Logistics Planning Blogs - LPC International

How Much Does a WMS Cost?

Posted by Jason Tindley on 13-Dec-2016 10:30:00

How Much Does a WMS Cost.jpg
This is a bit like asking, how long is a piece of string? It depends how long you want it to be, or in the case of a WMS, what you want it to do and how many people are going to use it.

In simpler terms it could cost from a few tens of thousands of pounds to several hundreds of thousands of pounds to get installed and then there is the ongoing maintenance/support and the hardware to consider.

It comes down to how large is your Company / operation, the number of transactions, the number of users and what complexity and functionality is it that you require of the system.

A “Tier 1” system will cope for the upper ends of all those questions or for lower levels if you need the upper cover for one of those areas, and have the money to spend / and make the ROI that you desire.

Those systems you may have heard of. Otherwise you need to look down the list to identify a system that meets your requirements and budget. (To see more on this download our free guide).

In any event you will not want to spend more than you need to get the functionality or support that meets your requirements. It pays to shop around. Some vendors can offer lease deals which includes not only the software but also the hardware such as mobile terminals, others may offer site licences instead of charging by users, but in the end it comes down to identifying what you need of the system as to how much it will cost. There is usually a long list of costs to be considered, these being:

1. Software licences or for numbers of users
2. Database licences
3. Modifications to the software
4. Installation / Integration
5. Go live support, including training
6. Hardware to various degrees (although it will probably be your task to provide tese elements separately)
7. Support, on line and on site
8. Maintenance
9. Upgrades

Of these costs, (unless you are leasing) 1 to 6 are up front or on acceptance of the installed system with 7 and 8 as ongoing annual charges some 15% to 18% of the software costs while upgrades should be included in the maintenance charges. Licence costs will be required for the WMS system itself and may be, if you don’t already have them, for the database.

Then dependent on how you have chosen your system there may be modifications needed to get the system to meet your specific requirements although if you have chosen correctly these may be minimal and any tweaks to the system will be by configuration. This may be an area where compromise occurs between a more expensive system with higher functionality (so bought off the shelf) to a cheaper system that needs to be enhanced at a cost.

Also if a system is “modular” make sure you don’t pay for modules you do not need, i.e. a yard management module when you only have two doors and no gatehouse.

You will probably be required to provide the Hardware; servers, PC type terminals, handheld terminals, RF nodes, printers etc. These will be in general to your specifications but the WMS provider will provide additional specifications for some items, in particular the server(s). Some suppliers of WMSs may be able to supply some or all of the hardware but in most cases you will be able to source more cheaply, it will just take a bit of effort if you do not already have preferred suppliers.

Terminals could add a big element to the overall budget especially if you have a large number of users. Radio frequency (RF) Remote terminals for instance will add between say £600 and £2,000 per unit handheld and fork truck mounted ones from £1,500 to £4,000 so you can see what effect 30 hand held terminals and 10 truck mounted terminal could have and that is without laser printers and barcode printers etc. that you may also need. Industrial large label printers com in up to £1,000 - £2,000.

Things might not be as bad as they seem, especially so if you are replacing an existing system in that you will probably be able to re-use peripheral equipment. If you are starting off on the Warehouse Management System road than it is likely that you will be looking at the systems that cost less, and will provide you with the greatest benefits in the step change from a spreadsheet, or worse, to a proper WMS – more efficiency, better KPIs, better service levels, better stock control and more profit.

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Topics: Warehouse Management System, Warehouse Productivity

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