2009 a good time to invest in Warehouse House Management Systems

2009 is set to be a challenging year for all most businesses. The companies that will continue to survive and be profitable are those that can adapt to the changing environment, quickly.

For most companies pricing will again come under renewed downward pressures, from existing customers squeezing for additional savings and as competition intensifies to win business in a marketplace with less activity.

In such environments the only way to maintain or improve margins is to cut costs and/or improve efficiencies.

Warehousing and Inventory activities provide a concrete, measurable and quick area to cut costs and improve efficiencies, while improving customer service.

Warehouse management systems can be deployed in a matter of weeks/months so the benefits can quickly be attained for the business.

Perpetual Inventory Counting, Walk Sequence Logic, Pallet building logic, System driven put-away and picking, real-time stock visibility, KPI (Key Performance Indicators) and stock accuracies of 99.8% all allow for savings and improved efficiencies. The various functionality can all be up and running within months.

Does a WMS make sense for your company? The answer is out there and may not be an automatic “no” because you aren’t the largest player in your market or you don’t have a myriad of locations. A WMS can be successfully deployed in almost any firm regardless of the size of the company or the warehouse. You need focus to ensure you do not automate bad processes, that your attention is on project and not the product and that you tackle the complexity of the operation and not the size.
The implementation of a WMS has improved the operations of companies smaller than yours; only a careful analysis of your current situation can tell you what you need.

Joe O’Shea
Principal Systems – Warehouse Management Systems (WMS) – Supply Chain Solutions

The Real Challenges of Integrations in Warehouse Management Systems

The successful integration of Warehouse Management Systems (WMS) with other accounting, legacy and materials handling systems requires a focus across many fronts.

Software is a moving target and in many instances there is no ready at hand method but just hard work allied to tried and tested methodologies. Specific emphasis is also needed on being creative and disciplined to address the many variances that each and every integration presents.

Sometime integrations are simple and straightforward, such as in importing a CSV file with defined formats and fields. But often they are a lot harder, where interfaces must be written to allow the communication of the many actions and events that make up a dynamic WMS.

Integrations cry out for discipline and the need to put together a team of people with the mindsets to cover both the creative and discipline aspects of any project.

No matter how many resources are on a project, both areas must be represented in order for you to get the most robust and cost effective solution. As a buyer of WMS integration, you will need to ensure the vendor team you have chosen for the integration effort has both creativity and discipline.

Most importantly you must recognize that in many cases your IT team needs to contribute extensively in these areas too so that a through specification is defined, a robust testing and user acceptance methodology is in place as well as ensuring that the full impact / risks of any integration is understood by all parties to the project.

Watch out for the “new kid on the block” syndrome. You must check out how many integration customers does your WMS vendor have? It takes a number of years and many integration installations to experience a wide variety of customer preferences to get to a good place on the learning curve in the real life world of integration know –how.

Cost effective integrations is all about the “total cost of ownership”. The ill-conceived, or poorly executed interfaces can cause severe headaches in that these things can bleed hours of effort and cost every week across your whole operation.

Training and productivity measurement are also key to making integrations’ work. So users must be trained about the changes that will take place, and on the reality of system start-up problems.

Let users take ownership of the system, and be sure to put the time and effort into your project approach and make sure that it is air tight.

John O’ Malley
Principal Systems – Warehouse Management Systems (WMS) – Supply Chain Solutions

Where to find supply chain, or warehouse efficiencies?

Central to driving efficiencies involves tracking key performance indicators (KPIs), such as; cases picked, overtime, percentage of orders despatched same day, picking errors, etc.

Key areas where efficiencies are identified, include:

1. Back Office:

(a) File integrations
- Integrate electronically with clients to reduce back office admin.
- Seamlessly email all/any documents, invoice etc. from the PC
- Eliminate time consuming fax machines and printers
- Web online POD Enquiries
- Allow customers dial in and make their own enquiries
- Radio & Voice Control Operatives
- Empower operatives with system drive instructions reduce
- Required back-office dependence

(b) Auto Reporting
System generated reporting and auto circulation by Fax/Email as scheduled.

2. Warehouse Floor:

(a) Deskill Operatives
- System driven put-away and picking logic.
- Walk Sequence and Pallet Building Logic
- Optimised Walk Sequence, picking non crushable then crushable items

(b) Dual Cycling
- Pre-emptive extraction of required pallets by put-away driver.

(c) Auto Replenishments
- Auto replenishment of pick faces based on optimised logic.

3. Error Reduction

Real-time information allows 100% Accuracy as potential errors are caught and rectified in real-time.

The above are just some of the ways that WMS and Supply Chain Solutions for Principal Systems improve operational efficiencies.

Joe O Shea
Principal Systems – Warehouse Management Systems (WMS) – Supply Chain Solutions

The Bottom Line Impact of WMS

To maintain and increase margins organisations must cut costs, maximise stock turn and optimize asset utilization. These tasks which cannot be achieved without effective WMS, or supply chain solutions.

Quantifying the Impact

Most organizations we work with to implement Warehouse / Supply Chain Management Systems gained an extra .5% to 1% in terms of accuracy levels as a result. Most importantly, there are not just once off gains, but deliver to the bottom line year after year.

Obviously, the impact on the bottom line is great. In fact there are few initiatives that can have such a fundamentally positive impact on the performance of a supply chain, or warehouse management.

Performance Advantages

But, accuracy levels is just one of the areas where systems impact on performance – the others are:

· Reduced labour levels (driven by more efficient picking and placing, elimination of manual processes, automation of key tasks, etc.) and costs (because of a reduction in numbers as well as a de skilling of staff)

· Reduced Administration and Paperwork, thanks to more efficient POD capture, RFID and other paperless technologies

· More Speedy and More Accurate Billing

· Better utilization of space (including minimizing conjestion at loading bays or pickfaces), as well as handling equipment

The Systems Imperative

In an industry where margins are under pressure all supply chain partners must drive efficiencies by cutting costs, maximising stock turn and optimizing asset utilization. These tasks which cannot be achieved without effective WMS, or supply chain technologies. No wonder many managers complain that their WMS is struggling.

Joe O Shea
Principal Systems – Warehouse Management Systems (WMS) – Supply Chain Solutions

ERP Vs WMS – Competing or Complimentary Systems?

New Challenges Require New Solutions

Many ERP and Accounting systems provide management with a high level overview of warehouse operations, as well as the core elements of inventory control.   Historically, this level of functionality was sufficient.

However, faced with new challenges in terms of accuracy levels, complex stock handling rules, traceability and rising costs, managers are looking for greater visibility and control in terms of warehousing performance.

Managers are looking to their Warehouse Management Systems to respond to the challenges of increased accuracy, more complex stock handling rules, full traceability and rising costs, only to discover that most are out of date and inflexible.    

Why ERP is not WMS

Accounting Applications and the majority of ERP (Enterprise Resource Planning) applications view stock from an Inventory control perspective and not from a Warehouse Management perspective, consequently they lack the high end functionality that provides warehouse efficiency gains.

Too often the warehousing and supply chain needs are overlooked and viewed as an add-on to the accounting and ERP application. A prime example is Directed Put-away and Picking, KPI reporting, Dual cycling, perpetual inventory counting etc. Organisations need more from their ERP systems to satisfy changing supply chain demands and deliver the efficiencies required to remain competitive in an environment of shrinking margins.   

The Functionality Gap

ERP systems technically don’t have the capability to deliver real efficiencies and stock accuracies. Furthermore, companies implementing ERP systems do not have sufficient warehousing expertise.

 

Our Solutions Are Different

At Principal Systems we are focused purely on the supply chain and have the technology and expertise to deliver improved warehouse management / supply chain performance and at the same time seamlessly integrate with any ERP system.

 

Joe O Shea
Principal Systems – Warehouse Management Systems (WMS) – Supply Chain Solutions

Before you buy a WMS, think about this…

“The mistake is thinking the software itself will solve the problems,” says one US expert. 

A lot of people buy “really sophisticated supply chain software packages and then basically all they are doing is automating bad processes.”

We make sure this does not happen to our clients.  That is because we have always held the view that we don’t just sell systems – our job is to help managers deliver improved warehouse management and supply chain performance.

At Principal Systems we recognize that warehouse, or supply chain optimization isn’t just about technology – is depends on an interplay of technology, people and process.

The best Warehouse / Supply Chain Management system will fail if it simply automates existing out of date, or inefficient processes.

Systems must be implemented to support not the existing, but new and improved ways of placing, picking, etc.

How efficiently do goods move through your warehouse, or supply chain? What are the opportunities for improvement? Such questions are central to process mapping and process re-engineering.

Joe O Shea
Principal Systems – Warehouse Management Systems (WMS) – Supply Chain Solutions

Increasingly Complex Stock Handling Rules

Supply Chain and Warehouse performance is based on the adherence to quite often complex stock handling, storage and delivery rules, such as:    

Stock Rotation Rules  - FIFO - LIFO  - Batch  Put-away considerations  - Keep like product together - Keep fast moving Product near door - XYZ Rack Considerations - Compatibility Tables - Temperature Control Considerations – Ambient, Chill, Frozen Picking Considerations - Pallet Building Logic – Pick heavy Items first - Walk Sequence Logic - Full Traceability through the pick-face - Stock Rotation Considerations - Variable/Catch Weights - Pallet Manifesting Traceability - Batch Management - Serial Item Number Tracking - Product Traceability and Recall considerations - Variable/Catch Weights Value Added Processing - Stock Labelling Rules - Dip Testing  - Blast Freezing - Tempering - Microwaving  - Trem Card Management - Sampling - Kitting and Assembly

Successful Supply chains and Warehouses operators must first optimise these business rule and then ensure 100% adherence to these 100% the time.

Give the human nature of most supply chains and warehousing asystem driven approach with “Check Points” and “Catch Points” is essential

Is your WMS struggling?

Most companies have warehouse management systems in place.  While these solutions have historically performed well, they can struggle to keep pace with the key challenges facing today’s warehouse managers.

Early WMS systems enabled managers to manage inventory in an era when stock handling rules were simple, traceability requirements were low, stock losses were considered inevitable and wages/other costs were less onerous.  Little wonder many managers complain that their WMS systems are struggling, out of date and inflexible. 

Independent research shows that a small proportion of systems in place provide ‘True’ WMS functionality (Aberdeen Research).

Is your WMS holding you back?  Early WMS systems managed inventory, not warehouses.  They focused on record keeping, as opposed to driving efficiency. 

The implementation of a full WMS will enable your business to perform at a new level – boosting accuracy levels, managing complex handling rules, delivering full traceability and cutting costs.

Joe O Shea
Principal Systems – Warehouse Management Systems (WMS) – Supply Chain Solutions

What is ‘Full WMS’?

What do industry analysts Aberdeen have to say about the state of Warehouse Management technology?  Well, a lot as it turns out.  They point out that most solutions fall seriously short of the functionality that is required to meet best in class requirements.

I have taken there 5 key characteristics of what they describe as ‘FULL WMS’ and summarized them below.

 

FULL WMS	Old WMS
Real time communication via wireless mobile devices	Delayed manual batch entry of records at a computer terminal
Automatic data capture (SKU numbers, bin number, purchase order numbers, etc.)	Data is captured manually, using keyboard entry
Tracks actual quantities at each bin or location	Stores expected, or notional quantities at bin location.
Instructs, or directs workers, in terms of; put-away, packing, etc.	Provides no direction and has no check points as regards put-away, packing, etc.
Can be upgraded to add new functionality as required / available (e.g. RFID, or adapt to new business processes)?	Major work is required to integrate new technology, or features

Source: Aberdeen Research, 5  Characteristics of True WMS

At Principal Systems our WMS solutions provide all this functionality and more besides.  required to compete in 2010 and beyond, including the 5 key features of full WMS systems as identified by independent industry analysts.

 

Joe O Shea
Principal Systems – Warehouse Management Systems (WMS) – Supply Chain Solutions

Don’t have a WMS?

Your paper, or spreadsheet-based systems will eventually struggle to cope with the growth of your business. Then the lack of a system will impact negatively on:

• Operating costs • Space requirements

• Stock losses • Billing accuracy, etc.

How you will benefit from WMS?

Companies with WMS can achieve higher levels of profitability and efficiency. In particular, WMS will enable your business to deliver:

• Higher Accuracy Levels • Complex Handling Rules

• Full Traceability • Cost Control

Joe O Shea
Principal Systems – Warehouse Management Systems (WMS) – Supply Chain Solutions