Solid as ever
Core WMS deployments bring benefits at Avnet, EXEL, and others
By Joy LePree, contributing editor -- Manufacturing Business Technology, 2/1/2003 12:00:00 AM
Warehouse management systems (WMS) automate the storage and movement of inventory in warehouses and distribution centers. Basic materials storage and retrieval has been superseded by strategies to increase throughput and productivity by managing the full range of resources to direct activities that include receiving, put-away, picking, shipping, and inventory cycle counts. Sophisticated techniques such as cross-docking and wave planning are found in today's systems, and some WMS packages handle labor management and reporting. The larger WMS vendors—via the development of applications in areas such as supply chain visibility—have evolved into broader supply chain execution software vendors.
Few enterprise software markets have moved as relatively unscathed through the recent economic downturn as supply chain execution. One reason for that may be the practical, direct benefits that warehouse management system (WMS) implementations can bring.
"When it comes to the benefits of WMS implementations, the three most common across the board are improved inventory accuracy, improved space utilization, and improved labor productivity," says John Clark, marketing manager with Provia Software, a Grand Rapids, Mich.-based WMS supplier. "This is the trifecta from installing a WMS."
The benefits achieved in each of these areas may vary from user to user, depending on which features and functions are used. But as users continue to attest, core WMS remains a reliable means of bringing supply chain improvements.
Accurate inventory
Performance, a Chapel Hill, N.C.-based bicycle mail order and retail company, implemented a WMS from Atlanta-based Manhattan Associates and immediately saw increases in its inventory accuracy levels. "Our inventory accuracy rose from somewhere in the low- to mid-90 percent, up to about 99.9 percent," says Chuck Lewis, director of engineering and logistics with Performance. "And that's because the WMS serves as a tool that ensures that our warehouse operators are as accurate as is conceivably possible."
According to Lewis, the company operates in a 100-percent real-time, radio frequency (RF)-enabled environment in which all the items are bar-coded, as are all the storage locations. "RF scanners are used to receive, place items in storage, replenish product to active pick locations, and update our order records to indicate that we've picked accurately, weighed the order, and loaded it on the truck," says Lewis.
The WMS allows the company to electronically record every action that takes place in the warehouse, versus relying on a manual system that required paperwork and calculators, which was not always accurate, and created lag time between activities and the recording of the information.
Further to the gains of improved inventory accuracy is the fact that the system cartonizes an order before picking. "Our WMS cartonizes each order, and knows how many cartons and what size they must be prior to picking an order," explains Lewis. "So when an operator goes through and picks an order, he's picking into the actual container in which we will ship the order. This not only saves time, but it enhances inventory accuracy."
The system also increases accuracy because operators must perform two scans—one when picking the item to confirm that the item that has been picked belongs to the order that's being worked on, and one scan of the carton in which the order is being placed to confirm that the correctly picked item belongs to the carton in which it's being placed.
"This double check has truly improved our accuracy, and therefore our customer service," says Lewis. "Because it's virtually impossible to make an error, our customers almost always get what they want."
Labor productivity
Following the implementation of DLx Warehouse from Waukesha, Wis.-based RedPrairie, EXEL, a global third-party logistics provider based in Westerville, Ohio, was able to boost labor productivity because the solution alerts operators to cross-docking opportunities.
"If we are unloading a product and it is within the inventory rotation requirement, we can take the product as it's being unloaded from the inbound vehicle and take it across the dock and put it into an outbound trailer that's calling for the same product, rather than putting it away and picking it later," says Jeff Calvert, senior director of information technology (IT) with the consumer, retail, and health care sector of EXEL. "The WMS gives us visibility, and has the smarts to alert us that the opportunity is there."
EXEL further increased labor productivity via task interleaving, which means one person can do more than one type of task. For example, to reduce "empty" travel time, someone who is putting away an item might next be directed to pick something up, rather than getting another put-away assignment.
"In the RF environment, if a person is putting product away and we have an inbound arriving, they can take it and put it away in a nearby storage location. Then, the next task they would get might be to pick a nearby product and take it to be loaded onto a trailer," says Calvert. "This type of task interleaving has allowed us to greatly reduce travel time in cases where there's nothing on the vehicle, and we've seen very significant productivity improvements using that feature of the system."
Susan Rider, a senior vice president with RedPrairie, agrees that task interleaving translates into increased labor efficiencies. "Traditionally, warehouse operators would have gotten an assignment to put a product away and after they did so, they would go all the way back to the receiving module to get the next put-away assignment, and someone else would have been sent out to get the item to be replenished, which highly increased transportation time."
Space utilization
Avnet, a Phoenix-based distributor of electronic components, recognized space utilization improvements after switching from its legacy system to White Plains N.Y.-based Optum's MOVE 7i WMS.
"Using our legacy system, we had to put everything in an alphanumeric sequence to properly catalog the warehouse. When you do that, you mix the inventory technologies," says Jim Smith, an Avnet senior vice president. "And in our environment, we have multiple shapes and sizes. When you do that in an alphanumeric sequence, you waste a lot of space because you have to use a square-footage orientation. But with the automated solution, we can now put like technologies together and maximize the use of space because we can use a cube-footage orientation. It also allows us to store products in more than one location because the system has the ability to track product location and, using RF technology, directs us to the proper location when it's time to pick that product."
Smith adds that space utilization has been further improved because the system stores data so effectively. "By taking the data from the system, we can proactively locate product in what we call the sweet spots for picking," says Smith. "If we have high-moving product, we can locate that in the closest, easiest, and fastest areas for picking, and the slower-moving products can be stored further away, or in places that aren't as easy to get to. This has not only improved our space utilization, but also increased our productivity."
David Landau, director of product management with Manhattan Associates, agrees that this ability is very helpful with space utilization. "It's not just how much space you use, but how well you use it," he says. "When it comes to the warehouse, there's definitely prime real estate, wherein you want fast movers in the prime areas at the front of the aisle, and the slow movers at the back."
WMS market outlook
The range of practical benefits from WMS is considered a key reason why the WMS market is expected to grow faster than some other well-established software categories. For instance, Dedham, Mass.-based analyst firm ARC Advisory Group predicts that the WMS market will grow at almost a 10-percent per-year rate over the next five years.
While that rate isn't as fast as some of the newer areas within the broader supply chain execution market, such as event and performance management, it's a steady growth rate that's expected to benefit by relatively immature markets for WMS in regions such as Asia-Pacific. Getting more companies in those regions set up on packaged, RF-enabled WMS solutions should go a long way toward optimizing global supply chains.
| Warehouse Management | ||
| Ann Arbor Computer | Apriso | Catalyst International |
| Cubicorp | EXE Technologies | HighJump Software |
| Infoscan | irista, anHK Systemscompany | LIS |
| Logility | Majure Data | Manhattan Associates |
| MARC Global | Optum | Peak Technologies |
| Provia Software | PSC Inc. | RedPrairie (formerly McHugh Software) |
| Robocom Systems | TECSYS | Vertex Interactive |
| Yantra Corp. | ||
| For more info, visit: www.manufacturingsystems.com/software_finder | ||
