Are you wondering if your WMS is still meeting the needs of your business? Especially as you plan for growth or expansion in the coming years?
Perhaps you’re still using pen and paper, spreadsheets, or that old green-screen inventory management software that’s been around forever. Or maybe you’ve installed a WMS but that was years ago, and it just doesn’t do all the things you wish it would like inbound audits, picking in more efficient methods, or enforcing outbound shipping rules.
If you're thinking about implementing a new WMS—or upgrading, expanding or replacing an existing WMS, keep reading to learn if it's time to take action.
What is a Warehouse Management System?
But first, let’s review what a Warehouse Management System (WMS) really is. Think of a WMS as the control center for your warehouse. It's where you keep track of all your inventory locations and movements as well as how you enforce the rules and requirements to move that inventory around.
So yes, in some ways the WMS still functions much like that old inventory management system you’ve been holding on to. But it adds so much more to your logistics operations with functionality like:
- Receiving and putaway process enhancements and system-directed assistance
- Allocation and reservation of inventory for specific orders
- Task creation and management
- Pick path optimization
- Real-time communication to financial and Order Management Systems (OMS)
- Integrations to material handling systems and automation (WES and WCS)
And in most cases it will also enable your digital supply chain transformation journey by helping you move from paper-based processes to systemic user interfaces.
Needless to say, we've seen WMS technology add value for many types of companies, including those in retail and ecommerce, food and beverage, CPG, pharmaceuticals and life science, automotive and aerospace, manufacturing, and 3PLs just to name a few.
Option 1: Install a new WMS
So now the question is, do I need a WMS if I already have some process or system that seems to do what a WMS does already?
If you’re currently using paper-based processes or spreadsheets and noticing inefficiencies, increased costs, or difficulty tracking inventory, it might be the right time to implement your first WMS. These methods, while possibly still effective to some degree, are not capable of streamlining your operations and continue to lack the required traceability and accountability of warehouse transactions required today, and they certainly will lack real-time and precise inventory visibility.
The following are examples of when installing a WMS becomes necessary if not critical:
- Running out of space or control: Your warehouse feels chaotic—staff are struggling, workflows are inefficient, and available floor space is diminishing quickly. A Warehouse Management System (WMS) can provide the control and visibility needed to streamline operations, optimize space, and better manage your resources.
- Difficulty integrating with customers or suppliers: Customers and suppliers are increasingly demanding real-time updates and integration through platforms like electronic data interchange (EDI) or other third-party tools. If your system can’t easily connect with theirs, it’s time to move to a WMS that supports these essential integrations.
- Manual processes causing bottlenecks: Your operations have expanded beyond what manual processes can effectively handle, causing quality issues, frequent order inaccuracies, and operational bottlenecks. Transitioning to a WMS will automate and streamline your processes, significantly reducing these disruptions.
- Excessive manual exception handling: Managing exceptions has become a burdensome, costly task consuming a large portion of your staff's time and energy. A WMS can automate these exception processes using rule-based workflows, dramatically reducing labor costs and complexity.
- Limited analytics and decision support: You're unable to access critical operational insights or accurate forecasting information. Without clear analytics, it's hard to make informed, strategic decisions. Implementing a WMS can unlock powerful business intelligence and demand planning capabilities, empowering better-informed decisions.
Option 2: Upgrade an existing WMS
Already have a WMS? Great—but if you warehouse needs have evolved, your system should have evolved, too. Here are signs it’s time for an upgrade:
- Struggling with data scalability: Your current system struggles to manage growing volumes of transactions, expanding SKU counts, or database demands. An upgraded WMS can smoothly handle these increases, keeping your warehouse responsive and efficient as your business scales.
- Incompatible IT infrastructure: If upgrades to your servers, operating systems, or security protocols are creating compatibility issues, your existing WMS risks downtime and operational instability. A new WMS version aligned with your upgraded technology stack ensures continued reliability and performance.
- Rising costs for support and maintenance: If maintaining your existing WMS—whether through vendor or internal support—is becoming excessively costly or impractical, it's a sign the platform has reached its practical limits. A modern version can simplify maintenance and reduce ongoing expenses.
- Excessive customizations no longer needed: Many of your original customizations may now be standard features in newer WMS versions. Continuing with outdated customizations indicates inefficiencies. Upgrading streamlines your processes and reduces complexity by utilizing built-in functionalities.
- Need for advanced functionalities: Your growing operation demands advanced capabilities like task interleaving, sophisticated picking optimization, detailed kitting and bundling, international shipping compliance, or comprehensive value-added services. These features are essential for keeping your warehouse competitive and are likely standard in the latest WMS versions.
- Availability of new integrations and features: Technologies or integrations that were previously considered "out of scope" or unavailable at your original WMS launch are now within reach. An upgraded WMS offers seamless access to these innovations, providing crucial features that enhance your operations and competitive advantage.
Option 3: Rip and replace an existing WMS
Sometimes an upgrade isn’t enough. A new version may not cut it and you'd be better off with a different WMS in certain situations:
- Technology vendor uncertainty or obsolescence: If your current WMS vendor is phasing out your software platform, merging with another provider, or exiting the market altogether, you will be left exposed without reliable support. Replacing your system proactively ensures stable, continuous operation.
- Expanding into new channels and markets: Your business is branching out—selling through additional retail or wholesale channels, direct-to-consumer models, third-party logistics (3PL), or even global marketplaces. If your current WMS can't smoothly support these omnichannel demands, replacing it becomes essential.
- Missing integrations and broader business needs: You're now needing integrations and capabilities—like labor management (LMS), yard management (YMS), or transportation management (TMS)—that weren't part of your original setup. If your existing WMS can't accommodate these advanced functionalities through upgrades, replacement is the best path forward.
- Migrating to cloud or SaaS: Planned changes to your IT strategy or infrastructure or your business' cost structure require moving to cloud-based or software-as-a-service (SaaS) solutions. Your current legacy WMS might lack the flexibility or compatibility required, making a modern replacement necessary to align with your technology roadmap.
- Costly system upgrades: If upgrading your existing legacy system has become more expensive, complicated, or resource-intensive compared to implementing a new WMS, replacing it is often the more practical, economical, and future-proof choice.
- Poor user experience: Your team finds the current WMS difficult to use—it's not intuitive, overly complex, or inflexible which results in inefficiencies, frustration, and reliance on manual workarounds. Replacing your system with a user-friendly, intuitive solution improves productivity, morale, and operational efficiency.
Option 4: Expand the capabilities of a WMS that works
If you're generally satisfied with your WMS but your business is evolving, you should consider expanding your current system rather than replacing it.
A WMS with robust extensibility tools that allows new screens, custom API calls, integration flexibility, and other user and vendor-generated modifications and extensions is a good start. An expansion of your WMS may be ideal when:
- Adding new sales and distribution channels or products: As your business grows, you will inevitably introduce new products, services, or operational flows—maybe even entirely new sales and distribution channels. Each one may require adjustments in your WMS to ensure smooth and efficient operations, such as modifying processes or adding new SKU management capabilities.
- Change to facility layout or expanding physical space: Significant changes or expansions to your facility's layout—like adding a new storage area, rearranging picking zones, or integrating a new conveyor system—can impact existing processes dramatically. Your current WMS may need enhancements or new integrations to adapt to these physical and operational shifts.
- Expanding your warehouse network: When you add more warehouses or distribution sites, you face the challenge of maintaining consistency and connectivity across locations. Your WMS expansion might involve standardizing processes, workflows, and user interfaces, ensuring uniform support, sustainable practices, and efficient management across your entire network.
- Missing or lacking functionalities: Your operational complexity and transaction volumes have grown significantly, rendering older customizations or extensions insufficient. However, instead of completely replacing the WMS, many of these legacy features can often be enhanced, re-coded, or rebuilt, incorporating your current and future business needs without disrupting your existing system infrastructure.
- New Value-Added Services (VAS): Introducing additional services like kitting, labeling, packaging, or bundling requires enhanced WMS functionalities. Interestingly, your existing WMS might already have these capabilities built in—just "sleeping" or unutilized due to past business practices. Expanding your WMS involves activating and configuring these previously unused capabilities, quickly enabling your business to deliver these new services.
- Integrating advanced Material Handling Equipment (MHE): Adding sophisticated automation—such as conveyors, robots, automated guided vehicles (AGVs), or sorters—introduces new integration complexities. Your current WMS likely already has powerful integration capabilities to connect seamlessly with Warehouse Execution Systems (WES) or Warehouse Control Systems (WCS), ensuring the efficient incorporation of advanced automation into your existing operations.
Now that you know when to install, upgrade, replace, or expand your WMS can significantly impact operational efficiency, scalability, and profitability, you should start to regularly assess your warehouse needs against your WMS’s capability to ensure they align with your changing business requirements. This practice is essential for maintaining a competitive lead in today’s technology based and dynamic logistics landscape.
Are you ready to evaluate your warehouse management needs? The right system can transform your operations—so make sure you choose wisely. And be sure to reach out if Spinnaker SCA can help.