WMS cloud adoption requires understanding exactly what your business needs from its supply chain—and what it can gain.
Recently Forbes’ Steve Banker published an article about cloud solutions for small and medium-sized businesses’ (SMBs) supply chain (“SMBs Get a Better Total Cost of Ownership from Cloud Solutions,” March 16, 2016). His point of view was very interesting to me, and his article began by pointing out that supply chain IT can be deployed on premise without customization—essentially, any organization can adopt what we call commercial off-the-shelf (COTS) solutions—in theory. Banker admitted he’s never seen an on premise deployment without customization, but then discusses a growing interest in COTS solutions for the supply chain available for the public cloud. In his article, Banker says that with public cloud, enhancements are not necessary.
That is a very popular belief, and something that is used in sales cycles in order to close deals for enterprise execution systems. However, that view is incomplete and limits the capabilities and efficiencies that can be gained from these types of systems. The misconception often comes from a misunderstanding of “cloud.”
How to Define Cloud for Supply Chain
So what is “cloud?” Banker provides a definition by comparing the difference between public and private clouds. Public clouds, according to him, are software used by multiple customers; private clouds are ones in which each customer has their own version of the software. In the case of many Software-as-a-Service (SaaS) solutions, this definition works; businesses lease the same software that everyone else uses with the same capabilities. When capabilities are modified, the software is upgraded for everyone. So solutions like SalesForce, a very common SaaS solution, run this way, and your in-house IT team does not have to modify the underlying code to make the SaaS solution work for your unique business model.
SalesForce is a perfect example of what a true “cloud” is—a solution where you just buy seats on a bus. Banker argues that SMBs should adopt public clouds for transportation and warehouse management (TMS and WMS, respectively).
“Companies that want to gain a strategic advantage with their supply chain will find that targeted modifications based on the way you do business, and the way you want to do business in the future, can be highly effective.”
– Ryan Kirklewski, Vice President of Consulting Services
The word “Cloud” may be one of the most abused and misunderstood buzzwords of the day, especially when it relates to enterprise execution systems such as WMS. So let me say this now: Cloud is about deployment—it is nothing more than the physical location of the software, servers, storage, and networks used by your supply chain.
To adopt Banker’s version of the public cloud—a COTS one-size-fits-all solution—would require businesses to change their processes to fit the solution configurations, instead of customizing the software to fit the way their business is conducted. He even goes so far as to say that “customizations should be avoided at all costs.” And that’s where Banker and I part ways.
Supply Chain Efficiency or Strategic Supply Chain Advantage?
The Forbes article promotes a very common belief that all customization is bad, which is easy to say when you don’t understand the IT systems in question. I agree that many small businesses have major problems with supply chain inefficiencies, and that implementing just about any Tier 1 or Tier 2 WMS out of the box solution—what Banker would call a COTS solution—will allow such a business to reap great benefits. However, what that COTS style implementation does is get the company back to level: implementing a basic structure required for every segment of an effective supply chain.
Companies that want to gain a strategic advantage with their supply chain will find that targeted modifications based on the way you do business, and the way you want to do business in the future, can be highly effective. This is where a customizable, Tier 1 solution built for managing operational complexity, scalability, and high performance can provide the business a competitive advantage.
In supply chain, especially within the contract logistics (3PL) space, businesses are always trying to maximize their efficiencies—getting the product into the hands of the customer while trying to touch the product as little as possible as it flows through the supply chain. In 3PL this is especially critical and something we see with all of our growing 3PL customers. In order for a 3PL to grow their business (and their margins) they need to be able to offer their customers the ability to meet any custom requirement while not driving down their own efficiency. This may include anything from providing personalized packaging and messaging with each shipment, to specialized reporting, to custom integrations with a customer’s business systems.
Supply Chain Software Upgrades Aren’t All Painfully Expensive
Over the years, companies who have customized their legacy software make the decision to replace it because upgrades and modifications would cost more than new software with better functionality. At the end of their vendor selection process, they may choose a solution with less functionality as a way to avoid re-living their legacy experience. And I have seen this happen more often than not—so I agree with Mr. Banker here. We have been called many times to perform “do-overs,” or uninstall these legacy solutions in favor of better systems, but in those cases it is almost always because the modifications done to the software were implemented incorrectly by a vendor, third party, or client who didn’t understand the complexities and capabilities of the existing software.
As a software developer, I’ve built systems from scratch and done modifications. If you’re a developer, it’s easy for everything to look like a code problem, so it’s very easy to write modifications that are overly engineered, overly complex, or simply designed incorrectly. It’s not just enough to know how to create customizations; the trick is understanding how to design them as part of a broader solution.
“We are not trying to solve software problems, we are trying to solve supply chain problems. Code is just part of the solution, not the whole solution.”
– Ryan Kirklewski, Vice President of Consulting Services
We are not trying to solve software problems, we are trying to solve supply chain problems. Code is just part of the solution, not the whole solution. The solution is an efficient business process that leverages standard functionality to its fullest (and when it exists) and is designed with targeted modifications to extend that functionality while minimizing the effect to your upgrade path.
We are a reseller of Blue Yonder WMS and we understand the solution from the code out. Blue Yonder is an extraordinarily powerful and capable system. But it’s most differentiating factor from every competitor in the market, especially for small and medium-sized businesses, is that Blue Yonder (formerly JDA) provides a way to develop modifications that are true bolt-ons, minimizing the impact to future upgrades while still enabling the process that gives your business a strategic advantage.
It is true that any modification you build will add some complexity to your software upgrade (whether it is JDA or another vendor). You will need to review your own code to account for any data model changes and to ensure that custom functionality is either no longer needed, due to new features in the standard product, or will not conflict with new features. But any upgrade you do to any software would require a similar review. The bottom line is that there are things you do that make your business unique that separates you from your competitors, and that gives you a strategic advantage. Giving those up because you are afraid of future upgrades can be short-sighted, especially when solutions exist to allow you to have it both ways.