By Alex Mills, Sales & Marketing Director, Chess Logistics Technology.
Most businesses selling items in a shop or online need some form of stock control. When it is a single outlet and the range of products on offer and number of customers buying them is small it is entirely possible to manage this process with little more than a good memory and some simple paper-based processes. But it soon becomes much more complex when the business is growing. The challenge facing these businesses is knowing when to invest in more advanced computerised stock control or warehouse management (WMS) solutions.
Established retailers recognised the benefits of computerised stock management systems many years ago. Over the past three decades these systems have evolved into sophisticated solutions that interface with other internal processes – such as ordering, deliveries and invoicing – and increasingly with systems operated by external business partners. The key benefits of reduced manual intervention, increased data accuracy, seamless data exchange and ability to share and analyse information have remained.
These systems have by-and-large remained the preserve of the larger businesses simply because the entry-level investment has always been beyond the means of the smaller and independent businesses. One reason for this is that end users want solutions matched to their unique business requirement. With even the most fully featured "standard" system this will mean some bespoke configuration which takes time and money even before any ongoing support, maintenance and upgrade costs are taken into account. Any systems available to smaller businesses tend to have limited functionality and are usually non-scaleable.
The landscape changed with the emergence of business-to-consumer e-commerce. For the first time, small businesses could reach a global audience and this disruptive model had consequences across the board. Smaller retailers are now expected to deliver the same levels of service as their established competitors. Customers do not care who supplies them as long as the product they want is available, at the right price and delivered on time. This is true whether businesses are selling through their own e-commerce solutions, specialist portals or general retail sites such as eBay and Amazon.
Much of this, however, relies on real time management of stock - physical and virtual - to enable the visibility and interoperability with other business processes including e-commerce. While many smaller businesses can outperform their larger competitors by being more agile and paying even more attention to customer service the problem with stock control has remained. These businesses understand the benefits advanced computerised stock management can bring but the cost of entry has remained tantalisingly out of reach. Even when a business is growing steadily, has a solid business plan and is confident of future success deciding when the time is right to cost justify a "conventional" WMS can be very difficult. It would be far easier if this threshold could be brought down to a much lower level.
Some off-the-shelf e-commerce packages include basic stock control functionality and larger sites offer "fulfilment" to smaller retailers but neither is likely to be adequate for a business that wants to deliver best-in-class performance and retain its control and independence. At some point these businesses may want similar functionality to the enterprise WMS solutions.
Given that many business applications are now delivered in the cloud it is surprising that there are very few feature-rich WMS solutions available. In fact, it is hard to find any from the established providers except at price points which still keep them beyond the means of the smaller business. One of the strengths of cloud solutions should be that users only pay for what they use, whether in terms of transactions, storage, bandwidth or some other measurable. Solutions should be scalable in a technological sense but also in the pricing which should be attractive to smaller businesses with limited budgets.
It seems that the market should be ready for a well-rounded cloud-based WMS solution that not only delivers core functionality but which is affordable, scalable for business growth and offers a clear migration path to fully-featured systems if needed later. The key benefits of cloud-based solutions would all be there – a solid core of essential features, continuous upgrades, no new technical infrastructure required, no management burden and guaranteed service availability.