August 30, 2024 Hang Up the Hammer: When to Upgrade Your Homegrown WMS

DIY WMS limitations? Upgrade for advanced integration, robust support, and scalability to maintain a competitive edge and foster growth.

For today’s distribution companies, having the right tools isn’t just an advantage; it’s a necessity. Think of your warehouse management system (WMS) as your trustiest tool—a simple hammer. In the beginning, it did exactly what was needed. However, as your projects grow in size and complexity, that trusty tool may no longer be the best fit for the job. The same is true for your business.

Initially, a custom-built WMS was a logical solution. As the business evolves and technology advances, the limitations of these do-it-yourself (DIY) systems become glaringly apparent. The once-sufficient in-house warehouse management solution becomes increasingly inefficient, lacks integration capabilities, and is unable to scale. At its core, the system begins to hinder productivity and competitiveness.

Recognizing when it’s time to transition from a simple hammer to a more sophisticated, versatile toolkit is easier said than done, but it’s necessary for sustaining growth and maintaining a competitive edge. Let’s begin by assessing your current situation and then look at three signs that it may be time to reevaluate your WMS strategy to ensure operations are positioned for future success.

First: Assess Your Current Situation

Historically, distribution companies opted for DIY warehouse management solutions due to perceived limitations in commercial systems, such as inflexibility or lack of customization. A proprietary WMS was believed to offer a competitive advantage by catering to a distributor’s unique needs, which helped justify the high costs in terms of time, money, and resources. This investment was also fueled by confidence that the in-house IT team could solve for what the market failed to offer.

However, these homegrown systems can lead to serious operational inefficiencies as the business grows. They often lack basic functionalities, overextend internal IT teams, and fall short when it comes to integrations with other business systems. This opens the door to errors, data discrepancies, and stagnating productivity, all of which highlight the limitations and inefficiencies of maintaining a custom WMS.

Unless a distributor has truly unique requirements that only a proprietary WMS can fulfill, investing in a DIY solution can be a waste of valuable resources. As such, it’s important to recognize the capabilities that a best-of-breed commercial WMS offers in terms of flexibility and configurability, without the drawbacks of homegrown systems. Distribution companies should carefully evaluate their current system’s readiness for future growth and be prepared to acknowledge when the transition to a more robust solution is necessary.

Sign #1: You’re Outgrowing Existing Capabilities

Several growth indicators suggest a company has outgrown its DIY system. For instance, watch for signs like a dip in customer service levels, declining productivity, inventory management struggles, or even the departure of key IT personnel who understood and managed the bespoke system.  These signs may point to the need for an upgrade. The challenges become even more pronounced as a business scales, signaling it’s time to shift to a commercial WMS that can grow with the business and more effectively meet changing demands.

At first, the homegrown approach might seem cost-effective. But just as a homeowner might only need a hammer for simple DIY projects, professional expertise is required for more complex tasks to ensure the work is up to code and built to last. In both cases, mistakes can lead to significant financial losses that are far greater than the cost of investing in a professional solution.

The upfront investment in a commercial WMS may cause sticker shock, but the long-term benefits far outweigh the initial cost. These alternatives offer cost savings in both maintenance and customization. Distributors should take note, acknowledge the limitations of a DIY WMS, and prepare to invest in a robust, integrated system that supports their growth trajectory.

Sign #2: You’re Encountering Technical Compatibility Issues

Another important consideration when moving away from a homegrown solution is the need for integration with existing software, such as Enterprise Resource Planning (ERP) systems. A top-tier WMS should offer seamless integration with other software and systems, like major ERP platforms, which helps increase efficiency and lower operational costs by streamlining many of the tasks regularly performed by employees.

Still, challenges that arise when connecting a new WMS with legacy systems are inevitable. Whether facing security issues, data integrity concerns, inadequate inventory management capabilities, or other gaps in functionality, a careful evaluation of WMS software is needed to preempt these risks and ensure smooth integration.

Future functionality should also be on your radar. Even if your current demands are modest, selecting a WMS with the option to include features like vendor-managed inventory, material handling integrations, and support for emerging technologies such as AI and robotics can save you from future headaches. Look for solutions that not only fit well with current systems but also offer the flexibility to expand capabilities to future-proof operations.

Sign #3: You Lack the Availability of Training and Support

One of the most critical, often overlooked aspects of adopting a new system is the quality of training and support. In DIY systems, training is typically handled internally. While this may seem like a cost-saving measure, it can result in inconsistent training quality and information gaps, especially when employee turnover occurs. This can lead to decreased productivity and increased error rates as new or untrained staff struggle to understand the system’s intricacies without adequate guidance.

On the other hand, commercial WMS providers specialize in creating user-friendly systems that are supported by comprehensive training programs. These programs ensure that all users can effectively use the software from day one. More importantly, these training programs are routinely updated to reflect the latest features and best practices, something that is much less feasible with a homegrown system where updates may occur irregularly and without corresponding updates in training materials.

High-quality, in-house vendor support extends beyond just simple troubleshooting. Top-rated WMS solutions typically come with a package of continuous support that includes access to a dedicated team of experts, ongoing training sessions, and regular updates. This type of support minimizes downtime and ensures the system evolves with changing business and industry standards. In-house solutions, on the other hand, often fall short due to limited support resources. This leads to longer downtimes and delays in resolving critical issues that negatively impact business operations.

Furthermore, WMS vendors frequently offer a range of support options, including webinars, in-person workshops, user events, and extensive online resources. This level of support ensures that help is available in various forms to suit different needs. By investing in a commercial WMS with these robust educational tools and support services, distributors are empowering their employees with the knowledge and skills needed to maximize the value of their warehouse management system.

The decision to transition from a DIY WMS involves several considerations. Companies must weigh the immediate and ongoing costs against the benefits of improved efficiency, customization, and scalability to meet today’s challenges head-on. By carefully considering these three signs, distributors can make informed decisions about their warehouse management strategies. Recognizing when it’s time to hang up the hammer and upgrade to a commercial WMS is an important first step.

About the Author:
Eric Allais is president and CEO of PathGuide Technologies Inc., a provider of warehouse management systems for distributors. He has over 30 years of experience in marketing, product management, and sector analysis in the automated data collection industry, including warehouse management practices in wholesale distribution.

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