Showing posts with label warehouse management systems. Show all posts
Showing posts with label warehouse management systems. Show all posts

Saturday, 8 June 2013

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.

Tuesday, 4 June 2013

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.

Wednesday, 22 May 2013

Is your Internal logistics helping your business grow, or holding it back?

Internal logistics is just as important as customer shipments

Variety is a great thing and can teach you a lot.  Over the last few weeks I have been helping
  • a hospital
  • an equipment company
  • a mine
  • a hotel
3 out 4 were concerned with internal logistics.  With all the focus that you see on commercial supply chains the criticality of internal logistics is often forgotten.  If your revenue engine is service delivery and not shipping products then you will not have a commercial oriented supply chain but your internal logistics are no less critical to the success of your business.  Unfortunately the internal support departments of an  organisation can end up being neglected until they start to impact the performance of the business.  Better, I think, to realise that internal logistics feeds and supports the service delivery and helps it to be profitable and grow.

The irony of the neglect is that internal logistics is usually pretty straightforward and (especially if it has been neglected) will not require a massive investment to significantly improve its performance.   A new layout of racking and stock that optimises stock storage and product flow can work wonders.  Small changes to the use of an existing system can work wonders in process efficiency.

If it is time for a major upgrade then you should know that Warehouse Management Systems are not just good for customer facing warehouses but also for internal logistics operations.  The simpler demands of internal logistics mean that simpler and cheaper WMS can be implemented, producing fantastic improvements in inventory accuracy and productivity. This will cut costs and let the front line people concerned with service delivery get on with their jobs, instead of worrying about whether they have the equipment and supplies they need to do the job.  

The big opportunity hiding in most internal logistics operations is that you need to spend a little more effort on the support processes to make big gains on the service delivery side.  Perhaps the classic example of this is in the retail sector where they have long ago realised that sending store display ready  stock to their retail outlets saves ton of money and time (and space) in the back of house retail store.  Clothes are shipped to the store on hangers, priced and ready to hang up; not in cartons requiring hours of sorting and preparation by retail staff before they hit the shelves.

So how could you change your internal logistics to better support your revenue engine?



If warehousing, logistics and supply chain 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 business and career boosting ideas I suggest you join The Warehouse Performance Initiative.

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*).


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.

Wednesday, 10 April 2013

21 mistakes adding cost and killing productivity in your warehouse - #14

14.   Incorrect picking methodology


Picking is the highest labour activity in the warehouse and consequently gets a lot of focus on optimising it by both the Warehouse system developers and the materials handling equipment manufacturers.  Failing to select the best picking methodologies for your particular business needs will see you missing out on what can be relatively easily won productivity gains.

There are three basic picking methodologies and a nearly endless variety of variations depending on the technology, equipment and layout employed in your warehouse.  The three basic picking methods are:

1.    Discrete picking

a.    Picking one order in its entirety before moving onto the next order.  This is the standard picking method employed by all order processing systems.

b.    Most suited to intermediate to large sized orders comprising multiple pallets or cartons of stock (including large re-pack orders).

2.    Multi-order picking

a.    Picking several orders at once in one pass through the warehouse.  If you have ever grabbed pick slips for a dozen single line orders and sorted them into correct travel sequence then you have performed a multi-order pick.

b.    The key to multi-order picking is to create a batch of orders that can be picked by one person onto one trolley.  Each order is assigned a carton number.  The picks are sorted into travel path sequence regardless of the order number.  Each pick is taken from the shelf and placed into the carton number associated with each order.

c.    Multi-order picking functionality is normally only provided by a WMS, but provided you have a modern system with some flexibility in data access, it is quite possible to create a paper based multi-order pick. (Contact us for more details)
d.    Suited to small order sizes where the entire order will fit into one or two boxes.

3.    Batch pick and assembly (also called consolidated picking)

a.    Performing a single pick for the sum of the quantities required for each item in a batch of orders.  This allows a single pass through the warehouse to pick an entire wave of orders.  The stock is staged in an assembly area and needs a subsequent pick process to assemble the individual orders.

b.    Most suited to picking from slow to access areas where discrete picking would be very slow.  This can be used as an entire picking strategy but be wary of the fact that the assembly process is effectively double handling and the selection of items from a large batch pick can be slow.

c.    The slow assembly process can be facilitated by locating the items in the assembly area so that they can be found quickly.  This functionality is not common, but not difficult to code if required, and manual workarounds can also be devised to speed the selection process.

Some common variations and combinations are:

·        Discrete pick the fast zone batch pick the slow zone or bulk areas

o   In this method the majority of the order picks are done for a single order from the fast pick area and a second batch pick for the order wave collects the stock from the slow zone and stages it in an area of the fast pick zone. The order picker then collects what he needs from this staging area to complete the order and thus avoids the travel time through the slow zone.

·        Multi-order pick the fast zone and batch pick the slow zone

o   Similar to the above but more suited to small order picking.  As above but the picker completes multiple orders in one pass through the fast zone.

·        Zone picking (discrete or multi-order or batch)

o   For very large orders or where stock requires different storage conditions grouped into location zones (such as temperature control, security, dangerous goods, special racking).  The order is broken up into zones and picked separately in each zone (often by different operators).  The picks from each zone are usually then brought together on the dock for consolidation for shipping purposes.

Further adding to the options available are various technology and materials handling equipment assisted methods.  Here is a quick summary.

·        Goods to the man systems

o   These are a means to eliminate picker travel and speed up picking.  They can be used for discrete or multi-order picking depending on their level of sophistication.

o   Vertical or horizontal carousels keep the operator in position and move the shelves to present the goods required for picking.  These systems require their own control systems that interact with the WMS to manage the picking and put-away processes.

o   Kiva systems use mini AGVs that move shelves of product to present the goods to the picker.

·        Conveyor based zone picking

o   This methodology is the province of the large distribution centre.  A conveyor moves totes for orders through each zone of the warehouse so that a picker can be restricted to picking from a limited range of items into the tote.  The tote is directed to each zone where a pick is required and ends up at a despatch station for freight labelling and staging.

o   This method also works for carton picks but in this case the picker picks and labels cartons on to the conveyor which directs the cartons from each zone to sortation lanes where the cartons are palletised for each order.

o   Some of the picking may be automated picking systems such as the A Frame high speed picker or AS/RS systems picking pallets and delivering them directly to the dock with AGVs.

·        Wireless terminal assisted picking

o   Warehouse management systems provide the opportunity to manage the information normally presented on a paper pick slip with in any way you could possibly imagine.  An RF terminal can drive discrete, multi-order or batch picking and present the information to the picker via a screen or via voice and even vision based systems

o   Screen and barcode scanning is the most common.  All products and warehouse locations are barcoded to build accuracy into the pick process.  The RF terminal could be fixed to a trolley or forklift, or hand held.  There are also wearable units that allow the user constant use of both hands and eliminate the need to pick up and put down a scanner.

o   Voice directed picking has been implemented widely and is highly efficient because the picker does not have to stop to read a screen or scan a barcode.  Accuracy is built into the process with verbal confirmations of check digits and quantities picked.

·        Pick To Light systems (PTL)

o   Pick to light is a static racking based system usually built into carton live storage (roller racks) that uses a small electronic display at each pick face to indicate how many items to pick.  The operator presses a button to confirm the pick.  This is suited to high volume discrete picking (several hundred units per hour) of small items into repack cartons or totes.  PTL is often one of the zones in a large distribution centre but can also a be stand-alone installation.

What picking method should you use?  This is a very good question and it will depend on your business profile - what sort of inventory you carry and what your order size, quantity and frequency are.  Once this is known then it is a matter of costing the various options to find a suitable return on investment.  The important point to realise is that you may be missing out on increasing both your productivity, service level and accuracy by not taking advantage of what the best picking methods have to offer your business.

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.

Sunday, 20 January 2013

Time for a new approach to Warehouse Management Systems

Smaller warehouses need a WMS too! 
It has always stunned me how Warehouse Management Systems (WMS) and the associated technology has failed to trickle down to medium and smaller businesses in the same way that other software and technology has.

At the high end these systems are quite stunning in their scope and functionality.  Modern WMS have extraordinary control over warehouse operations and have extended their functions further up and down the supply chain to provide control from inbound shipments through to delivery and return from customers.

This is great but where are the low end systems with basic functionality that will provide 80% of the benefit for 20% of the price?  Where are the systems aimed specifically at small to medium warehouses?  Mostly in this space you have higher end systems trying to compete and price more affordably, but they can never get cheap enough and they are too costly and complex to implement.  In addition to this the whole scale and approach of their IT support model adds more cost to the implementation and makes the cost of ownership prohibitive.

As one IT business development professional said to me recently 

"...the lower end of the WMS market is 

under-served."  

Quite a massive understatement from what I can see.  Many quite substantial distribution businesses have still not implemented a WMS and the lower end businesses have to wait too long to get a decent return on their WMS investment and so it gets put in the someday maybe basket (nod to GTD followers).

WMS technology needs to
get more affordable
A new lower cost model for software, hardware and implementation services and support are needed if this technology is going to live up to its potential to radically improve the productivity of the tens of thousands of medium and smaller distribution operations not just in Australia but around the world.

I have decided to stick my neck out and build that low cost WMS implementation model.  I have started my search for software and already have one promising prospect.  Now I am on a mission and you can follow the journey on the Rapid-WMS Blog.  Watch this space!

If warehousing, logistics and supply chain 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 business and career boosting ideas I suggest you join The Warehouse Performance Initiative.

Tuesday, 8 January 2013

How do I improve the productivity in my warehouse?

This is a lightning overview of how to get some rapid productivity gains in your warehouse.

First off you should really assess the match between business strategy and the warehouse operations. No business is static, and now more than ever fundamental changes in markets and customer behaviour can creep up on a business and require a revised approach to your stock management and order fulfillment strategies.  If your customers are now ordering more frequently in smaller order sizes or your direct to customer online business has taken off then your costs per sales dollar may have sky-rocketed and your warehouse may need a rethink.