Understanding Warehouse Management Systems in the Cloud
Lessons Learned from Many Successful WMS Cloud Deployments
Guest Blog from Dan Gilmore, Chief Marketing Officer, Softeon, MHI Member Company
Even as, in general, supply chain software saw an aggressive transition to Cloud deployment in recent years, Warehouse Management Systems (WMS) were a bit late to the Cloud party. There were several reasons for the slow pace of adoption of Cloud WMS, including:
• Concerns about internet downtimes that would prevent companies from being able to ship products until service was restored.
• Concerns about performance for sub-systems such as wireless terminals (RF), Voice, material handling systems integration, and other processes requiring sub-second response times.
• The fact that many of the largest WMS companies were slow to embrace Cloud deployment models.
While the uptime and response concerns are understandable, in practice the performance in the Cloud has been excellent, including many successful deployments of WMS in complex, large scale distribution center operations. In fact, 100% of new Softeon WMS deployments are in the Cloud.
The Advantages of Cloud Deployment
Interest in Cloud WMS is high because it offers many advantages, as summarized below:
• Lower Cost Implementations: The more controlled environment simply allows software vendors to set-up new customers at lower cost than traditional deployments.
• Rapid Time-to-Value: The lower implementation costs come in large part from the significantly reduced time it takes technically to set up a new solution/customer. This has the advantage of not only more consistently meeting tight implementation schedules, but also accelerating time-to-value (meaning when positive payback from the WMS in terms of productivity gains is achieved). Time-to-value is an increasingly important consideration in supply chain software investments.
• Lower Upfront Costs: In addition to lower deployment costs, Cloud solutions are in general priced with a subscription model, rather than an (often large) upfront software license fee that is the norm in traditional deployments. This will also often speed up the payback period, eliminate or reduce the need to get a large capital investment approved, and support a more variable cost supply chain model.
• Much Lower Internal IT Costs Over Time: Requirements for in-house administration/maintenance of the software fall dramatically with Cloud deployments (reduced by as much as 90%) because the software vendor can offer managed services to its customers.
• Portability: As facilities open and close, issues with “moving” supply chain software to a new site, such as a different distribution center, go away with Cloud deployments versus traditionally deployed software.
Across dozens of Cloud WMS implementations from medium to large scale operating environments, Softeon has developed a number of lessons learned.
For example, we see three dimensions to consider in WMS initiative that might result in adoption of a Cloud solution:
• Deployment Model: Will the software be deployed in the Cloud, or installed inside the four walls of the enterprise (on-premise)?
• Pricing Model: Will the software be under a traditional license (with an upfront cost and additional annual support fees), or through some type of subscription or transaction-based pricing?
• Management Model: Will the acquiring company manage the WMS once it is deployed, or will the software vendor do this work, under what is generally called “managed services?
Potential WMS adopters during their evaluation process should understand these options and be aware of which ones each WMS vendor will offer and support.
Another lesson learned is that concerns about response times for RF, materials handling, etc. are very overblown, at least with a system architected to maximize Cloud performance, and we have seen almost no issues. That said, simulation prior to go-live is recommended to achieve performance certainty.
The ability to run the WMS in a “high availability” Cloud environment has also dramatically reduced concerns about down times, which are often less than on-premise deployments. To learn more about this topic, you can download Softeon’s white paper Understanding WMS in the Cloud 2023.
