A modern WMS (warehouse management system) is the winning component of any scalable business strategy. Savvy supply chain leaders know they need to invest, but identifying the true ROI of WMS can be challenging in a market flooded with options.

According to our North American Peak Season report, 92% of supply chain leaders agree that WMS and OMS systems will make their warehouse operations more profitable. Of this group, 70% are implementing WMS or OMS solutions now.

These investments are top of mind for a good reason: When asked which areas of their business need the most improvement, nearly half of respondents (48%) named warehouse management a top concern.

If you’re working on a business case for a WMS to improve your fulfillment operations, then it’s critical to understand the full ROI picture.

To invest or not to invest: Is it really a question?

First, let’s talk about the 22% of retail leaders who realize the benefits of a WMS or OMS solution but don’t plan to make investments.

There could be many reasons why supply chain leaders see the need, but punt on the investment. The most likely culprit is how to develop a convincing cost-benefit analysis that will win over internal stakeholders.

Presenting the business case for warehouse management

Michael Johnson, our vice president of business consulting, helps supply chain management leaders understand technology implementation and how integrated OMS and WMS systems work. But he sometimes sees them struggle to present a business case comprehensively or accurately.

If you’re evaluating warehouse management software, it’s critical to understand both short- and long-term ROI.

Get Help with Your Business Case

Grab time with one of our supply chain experts to fully understand the long-term ROI of your WMS.

According to Johnson, it’s quite possible to recognize value in just a few months. Look for a solution that can be implemented quickly and without disrupting existing operations. “Not only will you have that fast ROI,” he said, “but you’ll be ready to grow and scale easily after that initial implementation.”

To build a strong ROI story, focus on integrated OMS and WMS systems that create a clear path to revenue. Make sure the solution:

  • Connects seamlessly to ERP, ecommerce platforms, and sales channels without friction or extensive time/effort
  • Deploys fast with simplified onboarding
  • Supports real-time inventory visibility across all channels
  • Increases order throughput and accuracy to above 99%
  • Scales quickly to support growth without heavy IT resources or custom projects
  • Makes elastic fulfillment capacity possible so you can adjust to unpredictable peak loads
  • Works not only for this peak season but for future peak seasons

“When done correctly, this integrated approach provides strong ROI for WMS in a timely fashion,” Johnson said. “Expectations for investment returns have shifted, and businesses want to recognize value in as few as two or three months.”

To avoid concerns about systems integration — a business area that 43% of supply chain leaders say needs the most improvement for peak season — be sure the WMS will work with the types of supply chain systems and automation technologies you’re currently using and considering. WMS integrations with other platforms should be fast, easy, and inexpensive. There shouldn’t be extensive consulting or custom coding every time you need to add something new.

Watch this example with 3PL company Drive Fulfillment. After implementing our 3PL WMS, they can now bring on a new client or onboard a new aspect of a client’s program, in single-digit days:

 

The partner is as important as the WMS

While WMS platform features and benefits are important, remember this: The partner behind the WMS matters just as much as the solution itself.

To maximize the ROI of WMS, choose the partner that you feel offers:

  • A comprehensive understanding of your operation and the challenges you need to overcome
  • The means to identify and eliminate implementation barriers to ensure speed to value
  • Functionality to shift the burden from your people to your processes, improving productivity, worker experience, and retention
  • Predictable, flexible growth plans that help you to scale your business

Get both fast ROI and long-term value

Warehouse management technologies create the foundation for inventory, operations, and other technology systems. Getting these types of solutions in place is the first step to deploying automation, which more than half of respondents (55%) say they’re also prioritizing this year.

To start on the right foot and see the ROI of your WMS quickly, Johnson suggests beginning with a small project. Seek success right out of the gate instead of trying to launch all new systems, technologies, and processes at once.

A WMS that works at your pace

“Crawl, walk, run” is his motto. Get started, give your team and processes time to acclimate,  and continue integrating your WMS into your workflow as it makes sense. Partner with a team who knows your business and will remain consistent. Most importantly, don’t get locked into software that can’t scale with you. The WMS solution should empower you to add new features and functionalities as you grow.

Where are you on your warehouse solutions journey? How do your preparations for peak season compare to what other retail leaders are doing?

Take our Peak Season Performance Quiz

Get some benchmarks and best practices for improving the performance of your supply chain this season and beyond. The assessment grades your company based on 3 ‘pillars of readiness’ that are crucial to long-term growth: preparation, agility, and efficiency.

Or, grab our Warehouse Manager’s Guide to a Nightmare-Free Peak Season for more strategies.