ROI on day one

MHD talks to Samuel Dawson, Business Development Manager at Microlistics, about how incremental roadmaps for WMS implementation show the path to the future.

On its face, the notion of an “incremental roadmap” for implementation of a WMS system doesn’t sound like a radical proposition, but – as Samuel Dawson, Business Development Manager at Microlistics explains – it actually is. 

This is because both the design and architecture of traditional WMS systems are geared towards large organisations, and the providers often have large service consultants at their disposal to implement a new WMS all at once, he notes. 

“The traditional business model for a WMS company works off two streams of revenue: provision of the software itself, plus service consulting,” Samuel says. “There is a built-in incentive, given how many service staff many WMS providers have, to keep them out there and consulting and not sitting on the bench. The goal for such companies, therefore, is to prefer selling bigger projects. Instead, they opt to do long wholesale implementations, with complete implementation and strategy worked out in advance. This means that the buyer won’t see actual results until six to 12 months after the project begins. This isn’t to say that the outcome is necessarily the wrong one for those buying such software and services – but it isn’t agile enough for businesses that have immediate problems in need of immediate resolution.”

Samuel Dawson, Business Development Manager for Microlistics.

The limitations of this long-term approach came into sharp relief with the onset of the COVID-19 pandemic. This crisis shook up how distribution and logistical operations worked – most notably with a rapid shift to e-commerce and the attendant need for smaller, more individualised order fulfillment instead of larger shipments of the same items to retail stores. But is also imposed geographical limitations on the ability of consultants to move around and engage with businesses on the ground.

Furthermore, Samuel says, in a climate of economic and business uncertainty, many organisations no longer had the resources to spend big on a major WMS implementation absent a tangible near-time return-on-investment (ROI). 

“The issue that arose with traditional WMS architecture is that everything needed to be done before anything could be done,” he says. “Warehouses can’t be split into pieces any more than you could split a rubber band into pieces and expect it to work effectively.” 

So, how does Microlistics – and its latest WMS update, released late last year – address these hurdles? 

“Our approach allows companies to build from lower-level essential functions to higher- and higher-levels of complexity as and when necessary,” Samuel says. “Our WMS solutions are still split into industry specific verticals – for instance 3PL and retail, among others – but in terms of addressing immediate needs, our Microlistics Express can be deployed in as few as 30 days. It comes pre-configured with best practice workflows designed to maximise the accuracy and efficiency of warehouse operations. But the real beauty of it is that it is still the same platform as that for 3PL, retail, and the other verticals, meaning it can serve as the springboard for future growth and extended functionality as warehouse management needs grow in complexity.” 

What this has meant in practice during the pandemic is that major retailers and convenience stores have been able to quickly transition to online service and fulfilment with Microlistics Express, and then branch out into more specific and complex functions without having to start the whole process over again. 

“With Microlistics, companies can start with the low-hanging fruit, and then strategically pick the add-on functionalities as they need them,” Samuel says. “This is what we mean when we speak of an ‘incremental roadmap’. You don’t have to chart out your entire journey ahead of time in a top-down manner. Rather, you can implement the basics, assess the performance, demonstrate your ROI within your organisation, and then build up to the next stage.”

In other words, it’s a move from conceptualising WMS implementation in vertical terms to thinking of it in horizontal terms. The basics of WMS that cut cross all potential customer requirements – 3PL, retail, cold storage, et cetera – can be dealt with and then more specialised functionalities are built on top of that groundwork. Whereas with the legacy approach to WMS implementations traditionally everything has been done in one large six- to twelve-month stroke.

One significant benefit to such an approach is it significantly lowers barriers to entry for smaller businesses that wish to implement WMS but lack the spending power to undertake a long-term implementation that doesn’t quickly realise an ROI.

But even for larger organisations, the incremental approach means that it’s easier to make the internal case for WMS expenditures because the initial cost is comparatively modest, the implementation is swift, and the benefits considerably more immediate. It also avoids concerns that unnecessarily complex and sophisticated solutions are being sold to an organisation that doesn’t need them.

“I think some bigger businesses were anticipating that the pandemic conditions would be a flash-in-the-pan, and that they could wait till it’s over before resuming their traditional large-scale WMS implementations,” Samuel notes. “However, my impression is that there’s a growing realisation that the post-COVID normal will not be the same as the pre-COVID normal. Either way, shifting to an incremental approach is a sound way of reducing risk.” 

A further benefit of the incremental approach is that it’s able to engage workers at a lower level. The pandemic has certainly induced organisations to value and pay more attention to their supply chain business units, but even within those supply chain units the incremental process allows Microlistics consultants to work more directly with those workers affected by the implementation.  

“A multi-phased approach such as we offer customers imposes more discipline, insofar as it focuses attention on what is actually needed by those warehouse workers who are facing a problem right now,” Samuel says. “We’ve found that you get more buy-in, more emotional investment, and more useful information from the workers on the ground. This grass-roots approach empowers workers by involving them more in decision-making and roadmap development, and a better end-result. Rather than a feeling of corporate higher-ups making a decision and having the results trickle down to the base, the operators on the ground – who are after all the people that keep an organisation running smoothly – now have a voice.” 

For more information on Microlistics, click here. 

The post ROI on day one appeared first on MHD.

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