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How to Write the Business Case for a WMS Upgrade

Supply chain managers are responsible for creating the plans for a WMS upgrade and new WMS implementations. A new implementation refers to the implementation of a WMS for the first time within a company, whereas a WMS upgrade may involve the improvement of the WMS to handle new needs and capabilities. Although writing the business case for a WMS upgrade is similar to that of a new implementation, there are a few things supply chain managers need to consider making the business case the best it can be.

What’s Wrong with Your Existing WMS?

The problems of pre-existing WMS solutions are due to their age. While a WMS offered a tremendous competitive advantage 20-years-ago, the encroach of Amazon and e-commerce makes even older, and robust systems seem ineffectual. Legacy systems are incapable of handling the around-the-clock demand necessary to stay competitive, and the opportunity for errors increases. Transparency into warehouse layout and bin locations dramatically increase costs, and according to Chris Barnes, 55 percent of pickers’ time is spent traveling between bins. The cost of completing an order that is not in the prescribed location is four times higher than fulfilling an order that is where it is supposed to be.

How to Recognize When It’s Time for a WMS Upgrade

  • The rate of inbound logistics exceeds average sales.
  • Order errors are occurring with higher frequency.
  • Pickers spend more time traveling to find products that are not in the appropriate locations than fulfilling actual orders.
  • Freight spend increasing without explanation.
  • The existing WMS has severe lags in reporting capability and unexpected errors.
  • The rate of product returns is increasing.
  • Customers report continuing dissatisfaction with customer service representatives.
  • Bottlenecks occur throughout the warehouse.
  • Multiple bins are at 25 percent or less capacity.
  • Your WMS does not support re-slotting or re-optimization of your warehouse.
  • Problems staying in compliance with Amazon and third-party reseller standards.

Steps in Writing the WMS Upgrade Business Case

The steps to writing a WMS upgrade business case are highly similar to the WMS implementation business case, but it is important to note the essential savings and areas affected by the upgrade. The steps follow the Gartner 13 we laid out in our blog post about writing a business case for a new WMS implementation, but supply chain managers must go a step further to highlight how a WMS upgrade will correct the issues within the pre-existing system. Depending on the upgrades necessary and the age of your current system, this could turn into a new implementation.

Plan Your Upgrade by Writing a Winning Business Case Today

Supply chain managers faced with the challenge of writing a business case for a new WMS upgrade should review the steps necessary for building the business case for a new WMS implementation. Unlike a new implementation, an upgrade will typically cost less and may address short-term problems within the existing systems. Unfortunately, the risk of further upgrades in the future will remain. Therefore, managers may be forced to move the upgrade in the direction of a new system in its entirety. In fact, a WMS upgrade can quickly turn into a new WMS implementation if left unchecked. Our next blog will explore that possibility and how to prevent it from destroying your budget.

Veridian, a Manhattan Associates, HighJump, and JDA warehouse management system implementation company, can help you realize your supply chain success. Fill out the contact information below in order to schedule a consultation call with one of our supply chain professionals.