WMS Update: What do we need to run a WMS?

Logistics professionals across most industries are in a quandary over how to manage the growing demands of e-commerce and omni-channel distribution. Ask just about any logistics manager how he or she has managed to adapt to these quick shifts—which now finds companies less focused on pallets and more centered on individual, customer-centric orders-and you’ll probably get a long-winded complaint in return.

At least some of that frustration can be traced to the warehouse, where companies across all industries are looking for ways to work smarter, better, and faster in a high order volume environment. One lap around the exhibitor floor at the recent Modex 2016 exhibition in Atlanta, for example, reveals 850 vendors who are eager to help.

From Lucas Systems’ mobile work execution solutions to Pcdata USA’s innovative pick-to-light systems to SphereWMS’ cloud-based warehouse management systems, among dozens of others, the field of technology tools and applications designed to support warehouse activity is literally expanding every year.

This proliferation of technology isn’t always easy for shippers to navigate. “To say that the market is confused right now would be an understatement,” says John Hill, a consultant with the St. Onge Company and a long-time warehouse management expert. During his question and answer sessions at Modex, he said that shippers wanted advice on whether they needed a warehouse management system (WMS), warehouse control system (WCS), warehouse execution system (WES), or some combination of all three.

Giving definitive answers to these questions without knowing more about the specific, physical warehouse or distribution center (DC) setup can be a crapshoot, according to Hill. “When you don’t see the operations environment, or when you can’t characterize or profile its specific requirements and pain points, then it’s difficult to make an informed assessment of whether a WCS, WES, WMS, or some hybrid approach is best for someone’s particular requirements.”

You’ve come a long way, baby
Historically, warehouses have been run with two different types of technology platforms: WMS and WCS. Where WMS enables shippers to allocate inventory based upon order demand, WCS manages the flow of materials being moved by material handling equipment on the warehouse floor. Often referred to as an “equipment control system,” the WCS oversees activities like receiving, putting away to storage, picking for pallets and cartons, and related processes— most of which are manual in nature.

In the late-2000s, that scenario changed as the concept of “goods-to-person” picking came to be. This activity has since evolved into piece picking—a concept whose growth was mainly driven by catalogue companies. Thanks to Amazon’s next-day and two-day order fulfillment promises, more automation is making its way into the warehouse as companies scramble to find ways to pick cases and pieces faster and in higher volumes.

So, where the WMS still manages both the front and back ends of the typical warehouse, warehouse execution systems are orchestrating the flow of goods within the warehouse, keeping workers busy and on task, and ensuring that product arrives at the packing stations at the right time—at which point the process is handed back over to the WMS.

To boil it down even further, Hill defines WMS as the system that “takes care of inventory management and labor management,” while the WCS handles “real-time management of material handling equipment.”

Hill says that the push is on to incorporate one or more warehousing systems (i.e., WMS, WCS, and/ or WES) into the distribution environment. Omni-channel and e-commerce—the latter of which is expected to hit $500 billion by 2018 in the U.S. alone, according to eMarketer—are two of the main drivers. “Companies are no longer just receiving pallets, storing them, and then putting them back on trailers,” says Hill. “Now, they’re moving, storing, and shipping both pallets and individual cases.”

Because these activities are taking place simultaneously within the four walls of the warehouse or DC, compa¬nies have to be able to handle everything from a single-item order going to one end user to a full pallet-load of goods being shipped off to a retailer. “This scenario creates challenges not only for the mate¬rial handling equipment and for the warehouse’s overall setup,” says Hill, “but also for the software itself.”

According to Hill, this level of complexity helped to pave the way for WES usage in the warehouse. However, Hill contends that WES is better equipped to handle the real-time complexities of the omni-channel warehouse versus the traditional WMS or WCS.

“WMS and WCS have been playing in the sandbox together for more than 30 years,” says Hill, adding that when WES came on the scene, promising to coordinate the labor and material handling mechanisms while efficiently transporting products within the ware¬house’s four walls, warehouse managers sat up and took notice. “The WES is basically the WCS and WMS on steroids in that it can handle multiple tasks in real-time and change almost on the dime based on certain constraints.”

For example, Hill points to the ware¬house that’s handling multiple orders in various sizes that have to be shipped to numerous customers. Let’s say that operation has the day’s activities set up and ready to go, only to have a rush order come in from a critical customer for same-day shipping.

“In the past—using just WMS—you would almost have to sit down and reschedule the entire day around this change,” says Hill. “And while WCS can manage these shifts, it still requires an orchestra leader who is in the physical environment and knows what its options are from the point of resource redeployment. That’s where WES comes in.”

Good demand, solid adoption
As he scans the supply chain execution software—those systems that handle the flow of tasks involved in the supply chain, such as order fulfillment, warehousing, and transportation—Joe Vernon sees healthy demand across most warehouse-related applications.

Cloud WMS providers are seeing “good demand and good adoption rates,” says Vernon, senior manager of North America supply chain technology for Capgemini. With labor costs making up one of the biggest expenses for any warehouse or DC, Vernon says more shippers are leveraging their WMS’ labor management capabilities. “WMS is a strong sector,” says Vernon. “And because it’s part of workforce management, the software is getting more attention for its ability to squeeze more productivity and efficiency out of the warehouse.”

As Hill pointed out, solid, automated warehouse management is also helping shippers tackle threats like Amazon’s next-day and two-day service while effectively dealing with the overall “changing nature” of distribution. “Distribution as a whole is getting more and more specialized, and that’s changing the way warehouses and DCs operate,” says Vernon. 

Within the wholesale grocery sector, for instance, suppliers are being pressured to ship smaller bundles of goods that are packed in sequences. This, in turn, allows the customer to turn around and drop the goods off at numerous destinations quickly and efficiently. “The shipments arrive already stacked and organized in a way that makes it easier for the customer to distribute the goods to its shelves,” says Vernon. “That’s one example of WMS at work.”

In terms of the integration of WCS and WES with WMS, Vernon says historically that the WMS received the orders while the WES and WCS handled more of the logistics behind the process. The lines across these three software sectors have blurred in the last few years as vendors have improved, enhanced, and expanded their offerings. Vernon points to Fortna and Forte as two of the companies that have made strides in this area.

“Both of these vendors have been working on this for a while and offer nice solution sets that can make the WCS do things that a WMS was really never meant to do,” says Vernon, who also sees JDA’s WMS as a good example of a flexible warehouse option. “That WMS is becoming so straight forward to configure that in a couple of weeks a shipper could add a configurative operational environment, with the WCS doing the ‘heavy lifting’ or optimization, if you will.”

There is no “silver bullet”
With no end in sight to the e-commerce explosion, and with more customers expecting personalized orders right down to the individual item level, warehouses and DCs will continue their push to automate and streamline their process and people.

“Any company that’s not already using automation should definitely be thinking about it,” says Vernon, who expects more adoption of basic equipment (robots and conveyors) plus the communication and orchestration tools needed to control that equipment to continue. “The breadth of what the WCS can handle will expand as more of these devices become standard in the warehouse.”

Hill, who expects the steady stream of questions around “what software do we need to run our warehouse?” to continue, says his best advice to shippers is to stop looking for a one-size-fits-all solution to their problems. “I run into a lot of people who are looking for the Holy Grail in all of this, but there isn’t one,” says Hill. “It takes some blood, sweat, and tears to really define your requirements and convey them to a prospective software vendor. There is no silver bullet.”