What You Should Know Before Buying A Supply Chain Execution System

By John M. Hill, principal, Esync

How does a WMS operate? Space constraints preclude a full WMS description in this presentation, but let's take a look at a major functional area to contrast pre- and post-WMS implementation. A typical, non-WMS receiving scenario is illustrated on the right. Materials arrive, are identified and checked in. Receipt data is transcribed for later entry into a host level inventory system. Dock personnel then make a determination as to disposition and issue or execute move tasks accordingly. Storage locations are maintained in a tub file and operators depend upon experience for location selection. Move completions are transcribed for key entry to the host system or manual adjustment of warehouse inventory records and location files. The process is time consuming, paper intensive and error-prone.

In the WMS environment, unless inbound materials have been bar coded or RFID-tagged by the shipper, the check-in process is essentially the same as that described above. But, this is where the similarity ends. Check-in is executed by operators using WMS-linked radio data terminals or video display terminals. The WMS matches each line item against its records of ASN's or anticipated inbound purchase orders. Exceptions are noted and transmitted to the enterprise system, but the materials are accounted for and stored or staged for disposition according to user-defined rules. If goods arrive for which there is no ASN or the purchase order is not on file, the WMS will verify the part number, stage or temporarily store the materials and request disposition instructions from the enterprise-level system.

The WMS then generates a unique bar code tag ("license plate") to be applied to each carton or pallet received and the goods are staged for putaway. Note that "license-plating" can also be accomplished with RFID tags. The tag number is what the WMS uses to track the specific receipt during its journey through the warehouse. Damaged goods, returns and materials requiring QC are segregated from those to be crossdocked or stored. As check-in and staging for receipts are completed, the WMS immediately tasks operators via radio data terminals to move to the staging area. At staging, an operator scans the bar code (or RFID) "license plate" on a receipt and the WMS determines where it is to be moved.

The WMS maintains a map of each warehouse location by size, capacity and status (empty, full or partially full) and the type(s) of handling equipment required to service it. The system also maintains a "part master" including the dimensions, weights, handling instructions and popularity for each SKU's handling unit of measure (e.g., each, case, pallet). If a receipt is to be moved into a warehouse storage location or forward pick location, the WMS will check the part master for SKU characteristics and then match them against available locations and required handling equipment. The WMS then instructs an operator (with the correct piece of handling equipment) via radio data terminal to move the receipt to the selected location.

Each storage location in the warehouse carries a unique bar code identification label. (Some companies are now testing RFID tags for this purpose). Once at the selected location, the operator scans the bar code (or RFID location tag) to verify that he or she is in position and the WMS responds with an instruction to store the load. If the location is full, the operator will so indicate using the radio data terminal and the WMS will instruct him or her to move the load to a secondary location. In this event, the WMS will also record the anomaly and trigger a location cycle count or send a message to a supervisor.

The process for handling damaged goods, returns and QC samples follows the same procedures with operators tasked to move goods to these areas and verify that they have done so. Items selected for cross docking or to fill backorders are generally moved to a shipment staging area for consolidation with other order components.

There are multiple variations on the WMS receiving and putaway process described above. What is significant is that every task is time stamped and recorded with the identity of the operator who performed it. The location and status of each piece of inventory is available at all times. Indeed, every time an item moves, WMS records are updated instantly - - in receiving, storage, picking and shipping!

WMS Benefits

Although the benefits of successful WMS implementation will vary from user to user, those most frequently cited include:

Reduced/Improved:

Damage/Shrinkage

Inventory Accuracy

Misplaced/Lost Stock

Space Utilization/Stock Location

Search Times

Throughput

Safety Stock

Order/Lot Tracking

Outside Warehousing

Stock Rotation/Inventory Turns

Paperwork, Forms

Customer Service

Human Error

Work Planning/Scheduling

Direct/Indirect Labor/Overtime

Resource Allocation

Deadheading/Equipment Costs

Labor Productivity

Utility Costs

Equipment Productivity

Courier/Delivery Costs

Performance Measurement

Physical Inventory Taking

Backorder Handling/Crossdocking

Users of properly scoped and implemented WMS report productivity improvements of 20% to 30%, inventory accuracy of better than 99% and labor cost savings of 25% or more, much of it in indirect support and clerical areas.

WMS User Profile

Typical Warehouse Management System users are generally operating multiple distribution facilities with all or most of the following characteristics:

-- Size: 75,000 square feet or more

-- Conventional Material Handling: Seven (7) or more Lift Trucks

-- Mechanized Material Handling: Conveyors/Automated Storage

-- Little or No Computer-Based, Real-Time Operations Management

-- Discrete Products: Large Number of SKU's

-- High Transaction Volume and/or High Unit Value

-- Low Inventory Turn/Shrinkage

The foregoing notwithstanding, a number of WMS have been installed with good success in much smaller facilities (e.g., jewelry warehouses) with lower transaction volumes. Increasingly, we're also seeing WMS implementation by manufacturers and distributors to provide the smaller, more frequent deliveries, compliance labeling, advance ship notices and improved visibility of order status demanded by the e-commerce consumer.

WMS Vertical Markets

No market emerges as a dominant WMS user. Major users, however, include:

Aerospace

Apparel Manufacture/Retail

Automotive

Automotive Aftermarket

Consumer Products

Cosmetics Manufacturing

Delivery Services

Drug Retail

Electrical Products

Electronics

Food Processing

General Merchandise Retail

Grocery Wholesale/Retail

Health & Beauty Aids

Lumber/Lumber Products

Mail Order

Office Products

Paper Products

Pharmaceutical

Photographic Products

Plastics

Plumbing Supplies

Shoes

Tobacco

Toys Retail

Utilities

Wine/Spirits, Etc.

WMS Suppliers

Although as many as 375 companies have been listed in the Council of Logistics Management's annual Logistics Software Survey, those we see most frequently in the marketplace include:

Acatech Solutions Inc.

Ann Arbor Computer

Applied Tactical Systems Inc.

Catalyst International

CSI (Cambar Software Inc.)

Delfour Corporation

EXE Technologies (Now SSA Global)

Genco Distribution System

HAL Systems Inc.

Intek Integration Technologies

HighJump Software Inc.

Integrated Warehousing Solutions, LLC

irista

JD Edwards

Knapp

LDS

Lilly Software Associates

LIS Warehouse Systems

Logility

Majure Data Inc.

Manhattan Associates

MARC Global

Microlistics (Asia/Pacific)

Mincron Software Systems

Motek

OMI International

Optum Software

Oracle

Provia Software

QSSI (Quality Software Systems, Inc.)

Radcliffe Datahorse

Radio Beacon Ltd.

Red Prairie

SAP

SK Daifuku

Swisslog Software USA

V3 Systems (formerly Midgard)

Yantra Corporation

Zethcon Corporation

NOTE: The above is a representative listing of suppliers. Inclusion hereon should not be construed as an endorsement; nor should omission be interpreted as the absence of endorsement.

The products offered by these companies share many features, but differ widely as to flexibility, adaptability and user friendliness. Given the variations, it is critical that you take a measured approach to assessment and articulation of your requirements in order to better assess the suitability of alternative solutions.

The last installment in this series will appear in the next Material Handling Management newsletter.

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