Is Cloud-Based WMS an Option for Complex Distribution Centers?

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1 Welcome to Session 233 Is Cloud-Based WMS an Option for Complex Distribution Centers? Presented by: Sponsored by: Chuck Fuerst 2012 Material Handling Industry. Copyright claimed as to audiovisual works of seminar sessions and sound recordings of seminar sessions. All rights reserved.

2 Why the Need for an Alternative to Installed Software? I m not sure we have the expertise to administer this system It s a pain and expensive having to keep our hardware current Our IT staff have so much on their plates Listen In: Sometimes we just don t upgrade because of the effort and expense I feel like we re always behind I feel like we need an extra person just to manage hardware vendors, support contracts and insurance what a headache!

3 On-Going Costs for On-Premise Software Hardware updates Additional software (back-up, monitoring, VM) Dedicated IT personnel Bandwidth Electric (power, cooling) Space/insurance/security Cost of system outages

4 What Does In the Cloud Mean? Your vendor hosts your system for you in a secure data center You access the system through the Internet just like plugging in to an outlet. Use as much power as you need Vendor takes over the burden of system administration

5 Cost Comparison: On-Premise vs. In the Cloud

6 What Is WMS in the Cloud?

7 Cloud vs. On-Premise Considerations Economic: Cloud-based deployments are subscription-based, which can minimize upfront capital expenditures for perpetual software licenses and servers Focus on core competencies: Technology infrastructure may be managed more effectively by the engineers who created the technology rather than your own IT organization.

8 Cloud vs. On-Premise Considerations Cost of Upgrades: WMS upgrades are often expensive and complex because of customization done to the WMS. With a cloud-based WMS, the software upgrades and updates are managed as part of the service by the technology provider. This can significantly reduce the cost and complexity of a WMS upgrade.

9 Side-by-Side Comparison Component On premise Cloud Pricing model Perpetual software license Monthly subscription Hardware Customer purchases Included OS licenses Customer purchases Included Software licenses Customer purchases Included Maintenance fees 18-22% of software cost Included IT operations (backups, patches, security, monitoring) Operating costs (electric, space, bandwidth, hardware upgrades) Customer performs Customer purchases Included Included

10 What About Automated Material Handling Equipment Integration? A common objection Ex: conveyor sortation systems, pick-tolight, carousel, automated storage and retrieval systems (ASRS) Integration with cloud WMS is possible with thorough testing

11 Increased Service Levels With Cloud Deployment High availability 100 percent uptime outside of scheduled maintenance Back-up Daily server back-ups Full daily database back-up Disaster Recovery In the event of disaster at primary, secondary datacenter will be brought up within hours The last daily server image can be used to restore

12 Mbps Network Connectivity Example Actual cloud WMS customer with: Pick to light Automated cart picking Conveyor sortation ERP interface IPSEC VPN Tunnel Traffic Profile

13 Networks & Security Secure multi-tenancy architecture Secure private network with flexibility to connect via direct connection, VPN, or client VPN Robust security measures including DDOS protection and IDP/IDS Switching & Servers Fully redundant enterprise-class equipment Our Dynamic Allocation v2 Intelligently allocates resources Higher performance than most virtual machines. Dynamic IO (Storage) Intelligent provisioning and migration Three copies of data kept at all times Pay for capacity separately from performance Cloud Architecture

14 Cloud Security Example Threat Unauthorized physical access to cloudbased computing assets Unauthorized system access Unauthorized access to data Theft of data Virus and malware Hardware failure or disaster Countermeasure Infrastructure access controls Information security controls (e.g. password encryption) Access controls (e.g. authentication, authorization) Identity management Data location management Database access controls Data security software Data reliability processes (e.g. automated backup and replication)

15 Scalability/Elasticity Vertical Add compute requirements as needed Autoscale Dynamic addition of compute requirements Horizontal scaling with load balancing

16 Questions to ask your cloud provider How thorough is the service-level agreements Any SLA worth its weight should specifically address uptime guarantees, as well as incident response times and remedies What levels of RTO and RPO do they offer The lower the RTO and RPO are, the more mission-critical the system is Where will your data reside and what backup and recovery procedures are included Will you have the option to migrate to an onpremise solution (if you desire)

17 Customer Success Full-service cold storage 3PL distribution company that handles 13 million cases (260,000,000 lbs) of perishable food products annually. Problem: Wanted to minimize risk of downtown, reduce on-site IT team Solution: Cloud-based WMS solution Early results: Reduced staff head count by 22%, increased productivity by 40%

18 For More Information: Speaker: Home Page: Visit MODEX 2012 Booth Material Handling Industry. Copyright claimed as to audiovisual works of seminar sessions and sound recordings of seminar sessions. All rights reserved.

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