Article written by: PhD. George Ogrinja, Supply Chain Director, Associate Professor Faculty of Economic Cybernetics, Statistics and Informatics, ASE Bucharest
Continuation of the article The dynamics of the business environment is pushing the WMS limits
Creating a Lean and Agile operational environment to meet specific customer requirements
The permanent adaptation of the business strategy to market demands requires a WMS able to be reconfigured by client-users, without having to wait for the IT company to find time in their agenda to make the required system changes.
There are two types of WMS configurations:
a) application configuration that allows changing the working mode and user interfaces;
b) business rules configuration for adapting the operating mode of the warehouse to the customer’s requirements.
In other words, the creation of new forms, queries, reports, labels, tasks, resource assignments, business rules, etc., which were not included in the original system are possible without modifying the source code.
Flexibility is essential for adapting the company to its own business model and WMS systems which operate on the basis of business rules have demonstrated flexibility, because they allow the unrestrictive configuration of the workflow.
A few recommendations for a solution easily adaptable to company objectives:
a) Getting standard WMS functionalities in a non-standard business environment
Any business has processes, services and unique distribution models that allow the maintenance and expansion of competitive advantages on the market. Any WMS solution provider can anticipate and pre-configure the initial parameters and the complete set of company-specific business rules.
b) Rapid Operational adaptation to the requirements of the dynamic market
Reconfiguring the WMS solution is done without modifying the source code.
The result: reduced costs, rapid implementation of operational changes, increased the return on investment and lower change risks.
Practical Cases of Lean and Agile changes we’ve seen have referred mainly to configuring WMS business rules for adapting the process flows in accordance to business requirements.
Reconfiguration was done when customer requests were no longer covered by the WMS processes or part of the warehouse activities were no longer controlled by the system.
As a result, there is a decrease in data accuracy in the system with an increased number of processes beyond the control of WMS.
The major difference between successful organizations and weak organizations is defined by the quality of the processes and their execution.
In general, the process flow is reviewed after receiving complaints from customers or after a period of time of poor performance of the warehouse. There are rare cases of proactive review of process flows.
Warehouse Management Software Could Be the Solution
In order to face the cost reduction challenges, best practice implementation and detailed monitoring of warehouse processes is essential in increasing productivity.
Based on WMS business rules and restrictions imposed by them, strategy execution tasks that allow optimizing warehouse activity can be elaborated. That’s why reconfiguring workflows and revision of current technology can represent the solution to improving the performance of the processes.
Concrete reconfiguration examples:
1. Customer – oriented configuration rules
– In the pack/ship process – reconfiguration cases are frequent in the case of 3PL warehouse services suppliers where pick/pack/ship workflows vary depending on the customer’s requirements (packaging units, labeling, orders consolidation and unit load systems, full set of documents relating to shipping, transport mode, etc.).
– In the process of billing warehouse services to customers – inventory are warehouse operating activities monitoring flows for billing 3PL services vary depending on customer outsourcing contracts.
– In the picking process – setting the business rules in accordance with customer requirements laid down in the sales contract between Supplier and Customer.
A) In the Assembly industry there are common situations in which a partial fulfillment of the order is not allowed. In these situations the WMS reserves the stock for existing product lines (e.g. it puts “Hold” on the picking of the respective lines) and after the replenishment of the “stock-out” it puts the customer order “Ready for picking” state. Noting that picking operators cannot view order lines in the status “HOLD” in order not to allow the partial collection and delivery of the order, thus breaking the specific contractual agreements.
B) In the pharmaceutical, food industry, etc., fields there are key accounts that require the “produced from a single lot” delivery rule. The WMS must allow reconfiguration of picking rules specific to these main clients by defining the option “single lot” in the compatibility criteria of the picking rules.
2. Process oriented – configuration rules
Workflows are established depending on the handling, storage and delivery of goods conditions.
2.1. INBOUND Process Configuration
2.1.1. Fast shipping of backorders
The use of “cross-docking” for quick dispatch of products that are missing from the initial order (if the customer accepts the creation of backorders) can represent a solution for increasing customer loyalty.
Multiple “Inbound” workflows can be configured, depending on the types of tasks permitted by the WMS. One of these is the “cross-docking” workflow which can be achieved if the system includes in “Inbound Logistics Tasks” category the “Cross-docking” task. In defining the “cross-docking” workflow, “Customer compliance labeling” VAS (Value added services) can be associated if the package is not labelled by the supplier or the customer/carrier requests a specific labelling format.
2.1.2. Optimize storage resources – by configuring the putaway processes
For optimal allocation of storage resources (space, operators, equipment) the rules which establish the putaway process workflows are based on the following parameters: inventory turnover, volume, batch number, stock turnover rules for reducing the risks of ageing or expiration, other restrictions.
Generally, the re-slotting (reallocation of old cells) process is reconfigured once with the putaway process (allocating new cells in accordance with the slotting rules). See the importance of the re-slotting process presented in detail in the previous articles.
Setting up a correct putaway process allows for increasing productivity and reducing operational costs by default.
2.2. Picking process configuration
2.2.1. Setting up the picking methodology
Reallocation of picking methods is usually done at the changes occurring in orders profile. The current trend in orders profile is: many orders, smaller orders, a few lines per order.
For example, as a result of these changes in the orders profile, “pick and pack in one single pass“, meaning the direct collection of products in the merchandise transportation container has become one of the most common picking methodologies. By eliminating packaging operations from step 2 (pick and pack) the implementation of the “The fewer touches of product, the less the cost of shipping an order” principle is ensured.
The diversity of the product and sales channels portfolio, require different product picking methods: Order picking , Wave picking , Zone Picking, Bulk/Batch picking and combinations of them in order to reduce travel times (waste of time).
What are the possibilities for defining the warehouse structure and what are the ways of defining and allocating picking methods that the WMS tools provide? How are the customer order grouping and picking orders consolidation rules defined?
2.2.2. Setting the picking orders rules
Let’s suppose that through the picking methodology it was established the Pick Wave method that involves creating a Wave Pick order by grouping multiple sales orders on various criteria. Among the general criteria for the customers’ orders consolidation, there are: order number, carrier, picking zone, customer priorities, timing of delivery routes, destinations, etc.
Examples of configurations that provide adaptation of the warehouse to the business operational requirements. Let’s suppose that the warehouse delivers the online orders from customers in the morning through a “Express” courier company. Possible methods of configuring the picking method through business rules:
A) Choosing the Carrier “Express” selection criterion will consolidate into a single picking document all orders of the “Express” delivery carrier.
Consolidated picking lines of the first step will be resorted and distributed in the packing phase on customer orders. What are the possibilities of sorting the picking lines on customers that the warehouse offers?
B) Choosing the “Carrier” and “Order number” selection criteria will generate a picking order for each customer order deliverable through the same Express carrier.
The second configuration method of the picking process allows the “pick and pass method” previously presented, which is operational in the case of warehouse with simple handling equipment products.
You can create advanced order delivery selection and grouping criteria by defining several selection criteria and assigning priorities to the selection criteria attributes.
Conclusion: according to the technical facilities of the warehouse with material handling equipment, the WMS can reconfigure to meet the dynamic customer demands.
2.2.3. Setting product allocation rules in the picking orders – the most common configuration/reconfiguration refer to the allocation of products in the picking lists.
“Picking business rules allocation” settings can be:
a) General: for example those relating to FIFO (First In, First Out) or FEFO (First Expired First Out), stock turnover, prioritizing picking tasks on measurement units (collecting customer orders in the following order: pallets, boxes, individual products by using conversion of measurement units increases warehouse productivity) etc.
b) Specific: According to customer’s requirements such as quality restrictions, sales volume stipulated in Supplier-Customer contracts. Customer’s requirements are defined in the picking rules attributes (some examples have been presented earlier in the “customer oriented configuration rules“ chapter).
3. Product /order oriented configuration rules
Effective implementation of the postponement strategy has allowed manufacturers to achieve make-to-order (MTO) and assemble-to-order (ATO) customer product configuration inside the distribution centers. The shift from make-to-stock (MTS) mass production to customized mass production (mass customization) completely changed the role of warehouses in the quickly adapt to market demands process of the supply chain.
WMS solutions can provide product configuration options and stock control of their elements, monitoring facilities of Assembly tasks state, planning, monitoring and allocation of labor, inventory control of made to order finished products.
What MTO products configuration VAS services (kitting, assembly, etc.) does the WMS offer for the implementation of the postponement strategy? (see previous texts concerning the importance of this strategy in the supply chain).
4. User oriented configuration rules
4.1. Task Type Assignment Rules – Rules Engine can assign tasks to operators based on the necessary skills and equipment (characteristics, capacity).
4.2. Customizing user interfaces and task workflows on mobile terminals.
For example, to simplify the execution of Pick, Pack and Ship operations, is it possible to realize the configuration of the confirmation operations on the same page of the mobile terminal?
Can you add tags or additional record fields, hide unnecessary fields and assign default values in the process of user interfaces reconfiguration?
Can you configure workflows on users or user groups?
5. Interfaces with handling products systems
The permanently changing role of warehouses in the supply chain – from traditional storage warehouses to distribution centers and then to full-service fulfillment centers – has significantly increased the importance of the handling systems in increasing customer service levels.
A) In World Class retail companies, products are received in the warehouse on pallets and then products are individually wrapped and collected through the intensive use of automated product handling and labeling equipment and delivered “same day” with the help of courier services.
B) Shops and traditional supermarkets are starting to be configured to allow deliveries of customer orders coming through multi-channel. Traditional replenishment functions are now completed by the online orders fulfillment facilities, either through on-line product booking and buying them directly in stores, or by home delivery of the products ordered online.
The warehouse development trend to Fulfillment centers require a WMS able to configure the interfaces with WCS systems for controlling the MHS (Material Handling Systems) devices such as conveyers, carousel, pick-to-light, pick-to-voice technology, RFID systems, etc.
What standards for communicating information between WMS and WCS are provided through the WMS Solution?
How are the WMS and WCS working together (functionality, data, interfaces, reporting and response)?
6. Add on Interface required for adding new features
Can you create add on interfaces for 3PL services management, transport control, yard management, billing management, etc.?
7. Transparent processes through extensive reporting facilities
Can custom reports be achieved by individual configuration of the analysis options?