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Mon 1 Jan 2007 12:00 AM

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The rise of WMS

Although Europe and North America have pioneered the concept of warehouse management systems, the Middle East has reacted more cautiously. However, with the number of success stories in this region growing every year, it seems a change in attitude is around the corner.

The logistics industry has traditionally given warehouse management systems (WMS) a tepid response in the Middle East. The reaction is hardly surprising, considering the horror stories about prolonged or failed implementation resulting in massive financial loses.

However, as the technology continues to develop, the attitude of logisticians has steadily become more positive too.

WMS technology was first introduced in the Middle East around ten years ago, although it started making serious headway in the last two or three years.

Indeed, the use of WMS solutions from leading providers such as ATMS, Manhattan Associates and EXE is becoming more and more prominent in the Middle East, although the implementation rates pale in comparison to Europe and North America.

Amongst the first companies to spot the potential of WMS technology in the Middle East was SPAN, which has since grown into one of the region’s leading providers. “Around ten years ago, our director wanted to diversify SPAN and noticed the growing demand for warehouse software solutions in North America. He selected EXE and we’re now the largest supplier here in terms of market share and volume of business,” says Rami Ghandour, marketing manager of SPAN Group. “We’ve been selling WMS since 1996. The competition in those days was very limited, although more companies have entered the market in the last year.”

There is a consensus amongst WMS suppliers that in the last year or so, the products have experienced their fi rst boom in the Middle East. Psion Teklogix represents a niche part of the WMS supplier network, providing a range of ‘bolt-ons’ for the major software solutions.

Joe Iarocci, director at Psion Teklogix (Middle East), has been with the company since they first established themselves in Dubai two years ago. “I think that in the last 12 to 18 months you have seen a dramatic increase in WMS use, but there are still a lot of warehouses out here using paper, or they believe systems of people are more effi cient. However, it is starting to pick up,” he says.

Two dominant factors have contributed to this rise, the most obvious being the phenomenal growth of logistics operations in the Middle East. With Dubai now firmly established as a leading international logistics hub, warehouses must possess optimum efficiency to maintain the levels of demand.

Whilst warehouses built in Dubai were once built on a scale of between five and ten thousand square metres, facilities are now constructed more towards 20,000m2 in size. “In order to run large warehouse facilities, such as the ones currently being constructed in Dubai Logistics City, you must install the correct IT systems,” says Andreas Dür, branch manager of logistics consultancy company Xvise. “Warehouse management systems will become essential for the efficient management of these facilities.”

The nature of operations for suppliers of such technology has also changed in the Middle East. ATMS, for example, is one of the only WMS software vendors to have a direct office stationed in the region.

“Dubai has seen a significant increase in 3PL warehouses. With products changing from week to week, a system is needed to handle such rapid change,” says Arun Prasad, regional manager, ATMS. “Due to the booming logistics market in this region, the use of WMS is also growing. The two go hand-in-hand.”

The volume of goods going in and out of a warehouse is a definitive indicator of the extent to which a warehouse requires a WMS. Basic methods of warehouse management only focus on the two figures; counting what comes in and out, in order to identify how much is stored in a warehouse. As simple as this may sound, it becomes progressively complicated as the volumes entering and leaving increases. A high turnover without any WMS solution could limit the success of a company.

“Most of the facilities we see that require a WMS have high volumes coming in and out. They have multiple products, space problems, and they may not be able to expand,” comments Ghandour.

The decreasing cost of warehouse management solutions has also driven demand in the Middle East. Whereas once only leading logistic providers could afford such technology, there is a strong belief amongst suppliers that medium and smaller businesses are also becoming involved.

“A significant amount of small businesses believe WMS solutions are not essential, because the size of operations is limited. However, I think it’s a fundamental tool,” says Iarocci.

“It allows a solid base, so that when you expand, the efficiency is already built into your system, as opposed to a number of businesses that wait until they become a certain size before then becoming efficient.”

The notion of introducing WMS at ‘base’ level in Middle East warehouses is a strongly shared opinion amongst technology suppliers. Whilst it is debatable that many warehouse managers are technophobes, it is clear that WMS software has evolved at a rapid pace and so the more prolonged the decision to purchase one or not, the larger the technology gap and implementation process.

Suppliers in the region have already identified and catered for the gap.

ATMS, for example, has adapted its two models of WMS for the market; the tier one package, a complete 3D WMS, sold in the Middle East is only marketed as the more basic option in the UK. Alternatively, EXE offers a basic package that is advanced at the rate a customer wishes. Both EXE and ATMS are compatible with the Psion Teklogix range that starts with basic hand held terminals and progresses through to voice solution programmes.

“You have to understand the culture of implementation out here,” says Ghandour. “Some of the people are running warehouses and have never seen the right click of a mouse in their life. How can you implement a sophisticated WMS in that environment?”

The general response to such a question is an extensive implementation process.

The average implementation period with a European or US based company is roughly two weeks. In the Middle East it is at least two months.

The time factor is naturally a concern to warehouse management and is also coupled with scare mongering circulating the industry. “We constantly hear about companies suffering bad experiences with implementation. There are various sites you can pinpoint in Dubai with really bad implementation,” demonstrates Ghandour. “However, the software is doing very well in Europe, which highlights how a strong local implementation team can really make the difference.”

However, it is quite unjust to place the blame solely on implementation standards. Companies should also invest time in researching the different solutions and understanding exactly what they hope to achieve by implementing the technology.

“I believe that the companies here do not really have the skills to work out their requirements.

A lot of companies are asking for a WMS as it is trendy, they don’t understand why they need it,” remarks Dür.

ATMS, which also has a large presence in the UK, has firsthand experience in the difference between customer knowledge in both markets.

“Our UK customers know exactly what functions they need, they can clearly defi ne a RFQ (Radio Frequency Quadrupole) or an RFB (Remote Framebuffer), but here there is no similar kind of study,” says Prasad.

Of course, success stories can be found in the Middle East, and on a grand scale. Agility is an early pioneer of WMS, employing SPAN to implement the technology during the early days of the company’s operations. Similarly, Issa Baluch, chairman and CEO of Swift Freight International, is identified as an early visionary of WMS, having spotted its potential seven to eight years ago.

Aside from the logistic ‘giants’, RHS logistics is another fine example of a company who has reaped the rewards of WMS. Having implemented the EXE system in 2001, general manager, Richard Bell sees the importance in maximising a WMS. “In its basic package the EXE system has great functionality and would serve most logistics operators very well,” he says.

“What you do with it, as you develop going forward, is a combination of your own ambition and that of the provider.

The EXE system matches that for us, they have so many systems implemented across America and Europe that we actually follow the upgrade paths. We pay them a retainer so that as they create new modules, or have new releases, we automatically receive them as well.”

The evolution of WMS may not be complete in the Middle East, but it is certainly gathering pace. Suppliers and users alike foresee only progress for WMS, predicting the gap between the Middle East market and that in Europe and North America to be non-existent within three years. If that is the case, companies remaining cautious about the technology risk falling behind their more technology savvy competitors.

Common WMS mistakes

Mistake 1: Not doing enough homework

Analysing and then selecting a warehouse management system takes time and effort. Information is critical in selecting the most appropriate system for your organisation.

Mistake 2: Misunderstanding the benefits of automation

Automating warehouse operations and related functions can save your organisation considerable time and money. However, if you don’t also improve your current processes and ways of interfacing with RF-based hardware, accounting software and warehouse equipment, automating your system won’t deliver the full return on investment you require.

Mistake 3: Ignoring hard-toquantify benefits

It is difficult to calculate possible future gains such as increased productivity, better warehouse efficiency, improved customer service, and other factors after a new system has been successfully implemented. Remember, these types of benefits can dramatically improve your bottom line and should not be overlooked.

Mistake 4: Passing the buck

Top management and other key personnel within the organisation must be involved in the selection process. For the project to be a success, management needs to stay involved.

Mistake 5: Underestimating the ramp-up and debug phases

Many companies assume a welldesigned system will operate at peak levels shortly after they make the purchase. The best system will not perform as expected until properly trained personnel have developed complete competency with the system. Allow users to gain confidence through a gradual process of operational ramp-up, including incremental training and system usage. It’s important to ask questions, especially if you’re finding that your warehouse is not as productive as it can be. Discuss order fulfilment, shipping/receiving, inventory control, labour, and equipment challenges.

Important WMS questions

It’s important to ask questions, especially if you’re finding that your warehouse is not as productive as it can be. Discuss order fulfilment, shipping/receiving, inventory control, labour, and equipment challenges. Here are some questions to address:

1. How are inaccuracies negatively impacting your organisation?

2. What do you need to accurately pick, pack, and ship your orders?

3. How can your current system integrate with your e-business initiatives?

4. What information do you need to make strategic decisions?

5. How fast do you need warehouse data to be available across the enterprise?

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