A Warehouse Management System for every warehouse

Every warehouse should have a WMS - here's why

A WMS for every warehouse

In my job I walk into a lot of warehouses.  The thing that has frequently surprised me is the lack of penetration of warehouse management systems into the ever increasing number of warehouses and distribution operations that seem to spring up every day.  At the top end of business, of course, they are everywhere.  You really would not want to run a 20,000m² or more warehouse, with 30 or 40 staff, on paper or relying on Bob's* memory. But when you step down to the next tier you will find many businesses with quite large operations running on a basic paper based order and inventory system from their ERP.

At the lower end of the scale, WMS is essentially absent. Internal logistics operations supporting service businesses such as hotels and hospitals or engineering operations such as mining and building mostly don't even know what a Warehouse Management System is.

Given that a good Warehouse Management System can result in 25% productivity gains, improved inventory accuracy, reduced stock losses, faster order turnaround and greater order shipping accuracy, the benefits are simply extraordinary for the amount invested.

If I compare this to accounting software, which was really the first business productivity killer app. for the the modern computing age, then there would not be a small business that did not at least have PC and a copy of MYOB or Quicken.  There is a full spectrum of accounting software to help everyone from the sole trader to the biggest of financial institutions but no parallel capability for WMS.

Small warehouse operations can get significant
benefits from a WMS

So as a dedicated logistics professional (who likes a bit of a challenge) I decided I would fix this.  I started out this year by creating The Rapid WMS Project.  This was my personal side project to try and find if anyone out there was open to the idea of developing a low cost WMS that would be affordable for any organisation with even a small warehouse.  But the tricky thing was that I needed to be able to take the system under my wing so that I could develop a low cost implementation and support model that was not saddled with the overheads of a business oriented to tier one customers.

I found an ally who was almost uncannily, thinking the same thing, in Scott Symons of Paperless Warehousing.  It did take us a while to work out the detail but Rapid-WMS is now in pre-launch mode. That is to say we are looking for customers who would like to be part of something big.  Something that will revolutionise their warehouse operations and change the level of logistics productivity and competitiveness for Australia.

Rapid-WMS is a proven system based on the years of WMS expertise of the Paperless Warehousing premium system but stripped back to the core functions that you need to run a warehouse.  When combined with our years of experience in optimising warehouse and logistics operations and a fast and affordable implementation service, the results will transform the performance of your warehouse.

To find out more call us on 02 8078 6903 of fill in and enquiry form on the website.

*Bob is your best storeperson with an memory like an elephant.

You can follow more about The Rapid WMS project on the blog

If warehousing and logistics are important to your business or your personal career then why not follow this blog by email or on Google+.  To tap in to the full benefits of our business and career boosting ideas I suggest you join The Warehouse Performance Initiative.

21 Mistakes adding cost and killing productivity in your warehouse #21: Failing to maintain and develop your operations as your business grows and changes

The seventh habit in Stephen Covey’s Seven Habits of Highly Effective People is Sharpen the Saw.  This is the recognition that even the best “saws” become blunt over time.  If the saw wasn’t that sharp to begin with, then a few years down the track the work of cutting through becomes really hard!  Does your warehouse feel like that?  Just plain hard work to get through every day?

The mistake of not changing your warehouse operations as your business evolves can cost you dearly.  Even traditional businesses are constantly changing now and the pace of change seems to keep increasing.  New, products, new customers, new services, maybe even completely new business models can get dumped onto the warehouse and the common response is a hasty rehash of existing systems and processes to “get by for now”.  This pattern accumulates inefficiencies over time and can end up with a very inefficient warehouse, staffed by a lot of frustrated people, with the whole operation in need of a major overhaul.

The antidote to “getting by for now” is a program of continuous improvement.  I see two distinct areas to focus on to drive an effective continuous improvement program to keep your warehouse operations up to date and running smoothly.

1. A periodic audit and redesign based on the application of Lean principles will introduce a step change in technology or infrastructure to allow your business to operate at a higher level of efficiency and output.
2. A Lean principle based continuous improvement program will help you to optimise your current processes and work methods.

These ideas are really two sides of the Lean coin: 

• firstly the strategic business side which must be driven by the management team based on how the business is supplying value to customers and 
• secondly the operational continuous improvement that hones the day to day execution of the strategy and it supporting infrastructure.

The need for a change in strategy or infrastructure is often driven by a crisis or repetitive failures by the business to deliver the value required by its customers at a sustainable cost.  Service failures, customer complaints, out of stocks, overstocks, high operational costs, overflow storage are all examples of the sort of pain that will prompt a change in strategy or highlight the need for new infrastructure in a business.

If the resources to answer these challenges are not available within the business then help from professional business advisors will be required to help formulate an appropriate response to the business challenges.  This is exactly where Logistics Help can advise a business that is facing issues such as:

• the relocation of a warehouse or
• the need to keep the current warehouse viable for a few more years,
• warehouse management systems implementations
• materials handling systems
• freight management issues
• or any other warehouse related issue.

A review of the business operations followed by a guided implementation program aimed at delivering business results and a solid return on investment is what we specialise in at Logistics Help.

Whilst major change programs are essential to long term business health, they are not by themselves sufficient.  The ongoing operation of the facilities and systems are critical to success.  This is where any systematic application of Lean principles must flow throughout the company to the operators that deliver the daily work.  Training and coaching your operational staff including managers, supervisors and warehouse operators in the attitudes and tool kit of Lean, will ensure that you get the best out of your investments in the technology and infrastructure of your business.

This is a bottom up approach that engages the hearts and minds of everyone in your business to ensure its success.  Our aim at Logistics Help is to provide resources and training for your staff in applying Lean principles and up to date knowledge and tools for warehousing and distribution so that your warehouse is vibrant and productive.

To this end we have launched the Warehouse Performance Initiative to foster a community of warehouse professionals to raise the standard of knowledge, expertise and effectiveness of people working in warehouses around the world.  You can get involved straight away by signing up here and receive the compete eBook of these posts of the 21 mistakes as a thank-you.  We will also keep you informed of new features and resources as we build them.

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

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 Mistakes adding cost and killing productivity in your warehouse #20: Failing to invest in staff development

The best systems and technology in the world are of no use if you do not develop your staff to get the best out of them.  I do not want to dive in to human resource management and labour relations techniques here; but I do think that if you have got the culture right in your organisation, then one of the best things you can do is invest in training and developing your staff in ways that are relevant to your business.

Many businesses (particularly small – medium sized businesses) make the mistake of thinking that people will just pick up what they need to know along the way.  This is true to a certain extent, but would you neglect other areas of your business the same way?  Would you not bother to do any marketing and just hope that your customers figured out what you did and offered all by themselves?

So what training or development activities should you do for your warehouse staff?  Where do you start if you have literally nothing?  The place to start is with the activities that most directly impact on your customer service.  This is usually the picking, packing and despatch processes.  I suggest that you write a step by step work instruction based on the what your most experienced and best operators do.  This includes the physical process and any system interactions that they need in the performance of their work.  The written instruction will be a guide to the operator on what to do, and for the instructor on what to teach.  Starting with picking work your way through all your core activities until you have a complete set of training documentation.

You can also make this fun by making a video instruction.  Sitting all new hires through half an hour or so of video showing them the basics is a great way for many people to learn.  This should not be a substitute for detailed instruction and coaching by a supervisor, but it can help lighten the load somewhat, particularly if you use casual labour to manage peak workloads.

There are three stages required to cement any learning and all should be documented in a training register to record where people are at in their training program.  The three steps are:

1. I have been shown what to do and received the work instruction to refer to.
2. I have done the task for the prescribed period and feel like I know what to do.
3. I have been tested or assessed to be competent by an experienced person

If you adopt this approach you put the responsibility on both the operator and the trainer to confirm their competence in performing a task.  Your staff will become more productive due to reduced errors and a common set of procedures for all warehouse activities.  You should see your KPIs improve as you roll out your training program.  

Not only do you need a good training program in place for your warehouse operators but your supervisors and managers must also be developed to improve their management skill and understanding of warehousing and performance improvement so that they can apply these skills to improve the processes and operations within the warehouse.

Many supervisors and managers in businesses are drawn from talented and motivated storespeople but have had no formal training or broader exposure to the range of ideas and technologies available to improve the performance of their warehouse.

Recognising this need, Logistics Help are developing the Warehouse Performance Initiative (WPI) to help develop the skills of all those responsible for managing warehouses.  The sign up for those who are interested in joining is available now

The aim of the WPI is to create a resource to develop superior performance in warehousing regardless of business size, resources or location.  Starting with an online (and eventually offline) space providing ideas and resources drawn from wide experience of what works in improving warehouse performance.  Members of the WPI will be able to join in a forum to discuss ideas and get answers to questions from other members and expert moderators.

WPI members will also get all of the Logistics Help templates and self-help resources developed over many years of consulting experience, for half the normal list price.  Membership is free and .
The WPI will also encourage offline Warehouse Performance Groups where members can organize meet ups and regular meetings to help each other improve their skills and share experiences about what they are finding out how to improve their warehouse performance.

Ultimately we hope to develop some core modules for a training program for warehouse supervisors and managers which can be delivered both in workshop seminar format and online.   The aim being to dramatically improve the quality of warehouse performance for small-medium businesses around the world.

The sign up page is here.

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

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 Mistakes adding cost and killing productivity in your warehouse #19: Failing to invest in equipment, systems and technology

Equipment, warehouse systems and technology can be expensive and is an optional expense in the sense that it is not required to operate your business.  For these reasons some businesses shy away from making capital purchases.  The same businesses that do this will also have no problem meeting a non-optional but high wages bill every week and pay overtime when required to meet customer demand.  In our experience, provided the correct equipment is bought for your requirements, the investment in warehouse technology, systems and materials handling equipment is always rapidly paid for in reduced labour costs, let alone increases in accuracy and quality, responsiveness and improved safety.

Once you have adjusted your attitude to technology from scary cost to business investment, you will never look back.  Look at every purchase as an investment in productivity and calculate the return and payback period.  If you lack the capital to invest then leasing or borrowing is usually a viable option if your business is strong.  The payback even for large investments will typically be less than one year, so if capital is tight, a loan or lease agreement can be structured to be cash flow positive to your business almost immediately.

Delaying an investment in productivity will usually only cost you money in lost cost reduction.  Although you don’t feel this the same way as a sudden jump in costs, the impact is the same.  Should you treat it as any less urgent?  It is for this reason that I think failing to invest in technology when the option is available to you is wasting money.
Let’s look at how you can do a basic return on investment calculation for an area of business need.  My number one technology investment recommendation for a warehouse is to implement a Warehouse Management System (WMS).

Let’s look at a return on investment calculation for the Rapid WMS that we will be making available soon for the small-medium business market.  For a modestly sized warehouse running a simple paper based ordering system and employing 12 people an investment of a little over $90k pays for itself in less than seven months and makes you $1.5M richer over ten years, that is an average interest rate of 170% p.a. (flat) over 10 years.  You can’t get that from a bank!

Item	Unit Cost	Units	Cost
Project cost			$            91,750
Current FTE (Labour cost)	$            55,000	12	$          660,000
Estimated Productivity Gain	25%
FTE reduction saving	$            55,000	3.00	$          165,000
Revised Labour Cost	$            55,000	9.00	$          495,000
Payback in Months			6.67
Net profit gain year	1		$        73,250
Net profit gain by year	2		$      238,250
Net profit gain by year	5		$      733,250
Net profit gain by year	10		$   1,558,250

Unfortunately not all investments in technology will have as high a payback as the first implementation of a WMS but you get the idea.  Find an area of need where labour can be saved and service quality increased, find a solution that you like, calculate the return,  implement it well and reap the rewards.

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

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 Mistakes adding cost and killing productivity in your warehouse #18: Choosing the wrong carrier

Your choice of carrier and freight service is an integral part of your product and service experience.  Your freight provider will likely have more regular contact with your customers than you do.  Choosing the wrong carrier can not only add cost to your business by paying too much for freight, it can cost your business through poor service delivery that may drive your customers to your competitors.

So how do you choose a freight provider?  Let me start with the do it yourself option.  Should you run a dedicated fleet?  i.e. vehicles that deliver only for you.  The answer is yes if you have sufficient volume of orders and a limited customer base so that you can ensure a high fleet utilisation.  The most likely candidates are B2B companies serving a particular market niche.  The next question is whether to outsource the management to someone else.  This is probably also a yes unless you are very big and can afford to invest in the vehicles and management staff and systems required run your own fleet efficiently.  The halfway option is to manage a fleet of subcontractors, where you provide the management and any vehicle fleet management technology but the subcontractors buy the vehicles.

Even if you have a dedicated fleet you will most likely still need to use general carriers to service the areas of your market you cannot deliver to directly.  The best advice I can give here is to shop around.  You can do this yourself or engage a freight broker or a consultant to give you advice.  The brokers advice will not be independent as it will be limited to the carrier relationships they have in place.  A broker will help you manage your freight and will take a margin for doing so.  This can still be a very good option as they will likely get better rates for you than you could get yourself (with their carriers) even though they take a margin.

A freight consultant can perform a carrier review for you.  The only way to accurately compare rates among different carriers is to apply the rates from each carrier to a standard set of historical data that represents your typical freight requirements.  To do this a consultant (or broker) will collect all your historical freight data and run a Request For Proposal (RFP) process to independently test the market to find the best price.  In this case you will pay a fee to the consultant but the advice will be truly independent and not hidden in ongoing fees.

As independent consultants Logistics Help can run a cost effective (and anonymous) freight review for you and repeat it on an annual or bi-annual basis to make sure you stay current.  The fees are not high and will be recovered in lower freight costs.  As your business grows and changes you will be able to negotiate better rates as rates generally reduce with higher freight volumes.

Sometimes a change in freight service or niche carrier can give you lower costs on part of your freight requirement.  For example you can send freight to the metropolitan area of your capital city with an overnight express service (such as Star Track) or you can send it with a twice daily parcel service such as Couriers Please or Fastway.  The parcel service is usually cheaper and gives you more time to process your orders because they pick up in the morning instead of the night before.  They also provide you the ability to do very cheap same day freight for early morning orders, or simply the advantage of clearing your outbound freight twice each day.

A niche carrier may specialise in delivery to  particular state or regional area that you have a lot of business in.  In this case you may well get a better rate and a better service that your customers love because the carrier is a local.

Knowing what is available and which carrier is worth pursuing is what you are paying the broker or consultant for, but there is no reason why you cannot do it yourself if you have the time to do the research and are a good negotiator.  If you have any doubts or want to find out the costs to have a carrier review done for you then contact us to find out more.

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

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.