Supply & Demand Chain Executive - January 2010 - (Page 16)
feature story Warehouse Management WMS Update Where is the warehouse management systems market headed in 2010? By Andrew K. Reese Carl Brewer Jim Burleigh T he storyline of the Great Recession has been one of cutting inventories throughout the supply chain. The most recent “Manufacturing and Trade Inventories and Sales” report from the U.S. Department of Commerce showed that manufacturers reduced their inventories by more than 11 percent between November 2008 and the same month in 2009. On the retail side, the seasonally adjusted figure for inventories to sales across all retail trade fell to 1.37, according to Commerce’s latest report, down from 1.63 at the end of 2008 and the lowest reading for that metric since December 1994. The drawdown in inventory, of course, has not alleviated companies of the need to better manage the goods moving through their supply chains. In fact, the inventory challenge for 2010 and beyond will be finding the right balance of inventory to meet uncertain demand, says Jim Burleigh, CEO of San Francisco-based SmartTurn, a provider of on-demand inventory and warehouse management solutions. The problem that many companies will face moving forward, Burleigh adds, is the lack of any visibility or data to make the right decisions. Burleigh argues that those companies that have robust warehouse management systems in place will also have access the data they need to determine what they have in the supply chain, where to distribute it and, most importantly, how much to distribute. “For those who do not have an effective strategy for managing their supply chains,” he adds, “they will continue to make kneejerk decisions that will result in inefficiencies, lost sales and, more importantly, declining market share.” Visibility Is King Carl Brewer agrees that companies must ensure that their warehouse management system (WMS) is providing the proper level of accurate visibility into their inventory. Moreover, that visibility must be as close to real time as possible, says Brewer, who is president of software solutions at Downers Grove, Ill.-based Upp Technology, which offers a variety of inventory and resource management solutions, including a WMS. “You can’t afford to make bad decisions based on old data anymore,” he says. The push to pull more real-time inventory data out of the warehouse reflects the changing nature of the supply chain, which is shifting toward becoming much more integrated both from a process and a technology standpoint. “What I used to tell people a few years ago,” says Brewer, “was that what supply chain did for my business was force us to kick down the walls of the warehouse to provide upstream and downstream visibility. Back then, that was a strategy, but now it’s a live-and-die proposition.” Third-party logistics providers, for example, can now expose an order management system to their clients, or even their clients’ clients, allowing customers to interact directly with their inventory in a 3PL environment rather than going through a staged process. If, in the past, the dynamic was to create demand, then do the processing and prioritization against supply to then push and fulfill, today the idea is to shorten that bridge or do away with it altogether, so that fulfillment is guaranteed because everyone is looking at the same numbers for inventory. Companies also are looking to their WMS solution providers to offer new and innovative ways to make use of the data coming out of the systems. “It’s all about accessibility and expression of data,” Brewer says. Business executives want solutions that provide actionable information quickly without the need to bring in an IT specialist to set up a query. “Users don’t want to talk to the business analyst anymore; they want to be the analyst. And they don’t want to have to go to the data, they want the data to come to them,” Brewer says. Where WMS Is Hot Of course, as the economy went into a tailspin in 2008 and moving into 2009, many companies pulled back on their investments in WMS and inventory management solutions. Analyst firm January 2010 | www.SDCExec.com 16
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