Working Out a WMS’s Total Cost of Ownership in Manufacturing: Materials, Peripherals & Integrations
Published on 29 June 2022
When it comes to calculating a new Warehouse Management System’s (WMS) Total Cost of Ownership (TCO), it can be quite difficult to identify all the required investments and expenses that go into it. Thanks to their vast experience configuring and implementing WMS at manufacturing companies, experts at Generix are in a great position to help stakeholders better assess their solution’s TCO.
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In a series of blogs, our experts break down the various costs associated to a WMS’s TCO and offer some advice to help manufacturers maximize their ROI. In this blog, we focus on the hardware and material needed to run the solution and consider the system’s integration with a company’s technological and physical infrastructure.
Hardware, Consumables & Peripherals
With the implementation of new technology comes the need to acquire the material and hardware to run it. With on-premises solutions, a manufacturer must acquire the servers, hardware, and peripherals necessary to run the WMS. On the other hand, because they are hosted on the cloud, SaaS solutions like the SOLOCHAIN WMS/MES generally require very little investment in hardware beyond the computers needed to access the internet.
Regardless of the deployment model they opt for, manufacturers will have to acquire – and budget for – the material to leverage all of their new WMS’s functionalities. This includes new computer screens, handheld scanning devices, batteries and charging docks, cables, sensors, etc.
For example: The SOLOCHAIN WMS/MES makes it possible to print and leverage barcodes to better manage and track inventory. A furniture manufacturer that wants to leverage the WMS’s inventory management capabilities must therefore include in its investment budget the acquisition of new printers and other peripherals. The manufacturer will also have to account for the ongoing costs of consumables, such as labels and toner cartridges.
Another example: SOLOCHAIN’s interface can be installed on mobile handheld devices to support employees on the warehouse floor. Companies that do not already own such devices will have to factor in the cost for their acquisition and for training their employees to use them. Meanwhile, companies where mobile devices were already in use will have to schedule (and budget) the necessary tests to ensure that they are compatible with the new system.
The Costs of Integrating Your Entire Software Architecture
A WMS’s performance heavily depends on the system’s successful integration with the company’s software architecture. Through proper integration with a company’s ERP, the SOLOCHAIN WMS/MES can greatly optimize back-office functionalities and thereby significantly improve margins. A company’s digital transformation roadmap and budget should therefore include careful considerations for the new WMS’s integration with their ERP, MRP, TMS and/or other systems.
In some instances, systems integration requires the purchase and implementation of gateway applications (API, EDI, etc.). Keep in mind that gateway solutions exist that are specifically adapted to the requirements of a given industry. LIDD Connect, for example, was designed to help food processing companies integrate their ERP with their WMS. Manufacturers stand to save a lot of their precious capital and maximize the impact of their WMS on their operation by enlisting the help of solution providers who are familiar with their industry and the systems already in place.
One last consideration on the subject of systems integration. A powerful WMS like SOLOCHAIN gives manufacturing companies access to a wealth of highly detailed and accurate inventory data. With the appropriate platform, a manufacturer can leverage that data efficiently to gain a serious competitive advantage and significantly improve their ROI. Those who can afford it, may do well to consider investing in the implementation and integration of an analytics platform that, once integrated with their WMS, will empower their software architecture with predictive AI capabilities.
A Physical Infrastructure Fit for New Warehousing Possibilities
With new technology come new warehousing possibilities. A WMS like SOLOCHAIN has the power to dramatically transform and improve activities across an entire facility – and even beyond! In fact, with the support of a WMS, receiving, replenishment, picking, staging, and shipping activities can be optimized to such an extent as to render existing material handling equipment obsolete.
To truly reap the benefits of a new WMS, companies must be on the lookout for the demands the system’s capabilities will make on their MHE and/or facility layout. It may be that the new WMS enables waveless picking and that the totes that were traditionally used by pickers will prove insufficient to the task. Or maybe the implementation of new replenishment and picking methods makes the old slotting strategy inefficient, calling for the design of new pick paths and/or a new facility layout.
In today’s distribution world, manufacturers in all industries must constantly strive to improve the integration of their physical and digital infrastructure. By working with an implementation team who has a deep expertise in the integration of the technological and physical infrastructure specific to their industry, manufacturers can better identify the investment opportunities to unlock new efficiencies and maximize the ROI generated by their new WMS.
One Last Piece of Budgeting Advice
A WMS has the potential to change the way your whole company operates. It is indeed one of the signal advantages of a WMS like SOLOCHAIN, that it connects everyone across your entire supply chain through a unique interface and a centralized master database. SOLOCHAIN integrates end-to-end workflows and enables real-time collaboration between all employees, from the back office to the warehouse floor.
Consequently, if you want to make sure you’ve thoroughly considered all requirements and budgeting aspects, make sure that you bring everybody into the fold as you prepare your budget: IT, Operations, Finance, Sales, and even HR.
Your IT team will know to warn you of integration concerns, ongoing maintenance costs, and hardware requirements. Meanwhile, your people in Operations will help identify your requirements and the features the new system must have to improve processes and optimize workflows. Your sales director might highlight the need for a new eCommerce platform to support the improved performance of that sales channel while your HR director warns of special accessibility requirements.
What functionalities and capabilities you select in the end will play an essential role in identifying the WMS best adapted to your needs. Those breadth of these functionalities will also be one of the most important drivers of the solution’s TCO. That is why you must make sure to involve all the stakeholders at your company.
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About Generix Group
Generix Group provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.