Friday 19 April 2013

21 Mistakes adding cost & killing productivity in your warehouse #17: Non-integrated systems

There is no doubt that Information, Communication and Technology (ICT) systems have been the key driver of productivity in every aspect of human endeavour for many decades now. Many different systems exist that have benefits for the warehouse and the supply chain in general.  Whenever a new system is introduced there is always a choice about whether to use it as a standalone separate system or to interface it to the rest of the business systems.  It is my opinion that except in the most low volume transaction environment it is usually a mistake not to integrate systems.


By integration I mean the transmitting of data between the two systems.  In the context of warehouses and supply chain this data will usually be related to transactions or system updates about the movement of goods: into, around and out of the warehouse. 

The ideal integration is automated real time transaction by transaction.  Stepping down from this is periodic updates (anywhere from 5 minutes to once daily).  Batch updates with manual intervention (downloading a file from one system, transforming it into a suitable format and uploading it to another).  The lowest level of integration is a manual interface where outputs of one system are keyed into another.  This is only acceptable for very low transaction volumes or during a trial learning phase or proof of concept.

There is of course nothing wrong with starting off the use of a system without integration or with manual integration as a valuable way to start getting benefits early and learn more about the new system.  This learning will often inform the development of the interface and how the systems best work together.

Here are a few examples integration between systems in a warehouse.

·        Purchase order information is sent from a customer to the host system.

·        Order information is sent to a WMS and order confirmations returned.

·        A WMS send order information to a Pick To Light subsystem and order confirmations are returned.

·        Despatch information is sent to a freight system and con-note numbers and costs are returned.

·        A transport management system sends manifest information to a fleet management systems and receives proof of delivery information in return.

·        A WMS sends information to a check weight system and receives a confirmation in return.

·        A WMS sends an Advance Shipping Notice to a customer’s system.

Lack of integration adds cost and introduces the potential for errors in re-keying information.  It creates data gaps where data required by an operator must be sourced from two or more different systems.  It makes reporting of business information more difficult and more costly, and as mentioned in previous posts data and the ability to analyse it is one of the most important assets a business now has.

I sometimes see businesses with a non-integrated system such as a WMS and whilst I can understand that the lack of integration got them up and running quickly, there is no roadmap to integrate the systems and the expected costs of integration are too high.  It is far better to determine the roadmap to integration with full understanding of the cost before you embark on a project.  Sometimes the integration costs can blow out the cost of a project and reduce the ROI to unacceptable levels.  In this context then it may be better to look for an alternative system that has already been integrated to your host system where the integration costs are low.

Only in the context of a commitment to full automated integration of all warehouse related systems can you keep the productivity and service of your warehouse at world class levels.  Let this be your starting point and aim whenever considering the implementation of a new system in your warehouse.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).


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