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WAREHOUSE MANAGEMENT

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WAREHOUSE MANAGEMENT

In our increasingly digital economy, it is easy for consumers to forget that the products they buy without ever setting foot in a physical store are shipped from a physical warehouse or distribution center. There is, understandably, even less appreciation for the importance and complexity of warehouse management. Depending on the business, warehouse management can be enormously complex and technologically awe-inspiring. The most automated warehouses feature an intricately choreographed matrix of robots that is marvelous to witness.  

The one thing all modern warehouses and distribution centers have in common is a warehouse management system (WMS). A WMS is a software application for managing and optimizing the warehouse’s operations, including such functions as receiving and putaway, inventory tracking, picking and packing, and shipping. More comprehensive systems can also include capabilities such as labor management, work planning and optimization, slotting, parcel management, yard and dock management, reporting and third-party billing, and logistics.  

To briefly describe these functions and capabilities:  

  • Receiving is the process of delivering and unloading inventory. 
  • Putaway is a collective term for all the processes that occur between receiving a supply of goods from a vendor and having it stored away in the warehouse.  
  • Slotting is the process of organizing the inventory to make picking and replenishment quicker, easier, and more efficient.  
  • Inventory tracking enables the use of advanced tracking, automatic identification, and data capture (AIDC) systems, including RFID and barcode scanners, to ensure that items can be easily found.  
  • Picking and packing is the process of picking the correct type and number of items from shelves and packing them efficiently for shipping. There are various types of picking, including zone picking, wave picking and batch picking. 
  • Shipping is a series of processes that move items from the warehouse to the customer. 
  • Labor management helps monitor workers’ performance by using key performance indicators (KPIs) that identify workers who perform above or below standards.  
  • Yard and dock management helps truck drivers coming into a warehouse find the right loading docks. 
  • Reporting helps managers analyze the performance of warehouse operations and find areas to improve.  

There are basically two types of WMS — integrated and standalone. An integrated WMS is one offered by an enterprise resource planning (ERP) vendor as an extension of a preexisting ERP system. The ERP part of the system manages invoicing, accounting, and inventory tracking, while the WMS part manages order intake and picking, as well as product receipt and shipping. With an integrated WMS, it is easier to perform financial analytics aimed at increasing profitability, such as restocking higher-margin items instead of items that sell well but at a low margin. While more limited in scope, a standalone WMS focused primarily on warehouse management will, by virtue of that focus, generally feature a richer set of functions and more robust reporting capabilities.  

Modern warehouse operators are looking beyond basic warehouse tasks and placing greater emphasis on user experience and usability, responsive UI design, workflow management tools, process streamlining, visualization capabilities, and differentiated UX across users, as well as multiple interaction modes such as mobile, voice, and augmented reality. Other emerging technologies such as smart glasses and other wearables could further enhance WMS capabilities. 

Increasingly, operators are also looking for more advanced WMS that can deliver real-time insight into warehouse operations and capabilities to enhance performance and throughput, operational efficiency, and decision-making through advanced predictive or prescriptive analytics, modeling and simulation, and machine learning capabilities. 

The most advanced WMSs are able to support integration with material handling and robotics. Entire facilities can be engineered to support highly automated operations where software shifts the emphasis from people-centric WMS processes to material handling integration (WCS). 

Over 100 DataArt engineers currently work with Ocado Technology, an online grocery disruptor that has developed the world’s most advanced end-to-end eCommerce, fulfillment, and logistics platform using advanced artificial intelligence, robotics, big data, the cloud, and IoT. Ocado’s warehouses are run by robots that move across a cubic grid where each square is a stack up to 21 containers deep. When an order is sent to the warehouse, the robots move toward the appropriate container, passing within five millimeters of each other. Armed with a grabbing mechanism, the robots can pick up one container each. The robots also move the finished orders to a van for delivery. 

The Power and Benefits of a Custom WMS 

Although a WMS can be complex and expensive to implement and run, organizations gain numerous benefits that can justify the complexity and costs.  

Implementing a WMS can help an organization reduce labor costs, improve inventory accuracy, improve flexibility and responsiveness, reduce errors in picking and shipping goods, and improve customer service. Modern WMS operates with real-time data, allowing the organization to manage the most current information on orders, shipments, receipts, and the movement of goods. 

Given the vital importance of warehouse management, a business’s WMS can confer a decisive competitive advantage or place the business at a perilous disadvantage to its competitors. This is especially true in a business like online grocery delivery, where fulfilling customer orders as quickly and accurately as possible is the name of the game. 

DataArt recently partnered with a leading online grocer in Eastern Europe to develop a custom WMS. With growing, ambitious competitors hot on our client’s heels, geographic expansion and responsiveness to customer feedback became essential to capturing and maintaining market share. However, the company’s agility and ability to scale and innovate was hampered by the implementation of its in-licensed SAP enterprise warehouse management (EWM) system. Over the years, the EWM system became laden with around 80% custom code, making it clunky, heavy, and costly to customize and support. Another major drawback was the lack of cost-effective scalability, given that an additional license would be required for any new warehouse. With the planned opening of many new warehouses in the near future, the EWM would quickly become cost-prohibitive.  

Our client’s CIO recalled how the COVID-19 crisis made the need for a new WMS even more urgent: “The market became very competitive as COVID-19 caused many offline grocery retailers to provide online delivery service. We thought of this as a positive change that would accelerate innovation and ultimately lead to better service for customers. However, we needed to scale fast to cover new geographical areas, and we needed a WMS system that would allow us to quickly and cost-effectively open new warehouses and introduce new business processes.”  

The client examined a wide array of options, including an upgraded SAP EWM system and other “out-of-the-box” solutions at various price points. The company found that a lower-priced solution would not provide sufficient flexibility and that an upgraded SAP system or another, higher-priced solution would cost more than a custom-developed WMS. The company also wanted to escape dependency on out-of-the-box solution vendors and to retain core expertise in-house. All things considered, partnering with DataArt to develop a custom WMS emerged as the clear best option. 

The CIO has been effusive in describing the business benefits of the custom WMS: “In this competitive landscape, anything that allows you to move faster than competitors is a valuable strategic asset. The custom WMS went into production within a year of hiring DataArt. We planned and hoped to run one warehouse on it, but we managed to significantly exceed expectations and have three warehouses running on the WMS almost by the same deadline. For a system that has only been operating for four months, it is very, very fast. Launching a warehouse every couple of months is unheard of in our industry. My colleagues in the market find it difficult to believe. I think that is a huge indicator of the project’s success.”  

By developing a custom WMS, the client created a powerful competitive advantage and unleashed new potential for innovation and growth. As the CIO put it: “With our own solution, we are unconstrained by any vendor, their upgrade cycle, or their pricing policy. The system is highly productive, light, and flexible.” In addition to new potential for innovation and growth, the client has already realized a host of particular business benefits from the custom WMS, including:  

  • Increased facility throughput, overall performance, and efficiency  
  • Increased employee productivity  
  • Reduced maintenance costs  
  • Reduced warehouse operation costs  
  • Company-owned IP that can be licensed to other companies with similar warehouse operations 
distribution chargers made4net “largely making compromises between the way a warehouse wants to work and the way the system allows the warehouse to work,”

The 6 Most Expensive Words in Distribution

While some organizations may continue to operate the same way they did 50 years ago, today’s competitive business climate forces distributors to take a hard look at their warehouse operations and reevaluate how these spaces can transition from a lost capital expenditure to a profit center.

When asked about the technology used in their warehouses and distribution centers, 44% of respondents surveyed for Peerless Research Group’s recently released 2022 Materials Handling Technology Study said their companies are currently in a phase of “cautiously embracing change.” At the same time, 19% reported taking a wait-and-see approach and 23% revealed they’re moving slowly and among the last to adopt technology.

As I consider these survey results, I can’t help but to think of a Bob Dylan song I’ve always been particularly fond of, titled, The Times They Are A-Changin’.

Although the “cautious middle” approach to digital innovation isn’t new, it is a mentality that’s historically plagued the distribution industry. And it’s why we still hear companies unknowingly utter what I call the six most expensive words in distribution: “We’ve always done it this way.”

Unsurprisingly, the solution usually involves adopting the right software and hardware to breathe new life into operations. That said, many have a hard time understanding the importance of adapting to evolve, even though it’s critical to the bottom line and the longevity of the business. Regrettably, the urgency of this need typically isn’t recognized until it’s too late.

Escape the Comfort Zone
In my years of working with enterprise application software for businesses, one of the biggest hurdles I’ve witnessed is watching the way decision makers choose to stay within their own comfort zone. This is common, but certainly not exclusive to, businesses run by generational families that are content with the status quo. Steady as she goes (a nod to another group of musicians I’m a fan of, The Raconteurs) is the approach; however, this mentality introduces significant hurdles when there’s a stronger need to introduce change that would otherwise improve the business.

Growth is great. That is until it starts to get in the way of the ability to get goods to the customer accurately and on time. Equally concerning is the fact that I’ve witnessed distribution businesses add more employees to their warehouse under the guise of “growth” – when what they’re really doing is supporting inefficient, manual processes that are heavily reliant on institutional knowledge. What these organizations often find is that adding more employees doesn’t necessarily yield higher productivity because paper-driven processes deny them the ability to reach a level of accuracy and efficiency required to stay competitive in an increasingly digital world.

When owners become complacent or buy into the “we have always done it this way” approach to warehouse operations, they run the risk of needing to eventually raise the white flag and sell their business. It’s an unfortunate exit strategy, and it’s not pleasant to think about. To avoid such a fateful end for their organizations, distributors must learn from stories of failure and have the mindset to keep evolving with the technology of the times that keeps their operations efficient and their business competitive.

 Conceptualize the Need

As our industry advances with new technologies, I still see warehouses and distribution centers using old-school techniques such as whiteboards or spreadsheets to manage inbound and outbound logistics. For some, the issue is less about being stuck in a comfort zone and more about a struggle to envision the autonomy and financial benefits of those new technologies. In other words, conceptualizing the need becomes an obstacle.

To help distributors recognize such obstacles as the true opportunities that they are, providing examples is key. Say you’re considering a warehouse management system (WMS) to streamline and automate operations. You may be told that a WMS will have a positive ripple effect over your entire organization, from human resources to the C-suite, and that you can expect to see significant operational gains in nearly every functional warehouse area, from receiving, putaway, and picking to cycle counting, shipping, and more. But let’s cover what these gains look like in practice.

Think of a WMS, for example. At its most basic level, a WMS eliminates paper-based processes that directly hinder company growth. Paper-based systems inherently lead to more errors and customer frustration because every time a warehouse manager resolves an error, it costs the company money. Paper will never compete with automated systems. Besides the operational inefficiencies, think of the money wasted on the materials and supplies needed to support manual processes (e.g., toner, staples, clipboards, filing cabinets, storage space, etc.). If a distribution company is looking to compete on picking accuracy, delivery and improved customer service, the WMS would allow them to abandon paper for good.

Let’s take this example a step further. A WMS that offers inbound transportation management allows complete control over scheduling deliveries by simply assigning specific times and bays. This ensures that the right equipment and manpower is ready for unloading (e.g., pallet loaded vs. floor loaded). When the shipment arrives, employees can check the trucks in and out as the system automatically captures metrics on both sides of the operation. Giving warehouse managers the ability to keep an eye on time, space, employees, and vendors more effectively is a win-win in anyone’s book.

Ask any distributor responsible for fulfilling e-commerce orders and they’ll tell you returns are a big issue. The right WMS can make life easier by handling the logistics to manage returns. These tools help e-commerce distributors achieve significant shipping cost savings for the company and its customers, adding to the overall ROI of the system.

When you consciously examine obstacles and open your mind to how technology can lead the way for the betterment of your business, it’s easier to conceptualize and justify a WMS investment. This allows you to forge beyond and away from any stagnation stemming from that “we have always done it this way” mindset.

Flip Obstacles into Opportunities

Embracing technology and digital transformation isn’t about giving up control or abandoning your comfort zone, it’s about changing one’s perspective. At the same time, it usually comes down to user adoption and trusting the software and hardware to do the job it’s intended to do. The key is to find a genuine vendor partnership that provides your warehouse or distribution center with the right technology and support needed to foster a paradigm shift that will effectively flip perceived obstacles into viable opportunities. The result can help your business slash expenses and eliminate outdated and costly manual practices as well.

While the six most expensive words in distribution are, “We’ve always done it this way,” ironically, the six most transcendent words in distribution echo the name of a hit country song by Jason Caraway, “I Wish We’d Done This Sooner.”

Author’s Bio

Mark Van Leeuwen has been with PathGuide Technologies, Inc. for over 10 years. He has more than 25 years’ experience building a strong clientele and ensuring customer success by working with distributors to understand and appreciate their unique business issues and opportunities. 

wms

Ecommerce Behind the Scenes: Efficient Warehouse Management with WMS

In the last year and a half, we have witnessed a profound transformation of the business reality, a rapid transition of organizations to the digital world, and a significant change in consumer habits. The growth of e-commerce is a sign of this transformation. According to the forecasts of the study “Economia e Sociedade Digital em Portugal”, released last year, e-commerce in the B2C (business-to-consumer) segment will continue to grow in Portugal and should reach 10.8 billion euros by 2025. The same trend will be felt in the B2B (business-to-business) segment, where e-commerce is expected to reach 155.8 billion euros in that same year.

This paradigm shift forces companies to be increasingly agile and efficient in managing their operations and supply chains in order to meet the growing demands of consumers and an increasingly competitive business ecosystem. The key to positioning companies at the forefront of competitiveness lies in the adoption of technological and innovative tools that enable organizations to optimally and efficiently manage their operations. And in this field, I would like to highlight the importance of Warehouse Management Systems (WMS).

At a time when e-commerce is expanding and delivery times are increasingly shorter, it is imperative for a company to ensure rigorous management of its warehouses and ensure a response, without delays or failures, to customer orders. And it is precisely in this field that WMS systems stand out. These systems allow total control of the logistics operations in the warehouse, through automated and intelligent processes, from the moment merchandise enters a warehouse until it is dispatched.

Among the main advantages of these systems are the following:

-More efficient stock management: Through process automation, WMS systems ensure more efficient stock and inventory management, as well as better optimization of all available storage space

-Obtaining real-time data: The visibility of operations is a feature increasingly valued by companies and WMS systems allow organizations to know in real-time all the essential information about stocks, movements, and other aspects

-Logistics Performance Monitoring (KPIS): In addition to visibility, these systems also allow, through specific modules, to monitor the logistics performance of the warehouse activities. By formatting data for analysis and presenting reports, the systems help managers identify possible inefficiencies and possible improvements that can be implemented to ensure a more efficient and productive warehouse management.

-Ease of integration, configuration and usability: It is a tool that can be easily integrated with other systems that companies use, particularly with ERP. In addition, these systems are typically intuitive and easy to use, to ensure that everyone involved in the logistics operations of the warehouse can use them without difficulty.

-Decreased likelihood of errors and failures: By allowing the automation of processes, WMS systems contribute to the reduction of failures and to a better optimization of human resources allocated to warehouse management.

-Thus, WMS systems are increasingly becoming an indispensable tool for organizations to manage their warehouses more effectively, reducing costs and errors, ensuring faster execution of operations and, ultimately, guaranteeing better customer service.

It is tools like these that help companies navigate this new business environment in which e-commerce is playing a catalytic role in the transformation of business models and corporate value chains. I have no doubt that the incorporation of this and other technologies will be a critical factor for success and raise the levels of competitiveness of organizations in this post-pandemic context.

Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. Our solutions are in use around the world, and our experience is second-to-none. We invite you to contact us to learn more.

warehouse management system

WMS Software: Is a Warehouse Management System Worth the Cost?

In the modern business world, software such as word processing programs, expense report software, payroll software, etc., continue to emerge. The usage of these applications is to increase and measure operations and productivity and conduct other business functions effectively.

Like those mentioned above, another software program that aids in controlling and managing a warehouse’s everyday operations is the warehouse management system (WMS). The WMS software directs inventory receipt and storage, improves order picking and shipping, and offers recommendations on inventory replenishment. A warehouse management system could be used as a standalone tool or as part of a wider Enterprise Resource Planning (ERP) framework.

Primarily, warehouse inventory management systems could only deliver vital functions, primarily on the storage location information. WMS functionality can now range from basic best practices in grab, load, and ship features to sophisticated programs facilitating improved interactions with material-handling devices and yard maintenance.

A warehouse management system helps to reduce the possibility of errors occurring when a product is shipped. The program can also help you fulfill orders on time and track ordered products inside the warehouse in real-time.

Additionally, a third-party service provider can host WMS in-house (on-premise) or online (via the cloud). The latter is becoming more popular as the business landscape shifts more towards digital. A cloud-based WMS is simple to scale, allowing you to pay only for the number of users and software technologies you need. And, as appealing as this all sounds, keep in mind the underlying costs and other factors when considering WMS.

Factors You Should Consider When Estimating WMS Costs

You must carefully evaluate the offerings of your prospective technology providers and each merchant’s capabilities in providing a WMS. It is recommended to obtain quotations for the various services included in the system and compare them to the intended budget for the WMS implementation. But most importantly, it is first necessary to understand that WMS prices vary according to an organization’s size, products, industry, and specific needs. The following are some of the essential factors to consider when determining the cost of a WMS:

The Number of Users

The total sum of users who will use the software is one of the most important factors to consider when calculating a WMS cost. Note how many administrative staff or warehouse workers will have to use the WMS as this will definitely affect the fees of the subscription. The majority of technology providers base the cost of WMS on the number of users—the more users, the more expensive it may be. To determine the cost of these licenses, multiply the base WMS subscription fee by the number of users.

Products and Industry

Other things to consider when assessing the expenses of a WMS include the types of items processed or distributed by a company, as well as the sector to which they belong. WMS cost quotations vary by the complexity of a product’s storage, manufacturing, and shipping. Furthermore, companies’ regulated goods by governmental bodies, such as medicines or cosmetics, may increase WMS costs. These factors influence prices because the technology provider considers the scope and extent of an organization’s processes to assist the software.

Hardware

Companies may also have to consider the costs of any hardware or equipment integrated into the system. Some third-party vendors may offer devices such as a barcode or tag printers, data and voice terminals, and so on – but at a higher initial cost. If an organization already has hardware and software, it can be modified to save money.

Other than these, it is also essential to consider the value of purchasing a WMS for organizations. The best WMS for any company is one that can meet its specific needs and requirements, allowing it to grow and become more effective in an ever-changing business world. Following this, there is more discussion about the benefits of using a WMS.

Benefits of a Warehouse Management System

A good WMS benefits both your business and your customers. Here are a few reasons why having a good WMS is advantageous:

Faster Inventory Turnover

Improving inventory management is the first step toward improving the efficiency of your warehouse and, as a result, your business. It means complete inventory control, from receipt to shipping, when we say inventory management. An effective WMS can significantly enhance inventory management and speed up inventory turnover. A WMS can assist cut lead times by minimizing inventory movement and improving record accuracy, lowering the demand for safety stock.

Enhanced Customer Service

A warehouse management system (WMS) reduces inventory documentation by letting the digital storage of reports, pick tickets, move tickets, and do invoices and packing. Product availability may be more accurately determined, offering customers more realistic delivery dates, reducing customer complaints, and improving overall customer service by expediting operations from the order through delivery.

Warehouse Personnel Reduced

A WMS system can greatly help your warehouse run better and more efficiently by standardizing inventory movements, picking procedures and inventory placements, and minimizing potential error rates and of course, training expenses. It can also aid in stock-flow optimization through the use of an automatic replenishment system.

Better Stock Control

Because of the nature of warehouses, the stock is constantly in motion. Goods are traveling in multiple directions, whether they are coming in, being stored, or leaving, making the process confusing. It is recommended that you keep track of which stock items have the highest turnover rate so that you can store them more efficiently and keep downtime to a minimum.

Optimized Warehouse Space

Ample storage space is essential for a successful warehousing operation. Correct warehouse organization can increase the number of goods stored; for example, using narrow-aisle equipment allows you to place racking closer together.

Improved Labor Productivity

A slow, inefficient, and unproductive warehousing operation is likely the result of several minor issues, such as outdated processes and a lack of employee motivation. It is critical to develop modern systems and techniques to help increase efficiency. A warehouse management system can assist with this.

Final Thoughts

A well-designed Warehouse Management System (WMS) may give several advantages to the company. These benefits include real-time inventory visibility, substantial cost reductions, decreased mistakes, increased productivity, and efficiency gains. Expenses connected with implementing and maintaining a WMS might vary based on which solution is appropriate for your company. Thus, it is critical to carefully analyze all options and costs associated with implementing and maintaining a new WMS.

A successful warehouse management system will require internal preparation for the company before implementation. It will need configuration to ensure that it includes all of the necessary functions for the business. It must ensure that all employees understand how to operate the new system entirely. Each of these processes will have its own set of expenses, which may vary based on the size and complexity of the project. Costs associated with configuration might rise if modifications surpass the extent of the project’s initial scope. It must have careful preparation and think on the part that could help to avoid incurring unnecessary expenses.

The warehouse management system is worth the cost for companies trying to enhance their warehouse management operations. Instead of relying on employees to do repetitive and simple activities, a WMS enables companies to leverage their employees’ skills, knowledge, and experience to grow and improve the company. In addition, the new warehouse management system may demand modifications to their existing warehouse. Companies may need to upgrade their Wi-Fi or install cabling for specific hardware charging stations, reorganize inventory placements, or take other essential actions depending on the WMS. It is to ensure that they can fully benefit from all of the features available. Therefore, it is crucial to remember that these alterations may result in higher initial investment costs for their system than planned.

pharmaceutical

5 Ways WMS can Benefit the Pharmaceutical Supply Chain

Warehouse management software is a must for every supply chain, but for some industries, it can provide additional benefits. Craig Powell, Managing Director of Balloon One, shares his insight into how warehouse management software can be used to optimize pharmaceutical logistics.

Every supply chain is dependent on effective warehouse management, but for the pharmaceutical industry, there are additionally complex challenges to be overcome. Fortunately, many of the unique issues that handling drugs and medical equipment present may be benefitted by the implementation of warehouse management software (WMS).

Below, I’ll take you through just some of the ways that WMS can benefit your pharmaceutical warehouse.

FMD compliance

With WMS technology, it’s easier to process and securely transfer digital information so that transparency across the whole supply chain can be achieved. This is crucial for compliance with the Falsified Medicines Directive (FMD). The FMD states that every pharmaceutical package must have a unique barcode, containing the batch number, expiry date, and a unique serial number. WMS can read these and keep track of this information, improving efficiency. This also ensures that SecurMed UK, the national medicine verification organization, can be informed when stock is received, moved, and picked for dispatch — again, in compliance with the FMD.

Time sensitivity

One of the most important elements of pharmaceutical supply is tracking drug expiry dates. WMS can keep dates and product locations to hand, along with other important digital information, to help optimize your first expired, first-out (FEFO) system of inventory management. Not only will this further ensure the goods you store and move are safer, but it can drastically decrease what slips through the cracks and needs to be thrown away once expired. This can help you keep to waste output targets and saves your clients money too, and fewer resources are wasted. It also helps ensure that stock spends as little time in transit and storage as possible, so efficiency is further improved.

Pharmaceutical maintenance

According to the MHRA, almost one-third of critical and major deficiencies are due to improper storage temperatures (ABB). WMS can help you keep track of complicated storage information such as the need for temperature or climate-controlled warehousing, as well as contamination control. It can even alert you to urgent issues such as faulty fridges. All this can prevent medicines from spoiling, keeping wasted stock to a minimum, and accurate temperature control can help save energy while lowering heating and cooling costs too.

Eliminating security concerns

With data and information, such as stock levels, presented in a visual, easy-to-digest format, you can also far more effectively manage security issues such as theft. Digitizing processes such as vendor tracking and labeling can prevent both accidental and criminal mislabelling, reducing the risk of ‘salting’; monitoring motion-detection alarms and cameras can prevent tampering and criminal activity, and logging each step of your safe disposal practices can prove useful for meeting regulations — or if you come across any legal or environmental trouble.

Customizable solutions

WMS is designed to be customizable to suit all kinds of projects, so no matter what your needs are, you’ll likely find the technology or be able to personalize your software to better streamline your processes. For example, if you need tailored traceability and storage monitoring, or personalized picking and packing systems, don’t make do — research the options that are available to you. If you can’t find a solution for a particularly complex warehousing requirement, speak to your WMS provider about what packages, add-ons, and personalized services they can provide.

These are just some of the ways WMS is elevating the pharmaceutical supply chain. If your warehouse has complex requirements, you may be surprised by how easily you can streamline your processes with this technology.