Supply Chain

Warehouse
Management Strategies

Jim Burleigh, CEO of SmartTurn, discusses a new option for today’s warehouses — SaaS (Software-as-a-Service) Warehouse Management System (WMS).

Question: What is SaaS, and why does it matter for today’s warehouse?

Burleigh: SaaS is the delivery of applications via the web as a utility or a service.

There’s no software installed locally.

The trend, in the last decade, has been to have more software delivered over the web as a utility instead of being installed on a local machine. It works the same way you would use Ebay as a storefront to sell things, instead of creating your own website to sell things.

More importantly, SaaS can mean a huge savings for a consumer (or warehouse) by reducing the total cost of the ownership 80 to 90 percent.

Question: How can SaaS save that much?

Burleigh: It eliminates all sorts of things. The warehouse no longer has to have an IT staff, a server on site, or other costs associated with upgrading software. If you have access to the web, you can use it. You simply log in.

More importantly, it’s not an expensive system. Warehouses who work off paper, Excel, or QuickBooks, or who have old vertical or old legacy systems, know that they should have a WMS system or a better system than what they have, but they think it’s going to cost them too much money. But it’s not a $50,000, nor a $100,000 problem to solve. It is a $500 a month solution.

Question: What advantages are there to using an SaaS system?

Burleigh: Using an SaaS system, warehouses can take advantage of tools provided by companies like Google and Yahoo. These tools are native on the web and blend into the traditional WMS. For example, on your computer you might have an icon about the weather, or a ticker symbol showing the status of your stocks. These are what are often called Google Gadgets. They are little utilities that give you a window into the world of the web. You can do that with your WMS as well.

Those little gadgets can give you a view into warehouse capacity, orders, expected shipments, etc. It’s a very simple “point and click” type of implementation to use these things.

A 3PL can use these gadgets to keep its customers informed. Not only is the customer happier because they get to see real time, continuous, information, but the 3PL now has a lower cost of doing the administrative work. In short, you cut costs and increase customer service at the same time.

Question: So a 3PL’s clients would track just like they would a FedEx or UPS shipment?

Burleigh: Yes. The gadget itself is just a fundamental tool supplied by, say, Google. The data stream is attached to the back of it. And the 3PL will determine what information the customer can see.

Question: Are warehouses pushing for this kind of technology?

Burleigh: Actually, it’s being driven from the true consumer perspective and then back to the consumer of logistics’ perspective.

As a consumer, you think nothing of using the web to visit Amazon.com, order something online, and then go to either Amazon or UPS and check the status of your order. That’s the pressure being put on the supply chain. More and more people are expecting the equivalent of UPS and FedEx tracking out of their logistics provider.
And that’s exactly what an SaaS system can provide.

Question: What kinds of information can a warehouse track?

Burleigh: Where the technology is out there, a core component is an inventory grid that allows you to look at one warehouse or across a whole supply chain with multiple facilities in it. With an inventory grid concept, data can be pulled from another WMS. Information can be pulled from a cross-dock facility, a marine terminal, a train depot — really anywhere.

Once the information is aggregated into this inventory grid, you can then use these tools, like Google Gadgets, to look at the info. It’s secure and you get instant, real-time access to this information any time or any place you want.
Question: How does the system work if you are making changes in your supply chain?
Burleigh: It’s very easy to change, because again, it’s all up in that one big server in the sky.

Say a supply chain overall manager wants to change from Vietnam to the Philippines — he simply stops the access for the first person, gives the access to the new person, and sets his privileges.

Question: What if someone in the supply chain isn’t part of a WMS?

Burleigh: If you go back to something like EBay or Amazon, anybody, anywhere can log on and use it.

If you want to track what’s coming in and out of what we call “dark spots,” typically those areas have labor costs low enough that they will do things manually for you. You just give them a system that you control, provide enough access for them to use it, and then they manually log in. Now you’ve got supply chain visibility over those “dark spots” in the supply chain.

Question: How long does it take to transition from traditional, in-house software to an SaaS system?

Burleigh: It normally takes two to four weeks to get up and running. But if a customer has everything ready to go, it can be done much faster.