Executive Briefings

Warehouse Management: Adapt Your Strategy for the 2010 WMS Market

Analyst Insight: It is a challenging time to develop a business case for a warehouse management system (WMS). While the tight operational controls required in the current business climate can be provided by a WMS, the capital necessary to fund these initiatives has never been more difficult to acquire. How can progress be made toward tighter operational controls considering the current situation of limited funding?

The current economic realities require new strategies to approach warehouse management or any other supply chain management software initiatives.

One strategy to better position supply chain management initiatives for the limited investment opportunities is to develop a "self funding" business case that frees up working capital, resulting from quick-hit improvement opportunities.

For example, inventory assessments are a great way to quickly identify opportunities to selectively reduce inventory, while simultaneously maintaining or improving service levels. By leveraging the savings from these initiatives, funding will become available to invest in necessary supply chain management software. The supply chain management software can then be used to extend the initial savings opportunities by providing the visibility and process control needed to establish the optimal balance between transactional costs and inventory turns.

With higher visibility and better inventory processes in place, companies will be able to determine the best economic order quantities - which will provide the highest customer service levels - that make the most cost-effective use of the distribution assets. Down the road, the investment in supply chain management technology can be leveraged to scale operational efficiencies when significant customer growth returns.

So, an inventory assessment is one strategy that can free up capital and help establish a solid business case for investing in supply chain management software initiatives.

The Outlook

In 2010, a large number of competing efficiency initiatives will be fighting for the same limited pool of investment dollars. Make the most of these challenging times and identify specific strategies that can maximize the value of investment in supply chain management technology. Develop a strategy to free up working capital now; then leverage that investment in supply chain management to be prepared to cost effectively scale your operations when order growth returns.

The current economic realities require new strategies to approach warehouse management or any other supply chain management software initiatives.

One strategy to better position supply chain management initiatives for the limited investment opportunities is to develop a "self funding" business case that frees up working capital, resulting from quick-hit improvement opportunities.

For example, inventory assessments are a great way to quickly identify opportunities to selectively reduce inventory, while simultaneously maintaining or improving service levels. By leveraging the savings from these initiatives, funding will become available to invest in necessary supply chain management software. The supply chain management software can then be used to extend the initial savings opportunities by providing the visibility and process control needed to establish the optimal balance between transactional costs and inventory turns.

With higher visibility and better inventory processes in place, companies will be able to determine the best economic order quantities - which will provide the highest customer service levels - that make the most cost-effective use of the distribution assets. Down the road, the investment in supply chain management technology can be leveraged to scale operational efficiencies when significant customer growth returns.

So, an inventory assessment is one strategy that can free up capital and help establish a solid business case for investing in supply chain management software initiatives.

The Outlook

In 2010, a large number of competing efficiency initiatives will be fighting for the same limited pool of investment dollars. Make the most of these challenging times and identify specific strategies that can maximize the value of investment in supply chain management technology. Develop a strategy to free up working capital now; then leverage that investment in supply chain management to be prepared to cost effectively scale your operations when order growth returns.