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Cloud-Based Warehouse Management: Is It Right For You?

Cloud-Based Warehouse Management: Is It Right For You?

Cloud computing technology has revolutionized many business models and media to deliver business value more efficiently. As networks increase their data throughput and the cost of processing power continues to decline, customers are finding they can reliably run applications from the cloud. Huge success stories from leading ERP companies like SalesForce.com and SAP have legitimized the delivery of cloud-based software solutions globally.

Warehouse Management Solutions (WMS) are no different than any other mission-critical software application that is critical to the survival and operational success of a business. Since cloud delivery now has a variety of architecture options (private, public, or hybrid), the architecture to support a stable and robust system now exists in most data centers.

From a WMS perspective, the “cloud” has now enabled Tier 1 and Tier 2 organizations to more effectively deploy sophisticated supply chain functionality globally without maintaining a repetitive and costly on-premises footprint. There may also be benefits for smaller, growing, geographically diverse Tier 3 organizations that want to implement a subscription-based, hosted cost model.

Implementation cost reduction

The most common advantage cited for any cloud-based deployment is that deployments are faster than a traditional on-premises deployment. Configuration and configuration aside (which must happen with any WMS), the solution provider provides the IT workforce and computing architecture in a hosted, continuously managed model, and thus provides faster return on investment.

Initial implementation costs can be deferred when items such as license costs are spread out over the term of a multi-year contract and become an operating expense rather than a capital expense. Additionally, a reduced cost of capital can offer cash flow benefits to an organization and reduce investment risk when implementing a warehouse management solution.

A focused skill set and dedicated monitoring

Backup and disaster recovery is also included in a fully managed hosted service, again eliminating the need for company IT resources to support a WMS server environment and local backup systems. Often, running a warehouse management system requires a special skill set (knowledge of a particular ERP interface, data tables, critical transactions, product SKU data changes, etc.), which must be maintained by the customer, which represents additional time or cost.

With cloud WMS, the customer can rely on the solution provider’s help desk, which has 24/7 dedicated software expertise and visibility. The provider can proactively monitor host environments, perform seamless backups and upgrades, scan databases, increase overall system reliability, and reduce cycle time for problem resolution.

A cloud-based offering will usually come with a service level agreement that outlines the terms and conditions of the secure offering with guaranteed performance and service level agreements. This acts as a guarantee for the organization and provides a degree of risk mitigation against exposures that companies have sometimes not implemented internally.

Easy access and exchange of information

Unlike spreadsheets or desktop applications, a cloud-based solution doesn’t tie the user to a desktop in the warehouse office. Web-based inventory management gives your staff anywhere, anytime access to real-time data, whether on the go with a mobile device or receiving alerts at other warehouse locations.

With cloud-based WMS, information sharing and B2B integration are also simplified. Cloud-based inventory control systems that have the ability to “federate” modules with downstream providers enable consignment inventory management, direct-to-store parts ordering, or pre-printing of ASNs and other code labels of bars before shipment to main distribution gold shop rentals.

Access to product releases and updates

Cloud-based solutions also offer the benefit of regular software updates and routine maintenance, available 24/7. Larger version upgrades and new modules can be fully tested in emulated production environments, with much better access to variable test environments that can use different processors, operating systems, storage, and transport fabric. All of these activities can be managed in a way that does not disrupt daily business services.

With access to best-of-breed integration tools, a cloud-based implementation is well suited to providing a standard integration architecture and support for EDI mapping and two-way communications between multiple partners. In addition, small organizations can take advantage of economies of scale when it comes to database-related license costs, especially when moving from rapid releases to larger databases that support ever-increasing data demands.

Other traditional costs can also be avoided. Costs like managing firewalls and providing a VPN architecture for system access (and installing VPN clients on laptops) are now handled with updated web tools that provide secure single sign-on functionality.

not always fit

Cloud-based solutions are not suitable for all organizations, although the reasons against taking advantage of economies of scale and subscription-based pricing are becoming less tenable, as evidenced by the increased adoption of cloud-based WMS. in the cloud year after year.

For example, if an organization has a strong IT department and long-standing experience with the WMS and hosts other in-house applications, the costs of an additional system may already be spread out and not perceived as an area of ​​concern.

In other cases, internal and service provider networks are not yet up to the task of providing the kind of dedicated bandwidth that RF scanners and voice systems need to provide the fraction-of-second response that the mobile worker. Most Wi-Fi solutions, when installed correctly using a professional site survey as a guide, offer more than extensive coverage and bandwidth in the warehouse. More important is the Internet bandwidth and quality of service available to the user. Latency, jitter, and interruptions can slow data requests from RF devices and affect worker productivity. The data pipeline that supports RF scanning in the warehouse must be dedicated and monitored to prevent dropouts and slow responses.

meet the criteria

With the above in mind, here are some key points to consider when thinking about a “cloud-based” WMS:

  • Do you need anytime, anywhere access to your inventory positions?

  • Are you a fast-growing organization that will spread over a wide geographic area?

  • Is your business seasonal or going through periods of low or low usage where you could benefit from a flexible monthly pricing model?

  • Do you have limited IT capabilities as an organization and would prefer not to invest in additional computing resources to support your warehouse management environment?

  • Do you anticipate that your storage needs may be temporary in some cases, requiring migration from one logical store or physical location to another?

  • Is your business sensitive to cash flow and prefer financing in the form of operating expenses?

  • Do you have a diverse set of user groups that need to view the same set of inventory data across multiple locations?

  • Do you need to see dashboard-type metrics and KPIs on other form factors, such as smartphones and tablets?

  • Do you need vendor- or customer-managed (consignment) inventory or a return materials (RMA) process at the distribution or retail level?

  • Are you running an operation that can function just fine without RF scanners and wireless infrastructure, ie. on paper?

  • Do you have other vendors or suppliers that can use your WMS to prepare purchase orders, print carton labels, and create ASNs to increase supply chain visibility and standardization?

  • Do you have data security requirements that go beyond what you can afford or offer locally on premise? (The data centers offer strict security standards that meet government criteria)?

  • Is it important that your technology provider is responsible for 100% of updates, maintenance and 24/7 support?

  • Do you have varied or ongoing training requirements for warehouse staff that can be streamlined through web-based delivery to multiple locations? (Certification, safety and quality assurance requirements can be integrated into warehouse management processes to comply with safety and security policies)?

If you answered “yes” to any of the questions above, you may be a good candidate for a cloud-based warehouse management system and should start working on a business case that compares the costs of on-premises equipment, licenses initial costs and IT Resources to the distributed monthly costs of a cloud-based WMS solution.

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