Commentary: Challenging the warehouse management system implementation paradigm
Warehouse management systems have come a long way from the 1980s and 1990s. So why are so many companies still asking for customizations? Here's the case for no modifications in WMS implementations.
The warehouse management system (WMS) market in the United States is fairly mature, with many companies on their second, third, or fourth system. The software has come a long way from the custom-written systems developed in the 1980s and '90s that often took well over a year to get up and running, were prone to bugs, and caused integration nightmares. Much sleep was lost by information technology (IT) and operations staff when a go-live was imminent, worried that the cutover might cause bottlenecks in their shipments or, even worse, shut down their distribution center entirely.
It only makes sense that these complex, robust systems would evolve over time. Many of the "best of breed" providers now offer WMS software that, while still able to handle complex operations, are easier to use and often are web-based and mobile-friendly. Features that were once custom-developed to meet the need of a specific client or industry are now part of the standard software and accessible to all users as part of the base system. Even so, many companies have not recognized these changes and instead are still trying to implement WMS in the same way that they have for years.
Implementations—the old-fashioned way
Historically, the complex nature of WMS software meant that a lot of technical expertise was needed just to implement the software successfully—let alone make any customizations that might be necessary to fit a company's functional requirements. Implementations were often long, expensive, and painful. They would be measured in years rather than in months. Furthermore, the systems were not user-friendly, consisting of green screens and basic commands that were not intuitive. As a result, the software required extensive training that was often tedious and time-consuming. Finally, to meet the individual needs of a distribution operation, the software was usually heavily modified and custom-coded.
Even at that time, it was recognized that customization wasn't always a good idea. The software was typically customized to meet the existing processes, but the processes it was automating were not always the most efficient way to do things. Companies expected software to be a magic wand that would instantly make them more productive, efficient, and profitable. But in hindsight, managers often realized they should have fine-tuned their processes to align with best practices first before they customized the software. Furthermore, highly modified WMS software required even more training and led to even longer implementation timeframes.
Still, having a WMS was a far cry from handling operations with paper. Once a system was configured and working properly, it provided a great deal of information to aid in decision making, helped end users increase efficiency and productivity, and reduced costs.
New approach to implementation: no modification
WMS software and implementation processes have come a long way in the past couple of decades. Warehouse management systems now include best practice processes for most industries and functional requirements. In fact, they've gotten so good that if your process requires a modification, you really need to spend the time to dig deep and ask yourself if your way is truly better and necessary, or if you would benefit from changing your process. Software is also written differently and is more configurable, which means features can be turned on or off within the system based on a company's industry and requirements.
Still, many companies today continue to choose to write modifications to the software rather than change their processes to match the software's built-in best practices approach. Perhaps this is because of a "this is the way we've always done it" mentality or because the company hasn't taken the time to research the benefits of changing processes to match best practices. And sometimes consulting companies even encourage modifications because it means more billable work for them. However, many problems arise when you modify the code of software, including higher total cost of ownership, longer implementation timeframes, integration integrity issues, increased fees for support and maintenance, and limited ability to upgrade and adopt new features as new versions of the software are released.
While implementing a WMS with no modifications would have been out of the question 10 years ago, it is a very real option for most companies today. In fact, it should be the expectation and starting point, rather than assuming from the beginning that there must be system modifications. For example, most of our clients who are upgrading to a new WMS are now choosing to reduce their modifications by 80 to 100 percent and have seen many benefits to this no-modification approach. The upgrades on average cost only25 percent of their original implementation, and they are saving an average of 30 percent on maintenance costs.
Additionally, a no-modification WMS implementation can be up and running in three to nine months, versus one-year and longer for more modified systems. To understand why, let's look at a simple modification that might take five to 10 days of development and unit testing, plus another week or two of acceptance testing and rework. This modification would also require time and resources to update documentation, training materials, and standard operating procedures. And if that piece of functionality needs to share information with other systems, such as an enterprise resource planning (ERP), transportation management system (TMS), or labor management solution, then you need to modify the integration with those systems, potentially impacting the integrity of those systems. Additionally, any modifications can have an impact on the existing adjacent code within the WMS. All this adds up quickly to significant cost, time, and integrity issues, and this example is based on only one straight-forward modification. And the increased costs continue—most WMS vendors charge an extra 15 percent of the cost of the modification annually for maintenance costs.
Getting started
If you are interested in implementing a WMS with the goal of no modifications, start by an analyzing your current operations and processes with a partner who has distribution expertise and deep knowledge of the WMS features, functions, and capabilities. Together you will explore each functional need you have alongside the WMS standard functionality and discuss how the software and processes meet and how processes might be tweaked to match the WMS best practices. For some companies, modifying WMS software may make sense but only if the costs associated with modification are less than the long-term cost savings for such modification.
Based on our experience, we believe that for the vast majority of companies, the no-modification approach advocated here is most beneficial. It is easier to install, can be up and running faster, costs less, and provides a smoother upgrade path so you can more easily take advantage of new features as they are released. No modifications also mean that you are raising the standard of your operational processes to be in line with best practices; the ones that the software is based on at the start. This alone will provide efficiencies for your operations that may not have been previously realized.
Business software vendor Cleo has acquired DataTrans Solutions, a cloud-based procurement automation and EDI solutions provider, saying the move enhances Cleo’s supply chain orchestration with new procurement automation capabilities.
According to Chicago-based Cleo, the acquisition comes as companies increasingly look to digitalize their procurement processes, instead of relying on inefficient and expensive manual approaches.
By buying Texas-based DataTrans, Cleo said it will gain an expanded ability to help businesses streamline procurement, optimize working capital, and strengthen supplier relationships. Specifically, by integrating DTS’s procurement automation capabilities, Cleo will be able to provide businesses with solutions including: a supplier EDI & testing portal; web EDI & PDF digitization; and supplier scorecarding & performance tracking.
“Cleo’s vision is to deliver true supply chain orchestration by bridging the gap between planning and execution,” Cleo President and CEO Mahesh Rajasekharan said in a release. “With DTS’s technology embedded into CIC, we’re empowering procurement teams to reduce costs, improve efficiency, and minimize supply chain risks—all through automation.”
And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.
One of the biggest targets for innovation spending will artificial intelligence, as supply chain leaders look to use AI to automate time-consuming tasks. The survey showed that 41% are making AI a key part of their innovation strategy, with a third already leveraging it for data visibility, 29% for quality control, and 26% for labor optimization.
Still, lingering concerns around how to effectively and securely implement AI are leading some companies to sidestep the technology altogether. More than a third – 35% – said they’re largely prevented from using AI because of company policy, leaving an opportunity to streamline operations on the table.
“Avoiding AI entirely is no longer an option. Implementing it strategically can give supply chain-focused companies a serious competitive advantage,” Kristi Montgomery, Vice President, Innovation, Research & Development at Kenco, said in a release. “Now’s the time for organizations to explore and experiment with the tech, especially for automating data-heavy operations such as demand planning, shipping, and receiving to optimize your operations and unlock true efficiency.”
Among the survey’s other top findings:
there was essentially three-way tie for which physical automation tools professionals are looking to adopt in the coming year: robotics (43%), sensors and automatic identification (40%), and 3D printing (40%).
professionals tend to select a proven developer for providing supply chain innovation, but many also pick start-ups. Forty-five percent said they work with a mix of new and established developers, compared to 39% who work with established technologies only.
there’s room to grow in partnering with 3PLs for innovation: only 13% said their 3PL identified a need for innovation, and just 8% partnered with a 3PL to bring a technology to life.
Even as a last-minute deal today appeared to delay the tariff on Mexico, that deal is set to last only one month, and tariffs on the other two countries are still set to go into effect at midnight tonight.
Once new U.S. tariffs go into effect, those other countries are widely expected to respond with retaliatory tariffs of their own on U.S. exports, that would reduce demand for U.S. and manufacturing goods. In the context of that unpredictable business landscape, many U.S. business groups have been pressuring the White House to pull back from the new policy.
Here is a sampling of the reaction to the tariff plan by the U.S. business community:
American Association of Port Authorities (AAPA)
“Tariffs are taxes,” AAPA President and CEO Cary Davis said in a release. “Though the port industry supports President Trump’s efforts to combat the flow of illicit drugs, tariffs will slow down our supply chains, tax American businesses, and increase costs for hard-working citizens. Instead, we call on the Administration and Congress to thoughtfully pursue alternatives to achieving these policy goals and exempt items critical to national security from tariffs, including port equipment.”
Retail Industry Leaders Association (RILA)
“We understand the president is working toward an agreement. The leaders of all four nations should come together and work to reach a deal before Feb. 4 because enacting broad-based tariffs will be disruptive to the U.S. economy,” Michael Hanson, RILA’s Senior Executive Vice President of Public Affairs, said in a release. “The American people are counting on President Trump to grow the U.S. economy and lower inflation, and broad-based tariffs will put that at risk.”
National Association of Manufacturers (NAM)
“Manufacturers understand the need to deal with any sort of crisis that involves illicit drugs crossing our border, and we hope the three countries can come together quickly to confront this challenge,” NAM President and CEO Jay Timmons said in a release. “However, with essential tax reforms left on the cutting room floor by the last Congress and the Biden administration, manufacturers are already facing mounting cost pressures. A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses—employing millions of American workers—will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk.”
American Apparel & Footwear Association (AAFA)
“Widespread tariff actions on Mexico, Canada, and China announced this evening will inject massive costs into our inflation-weary economy while exposing us to a damaging tit-for-tat tariff war that will harm key export markets that U.S. farmers and manufacturers need,” Steve Lamar, AAFA’s president and CEO, said in a release. “We should be forging deeper collaboration with our free trade agreement partners, not taking actions that call into question the very foundation of that partnership."
Healthcare Distribution Alliance (HDA)
“We are concerned that placing tariffs on generic drug products produced outside the U.S. will put additional pressure on an industry that is already experiencing financial distress. Distributors and generic manufacturers and cannot absorb the rising costs of broad tariffs. It is worth noting that distributors operate on low profit margins — 0.3 percent. As a result, the U.S. will likely see new and worsened shortages of important medications and the costs will be passed down to payers and patients, including those in the Medicare and Medicaid programs,” the group said in a statement.
National Retail Federation (NRF)
“We support the Trump administration’s goal of strengthening trade relationships and creating fair and favorable terms for America,” NRF Executive Vice President of Government Relations David French said in a release. “But imposing steep tariffs on three of our closest trading partners is a serious step. We strongly encourage all parties to continue negotiating to find solutions that will strengthen trade relationships and avoid shifting the costs of shared policy failures onto the backs of American families, workers and small businesses.”
In a statement, DCA airport officials said they would open the facility again today for flights after planes were grounded for more than 12 hours. “Reagan National airport will resume flight operations at 11:00am. All airport roads and terminals are open. Some flights have been delayed or cancelled, so passengers are encouraged to check with their airline for specific flight information,” the facility said in a social media post.
An investigation into the cause of the crash is now underway, being led by the National Transportation Safety Board (NTSB) and assisted by the Federal Aviation Administration (FAA). Neither agency had released additional information yet today.
First responders say nearly 70 people may have died in the crash, including all 60 passengers and four crew on the American Airlines flight and three soldiers in the military helicopter after both aircraft appeared to explode upon impact and fall into the Potomac River.
Editor's note:This article was revised on February 3.
GE Vernova today said it plans to invest nearly $600 million in its U.S. factories and facilities over the next two years to support its energy businesses, which make equipment for generating electricity through gas power, grid, nuclear, and onshore wind.
The company was created just nine months ago as a spin-off from its parent corporation, General Electric, with a mission to meet surging global electricity demands. That move created a company with some 18,000 workers across 50 states in the U.S., with 18 U.S. manufacturing facilities and its global headquarters located in Massachusetts. GE Vernova’s technology helps produce approximately 25% of the world’s energy and is currently deployed in more than 140 countries.
The new investments – expected to create approximately 1,500 new U.S. jobs – will help drive U.S. energy affordability, national security, and competitiveness, and enable the American manufacturing footprint needed to support expanding global exports, the company said. They follow more than $167 million in funding in 2024 across a range of GE Vernova sites, helping create more than 1,120 jobs. And following a forecast that worldwide energy needs are on pace to double, GE Vernova is also planning a $9 billion cumulative global capex and R&D investment plan through 2028.
The new investments include:
almost $300 million in support of its Gas Power business and build-out of capacity to make heavy duty gas turbines, for facilities in Greenville, SC, Schenectady, NY, Parsippany, NJ, and Bangor, ME.
nearly $20 million to expand capacity at its Grid Solutions facilities in Charleroi, PA, which manufactures switchgear, and Clearwater, FL, which produces capacitors and instrument transformers.
more than $50 million to enhance safety, quality and productivity at its Wilmington, NC-based GE Hitachi nuclear business and to launch its next generation nuclear fuel design.
nearly $100 million in its manufacturing facilities at U.S. onshore wind factories in Pensacola, FL, Schenectady, NY and Grand Forks, ND, and its remanufacturing facilities in Amarillo, TX.
more than $10 million in its Pittsburgh, PA facility to expand capabilities across its Electrification segment, adding U.S. manufacturing capacity to support the U.S. grid, and demand for solar and energy storage
almost $100 million for its energy innovation research hub, the Advanced Research Center in Niskayuna, NY, to strengthen the center’s electrification and carbon efforts, enable continued recruitment of top-tier talent, and push forward innovative technologies, including $15 million for Generative Artificial Intelligence (AI) work.
“These investments represent our serious commitment and responsibility as the leading energy manufacturer in the United States to help meet America’s and the world’s accelerating energy demand,” Scott Strazik, CEO of GE Vernova, said in a release. “These strategic investments and the jobs they create aim to both help our customers meet the doubling of demand and accelerate American innovation and technology development to boost the country’s energy security and global competitiveness.”