Are Cloud-based Warehouse Solutions the Future of Warehouse Management?
Since its inception almost 50 years ago, the Cloud has revolutionized the way we go about our lives. Even more significantly, it has revolutionized the way we do business. Over the past two decades, the Cloud has fueled the transformation of digital management. Companies are discovering that cloud-based computing cuts cost, increases scalability, and improves customer service.
A shift is coming in the way cloud-based business is done. As innovations with cloud computing continue to take leaps forward, the Cloud will no longer just be an inexpensive temporary server or practically-limitless storage space. Rather, it will bring innovative development services to a variety of applications within enterprise.
So far in the past few decades, we have seen that large enterprises are hesitant to transfer their applications to the Cloud. Some of their biggest concerns are cited as fears over losing connectivity bringing business to a halt. Security has been another major concern for large enterprises. Over the next few years though, these concerns will melt away as more and more corporations take the plunge and discover the benefits, especially when it comes to warehouse solutions.
One industry that is slowly making the conversion is that of complex distribution centers using cloud-based applications for warehouse solutions and management systems.
“One sector of the market has lagged behind the others in the march to the cloud: warehouse management systems,” said DC Velocity, a magazine serving the specific informational needs of logistics and supply chain managers and executives.
“The central nervous system of any high-performing warehouse has remained off limits when it comes to the Cloud. Until more recently, concerns about response times and uptime have largely kept users from benefiting from cloud technology.” (Aptean)
According to a study reported in Supply Chain Digest, only 6.5% of warehouse management systems are in the Cloud, as compared to over 20-40% of other similar industries that incorporate cloud-based business. However, if trends continue, that number is expected to climb from 6.5 to over 35% in the next 2 years as large-scale distributors recognize its benefits and ROI in warehouse solutions.
One company that has been on the forefront of innovative technology for cloud-based warehouse solutions systems is irms|360. Recently, their Chief Architect discussed some of the biggest concerns large distributors have about making the transition to the Cloud. Our warehouse management experts at Specialized Storage Solutions found the information they provided particularly interesting, so we thought we would share with our community as well.
*The following is an excerpt from that interview.
What are some of the biggest concerns warehouse managers have about transitioning to cloud-based warehouse solutions?
Jeff Atkins, Senior Director of Product Management and Chief Architect of the irms|360 Enterprise Cloud Warehouse Management System, envisions the cloud driving mission-critical software in the very near future for all organizations regardless of size or complexity. We sat down with Jeff to discuss how concerns about transitioning to a cloud WMS are largely outdated and misunderstood, and how important cloud technology is to the future of supply chain technology.
A primary concern with a cloud WMS is that your warehouse’s Internet connection could go down at any moment. How do you address the risk of losing Internet connectivity with a cloud system?
Atkins: As with all components of the computing ecosystem, redundancy/failover is recommended when moving to the cloud. Failover Internet connection(s), from a provider other than your primary, is a common practice in today’s environments with both the telco and cable companies having representation in the overall solution.
How do the response times in the cloud compare with an on-premise WMS? Can a cloud WMS handle real-time requirements for high-speed scanning and highly automated environments?
Atkins: The irms|360 cloud application has been built to minimize payload and traffic required for web, mobile, and integration transactions. Response times are very comparable to on-premise provided that the appropriate networking environment is in place and that data communication lines are not saturated with traffic from other external applications like email and CRM.
With the risk of protecting customer and partner data being so high, do you feel that a cloud WMS is as secure as hosting onsite?
Atkins: Absolutely. Cloud providers spend quite a bit of human and financial capital ensuring the cloud environment is secure with multiple layers of security and intrusion detection strategies.
The surge in cloud WMS adoption has been attributed primarily to small- and medium-sized organizations that are not using advanced warehouse technologies and high-speed automation systems. Do you see larger, more sophisticated organizations transitioning to a cloud WMS?
Atkins: Yes. Not only is it already happening, it is inevitable for organizations that want to survive in today’s competitive landscape. The cloud allows organizations of all sizes to offload burdensome tasks such as infrastructure administration, maintenance, and upgrades as well all other responsibilities that come along with on-premise software.
Cost is the primary factor driving a transition to the cloud. Do you see the economics of the cloud driving decisions for multimillion- and multibillion-dollar enterprises in the future?
Atkins: Absolutely. Cost is a driver for businesses of all sizes, but so is the categorization of their spend (CAPEX vs. OPEX). The ability to offload infrastructure and software responsibilities to the cloud provides an excellent opportunity for businesses to focus on their core competencies and redirect dollars to operational needs.
For businesses running on legacy technology, how will the cloud position them for the future?
Atkins: The cloud enables businesses running on legacy technology to move to a platform that will support their business needs as well as their customers’ business needs. For the irms|360 WMS, having an open architecture allows bi-directional communication via a myriad of methods. This has proven to be key for our clients to ensure their portfolio of continued operational capabilities during times of change.
*This is an excerpt from an interview with Jeff Atkins at irms|360 from Aptean.com.