Today's Economy Requires New Supply Chain Thinking: WMS 2.0

Feb. 3, 2009
The financial benefits of WMS 2.0 are clear: improved relationships with customers and partners can save a typical warehouse thousands of dollars per month.

The tipping point has arrived for the warehouse with WMS 2.0.

What is WMS 2.0? Most of us are familiar with Warehouse Management Systems (WMS) as enterprise software that is as expensive, complex and cumbersome to implement as it is to use. Today's supply chain, however, requires a new approach where businesses aren't beholden to the traditional software companies. For many, the supply chain is not only challenging to manage because of external complexities, but is also a drain on resources due to inefficient processes. So why work with enterprise software and make it even more challenging when there is another option?

We've reached a tipping point at which technology vendors need to address the need for an agile and dynamic solution to the age old problem of inventory visibility and collaboration. WMS 2.0 is collaboration that can only be established through a software-as-a-service (SaaS) model. A true, multi-tenant SaaS architecture provides the infrastructure and power for collaboration leveraging the Internet and its ubiquitous nature to manage across a supply chain network. The financial benefits of WMS 2.0 are clear: improved relationships with customers and partners can save a typical warehouse thousands of dollars per month.

Without a WMS, inventory visibility, and supply chain visibility remains spotty with many "dark spot" warehouses throughout the supply chain. WMS 2.0 provides businesses an option that was previously out of reach: access to a world-class system with real-time inventory visibility and collaboration.

Facebook for the Supply Chain

While mostly used for personal activities, the concepts behind Facebook are applicable to the supply chain. Within WMS 2.0, users can join partner networks organized by fields (e.g. city, region, and business/industry sector) to connect and interact with others within that network. Companies can add additional partners and customers send messages, and update their profiles notifying them of new offerings and services. Information such as detailed profile, inventory data, shipping information, and delivery dates is easily restricted to specific customers or partners so little risk exists for unauthorized access or security breaches. These permissions can easily be set with the check of a box over a secure Internet browser.

Another catalyst for change is the behaviors associated with the Web experience when it comes to real-time and transactional inventory information. If customers do not get what they want, when they want it, at a reasonable price, your organization is at risk. The Web experience demands real-time product availability, delivery status, and now, a lower "carbon footprint" as products move along the value chain.

Simplicity with WMS 2.0

Software vendors have found new ways to gather and present information, tasks that were previously complex or required IT resources are easier to set up.

  • Web-based Administration
    A "connected WMS" has to provide role-based, custom permissions to view, create or edit data. Inventory visibility across a global supply chain usually costs tens of thousands of dollars to create, with each user paying for additional licenses to access their snapshot of information. A non-IT person can set up/modify custom system access to business owners, warehouse teams, trading or logistics partners, or customers through a browser, Google Gadget, or directly into another application they are familiar with (e.g. SAP, Oracle or QuickBooks). Cost and complexity are kept to a minimum since users are able to selectively share information through a visual or Web interface with customers and trading partners.
  • Collaboration Tools
    Beyond providing custom access to all users, many supply chains require proactive reporting on performance metrics (shipments, backorders, inventory status, ATP, priority customers, etc.). Decision makers need aggregated information to support their planning and decision-making process. In most cases, users may not need to manage warehouse operations and only seek metrics for the "perfect order" or customer status. Information is customized and delivered on a permission basis through the simplest form on the Web. Users can view a number of Google Inventory Gadgets on their desktop, iPhone or web-device, in real-time, automatically, and without fuss. A warehouse owner can check on warehouse capacity, shipments, customer status anywhere, anytime.
  • Global Visibility
    Most supply chains involve more than one warehouse to consolidate, store or ship goods to market or business customers.The biggest hurdle to innovation in supply chain is the inability to connect partners, inventory hubs, or simply internal inventory locations. It becomes even more painful to make a change should you decide to change your supply chain (e.g. move a DC, employ a 3PL, change your supplier or reseller channel or inventory location).

A collaborative relationship must be based on trust and WMS 2.0 is about leveraging the trust with customers and partners to plan and execute in a changing economy, drive competitive advantage and reward success. The bottom line is to integrate systems and provide supporting collaborative forecasting and replenishment processes with the goal of increasing sales and operational efficiency.

Richard Yim is Vice President of Products at SmartTurn and leads the company's supply chain innovation group. SmartTurn provides on-demand warehouse management systems

Interested in information related to this topic? Subscribe to our Information Technology eNewsletter.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!