Warehouse Management System Development: Custom vs Off-the-Shelf

Alexander Ivanov

Alexander Ivanov

Head of Logistics and Supply Chain Technologies

Jul 19, 2022
Lesedauer: 9 Min.
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Warehouse management software is experiencing impressive growth. As Data Bridge reports, in 2021, the global size of the warehouse management system market was as big as $2.8 billion. Around 2029, it is projected to reach $9.97 billion, with a 17.2% CAGR. This upward trend is fueled by the overall digitization process in general and enormous demand for eCommerce in particular. In this piece, we will try to explore the market and answer an important question: whether you need a custom developed or off-the-shelf warehouse management system to succeed in this market. And what are the warehouse management system features you need to obtain?

WMS Development: Custom vs Off-the-Shelf (img 1)

What is warehouse management software?

To begin with, let’s define what warehouse management system development is all about? A warehouse management system can be understood as an app to assist you with ‘supervising and administering the day-to-day processes in a warehouse’ and ‘ensuring it is running’ in a cost-effective and transparent fashion.

As such, this software is supposed to create and support an interactive link between your warehouse and employees, while providing for real-time visibility of the entire workflow. Its tasks may include:

  • Inventory tracking and barcodes;
  • Delivery monitoring and shipping control;
  • Packing, picking, and receiving;
  • Slotting;
  • Returns;
  • Audits and cycle counting;
  • Data management.

Thus, whatever your business is, be it an SME or multinational enterprise, you definitely need a WMS of one sort or another for greater speed and productivity.

What are the key types of warehouse management systems (WMS)?

Basically, most experts agree that there are four types of warehouse management systems in existence.

Simple standalone WMS systems

These have limited functionalities and don’t require sophisticated integrations or total connectedness. As such, they are mainly used by small-sized enterprises for inventory management and other main warehouse activities.

Cloud warehouse management systems

This type of software is delivered within a SaaS framework, providing you with fast and convenient access to a predefined set of features, for a fee, including analytics and Business Intelligence capabilities.

WMS with ERP

By adding an enterprise resource planning module, this advanced approach integrates your warehouse management with more advanced functionalities, e.g. HR and talent management, customer relations management, accounting, marketing and sales operations, etc.

WMS with supply chain modules

This covers not only warehousing, transportation, and distribution, but also integrates these dimensions with production. Consequently, it tracks material acquisition, replenishment of your inventory, manufacturing cycles, partnership management, etc.

Best ready-made WMS software

Ready-made software, aka off-the-shelf software, can be defined as software products that have been envisioned, designed, and built for the mass market. As such, it represents a ‘one-size-fits-all’ approach, aimed at satisfying the needs of a ‘typical’ company. Let’s examine what the best ready-made warehouse management software is and what the best representatives of this class are.

As of now, the estimates published by SelectHub can be viewed as a reliable starting point.

Oracle Warehouse Management

Oracle WMS makes it possible for organizations of various sizes to benefit from cloud capabilities. Among other things, it allows end-users to arrange, structure, and optimize their warehouse capacities, enhance effectiveness, and cut inventory spending.

Pluses:

  • As a cloud-based solution, it offers connectedness, automated updates, and fewer errors;
  • Accuracy ensured by Oracle as a trusted and top-ranked vendor;
  • Advanced reporting capabilities.

Minuses:

  • As of now, it is incompatible with the Mac OS X operating system;
  • Normally, it takes Oracle prolonged periods of time to release new versions with sought-after features;
  • Integration procedures might be complex and time-consuming when it comes to Oracle.

Dynamics 365 SCM

Dynamics 365 is positioned as a cloud warehouse management software suite with ERP components. Being fueled by Microsoft Cloud, it offers a range of value-adding capabilities, encompassing such dimensions as informative insights in real-time as well as IoT and AI-based projections.

Pluses

  • Industry experts and observers state that their cost optimization management is more than impressive;
  • With it at their disposal, end-users are in the right position to prevent costly and unnecessary downtime;
  • The dashboards one can build and fine-tune with Dynamics 365 SCM assist effectively.

Minuses

  • While being an advanced warehouse management tool, Dynamics 365 SCM is a relatively challenging solution to thoroughly master;
  • Several functionalities seem to be overly sophisticated;
  • Finally, it might take you a considerable amount of time to load the information stored.

Logiwa

Logiwa is positioned as a cloud-fueled warehouse management tool capable of automating and processing inventory management and order handling. While being focused on SMEs as its target audience, it still features enterprise-grade capabilities and numerous potential integrations.

Pluses

  • Easy integrations are a key advantage. With Logiwa at their disposal, customers can link their platforms with multiple accounting platforms, eCommerce presences, online marketplaces, etc.;
  • Greater visibility ensured via customizable reports covering all aspects of warehouse management, including shipping and returns, fulfillment statuses, inventory updates, etc.;
  • Cloud-fueled functionalities, enabling end-users to benefit from protected data storage and safe mobile access to data.

Minuses

  • When compared to other advanced WMS solutions, Logiwa is not universally intuitive and easy-to-use in terms of UI/UX;
  • Some reviewers highlight Logiwa’s ‘tricky’ terminology, configurations, and overall logic;
  • Reviewers have criticisized their support service.

Warehouse management system custom development: pros and cons

Obviously, the key advantage of a custom warehouse management solution is the fact that it is envisioned, designed, built, and supported on the basis of your unique requirements and situation. However, ordering such a custom software suite has both pros and cons.

Cons

Spending

Any advanced solution requires substantial investments. The more unique features you want to be envisioned and delivered, the more money you will have to spend. It is simply inevitable.

Time

This point is a continuation of the previous one. While an off-the-shelf WMS software product is available instantly and can be deployed quickly, building an advanced custom software tool takes time.

Involvement of your in-house team

By definition, custom software products address as many of your needs as possible. To fully grasp those needs and take all your preferences into consideration, some of your in-house representatives need to be involved in the project discovery, development, deployment, and testing processes.

Pros

Fine-tuned solution with better ROIs

At the same time, you will obtain an end-to-end tool capable of handling each and every challenge you are facing. As a result, you will be in the right position to accomplish every day-to-day task and save more resources in the long run.

Lower security risks

Ready-made software products are, essentially, a black box. You never know the quality of the code and how many safeguards there are in place. When it comes to custom software, you can implement as many security mechanisms as needed.

High-quality support

Not every vendor of off-the-shelf software products is ready to offer high-quality support combining individual approaches, dedicated managers, and adequate speed. With custom-built WMS solutions your support is likely to be more effective.

Compatibility

If you run a successful enterprise, you are likely to be using a variety of heterogeneous software products, to manage logistics, staffing, compliance, etc. Hence, when you opt for an off-the-shelf tool, there is not guarantee it will be fully compatible with the rest of your tools. Custom developers will ensure 100% compatibility.

Key features for a custom WMS solution

A truly modern WMS offers you the following list of features, even though extra integrations are always possible with custom solutions. Thus, this list is not an all-encompassing one.

  • Procurement and purchase order generation as an integral part of inventory management. This feature makes it possible for you to access and analyze the data provided by your suppliers and place orders for the items you need whenever you need them.
  • Receiving and putaway, i.e. a capability to scan the goods you have purchased and place them in the most optimal locations of your warehouse.
  • Storing and stock control, i.e. your ability to monitor every item you store and keep track of the amount of the items you manage, in total and across individual locations.
  • Sales order generation capability to manage your sales and deals from any connected location and authorized device, with all invoices and other documents automatically generated.
  • Picking and packing. In this respect, a reliable WMS makes it possible for you to find, pick, pack, and ship ordered items in the quickest and most cost-effective fashion.
  • An entire range of staff management aspects should be covered by your WMS, such as scheduling, employee reporting, and safety control. Namely, your WMS should allow you to assign people, track their efficiency, evaluate their performance, build labor cost estimates, and abide to applicable labor regulations.
  • Accounting capabilities, such as creation of customizable metrics, graphs, charts, and projections, report and e-doc generation, balance sheets, etc.

How to choose a WMS development vendor?

Finally, let’s examine how to choose a WMS developer if you opt for a custom solution. In fact, there is nothing new here. We can exemplify these simple criteria with Andersen:

  • What is the overall ranking of the company? In Andersen’s case, it is 4.9 on Clutch.
  • Does the company employ sufficient staff with relevant industry experience? In Andersen’s case, we have 250+ IT experts whose expertise covers supply chains, logistics, and warehouse management.
  • Finally, can the company show its portfolio of similar projects? Again, in Andersen’s case, 150+ software initiatives have been successfully accomplished.

Among other things, this range of success stories includes:

  • This WMS with advanced features for a large wholesaler that enables the customer to run a sophisticated supply chain processing enormous quantities of various items. To handle this challenge, the resulting solution makes it possible to automatically update stock availability statuses, assess and dive into performance data, generate barcoded labels, group orders by different filters, etc.
WMS Development: Custom vs Off-the-Shelf (img 2) WMS Development: Custom vs Off-the-Shelf (img 3)

Conclusion

With all the aforementioned trends and cited facts, it is safe to assume that a custom WMS solution is an optimal choice for your business if you are involved in complex warehousing processes. We at Andersen would be delighted to share our expertise with you and help you build such a tool. Contact us to launch your warehouse software initiative!

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Alexander Ivanov, Head of Logistics and Supply Chain Technologies
Alexander Ivanov

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