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Friday, April 19, 2019

Warehouse management systems

April 19, 2019 0

Why does a company need a WMs?
Although companies operating with paper-based systems are able to introduce
best practice into the warehouse such as improving warehouse layout and
minimizing travel time by having the fastest-selling items closest to despatch,
they can improve even further and become more productive by introducing
software technology into the warehouse.
Customers are becoming increasingly demanding and the ability to communicate via electronic data interchange, have online visibility and receive instant
replies to queries is more of an expectation than a need. A WMS can be part of
this solution.
Sales and marketing teams are also desperate for real-time information,
whilst finance departments are chasing data constantly.
Before we discuss the advantages of a WMS we need to point out that a
stock-control system is not the same as a WMS. We have come across many
companies who have purchased an inventory management system in the belief
that it will operate the warehouse efficiently. Stock-control systems will manage the inventory at stock location and quantity level, but the majority of these
systems will not manage productivity within the warehouse.
In our opinion, in order to be productive, warehouse systems need to be able
to work in real time, manage all the processes within the warehouse and have
the ability to communicate with other company systems. We will go into more
detail as to the minimum requirements of the system later in this chapter.
A WMS can process data quickly and coordinate movements within the
warehouse. It can produce reports and handle large volumes of transactions as
experienced in e-commerce operations.
The introduction of new technologies into your operation not only improves
your competitiveness in a challenging market but can also be instrumental in
meeting ever-increasing customer demands.


The potential benefits of having a WMS in place include the following:
real-time stock visibility and traceability;
improved productivity;
accurate stock;
reduction in mis-picks;
automatic replenishments;
reductions in returns;
accurate reporting;
improved responsiveness;
remote data visibility;
improved customer service; and
minimized paperwork.

There is an adage that says that any IT system costs twice as much as quoted, takes twice as long to implement and produces half the benefits. In order to avoid this, there are a number of simple steps that need to be followed when choosing a WMS.

Choosing a WMs
When choosing the right WMS for a company you first need to fully understand the needs of the company and the key business requirements, not only today but some time into the future.
You need to understand your company strategy, ensure that your specific needs are met by selecting the solution that best matches your business objectives.
The solution can either be sourced internally by writing your own software or you need to ensure that you choose the right business partner to work with
to develop the most effective solution.
A final step will be to calculate the return on investment (ROI) on the purchase and ongoing support of the WMS.


the process
It may be argued that not everyone needs a WMS. In fact, one of the greatest
challenges to introducing a WMS is not choosing the right system but convincing the management team that one is required in the first place.
During a project to improve the space utilization and productivity within a
client’s warehouse we were surprised to learn that the warehouse manager had
not been fully involved in discussions regarding the new ERP system that was
going to be introduced in the near future.
The vendor was asked whether their system could run the warehouse
operation and they replied in the affirmative. Unfortunately the system being
introduced could manage the inventory but was not a warehouse management
system.
When the new system had been implemented, the finance, sales and marketing teams were very happy with it but the warehouse manager was left to operate
a manual system to manage the workflow through the warehouse. As a result,
stock visibility improved on the system but productivity didn’t change. When
we suggested that the warehouse required a WMS to integrate with the ERP
system we were told that no further investment would be made in the IT
system as the system was able to manage inventory perfectly well.


selecting the right WMs
To ensure that the system you choose is the right one for your operation, here
are some best-practice guidelines courtesy of Business Application Software
Developers Association (BASDA) (2009) and Sage Accpac (2005):

Form a project team.
Define, record, review and improve current processes. Don’t automate
redundant or poor processes

Create a list of key functions required of the new system.
Incorporate any future growth plans in your specification.
List the benefits to your company of a WMS.
Research and approach a select number of vendors and select a small number with experience of providing solutions for your market sector.
Visit reference sites to look at operational effectiveness and discuss the benefits the WMS system has brought about since implementation.
Produce a return on investment (ROI) report.

Form a project team 
Assemble a team of people capable of logical thinking who will decide what your company needs from a WMS and what functionalities it must have and those it will be nice to have. The team should include members from finance, sales, production (if applicable), IT and of course the warehouse.
Appoint a project leader and define each person’s role, responsibilities and their level of involvement in terms of time and decision making during this.

Ensure that all participants are able to make available the time and resources to ensure the success of the project.

Define, record, review and improve current processes 
The first stage of the design process is to collect and collate as much information as possible about current processes and procedures. Once this is done you need to go through each process to decide whether it is actually required. There is no point in specifying an IT solution for a defunct process.
Do not make the error of automating poor processes. You need to get the processes within the company right before contemplating introducing a WMS.
Use a project team and your warehouse staff to identify which processes they find frustrating, redundant and inefficient.


You need to understand which processes are going to be improved by the introduction of technology, by how much and whether it is cost effective.
Understand how the warehouse communicates both internally with other departments and externally with customers, suppliers and transport companies.


Create a list of key functions
Each project team member needs to compile a list of the key functions required of a system and rank them by importance, eg 1, 2 or 3; or essential, greatly desired or nice to have.
Produce an agreed list of the essential requirements from the ideas produced by the individual team members and document them ready to be included in a
request for information (RFI).
This list should only have the essential, ‘must have’ functions. This will enable you to quickly discard systems that do not meet your fundamental requirements.


Incorporate any future growth plans in your specification
 Although difficult to forecast, you need to take into account likely future events when specifying a WMS. For example: are you looking to increase the number of SKUs significantly over the next few years; will your future operation require a ‘kitting’ operation; will you need to manage a group of warehouses; are you contemplating the use of a bonded warehouse, which systems are you likely to
need to interface with, what technology are you planning to introduce? These are just some of the questions that need to be answered prior to specifying a new system.



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Warehouse processes: receiving and put-away

April 19, 2019 0

Receiving
Receiving, goods-in or in-handling is a crucial process within the warehouse. Ensuring that the correct product has been received in the right quantity and in the right condition at the right time is one of the mainstays of the warehouse operation. These elements are often termed supplier compliance.
However, it is our contention that once goods have arrived at the warehouse it is usually too late to rectify most receiving issues. We believe there are many steps that need to be taken before the actual act of receiving takes place.


Pre-receipt

First we need to ensure that the supplier presents the products to the warehouse in the most appropriate way. It is normally the buyer who specifies the product and therefore may not have knowledge of the goods-receiving operation.
Our suggestion here is that the warehouse manager is also involved in specifying and agreeing the packaging, items per carton, cartons per pallet,


All too often we see items arriving at warehouses in unsuitable packaging that overhangs pallets, has incorrect or badly positioned labels and with the goods packed in quantities that do not relate to selling-pack quantities. Our proposal here is that samples are ordered and despatched in their transit packaging to ensure full compliance.
All these problems take time to resolve and are better handled at the supplier prior to delivery.
Areas that need to be discussed both internally and externally prior to the
order being placed should include:

size and type of cartons;
type of transit packaging – cardboard, plastic, totes, metal stillages,
roll cages, pallets;

palletized or non-palletized delivery of product;
size (length, width and height) and type of pallets, eg euro pallet,
four-way entry;

specific labelling such as product description, barcode and quantities;
position of label on carton and pallet;
carton quantities (inner and outer carton quantities, for example); and
mode of transport, delivery quantity and frequency of delivery.
Delivery in the standard selling quantity is also crucial in assisting the manager to increase the speed of throughput and simplify picking. For example,
many companies still place orders on their suppliers in multiples of 12 yet most customers order in multiples of 10 thus causing considerable extra work in computing quantities, opening cartons and re-packaging.


In-handling

One of the main challenges for a warehouse manager is to match labour hours with work content. Handling a product the least amount of time possible (labour touch points) leads to reduced labour hours and as a consequence, reduced cost.
Depending on the operation, labour can be the single biggest cost within a warehouse. It can be between 48 and 60 per cent of the total warehouse cost depending on the amount of automation utilized. It is also the most difficult cost to control.
In-handling makes up approximately 20 per cent of the total direct labour cost within a retail warehouse.



Preparation

Prior to the actual receipt a number of processes need to take place. The first
step is to ensure that suppliers deliver into the warehouse when you decide, not
when it suits them. There will be exceptions to this. For example, it is difficult
for parcel delivery companies to adhere to booking times because of the nature
of their deliveries; however, pallet and full-load delivery companies expect to
be given specific delivery times, albeit this is not their preferred option.
By providing delivery times for each supplier or their subcontractors, you
are in control and able to match your work hours to work content. A booking-in
or dock scheduling system needs to be introduced. Many of today’s WMS have
a dock scheduling module these days however an Excel spreadsheet will suffice.
Initially you need to decide on when you are going to receive products into
the warehouse. Are you going to have deliveries throughout the day or limit
them to a morning shift, for example?



offloading
On arrival, the vehicle details need to be checked against the booking reference and the vehicle allocated a loading bay or location in the yard. Any vehicle seals need to be checked against the delivery paperwork. Prior to offloading temperature-controlled vehicles, the temperature history
of the vehicle whilst in transit needs to be checked, together with the current
temperature of the goods. Once the vehicle has backed onto the appropriate bay or has been positioned in the yard for offloading from the sides, the in-handling team should
have appropriate labour and equipment to hand, to efficiently manage the
offloading process. Where vehicles are unloaded in the yard this usually necessitates the use of
two lift trucks, one to unload the trailer and another to put the product away within the warehouse.


Checking

Once the goods are offloaded, you need to decide whether they need to be checked before put-away. The ideal scenario is to move inbound goods directly from the loading bay to the storage area or despatch area if goods are cross docked.

Cross docking
The goal of most warehouses is to increase throughput rates and reduce the amount of stock held. Cross docking is a process where products are moved directly from goods-in to the despatch bays. This replaces the need to place the product into store and any subsequent picking operation.
Cross docking needs the full support of suppliers as to how they present the product. This includes clear labelling and advance notice of arrival together with accurate, on-time delivery.
Cross docking requires systems to identify the product that needs to be cross docked and a process needs to be in place to recognize and alert the staff.
Once checked in, the products should be taken directly to the despatch area and their floor or temporary rack location recorded on the system, alerting staff that the product is now awaiting despatch. The details must be recorded in order to provide an audit trail.


Recording

Depending on the product, there could be a requirement to record more than just the standard data such as product code, description and quantity on arrival.
Other information could include batch or lot numbers and serial numbers. Barcode scanning, which we will look at in the following chapters, is ideal for this type of data capture.


Quality control

It is accepted that certain products will require more stringent checking on receipt. These include high-value items, food, hazardous goods, temperature-sensitive product and pharmaceuticals. New suppliers will also fall into this category.
An area close to the receiving bay should be set aside to spot check items on arrival. This needs to be done as promptly and as efficiently as possible so as to avoid congestion and to get the products onto the system quickly. If there are issues, the items need to be taken to a specific quarantine area or, if space is an issue, to the storage area – but must be identified as defective or awaiting the results of tests. Most WMSs are able to block access to products on the system, making them unavailable for picking until cleared for sale. A physical sign at the location is an additional failsafe.


Put-away

Many of today’s WMSs allocate product locations in advance and instruct the operator as to where to place the goods. This can be directly to the despatch area if the product is to be cross docked as discussed above, to the pick face as a form of replenishment or to a reserve or bulk-storage location.
In order for this system to work effectively, a great deal of information needs to be programmed into the system. This includes the following:
size, weight and height of palletized goods;
results of an ABC analysis or slotting, where fast-moving goods are
placed closest to the despatch area (an area we will cover later);

current order data;
family product groups;
actual sales combinations;
current status of pick face for each product;
size of pallet locations; and
weight capacity of racking.

  
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What is a warehouse?

April 19, 2019 0
What is a warehouse?

A warehouse should be viewed as a temporary place to store inventory and as a buffer in supply chains.It serves, as a static unit – in the main – matching product availability to consumer demand and as such has a primary aim which is to facilitate the movement of goods from suppliers to customers, meeting demand in a timely and cost-effective manner.
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Thursday, April 18, 2019

Put to light

April 18, 2019 0
This system is particularly prevalent in retail store replenishment operations.The WMS will consolidate all the store orders for a particular group of stores. This might be done by region or despatch times from the distribution centre (DC).
The system needs to ensure that each group of stores has similar volumes where possible.
Depending on daily volumes, staff can increase or decrease the number of locations (stores) that they look after. Large-volume stores may be situated in a number of different zones with the totes/containers being consolidated at the despatch area.




       Individual product lines required by the stores will be picked in bulk and
transferred to the correct operator station by cart, pallet truck or via a conveyor. Each store will have a tote or totes assigned to it.
       Once the SKU has arrived at the ‘put’ station the operator scans each item anda flashing light displays at each location indicating which containers (relating
to a particular store) require that product and how many items are required.
Confirmed ‘put’ results are uploaded to the system in real time to update the WMS

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Pick by light/pick to light

April 18, 2019 0

Pick to light or pick by light uses light-indicator, LED or LCD modules mounted to shelving, flow racks, pallet racks or other storage locations. 

This system tends to be used in conjunction with zone picking. 
To begin the process an operator scans a barcode on an arriving pick tote or shipping carton which denotes the next order number to be picked. This communicates to the system that the operator is ready to pick. The system then sends a message to the zone in which the operator is stationed and all the pick locations for that particular order light up at once. 



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Radio frequency identification

April 18, 2019 0
RFID is a means of uniquely identifying an item using radio waves. Data is exchanged between tags and readers and depending on the frequency, may or may not require line of sight. Common uses in today’s world include library books, toll passes and access ID cards.
Its use in the supply chain has been limited until recently. However, highprofile projects within the US military, Asda, Walmart and Tesco have increased awareness.
The system enables the simultaneous reading of multiple items as opposed to barcodes, which need to be read individually.



There are two types of RFID tags: those that are passive, have no power source, limited data storage capacity, are read only and have a limited read range, and those that are active, have their own power source, have a larger data-storage capacity, have a read/write capability and are readable from a greater distance. 
Passive tags hold little actual data but are able to identify an item to a database where more comprehensive data is stored. For example, a conveyor-based sortation system can identify the item and interrogate the database to receive routing instructions. 
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barcode scanning

April 18, 2019 0
A barcode consists of a series of vertical bars of varying widths that represent letters, numbers and other symbols. Barcodes are used to identify products, locations in the warehouse, containers (totes, cartons, pallets), serial and batch numbers.



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