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The dynamics of the business environment is pushing the WMS limits

Article written by: PhD. George Ogrinja, Supply Chain Director, Associate Professor Faculty of Economic Cybernetics, Statistics and Informatics, ASE Bucharest

Continuation of the article 7 problems occurring in the warehouse management that a WMS can solve

In today’s dynamic environment the flexibility of a WMS becomes imperative.

Where do we meet the most common limitations of WMS solutions in warehouse projects?

1. Warehouse Layout – Computer Aided Redesign

Customer requirements and product mix are permanently changing. Space redesign software has to incorporate the ability to adapt to these changes. Periodically, it is very important to analyze historical warehouse transactions and to check if the warehouse structure is still optimal.

Can the software perform such a simulation?
It is possible the wizard configuration of a warehouse on areas and locations?
Does the 2D/3D graphics representation allow the definition and the reorganization of the warehouse structure?

The frequency of this valuation depends on the speed of the changes in the products mix, and the demand trend of individual products.

Does the software allow through “business rule engine” a dynamic reconfiguration of the storage spaces?

Some software allow the slotting (initial static allocation of storage cells) but not re-slotting (dynamic reallocation according to demand fluctuations: seasonality, promotions, new products, etc.).

2. Limitations in defining functionality objects – such as Warehouse structure, put away, picking, Handling Unit, RF and others.

3. TRM (Task and Resource Management) functions extension.
Increasing productivity is the main benefit of a WMS implementation and “Task management” increases labour efficiency and reduces warehouse operational costs. Practitioners in the world today say: “If a WMS does not have task management, then it is not, by definition, a warehouse management system”.

TRM allocates work tasks to warehouse resources (tasks/people or equipment).
Some of the TRM functions, without which it is difficult to talk of productivity in the warehouse, are presented below.

4. WMS with very low or non-existent Facilities of Labor management (LM) – there are very few WMS systems that provide LM facilities.

Given that labor costs represent approximately 45% of the total cost of the warehouse, the absence of a LM in the WMS structure is a compromise.

The WMS monitors important data for each warehouse operator, such as the number of lines or picked orders, orders cycle time, etc. The LM module extracts this data and uses it to compare the workers’ performance in relation to established standards and to calculate the operational staffing. In a transparent way, the performance above standards is rewarded and the lower results are used for the analysis of the causes.
Note that some WMS treat the LM via the facilities of TM and Workforce Management. The ability of a WMS to measure the workers’ performance and remuneration is very important.

Do the actual WMS labor monitoring function allow tasks execution times to be compared with standard or best practice times?
Is it possible to achieve transparent performance monitoring easy access to built-in and customizable monitoring reports?

Personally, when these WMS facilities were missing, labor management was achieved by programmable reports (results of catalogued procedures) but were always insufficient and incomplete and finally hard intensive.

5. Event-driven capability or Event Management: customizing warehouse events. Today mobile terminals require interactive warehouse.

Examples of events that, if cannot be programmed, affect the efficiency of the warehouse:

5.1. Dynamic real time orders dispatching – the possibility to add or change the quantities from the orders after their processing or even during the picking process. Inflexibility in reconfiguring the dynamics of orders picking (grouping according to priorities, edit/change, add of new commands in already built groups, etc.) is a huge compromise in order management. Other software providers have pulled out the order management component from the WMS. Does the WMS allow order management?

5.2. The dynamic switch between warehouse tasks called Interleaving – depending on ongoing activities (e.g. switch between picking and replenishment). The companies who implemented Interleaving have obtained an increase of 10% to 30% of the warehouse productivity.

5.3. Maintaining replenishment orders pending and releasing them along with the picking orders (very useful solution for “wave picking”).

5.4. Event Management (automatic notification of an operator when certain events occur in the warehouse).
Does the WMS allows Dynamic Event management? Typically, these functions are provided by the TRM/TM WMS module.

6. The development of Easy-to-read KPI’S

6.1. SCORE Model indicators
6.2. WERC indicators
6.3. The ability to customize your own indicators
6.4. The ability to develop dashboards/scorecards
6.5. Defining own user specific reports
6.6. The ability to configure the reports menu

WMS’s offer for KPIs is generally very diverse but also very poor. I noticed a deficiency of many WMS in the offer of KPIs and especially of standard KPIs (SCORE, WERC). A high-performance (WMS) offers monitoring warehouse resources (processes, people, etc), benchmark against standards, compared analysis, etc.

Does the WMS allow Dashboard design with standard indicators like SCORE, WERC, more easily accepted by the 3PL services clients in monitoring warehouse services supplier performance?

The compromise is in establishing non-standard indicators, favoring one of the SC members, for example the customer, through the means of defining performances. For example, what does the customer understand OnTime Delivery (contractual indicator) and what does the 3PL Warehouse services provider understant?

A standard definition of these KPIs allowed me to avoid the difference of interpretation between customer and supplier regarding partnership performance evaluation.

7. Implementing Value Added Services (VAS)

For example:
• Light assembly

After the recession, when the “cash is king” inventory policies have massively migrated from “make to stock” to “make to order” or a mix between them by applying the principles of postponement. Postponement is a VAS (Value added services) that requires final product assembly services (configuration) to the warehouse after knowing the real demand of the customer.

Why is this happening?
The products are so different, demand is very unpredictable and the most effective way is to store their components (make to stock) and assemble the requested configuration of the final product when you know the real demand (make to order).

The Compromise? In the absence of any “light assembly” VAS, the company keeps in stock products already configured, and in most cases it led to the ageing stock and the appearance of unsaleable products.

Is the WMS able to manage the stock of the components that make up the final product and the related tasks of the assembly/kitting operations required by the postponement strategy?

• Special-labelling according to customers requirements

For example, in post-Distribution Cross-Docking, the operators allocate and label the pallets on destinations after their reception. Does the WMS correlate the Inbound and Outbound flows for correct pallet labelling and routing?

Does the TRM/TM ensure support for value added services?

8. Cycle count inventory facilities

The daily stock inventory process has become very important in the context in which the WMS option (Dynamic Cycle Count) can eliminate the inventory periodically (annually, quarterly, etc.) and implicitly closing warehouse activities for a certain period of time.
Simple implementation: cycle count provides a daily inventory list of the products in ascending sequence of the geocode numbers, without taking into account the products turnover (products family turnover rate). Such a feature is not sufficient for complete and accurate stock inventory of products.

And this is because, in the context of a dynamic allocation of storage cells, the products can migrate from one cell to another, risking to get rid of the inventory process.

A more efficient implementation cycle count is generating inventory lists on various criteria:

a) rotation classes of products, i.e. A/B/C, the system offers the ability to generate random cycle count based on configurable parameters (turnover speed, value, manufacturer, etc.);
b) products that have generated errors in the picking process (inventory record error, wrong positioning, etc.).
c) inventory lists on zero or negative stock or other exceptions

In the case of generating A/B/C inventory lists, the WMS has to calculate the number of ABC cells and to determine how many locations are required to be registered per day in order to fully achieve the inventory process. Generally, the complete inventory of products classes must not exceed 1 month for class A, 2 months for class B and 3 to 6 months for the class C.

The limitations that arise in the practice of inventory cycle count refer to the implementation of the “Inventory accuracy improvement” process. This process consists of the following cycles: “detection of inventory errors, research and identify the causes, elimination of the causes, and continuous improvement of the inventory accuracy”.

NOTE: in most encountered practical situations, inventory corrections are operated without knowing the causes.

How does the WMS assure support for improving the stock accuracy?

For example:
a) Can you enter the options concerning the causes of errors?
b) Can you design a “Cycle Count Cause Report” to provide information on the evolution of daily percentage of significant errors and their causes?
c) Can the operator use an inventory system checklist for investigating possible causes?
d) Can the WMS generate a user defined report of all transactions relating to products with wrong stock over a period of time?
e) How is the stock error correction made after the discovery of the causes?
Here is where many WMS limitations appear in supporting stock accuracy improving actions, that is exactly the target originally declared, “stock without error”.

9. Multiple Picking Strategies

Current distribution centers fulfill multiple sales channels and a wide orders profile from online orders (e-taileri) containing 1-2 lines at a rate of 30-60% to retailer’s or other distribution center’s orders. Simultaneous multi-channel or omni-channel service affected the distribution centers design, picking, sorting, packing and order consolidation methods and technologies. Because an inefficient picking system would have a huge impact on growth of warehouse operating costs, WMS facilities that lay out multiple picking strategies would represent the solution of the problem.

For example, a retailer has segmented its customers and sales channels, such as:
– Traditional clients that buy from stores or supermarkets.
– Online clients.

According to the two customer segments, the company has organized two distribution channels, one for store replenishment and other for direct home delivery, in the case of online clients. Because orders volume on both sales channels of sales is small-medium generally orders fulfillment is generally decided from the same locations but using different picking methods, depending on the customer’s order.

For example, we will collect online orders in batch picking system because they have a very small number of lines and the retailer’s orders in the wave picking system.
Significant growth in the online orders’ volume has led many companies to plan in their operational strategy acquiring a sorting and consolidation systems of orders (automated conveyor systems) for the “next day or same day deliveries”.

Does the WMS allow simultaneous use of more picking systems according to customer’s order profile? For the case presented above, can you define batch and wave picking system simultaneously?

To efficiently and flexibly manage these situations, the WMS must provide the “order management” function for sorting, grouping and selection of orders on various criteria as well as a “wave” function for launching the picking orders. These operations may be carried out manually by the warehouse’s Dispatcher by analyzing ongoing picking orders and/or automatically through “Picking Business Rule Engines“.

“Go Unlimited” in picking strategy would involve:

– Sorting and grouping of orders according to various criteria (routes, customers, other priorities) for simultaneous release in the picking process.
– The separation of a picking order line on packing units for its best collection (palettes quantities from the pallet area, individual items from the shelves, etc.)
– Release of the picking list to multiple storage areas for simultaneous collection of an order or orders. Do the header information allow the consolidation in the packing area of orders collected from various picking areas?
– Defining in the “Business Rule Engines” of picking rules attributes (constraints, sorting, compatibility, allocation criteria etc.) in relation to the client’s requirements as established in the sale-delivery contracts.

For example: Are the LIFO, FIFO, LEFO FEFO or other user-configurable sorting rules allowed for rotation of products in stock? Can you configure FEFO/FIFO rule to implement a WMS in the pharmaceutical industry?

Can you define delivery requirements “produced from a single batch” in the compatibility criteria of the picking rules? The buyer has stipulated in the delivery terms, in order to simplify the receiving process that the “service provider undertakes to deliver the products from a single batch”. For the warehouse to comply this clause, does the WMS allow in defining the picking rules the “single lot” compatibility criterion?

How does the WMS treat outstanding order lines due to out of stock products?

How to unlock backorders without granting special rights to picking operators?

Can you define different “Customer-specific rules” in “Business Rule Engines” picking rules?

After establishing the picking strategy, the WMS will issue picking orders in accordance with the rules set out in “Picking Business Rule Engines”.

10. Integration of picking, packing and shipping processes

How can you save time and reduce the expedition costs?

Defining control states of order fulfillment process (Workflow status)

For example:
• Linearization of the shipping solution-simple, controlled and efficient workflow.

Consider the following sequence of activities of an outbound process in a warehouse: picking list launching, items picking, packing list printing, packing, invoice/delivery note printing, order delivery. Can you define and configure states associated with those activities in order to control their execution?
How many workflows can be defined simultaneously?
For example, the Warehouse delivers through courier services to the online customers and via LTL or TL to the traditional retail customers. Can you simultaneously define these 2 orders fulfillment streams? Noting that courier documents require mandatory notation of goods weight on the shipment documents and online orders can be pre-packaged directly in order picking phase. These are only a few examples through which the “courier” workflow differentiates from other types of workflows.

Can the delivery monitoring be made?

Defining the “Workflow status” in the sequence of the outbound warehouse processes allows the control of printing operations of picking and shipping documents as well as allocation and consolidation of merchandise parties by destinations. In the context of increasing the orders number by reducing their volume (current trend in retail) a WMS is ineffective if it does not allow consolidation/deconsolidation of orders on destinations, meaning a complete visibility over the shipping operations.

a) Monitor changes in delivery orders.

In logistics, the content of an order can be changed until the carrier’s door is closed. How does the WMS treat the adding, editing or canceling order lines operations? How do I monitor the internal return, extra shipping or rebilling operations? The WMS’s ability to operate the latest changes will retain the company’s clients.

b) Standardization of delivery packaging.

In the absence of a “cartonization” WMS solution the operators very often consume unnecessary time choosing the right order package. In the logistics practice, the decision to have three different types of boxes near to the average volume of customer orders reduces both the packing and transport costs.

Can the WMS determine the average volume or weight of an order?

Are there WMS advanced features that calculate the order volume and the right packaging assignment?

c) Printing shipping documents can be set automatically by “Release Rule” or “Rules based shipment processing”.

For example, you can perform automatic printing of delivery documents after confirming the full collection of the order, i.e., “I confirm pick”.

Can the “Shipping Document Sets” function be carried out in WMS or it requires a separate acquisition of an order management module? This feature, in the context of a large volume of warehouse activity, significantly reduces labor costs.

Can the ASN for each order be generated and transmitted automatically to the customer during the picking process? This anticipated document notification of orders delivery allows the customer to efficiently schedule its future receiving activities.

d) 3PL services Integration.

d1. Courier solutions migrate from monolithic and individual applications to integrative platforms where supply chain users can run specific tasks, workflows and Web services associated with the distribution processes through configurable user interfaces.

How easily does the WMS enable the integration of 3PL courier solutions?

d2. An uncontrolled WMS flow of data operating and packing labels printing processes is inefficient, time consuming and very often is the source of errors in containers labeling. Integrating in the WMS module of automatic packaging marking systems is the solution for warehouses with high workload. The moment package labels printing is chosen by the WMS and it can be done in various stages of the good flow, from picking to shipping.
Workflow processes of operating data and printing of labels packing is inefficient, time consuming and very often the source of errors in labeling of packages if not under the control of WMS.
Integrating in WMS of automatic marking of packaging module is the solution for any warehouse with high volume of workload. Time of printing packaging labels is controlled by WMS and can be done in various stages of the goods flow, from picking to shipping.

How easily does the WMS integrate the Automated Marking Systems?

e) Correct assignment of shipping orders on docks.

Controlling the assignment of orders on docks and carriers, programming units load in the reverse order of operation by destinations (first delivery destination loaded last) are some of the WMS features that streamline the shipping processes.

Does the WMS allow detailed reports for proper vehicle loading?
How do the WMS and TMS modules collaborate for increasing operators’ productivity in the order shipping area?

The productivity of a World Class warehouse is described by getting an over 99% accuracy of deliveries, meaning that the orders have to be shipped according to customer requirement at a rate of over 99%.

Next: Fourth Part Adapting a WMS to dynamic changes of business strategy


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