WMS: BEST PRACTICES AND BEYOND

WMS: BEST PRACTICES AND BEYOND

Many organisations fail to realise the true potential that a WMS can add to the business. DR TORSTEN MALLÉE discusses ways beyond the normal best practices to get the absolute best from your solutions.

Many organisations are not utilising warehouse management solutions to their full potential. Optimised utilisation of resources, proper inventory management, automation of billing and accurate stocking are just the fi rst steps in reducing costs and improving effi ciency within the warehouse. Unfortunately, for many organisations, the buck stops there. In the Chief Supply Chain Offi cer Report 2011, 88 percent of the respondents viewed supply chain improvements as important or very important for ensuring operating cost reduction. With the warehouse a central hub of the supply chain process, it is integral that companies use their WMS along with other agents in the supply chain in order to get the best returns on investment. The potential benefi ts of a WMS system are tremendous. The immediate benefi t an organisation notices after implementing a WMS is that many tedious processes are automated. Once an order comes in, the system immediately readies the legal guidelines for the export and generates all the barcodes, picking tickets and transportation documents necessary. Furthermore, the system is able to calculate the time required for packing orders and assign manpower to oversee the work when necessary based on a master manpower schedule. The result is that organisations can adjust their human resources requirements accordingly, re-assigning them to diff erent jobs and departments.

The most powerful part of a WMS is having completely visibility on the inventory levels in the warehouse. By tracing what goes in and what goes out on a daily basis, organisations will be able to reduce inventory levels, keeping only the minimum amount required in order to respond to emergencies. A good WMS is able to send immediate notifi cations to suppliers when inventory levels are close to falling below the minimum required amount, resulting in a continuous fl ow of goods and a decrease in bottlenecks. It is integral to have these basic best practices in place before looking at how you can apply the Business Intelligence to other areas of the supply chain.

FULLY OPTIMISING THE WAREHOUSE

In our experience, upon implementing a WMS, clients sometimes fi nd that there is only so much that can be optimised and that there are still some ineffi ciencies and bottlenecks. This generally means that they need to restructure their warehouse. This could include creating buff er zones in front of some packing stations for heavier consignments or shifting the placement of certain goods to improve access to the picking stations or even creating an additional loading bay for smaller consignments. Such improvements can have a great impact on the supply chain as your organisation is now able to respond to orders quicker, sometimes even by days depending on the original warehouse condition.

All your warehouses are fully optimised. You know the exact inventory levels in each, how long it takes you to process orders and send it to the respective customers, how long your suppliers and partners take to provide the goods for picking, average lead times and also what the average orders are. Using this information obtained from your WMS, an organisation can assess the productivity of each warehouse and depending on the maximum capacity and utilisation, may re-allocate resources and the scope of work for each warehouse. Moreover, using simple projection and analysis tools an organisation can create hypothetical warehouse distribution networks (eg one large central warehouse to replace three existing small warehouses) and analyse whether it would be more effi cient and costeff ective. This is an essential tool to help make signifi cant operational decisions.

EXTENDING WMS TO TRANSPORTATION

When a sales order comes in, a WMS is automatically able to process all the documents and decide the mode of transportation based on the delivery due date. The packing of the consignment is automatically assigned according to the urgency of the delivery. Let us assume the delivery is due in three weeks and is expected to fi ll up 2/3 of a large truckload. The system automatically knows that it will take four days for the large truck to complete the delivery therefore the goods will be packed and loaded onto the truck accordingly. However, the system is able to identify that there are two smaller deliveries due a day later for another client that share the same transport route. Immediately, the software solution checks whether the total weight of all three orders is within the allowable limit and if accepted, consigns all three orders together in one large truck instead of sending one large truck and a smaller truck.

This is possible because the WMS is fully integrated with the transport management system (TMS) and is able to roughly identify and plan routes for the delivery. In this hypothetical scenario, the organisation has not only reduced cost by saving on one delivery truck, but has also improved its green credentials, which is fast becoming an important consideration in business. In fact, from the aforementioned Chief Supply Chain Offi cer Report 2011, 75 percent of respondents attribute their push for sustainability as a way to create a positive customer image and enhance their brand equity. Imagine the possible savings when an organisation processes thousands or orders daily. We have seen how warehouse management systems can have a staggering impact on improving supply chain dynamics. To go above and beyond the supply chain, and create real value for your clients, customers, suppliers and partners, I recommend opening up and sharing information. For example, give a customer access to how quickly their products are being assembled; whether the delivery will be on time, how much inventory is available etc but deny access to products not directly related to them.

In an industry where high service levels, trust and reputation are becoming central to keeping customers and partners, it is important to create so called “glass walls” for your warehouse, giving partners and suppliers the visibility they require. At the end of the day, this will keep them prepared and ready to do their part (eg send more goods to the warehouse, prepare delivery transportation, be ready to accept delivery, etc) to ensure a sleek and effi cient supply chain.