Looking for a low-cost Warehouse Management System (WMS)? You're in luck—logistics managers at small and medium-sized companies today finally have a choice of affordable packages to fit modest budgets.

The reason: WMS vendors have begun to pursue the low-end market that they had long forsaken. In a bid to maintain revenues in a market where the Fortune 1000 companies have already bought their applications, vendors have scaled back their systems and begun selling them at a price that small and mid-sized firms can afford.

According to Steve Banker, service director of supply chain management for ARC Advisory Group in Boston, the North American WMS market shrank by 12 percent between 2000 and 2001. And although total WMS software and service revenues reached about $738 million in 2001 and is expected to grow to $1.17 billion by the end of 2006, ARC predicts that most of that growth will come from overseas. "The North American WMS market is mature," says Banker. "Most of the 10-percent growth we're forecasting over the next five years will occur outside of North America."

Such predictions have driven WMS vendors like J.D. Edwards, Ann Arbor Computer, Majure Data, Infoscan Software Systems and Manhattan Associates to develop low-end, Windows NT-based WMS packages for the masses. Those packages range from software only to turnkey systems including the application, implementation and even hardware. Most hover around the $100,000 range, although some dip as low as $40,000 and others reach as high as $300,000, depending on which features are included. "WMS vendors are looking for ways to add more revenue to the bottom line," says Tom K. Ryan, who heads up his own supply chain consulting firm in Chicago. "They have the expertise and knowledge, so they're taking the time to make the systems more applicable for small, simple operations that don't need all the bells and whistles."

A number of software vendors are diving into the market for low-cost WMS solutions. They typically offer a basic version as well as more costly ones that include additional functions. One example is Radio Beacon Inc. of Toronto, which offers its low-cost WMS solution in three versions: Radio Beacon Lite, Full and Pro. "They all do warehouse management, they just do more as you pay more," says Radio Beacon President Dale L. Jeffries.

Radio Beacon Lite is a wireless warehouse management software product that includes functions like receiving, putaway, cycle count, allocation, replenishment, picking, packing and shipping. The system itself costs $2,000 per user. A 10-user full implementation costs about $51,000. That includes a 10-user license, installation and training, $25,000 for handheld hardware, printers and radios, and $8,000 for PCs and a data network.

Not included, says Jeffries, is accounting software, complex order entry, EDI, door planning and manufacturing software. For users looking for a meatier version, Radio Beacon Full adds features for third-party logistics management, zones, lots, serials and complex shipping for $6,000 per user. For $10,000 per user, the Pro version adds features for managing carousels, conveyors, multi-warehouse operations and product forecasting.

Another vendor competing for the attention of smaller users, Intek of Belleview, Wash., sells its Warehouse Librarian product for a turnkey price of between $50,000 and $75,000. That price range is for five to 10 users, and varies depending on the exact number of users and the hardware requirements. According to Intek President Stan McLean, that price includes all software and services associated with the system. Intek's package handles receiving, putaway, order management, shipping replenishment, order picking, cycle counting and more. McLean says the product is best suited for manufacturers and distributors with $10 million to $25 million in annual revenues.

V3 Systems of Charlotte, N.C., also has its eye on small and mid-sized firms and has developed the $40,000 to $80,000 SCM and iSCM packages to meet those needs. C. Ashley Campbell, V3's president and CEO, says the products are based on the same V3 architecture that the firm uses to create its complex and scalable "configure to order" solutions for larger firms. "Small to mid-sized businesses typically have looked to deploy the V3 solution in one or more distribution centers and scale the solution as their logistics needs grow or change," he notes.

SCM automates the receiving, inventory management and outbound shipping process to eliminate keying of data, improve data integrity, and provide real-time data to the Web and to corporate host systems, says Campbell. The iSCM package, on the other hand, provides a full-featured WMS that automates and offers decision support for all WMS activities, including cycle counts, directed putaway and multiple picking scenarios. The packaged offering does not include such complex, specialized capabilities as merge-in-transit, cross docking and reverse logistics.

Another competitor in this niche, Infoscan Software Systems in Edina, Minn., offers its Dynamic WMF product for companies with sales of $5 million to $250 million, says CEO Don Lies. That product is available in two versions: Dynamic Express, for companies with 10 or fewer users, which sells for about $70,000; and Solo, which costs about $95,000. Those prices include the software license, implementation and hardware. Modules that come with both products include integration, full receiving (including labeling and directed putaway), order management and fulfillment, staging, and shipping. Solo also includes advanced picking and packing features and the ability to track serial lots and expiration dates.

Ann Arbor Computer of Ann Arbor, Mich., has also broken into the low-end WMS market with pcAIM, which starts at $100,000 for a radio frequency-based system that includes implementation, training and support. PcAIM supports multiple warehouses on a single server. It features quality control, kitting, cartonization, and an optional Web-based visibility tool.

Art Fleischer, the firm's sales and marketing manager, says pcAIM is targeted to companies with $50 million to $500+ million in annual revenues. While the product functions well off the shelf, he says, companies usually pay extra for system alterations, hardware, RF equipment, and services like site surveys and hardware installation services.

Even the largest vendors that have long been associated with high-end, expensive systems are looking at smaller companies for a revenue boost these days. A case in point is J.D. Edwards & Co.'s low-end WMS offering, Warehouse Management. That application from Denver-based Edwards represents just one piece of the firm's enterprise-wide system. The software includes warehouse basics such as picking, putaway and replenishment, among other features.

For under $100,000, companies can buy J.D. Edwards' "foundation" product, which includes financial software for accounts receivable, general ledger and other functions that integrate with the warehouse solution. "Hardware and implementation services would be beyond that, and [prices] vary greatly depending upon the customer's level of involvement in the process," says Bill Petersen, senior product marketing manager.

Another large technology vendor that has turned its sights on smaller targets is Atlanta-based Manhattan Associates, maker of PkMS Pronto. Bill Ducat, senior director of the firm's Pronto Business Unit, says Pronto includes various modules that also are available in its more advanced products, such as receiving, putaway, inventory management, replenishment and radio frequency. Users can add what Ducat calls "miniature, less robust" versions of the advanced products' management reporting, transportation and asset-management.

Pricing starts at $75,000 for the software licensing and goes up depending on what the user wants to add. Ducat estimates that the typical company will pay under $300,000 for RF equipment, servers, PkMS Pronto software license, implementation services, training and testing.

Also at the higher end of the scale is Atlanta-based Majure Data Inc.'s RF Navigator, which sells for $150,000 to $300,000 complete. "It truly is a full-scale WMS," says Patrick Majure, company vice president. "From replenishment to picking to loading trucks and everything in between, RF Navigator handles everything that needs to be done in a warehouse."

Wholesale building material distributor and supplier Universal Supply Co., in Hammonton, N.J., found that out a year ago when it bought and installed RF Navigator. With nine workers in a 100,000-square-foot warehouse, the company paid just under $200,000 for the complete system. Majure says that cost included $130,000 for the software and implementation services, and about $50,000 for RF equipment. Dante LaSasso, Universal Supply's materials manager, says the system has already paid for itself. "Our inventory has gone from being 85-percent accurate to 99.77-percent accurate," says LaSasso. "Plus, we've reduced our warehouse staff by three full-time and one part-time workers, which means a $10,000-a-month savings in manpower alone."

Thanks to a saturated high-end market, the bursting of the technology bubble, and vendors' willingness to include advanced features in their low-end packages, it looks like quality, sub-$100,000 WMS systems finally are coming of age. Features, service levels and prices vary greatly from vendor to vendor, of course. But ARC's Banker notes that most low-end offerings these days are real-time, RF-enabled systems that include the features that shippers need most, like receiving, putaway, picking and shipping.

Every WMS package can handle those routine warehousing tasks, Banker notes, but shippers shouldn't expect that all small-scale packages will offer the same range of features found in a higher-priced solution. Buyers should also beware, he says, that baseline "software costs" usually don't include hardware or implementation services, although some companies do bundle those offerings into a flat fee.

Is a lower-end WMS right for you? They tend to work best for companies with five to 10 WMS users, Ryan points out. They are also well-suited to simpler operations for which an automated pick, pack and ship system would result in great efficiencies, especially when it comes to inventory control. "A small operation can only reduce the number of employees by so much," says Ryan. "But an even bigger benefit for such companies lies in the inventory control and inventory-level reduction that comes from an automated WMS system."

Freelancer Bridget McCrae writes frequently on logistics technology.