaders should consider a few acquisition scenarios, as also explained by DC Velocity, before making a selection:
Of course, any system can be modified, but modification can be expensive and is not always the best solution. Modifications are one-time events, so the costs to modify once will recur. Maintenance costs will increase as modifications affect each maintenance upgrade. Supply chains should consider finding an off-the-shelf solution for replacement or integration to keep existing systems in place with new technologies.
The opportunity to invest in a WES in 2020 may be the best time for investment. The best path forward is still to understand what each system does, how it performs in the field, what the system can do without excessive modification, how it can operate successfully with existing systems, and the exact requirements the system needs to benefit the user. This is true of any new software implementation. Always review the system’s functions and limitations, as well as compatibility with your existing systems. Once thoroughly vetted, new systems can help companies realize better operational excellence, renewed productivity, and more effective scalability.
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