Would You Like an APS With That?

Jul 01, 2003 9:30 PM  By

Odds are you wouldn’t. Supply chain technology generates a good deal of buzz, but companies haven’t made significant investments in WMS, TMS, APS, or other supply chain applications, according to a recent study by researchers from The Revere Group, The Ohio State University, and the Air Force Institute of Technology. Of the installed programs, warehouse management systems are the most popular, cited for their ability to improve inventory accuracy, increase operational efficiency, reduce warehouse costs and administrative errors, and enhance labor productivity. Return on investment isn’t bad, either: On average, user satisfaction with ROI rates 5 on a 7-point scale.

TMS apps are less commonly used, although satisfaction with their ROI is a relatively high 5.6. Over half of the respondents haven’t even considered buying an advanced planning and scheduling system. The high cost of SC technology (prices can run well into six figures) may well be a barrier to its adoption, but other obstacles that respondents cite consistently are implementation delays, resistance from senior management and staff, need for additional training, and system incompatibilities. For more information, e-mail jcaltagi@reveregroup.

WMS Implementation Costs

LOW HIGH
Purchase $25,000 $30 million
Installation $50,000 $5 million
Annual maintenance $1,000 $30,000

Most Common WMS Functions Installed

RANK FUNCTION USERS
1 Order picking/packing 100
2 Real-time inventory status 100
3 Receiving and putaway 92
4 Cycle counting 92
5 Order management 75

Source: Study by The Revere Group, OSU, AFIT