WMS selection: your complete six step checklist

You’re ready for a new WMS and want to choose the right partner tomorrow.

We’ve all been there, and that’s why you’re getting this warning: slow down, take your time, and be careful not to rush into any hasty decisions.

Warehouse management system selection is a protracted process because that allows you to get the functionality you need from a vendor who fits your company and your goals. There are plenty of nightmare projects that moved from RFP to implementation in just a few months, and some of those companies are still paying to fix their WMS.

So, how do you safely put on the brakes and walk through the steps with enough time to get things right but fast enough to actually benefit from features while they’re still new?

You break it all down into manageable steps. That’s what this WMS checklist and requirements template guide is designed to help you do. We’ll look at everything, including:

  • asking the right questions to see if you need a new WMS
  • conducting a thorough requirements gathering exercise 
  • shortlisting potential WMS vendors
  • creating an RFP with those features
  • navigating software demos
  • finalizing your choice

Let’s get started with the process of knowing your needs and who should choose the key features of warehouse management systems to consider.

1. Identify if you need a new WMS

How is your warehouse running?

Take a few minutes and give yourself an honest answer to that question. Poke around and see if things are going smoothly in general; if you’re advancing and improving or standing still; and if you’ve had to teach your team tricks to get around missing or broken functionality in your existing WMS.

We often want to jump right into how much does a new WMS system cost, but the budget is secondary at this stage. If you have operational gaps, processes that aren’t tracked, or areas where you know you can improve, it might be time to look for a new WMS.

One WMS RFP template critique I often have is that they tend not to count the WMS as a team member and a piece of human capital. Everything your WMS can do is dependent on your workforce. So, I recommend starting with a review of what you can do and can’t do, then putting your WMS to the test by asking these questions about matching it to your workforce:

  1. Is your WMS software’s transaction flow intuitive for your staff?
  2. Are the screen GUIs closer to a video game, or a complex spreadsheet?  What would you staff say they prefer?
  3. Can you easily correct mistakes within the system?
  4. How long and how expensive is training new staff?
  5. Is there a natural hierarchy of transactions that fit with your existing organization?

If there is a disconnect between your answers to these questions and where you’d like your operations and workforce to be, it’s likely time to consider a new warehouse management system. So, let’s keep going on our WMS checklist.

2. Build your WMS requirements from internal reviews

Now that you know you need a new WMS, it’s time to start the warehouse management system requirements checklist! To do this, you must build a team of experts, leaders, and the people who will be working with the WMS each day.

This team will help you establish which are the most valuable features of your WMS and they’ll help you know what is required, an added bonus, and what they think you won’t need. It’s a clever idea to introduce the team to each other and do some basic team building work so that they can support each other in the development.

Beyond those exercises, it’s also a smart idea to provide some small incentives and a clear timeline for the WMS selection. That will help them feel like this is important to the company and won’t make it seem like an endless task that will each up time they need to do their regular job. As for incentives, start with free lunch and snacks, then increase rewards if the process is taking too long.

As for the actual team members you’ll want to tap, here are some thoughts:

  • Warehouse leaders and managers who will have thoughts on the processes being automated
  • Warehouse staff who will need to interact with the WMS UII regularly
  • IT staff who can talk about integration and requirements for the new system
  • Senior management who will want to see the business intelligence and analytics the system can offer
  • Customer service teams who may need to use the WMS for order verification, creating trouble tickets, and start the returns process
  • Accounts departments who can provide thoughts on accounts, asset management, budget, and other financial considerations.

This is the team you’ll want to help you identify what’s important to your operations and what features to select.

Which WMS features will I need?

Each WMS will provide a different mix of features and functionality. It can be hard to understand the differences sometimes. We’ve also run into companies who wanted a specific feature but were using different terminology, so some of the ask was lost in translation.

The big question for your team is if you have any industry-specific requirements; think hazardous material support, the need to keep goods at different temperatures, materials that are light-sensitive, or if local laws dictate special reporting requirements for your business. If so, you’ll want a vendor who knows your industry and can support those needs.

Should I go for cloud or on-premise WMS, and what's the difference?

One of the biggest questions facing new WMS users is whether to adopt a cloud or on-site service. Both are seeing significant innovation and customization, so the choice comes down to a few different areas of consideration.

  Cloud On-premise
Updates You are on the same release as all other customers, and the vendor can automate updates. Low burden for updates. Generally, you have access to new updates but will be responsible for initiating them and updating your system.
Customization Options tend to be more limited unless you create your own customization using vendor APIs Typically, more flexible and supportive of customization, but will require efforts to work with your infrastructure so may change as you update/change other systems
Hardware Designed to work on most devices so typically has lower barriers to use. Often customized to your specific hardware during launch. Can use your unique infrastructure but may not work on changed gear.
Price Often cheaper initially, may be more expensive over the longer term Higher upfront, but may have a lower per-user cost.
Support Usually, lower cost and more readily available Can be more expensive if extensive troubleshooting is required because customer service must know your equipment.
Maintenance costs Typically built into monthly charges so may feel hidden Often based on license cost at up to 25% of annual price

The pros and cons of cloud and on-premise WMS deployments across key comparison points

Use our free online comparison tool for a little help finding the right type of WMS for you and comparing both cloud and on-premise offerings

3. Start narrowing potential WMS vendors

If you want to lose a few days of your life, just Google “warehouse management systems” and write down every different name that pops up. You’ll have a list miles-long, and it won’t get you anywhere closer to finding the right fit.

It’s time to turn to the power of the Internet and the review services that already provide a comprehensive look at what’s on the market, from major players to new upstarts in your industry.

We provide our own vendor directory as both a whitepaper and an online comparison tool so you can filter options by keywords, business sectors, features, and more. Of course, we think ours is best, but what’s best for you is to use it in conjunction with other tools that allow you to sort by the features and requirements you established in the previous step.

Once you start to find companies and platforms with features you like, it’s time to look for natural ways to narrow the field. Here are a few of the biggest, and simplest, methods:

  • Review warehouse management system requirements and remove any that you don’t meet.
  • Check for integration experience especially with your mission-critical software, such as your ERP.
  • Ask your network about the vendors they’ve worked with; prioritize successes and get rid of horror stories.
  • Look at review sites and online communities to see how satisfied other customers are of different WMS. Focus on features and customer service, as WMS pricing is hard to move from one case to another.
  • Send out requests for information (RFI) to these companies. You can then compare results to uniform questions — though often this is most helpful for clearing out vendors who don’t respond and may similarly not respond if you needed trouble after implementation.

Initial narrowing should be broad and help you set the tone you want to take with vendors. You’ll also get a better idea of company culture by looking at RFI responses and listening to customers. Cull the list as you see fit and try to end with a group of vendors who have experience with your industry, warehouse size, and whose attitude fits with yours.

4. Build your WMS RFP and send it to potential vendors

Now it’s time to put that WMS requirements template to effective use. Your RFP should always be based on a specific warehouse management system checklist that comes from your team’s needs and your estimated budget.

Take a little time to create a hierarchy of needs so that you can separate out your must-have features from the ones you want. It’s up to you about whether you spell out which are absolute musts in the RFP itself.

How do I write an RFP?

There’s no magic formula or template or spreadsheet that you can follow to create the perfect RFP that will make your decision for you.

However, there are some things you can do to make your RFP easier to answer and ensure that it is comprehensive. You want your RFP to be direct and easy for vendors to fill out because it gives them a better chance of properly explaining their capabilities and answering questions in a way that you understand.

Section What to include
Project purpose Tell the vendor why you want a new WMS and tie it to fundamental practices of your business. This is where you show why a WMS is valuable to you and why you want to know more than just how much does a WMS cost.
Project timeline create a list of steps for a new WMS and provide a timeframe for each step. It’s okay to break down large sections into a series of smaller steps, but putting too many time constraints on those smaller steps may cause some vendors to treat your RFP with concern.
Requirements Cut your WMS needs into large areas and give each a separate section within the RFP. Discuss needed functionality within each area and provide some ranking for which are required and if any are reach functions. You can also specify if you want some functionality to work out of the box, where you need custom development, and what functionality you don’t need now but may grow into in the future.
(Suggested sections for requirements)

Here are just some of the areas you should specialize functionality within:

  • Receiving
  • Put-away
  • Yard and appointment setting
  • Asset management Inventory management
  • Quality control
  • Picking
  • Packing
  • Shipping
  • Performance management
  • Integrated WMS slotting
  • Alerts
  • Audits
  • Labor management
  • Physical infrastructure (gates, docks, trucks, RFID sensors)
  • Software in use (systems the WMS requires and can integrate with)
  • Hardware architecture and infrastructure
Other vendor qualifications Look outside the WMS and ask about what you want in a partner. This can include what their support looks like, the uptime of their cloud services, company culture requirements, how many engineers they have on staff, how often they release patches and updates, or how long your main point of contact has been in their position.
Proposal evaluation criteria Tell your vendors how you plan to review their responses and how you’ll apply a ranking to the different criteria you have. Two important things to note here are: the RFP response date should be a non-negotiable criterion, and you’ll want to make sure vendors see you as a potential partner instead of someone only concerned about WMS pricing. If you treat the WMS as a commodity, you’ll get lackluster responses.

A customizable outline for a WMS RFP template

 

One final tip: apart from creating a checklist of features for each section, ask some open-ended questions about the vendor’s business, experience, and system functionality. Give them a little space to tell you about what they offer.

You may see something that shows you forgot to ask about something that’s unique to your business. Or, you might be surprised and realize that there features in new WMS that you hadn’t thought of during the earlier process.

Create a simple method to judge responses

The best way to start judging your RFP responses is to start with a list of deal-breakers.

These tend to be required functionality or some infrastructure requirements that either your warehouse or the WMS don’t meet. If your WMS requirements included working across two or more warehouses, but a vendor can only support one, then remove them from consideration.

After you set aside companies that don’t meet mission-critical functionality, it’s time to rate everyone on the same scale. We recommend a 1:5 scoring system so you can easily see who is performing best in different areas as well as who is performing best overall.

The final selection is up to you, but we should provide a quick note that the highest scoring vendors aren’t always the ones that should make the final cut. You might have a vendor who is a leader in many categories but is too expensive or doesn’t provide the long-term support you need. Or, a vendor won’t support the software you use, so it would require either a shift to another new system or some in-house development for integration, which can add significant delays.

Create a list of three to five finalists and invite them to give you a demo of their product. Need a hand reaching that final set? Look at this guide for identifying standout WMS RFP responses.

5. Arrange demos from shortlisted WMS vendors

WMS vendors enter your World Cup at this point. They’re competing against each other, and you can only award victory to one. So, you’ll need to bring a scoring system to your WMS demos to keep things on track.

It’s a top method to seeing the platform in action for your daily activities as well as special functions like accepting a product return.

And remember, don’t use the demo to talk about pricing. Focus on what it can do for your business.

Vendor demo red-flags

There is one absolute must for a proper vendor WMS demo: they run an actual demo using a real PC and aren’t just showing you slides or a video. Pre-planned presentations give the presenter too much room to hide functionality challenges or limit the questions you can ask.

In our list of demo ground rules and questions you should ask during the process, we also note that you can request vendors use a clean set of your data for the test. It’ll help you get a real-world feel for the platform.

What questions should I ask WMS vendors at demos?

Bring your warehouse team and leads into the room and get them to watch the demo with you, giving people plenty of time to ask questions and observe functions. You want these to be free-flowing to see how the WMS may perform in your warehouse.

There are a few questions you’ll want to make sure get answered. Again, the final list will depend on your company, but here are some recommendations:

  • How is support offered and in what stages? Ask about implementation through go-live and on-going support.
  • What can we do with the data it creates? Can we export it? Create our own reports? What information is locked in the WMS?
  • Will it integrate with our [fill in the blank]? Look at databases, ERPs, infrastructure, and other platforms. Follow up with a question about who is in charge of making sure integrations stay supported when the WMS or other software changes.
  • Are there any required features that it lacks or that appear weak? Why?
  • What are the strengths of the platform? How did they gain this strength or area of expertise?

This is your chance to see how well you could use the platform in your operations, so don’t hold back and ask for proof when claims seem larger than life.

6. Make your selection and negotiate your contract

After all the demos are complete, return to your comparison chart and see if any items need to be adjusted. You might have seen promised features that weren’t realized or found that one system was incredibly intuitive, but the RFP didn’t make that case successfully.

Reach out to the final candidates with a list of requirements and your planned implementation schedule, asking for price estimates and a list of factors that could cause the price to rise. Blend this into your requirements to find the vendor that’s the best fit for your functionality needs, budget, and schedule.

Once you’ve selected the finalist, get with your legal team and find the right contract to create or use to establish what the WMS will provide, training and functionality, support, and more. Then, it’s up to you to close the deal.

Good luck!

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Geoff Whiting

About the author…

Geoff is an experienced journalist, writer, and business development consultant with a focus on enterprise technology, e-commerce, and supply chain development. Outside of the office he can be found toying with the latest in IoT, searching for classic radio broadcast recordings, and playing the perpetual tourist in his home of Washington D.C.

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Geoff Whiting

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