How much does a WMS cost?

Highly variable costs...

The price of a WMS ( Warehouse Management System ) can vary considerably, ranging from €25,000 to €250,000 (or even more). The cost of the WMS software depends on many factors, including the required functionalities, the size of the warehouse, and the complexity of the logistics operations.

The implementation timeframe (study, prototyping, training, launch) can range from 3 to 15 months depending on the complexity of the requirements and the diversity of the logistics flows to be managed. Of course, one must consider not only the cost of the WMS software and the integration service, but also other direct project costs, primarily:

• The costs of purchasing and setting up portable equipment (label printers, PDAs, scales),
• The costs of developing computer interfaces (ERP, TMS , OMS),
• The (additional) costs of purchasing computer equipment (PC, server),
• The costs of installing WIFI in the warehouse.

Implementation and operating costs

Most software vendors include an implementation (or "build") cost and an operating ("run") cost in their pricing. The latter typically includes:

• A software usage fee (monthly and based on the number of users and the number of activated options), often in SaaS (Software as a Service) mode.
• The associated corrective and evolutionary maintenance.

The advantages of the SaaS model

It's worth noting that compared to on-premise solutions, the SaaS model avoids investing in costly IT infrastructure ( and its associated maintenance). Hosting with a third-party provider also simplifies updates and allows users to benefit from future developments. The SaaS solution thus offers greater cost flexibility (OPEX versus CAPEX), which is particularly advantageous for logistics providers.

However, it is crucial to carefully assess the cost of logistics software. For example, the temptation to use second-hand equipment, reuse existing warehouse equipment, or purchase custom parts from a broker can be counterproductive, as this equipment is not always certified by the WMS vendor. Furthermore, reused equipment may not come with a maintenance contract guaranteeing standard replacement within 24 hours, for instance.

What internal resource(s) should I plan for?

The time spent internally working on a WMS implementation project is far from negligible. We distinguish between the time spent on:

• Collecting information in the field,
• To meet for the purpose of conducting studies,
• Making purchases (equipment, consumables, additional services),
• Conduct progress reviews with the service provider and internally,
• Managing IT adaptation projects (software and infrastructure),
• Update the data that will be injected into the WMS (especially the product records and the location file, which are very data-intensive),
• Reorganize storage facilities and conduct inventory checks,
• To train , practice the solution and transmit this knowledge (operating methods),
• Communicating both internally and externally,
• To provide support during the first few days of WMS .

Estimates of time and resources needed

Some integrators include time estimates in their quotes, either per project phase or per type of resource:

• On the service provider side : time spent by project managers, developers, and trainers.
• On the client side : time spent by the project manager, the project team, the Key Users, and the End Users.

It is customary to take (at a minimum):

• A ratio of "1 to 1" , between the days spent by a project manager on the client side and those spent on the integrator side,
• And a ratio of "1 to 0.5" for each member of the project team.

How to calculate the return on investment with a WMS?

By definition, this involves calculating the total cost of acquiring a WMS :

• In the "Build" phase : license purchase and implementation (i.e., external costs in purchasing services and internal costs in time spent by teams), hardware purchase costs, IT system adaptation costs, IT infrastructure costs.
• Then in the "Run" (or operating) phase: royalty and maintenance costs.

The gains generated by a WMS

It is important to compare these costs with the gains that this investment will generate, such as:

• Time saving
• Reduction of preparation errors,
• Human resource optimization,
• Decrease in inventories
• Proficiency in handling equipment,
• Reduction of musculoskeletal disorders.

Indeed, the price of a WMS must be evaluated not only in terms of initial costs but also in terms of long-term benefits for the organization. The return on investment calculation must include these factors to provide a complete picture of the added value of the logistics software.

We are available to discuss this topic further and provide you with answers and advice. We can support and assist you in achieving our shared goal: mastering your logistics flows .

It should be noted that operational logistics consulting firms have cost and gain ratios that can help decision-makers determine the best choice of WMS software .