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How to Justify WMS Modifications in Your Distribution Network

Aug 21, 2018

Every well-run distribution operation requires Warehouse Management System (WMS) modifications at some point to stay competitive in the face of changing industry and customer requirements. For example, you may want to implement slotting, undertake re-warehousing activities, add item attribute tracking, adjust picking and put-away rules—the list goes on. Whether you carry out these changes using your internal team, an external consultant, or your software vendor, you need to know how to take proposed modifications from concept to reality. Mishandling this process can lead to confusion, poor morale, and inefficiency if you’re unable to push the changes through.

A Double-Edged Sword
Justifying system changes can be a daunting task. Engineering and system modifications are often regarded as an expense with no return on investment. In this age of analytics and KPIs, distribution system managers are faced with the challenge of determining which changes have value and should be implemented, and which will turn into headaches or fizzle down the line. But it can be difficult to determine which are which. Sometimes recommendations may actually cause more damage than expected. This is because managers may only consider the needs of their own department without realizing the (possibly negative) impact changes could have in other areas. On the flip side, you also don’t want to delay modifications that will enable your operations or team morale to improve.

Below are tips on how to approach the modification process to reduce roadblocks and focus on supporting key business goals.

1. Establish a strong IT-operations partnership that keeps everyone on the same page 
To make an implementation or change process seamless, it’s essential to have relationships and partnerships in place before the project even begins. It makes communication easier and improves the turnaround time to get things done. Normally, the operations team is part of the business approval phase to help test the product and ensure it aligns with business goals before a modification is released. If operations and IT aren’t aligned, you risk running behind on implementation dates to get everyone up to speed. There are various ways to create internal partnerships such as consistently walking the warehouse floor to talk to managers, setting up recurring meetings to discuss open issues and concerns, and having a running task list to show progress.

2. Develop goals and a structured change process
As a team it’s beneficial to set departmental goals so you know how potential modifications can support them. These goals help you stay focused on the result and how to prioritize your full list of projects, including proposed system changes. Make sure your objectives align with your company’s overall targets. Remember that departmental goals should not be purely cost and performance related. Include employee-centered initiatives such as enhancements that impact wellbeing and safety—and potentially turnover. System modifications are often made to simplify associates’ work processes or protect them from hazards.

The next step is creating a process. The process should span how change requests are submitted and approved, as well as how they are prioritized. Identify the people who should be involved at every step across all relevant departments. When there is a transparent, clearly defined process in place, you’ll discover managers are more willing to cooperate. If managers are aware of upcoming changes ahead of formal requests for signoff, they’re more likely to be on board, particularly when they see how changes clearly support company goals. Your ability to establish a fluid process reduces the pressure on your employees to scramble to implement changes at the last minute in a drawn-out process fraught with delays and disagreements.

3. Justify the cost with data
Cost is always a factor when it comes to system changes, and it’s often the reason many aren’t implemented. You may hear things like “there’s no budget for that,” or “the expense isn’t justified.” One good way of leveraging the partnerships discussed in point one is utilizing the team to complete simple time studies. In larger companies this is often done in kaizen events with Lean Six Sigma personnel. If you know the average throughput per hour for the process in question, you can also complete time studies of the new changes in a test environment to determine the difference in throughput. By using simple averages and multiplying the difference in hours with the average wage rate, the savings throughout the year can be worthwhile. 

4. Don’t overlook intangible benefits and compliance requirements
Sometimes modifications don’t yield much in terms of savings, but they do provide intangible benefits. Examples include modifications that improve employee morale, enhance company culture, or improve facility safety. There are also times when changes are needed to comply with government, security, or customer requirements. List all the benefits of making the change and make sure the team understands the rationale behind the update. There is likely a cost associated with non-compliance, such as the loss of a key customer or government fine.

5. Close the loop
Once modifications have been developed in the sandbox and tested in the QA environment, it’s vital to get all the right people involved for final testing signoff and rollout. Affected teams must understand the changes, create training documentation, and communicate the changes. Managers normally assign their best employees to test changes before they sign off. This helps address any issues before they are released into the production environment. When the floor associates who know the WMS best aren’t involved in testing, you’re missing an important fail-safe to catch potential issues.

Learn more about the importance of keeping your development, testing, and production environments aligned in this related blog post.

Your Partner for WMS Modifications
4SIGHT works with busy operations and IT teams every day to identify, justify, and implement the system changes that make their companies best-in-class distribution organizations. Let us know how we can support you in your system modification efforts going forward.

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