There are a number of factors involved in the decision to replace a warehouse-management system, instead of upgrading the present one. Fuerst says companies need to "think about whether the WMS is hindering or helping [efforts to] use the warehouse for strategic advantage." New processes, slotting enhancements and modern methods of picking and cartonization might not be supportable by legacy systems. Long response times in the use of technology such as radio-frequency equipment might be a sign that the current system is inadequate. "If workers are waiting," he says, "you're losing efficiency. It's costing you money."

Advances in technology are occurring at a faster pace than ever before, meaning that legacy systems go out of date more quickly. At the same time, companies must weigh the benefits and cost of acquiring new systems, especially in an uncertain economy.

Waiting too long to replace old systems can lead to unnecessary costs. As customers and partners place more demands on distribution operations, "they're not going to wait for you to hold off on investments in technology," says Fuerst. "Inefficiencies are probably costing you more money than you realize."

Companies can back themselves into a corner by running in-house systems that have been painstakingly customized over the years. They often find themselves relying too heavily on a handful of individuals with knowledge of the technology. An off-the-shelf system can simplify operations while making better use of state-of-the-art tools, reducing information-technology overhead.

In searching for a WMS vendor, companies should focus on those "with a proven track record," says Fuerst.  "You want a company that's going to grow along with you."

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Keywords: supply chain, supply chain management, WMS, warehouse management systems, inventory control, inventory management, warehouse management, supply chain systems