Build versus buy is a timeless argument that can be applied to many aspects of a business operation. For companies involved in any form of distribution, warehousing, or ecommerce fulfillment, it’s an important question to consider: whether to adopt a commercially available Warehouse Management System (WMS), or to build it in-house. Finding the answer means weighing the pros and cons and asking some pretty clear-cut questions:
- What are the associated short- and long-term costs?
- Is the solution designed in such a way that integrations to additional warehouse automation are easily added in the future?
- Do we have the expertise and manpower to do it ourselves?
- Is it future-proof?
- What guarantees do we have that the dedicated resources we get won’t be pulled off the project if something else comes up?
Reasons to ‘build’
Designing and implementing custom-built, proprietary WMS software isn’t cheap. It requires resources and time in its development, as well as its ongoing maintenance and upgrades.
Common arguments used to justify a build approach include:
- Off-the-shelf WMS solutions do not satisfy every need. WMS solutions today have a lot of features baked in. However, some businesses feel that their specialized needs require custom software.
- Vendor-based solutions are inflexible. Most off-the-shelf software does not allow deep modifications to its functionality. For some companies, this may imply either too many or too few functions, resulting in a decision to take a DIY approach.
- Compatibility. If a business relies on multiple software platforms that need to share data, a lack of compatibility can be a deal-breaker. Build-your-own solutions may offer an advantage in the ability to develop consistent integrations across the platforms offered by various partners.
Reasons to ‘buy’
It’s probably safe to say that you didn’t build your car, roof your house or make your own shoes. Then why embark on a project as big as making your own WMS software? Unless your business is so unique that you really need a proprietary WMS, diverting your attention, manpower and money to develop one is most likely a waste of valuable company resources.
Here are some points to consider:
- Lack of in-house technical expertise. This one should be obvious. If your company’s software team doesn’t have the experience or skills to build a WMS solution, you should leave the development and maintenance of this business-critical software to a third party with deep WMS domain expertise.
- Budget. The costs associated with building custom software as complex as a modern WMS can quickly mount. Established, vendor-based solutions are generally more cost-effective and easier to implement, making better economic sense than using dedicated internal resources.
- Less disruption. Expert WMS vendors understand your business and will take the time to help you plan the roll-out of the WMS, whether it’s a phased approach or accomplished in one fell swoop. This ensures the minimum amount of disruption to existing processes, and gives warehouse staff an opportunity to gradually become familiar with new processes.
- Competitive advantage. One of the major benefits of any WMS solution will come from its ability to streamline all inventory-handling processes. From receiving and slotting to picking, packing and shipping, the WMS makes every point of the process faster, easier, more efficient, more accurate, and more traceable. For distributors and small businesses these advantages cannot be overestimated, particularly if your competitors are not using a WMS.
- Scalability and flexibility. Most WMS solutions offer incredible scalability to meet the needs of a changing organization. They can easily adapt to the implementation of additional equipment such as conveyors or carousels, and they can be given new functionality — such as inbound transportation management — through regular upgrades or additional modules.
- WMS solutions have been tried and tested for decades. When it comes to inventory management and ecommerce fulfilment, there are very few truly unique warehousing operations today. Most companies have similar processes and requirements that have already been taken into account. By adopting a tried, tested and trusted solution, your business will benefit from industry standards and best practices that won’t require you to reinvent the wheel.
If your company has internal software resources, taking WMS development in-house can seem like a very attractive option. If the software team doesn’t fully understand how to support the business objectives through development WMS software tools, the results will unlikely meet your expectations. Further, it is a real likelihood that resources will get allocated before the WMS is fully completed or implemented. There are plenty of DCs and warehouses doggedly running on paper and pencil or outdated WMS solutions, and as a by-product, they lack the functionality to be competitive by today’s standards.
A WMS that has the flexibility to support the changing needs of a business is worth every penny. There are examples of companies that have successfully developed and implemented their own WMS solutions, but they typically have the scale and geographical reach of big box distributors. For smaller companies with less complex needs, the advantage of being able to implement a commercially available WMS is very compelling. You’ll have the benefit of a system that has already had most of its kinks ironed out, without having to face the pitfalls and unexpected issues associated with developing and maintaining a solution completely in-house.
At the end of the day, the most important thing to consider in the buy vs. build debate is that your management and staff deserve the tools that allow them to grow and improve your core business. Find those tools, and you’ll be on the right path to continued success.