The main concerns in choosing between a custom and a commercial WMS are often about what level of customization is needed, relative cost, and the time involved. The final choice should be made with regard to your organization’s specific requirements, budget, and timeline.
In this guide, we will delve into the main differences between custom and commercial WMS solutions, to help you decide which one is right for you.
To Build or Buy a WMS? Consider These Factors
Deciding whether to build or buy a WMS requires careful consideration of several critical factors:
- System requirements. List features that are crucial for effective warehouse management, such as inventory forecasting, warehouse navigation, advanced report generation, and so on.
- Сustomization capabilities. You should be able to tailor a WMS to your specific business needs, including how you want to monitor inventory, track operations, control employees, and manage reporting.
- Scalability and flexibility. Be sure your WMS can be enhanced easily as your business grows.
- Budget and implementation time. Assess the budget and timeline you can invest in WMS implementation so as not to pay too much or wait too long for a perfect solution.
- Ownership rights. Consider whether you need full or only partial control over the system.
- Maintenance. Pay attention to technical support and warranty options to be sure you can get qualified help when required.
Considering these crucial aspects can help you make an informed decision that aligns with your warehouse management strategy. Now, let’s take a closer look at the pros and cons of each type of system, to gain a clearer understanding which option might suit your requirements better.
Commercial Warehouse Management Systems
Commercial WMS provides a basic set of features to efficiently handle inventory, order fulfillment, labor management, and other critical warehouse management tasks. With ready-made solutions, you can choose between cloud-based—which provides remote access to the system—and local, installed at the organization’s site.
Advantages of commercial WMS include:
- Quick adoption. Commercial warehouse management systems are pre-built, with a fast and easy implementation process.
- Lower upfront costs. Such software mostly has a subscription or licensing model, which is typically of lower cost.
- Proven functionality. Commercial solutions offer a comprehensive set of features that align with industry standards and have been tested and refined over time.
- User-friendly interface. Since ready-made systems must be intuitive for a wide range of employees with different backgrounds, they typically feature an easy-to-understand interface.
- Vendor support and updates. The vendor is responsible for handling upgrades, maintenance, and ongoing optimization of the product to ensure its smooth functioning.
Now, let’s consider drawbacks to a commercial WMS:
- Lack of customization. As commercial WMS contains only core functionality. It may not fully meet your unique processes or, on the other hand, may include items unnecessary for your business features.
- Inflexibility and non-scalability. A commercial WMS comes with vendor’s restrictions. Depending on the rights granted, it may be difficult or even impossible to modify the system, which limits the system’s flexibility and scalability.
- Integration challenges. Seamless data exchange and connecting to various internal and external specific systems require additional development efforts and extra expenses.
- Mobility limitations. Out-of-box configurations aren’t always optimized for dynamic, resource-constrained mobile environments.
If your business has limited resources and needs to align with standard functionalities, commercial WMS solutions may be a simpler option. However, with their scalability and flexibility limitations, a custom WMS may be a better alternative.
Custom Warehouse Management Systems
A custom warehouse management system is specifically developed to meet the unique requirements of a particular organization’s warehouse operations. Using a custom WMS, you can simplify and automate all aspects of warehouse management, such as inventory control, order fulfillment, receiving, picking, packing, shipping, and reporting.
Another benefit of a custom WMS is its ability to add enhanced functionality, such as demand forecasting, advanced inventory navigation, and marketplace synchronization, which can help double your warehouse efficiency and eliminate the possibility of human errors. However, like any technology, customized systems have their pros and cons.
Advantages of a custom WMS include:
- Adoption for specific needs. With custom WMS, you can create intuitive designs that perfectly fit each user task and choose functionality that will align with business needs.
- Long-term strategic alignment. The system can be adapted easily to accommodate changes in order volumes, warehouse locations, and new processes, providing long-term scalability as your business expands.
- Integration capabilities. A custom WMS can be seamlessly integrated with other enterprise systems, such as enterprise resource planning (ERP) or an e-commerce platform. Systems integrations enable smooth data exchange, eliminate manual data entry, and provide end-to-end visibility across all the warehouse processes.
- Ownership. By building a custom WMS, you fully retain control and ownership of the system’s intellectual property.
- High level of security measures. With a custom WMS, you can implement data protection measures, unique security protocols, and policies tailored exactly to your organization’s requirements and risk tolerance levels.
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The benefits of a custom WMS mentioned above are just the tip of the iceberg; there are many other advantages that we’ve described in detail in a separate article. However, it’s important to consider the potential drawbacks associated with custom WMS development and implementation.
Disadvantages of a custom WMS:
- Higher upfront costs. Custom solutions require investment in development resources, including skilled developers and project management, which can be expensive.
- Long development time. The development process involves analysis, design, development, testing, and deployment phases, which can extend the overall implementation timeline.
- Risk of cost overruns. Without effective project management and a skilled development team, it’s possible that the project won’t meet expectations and result in cost overruns.
In general, custom WMS solutions allow you to address your specific challenges and leverage competitive advantages within your particular business sector. Careful planning, close engagement with an experienced development team, and a thorough understanding of your specific needs will help you achieve the best result.
But before deciding which type of WMS suits you best, let’s consider the core differences between custom and commercial solutions.
Custom WMS vs Commercial WMS: Head-to-Head Comparison
As described earlier, both options have their advantages and disadvantages, which means you’ll need to carefully evaluate your needs and resources. Here are the key differences between a сustom and a сommercial WMS.
Functionality and fit
A commercial WMS is a pre-built solution that offers a set of standard features such as order fulfillment, stock level control, picking and packing. Commercial solutions are designed to cater to a wide range of industries but have predefined capabilities.
A custom WMS is built specifically for your organization, allowing you to tailor the system to meet your unique business processes, workflows, and requirements. Besides the core functionalities, it provides fully automated warehouse processes, in-depth data analysis, advanced reporting, and intuitive dashboards to investigate your warehouse performance.
Scalability and flexibility
A commercial WMS allows basic warehouse workflows and operational models, but has limitations in terms of scalability.
A custom WMS can be designed to scale and adapt as your business grows. It offers the flexibility to add new features and internal and external enterprise systems integrations to meet changing market requirements. In addition, custom solutions can be designed to easily incorporate new algorithms and emerging technologies, such as AI, ML, and IoT.
Integrations and data exchange
A commercial WMS uses standard APIs and provides pre-built integrations with third-party systems. Any custom integrations incur additional costs.
A custom WMS seamlessly integrates with any external or internal enterprise system, such as ERP, CRM, or transportation management systems, ensuring smooth data exchange and end-to-end visibility.
Ownership and control
With a commercial WMS, you rely on the vendor for ongoing support, maintenance, and updates. While this eliminates worry about renewals, you may have limited control over the system’s development and future enhancements.
By developing a custom WMS, you have complete ownership and control over the system. You can make changes and updates as needed without relying on external vendors. Additionally, to protect sensitive information and avoid data leakage, you can install any security measures you need.
Cost and time
Acquiring a commercial WMS involves licensing or subscription fees, which can be more cost-effective initially. Also, a boxed WMS can offer faster implementation, as the system is already available for deployment.
Building a custom WMS is more time-consuming. Since you build the system from the ground up, you will have to go through the entire product development cycle, from requirements collecting and analysis to deployment and staff training. On the other hand, a custom WMS is cost-effective in the long run because of its long-term scalability and reusability.
User experience and adaptability
A commercial WMS is designed with intuitive interfaces, standardized layouts, and familiar design patterns for a set of core processes and workflows.
In turn, a custom WMS’s UI can be specifically designed to match your organization’s preferences, workflows, and branding. This customization can result in a more cohesive and familiar user experience for employees.
Overall, while off-the-shelf systems have many limitations that lock you within a typical system, a custom WMS provides freedom, allowing you to create a unique solution and become a market leader.
Winner: Custom WMS
By building a custom WMS, you may benefit from :
- the exact functionality you need;
- compatibility with new technologies;
- better long-term flexibility;
- high level of customization over unique business flows;
- full control over the system’s maintenance;
- retention of IP rights;
- sufficient security level; and
- easy user adoption.
As an example, at HQSoftware we have developed a custom e-3PL system that allows automating and streamlining of most warehouse operations. Using the system, our client can automatically manage inventory, simplify product audits using configurable system criteria, and automatically update product information on a variety of platforms, including marketplaces.
In addition, the WMS provides automatic navigation to create optimal picking routes within the warehouse and determines the quantity of goods to reorder using a demand forecasting feature. By analyzing historical data, the system can calculate when goods are close to running out and order the necessary amount, displaying all this information in the calendar dashboard. With this enhanced functionality, our client was able to avoid overstock and reduce expenses.
As a result, this customized WMS helped our client decrease order collection by 25% and improve order fulfillment by 99%.
Hiring a Custom WMS Development Company
Implementing a custom WMS is a time-consuming procedure that requires assembling a high-skilled team. Moreover, the software development must be secure and efficient enough to handle common implementation challenges; otherwise, it will fail. While you can spend resources on in-house development, working with an outsourcing company that possesses deep domain expertise will be quicker and more effective.
Specialists at HQSoftware can design any kind of WMS project, based on a thorough analysis of your organization’s existing workflows, business rules, and strategic objectives. That analysis enables us to build a high-quality solution with an optimal combination of WMS features, upgrading the system with AI and ML technologies.
At HQSoftware, we offer a variety of WMS development services:
- WMS consulting. Our consultants can advise you on the best way to design a WMS that will align with your specific business. Additionally, we can plan out your project’s considerations and build a roadmap for it.
- Full-cycle WMS development. HQSoftware’s WMS solutions come with full-cycle development services, covering prototyping, programming, testing, cloud deployment, system integrations, and dedicated maintenance. We provide assistance for implementation, updates, bug fixes, and general system support.
- Software adjusting. If your current system doesn’t cover your needs, we can upgrade it by adding new features and advanced technologies, e.g. AI, ML, IoT.
- System migration. Our experts can migrate your current system to both cloud and newer technologies.
By the end of the project, you will receive a fully customized WMS that is designed to improve your warehouse ROI through optimized operations and warehouse management.
Custom WMS vs. Commercial WMS: Conclusion
Ultimately, to make an informed decision that aligns with your company’s resources, remember to assess the benefits and drawbacks of each system.
A commercial WMS is the perfect solution for businesses that need to manage only typical warehouse processes. Whereas a custom WMS, with its flexible architecture, forecast capabilities, and strong security measures, can become your business’s primary tool for effective warehouse management.
Nevertheless, if you find the technical aspects of custom development difficult to get your head around, or if you’re unsure whether you have the required resources, feel free to get in touch with us! Experts at HQSoftware can help you make a thorough cost-benefit analysis, choose the optimal development approach, and offer the best-in-class software engineers.
Head of Production
To ensure the outstanding quality of HQSoftware’s solutions and services, I took the position of Head of Production and manager of the Quality Assurance department. Turn to me with any questions regarding our tech expertise.
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