by Donald Kuzma, Trommer & Associates
Are your customers demanding more? Are you looking to upgrade your service and productivity levels by implementing a warehouse management system (WMS)? Are you ready for a WMS?
Warehouse management systems are one of the more powerful tools used today to control what goes on inside the warehouse or distribution facility, but not everybody is ready to install one. Many companies that have problems meeting shipping requirements or have inventory accuracy problems, etc., believes that a WMS is a solution to their problems. Unfortunately, automating the problem isn’t going to make it go away. The problem needs to be corrected before they move forward. A WMS has to be built on a good foundation otherwise you’re simply building a house of cards.
The purpose of this article is to help you decide if you are ready to implement a WMS system, or if you have to go back to the basics and re-enforce some basic warehousing fundamentals.
In order to decide if your operation is ready to implement a WMS solution, take a simple walk around the facility -- after hours. Make some observations and reply honestly.
• Are there pallets of merchandise in receiving that need to be checked in? How long have they been there?
• How much material is on hold? How long has it been there? What needs to be done to get disposition?
• Are receipts staged in the picking aisles?
• How full is your storage media? Is inventory spilling into the aisles?
• Are you storing and picking inventory from the right type of storage media? Piece picking from pallet rack or full-case picking from shelving?
• Is the inventory on the correct size of storage media? Is there unused shelf space behind the inventory? Do long parts extend into the aisle?
• Does the facility look neat? Was trash removed at the end of the day or were things just “dropped” until the morning? Is inventory square on the shelves and pallets or is it falling over and spilling into other SKUs?
• Are stocking locations, SKUs, aisles, etc., clearly marked?
• What is the condition of the equipment and storage media? Has it been neglected and abused?
• Is there any damaged merchandise in the storage media?
• Is the returns area in disarray? Are returns processed in a timely manner? What is the asset value in the returns area?
The next day, take a walk through the facility again and look at the operation.
• Does the operation flow smoothly, or do people look rushed?
• Do you have written procedures? Are they followed?
• Do your procedures contain exceptions? A few? Is everything an exception?
• Are there a lot of “work-arounds” to make shipments?
• Are work areas neat and clean? Are they too “personalized”?
• Is the shipping area organized? Are there notes taped everywhere to tell the shipper how to make a specific shipment?
If you’re uncomfortable with your tour and you’ve started to question some of the things that you observed, then you might not be ready to automate your system. It might be time to fix your practices and procedures. Many of the above items can be fixed through procedural changes; some are more involved.
It won’t always be enough to establish rules such as “All receipts will be checked in on the day they arrive.” It would be better to set a goal for check-in and measure the check-in time against the goal. By establishing and measuring this Metric you can now determine the extent of your problem and begin to determine the causes of the problem. Other Metrics should be identified and measured. These include, but are not limited to: time to stock a receipt, number of items awaiting processing in returns, length of time to process an order, out-of-stock items, number of available stock locations by storage media type, etc.
The written procedures should be reviewed or, in the worse case, written. This step should be done as part of the functional specification development for the WMS. You should also question each exception to a procedure. Was the exception a one-time occurrence that is implemented on every order? Is the exception really necessary? Should the exception be made the standard to simplify the procedure? An effort should be made to minimize the number of exceptions because these exceptions will only complicate the WMS implementation, add cost to the implementation, and extend the implementation schedule.
Once the procedures are documented, determine if people take shortcuts or work around the procedures. These shortcuts are not allowed in the WMS environment because they are a disruption to the sequence of transactions necessary to keep the WMS records in balance. The results are inventory shortages/overages, missed shipments, unbilled shipments, etc. The shortcuts must be eliminated prior to WMS implementation.
The last item affecting a WMS implementation is the layout of the facility. This includes storage media selection and powered equipment such as lift trucks and conveyors. Many times equipment is added to a facility as space allows to meet additional inventory or sales demands. Many times this results in a layout that is less than optimal. Ideally, the layout should be corrected prior to the implementation of the new WMS. It is not advisable to reconfigure your warehouse layout and implement a new WMS concurrently.
The implementation of a new WMS is a big step for most companies. To assure success you must have a solid foundation on which to build. If you are unsure about the condition of your operation, seek outside assistance and have a facilities audit performed on your operation. A good facilities audit will review your processes from receiving through shipping, look at the general condition of the facility; review your storage media utilization, and any mechanical equipment. The result of the study should give you a good roadmap to get ready for your WMS project.
Don Kuzma is president of Trommer & Associates Inc., an Akron, Ohio, consulting company specializing in the design of warehouse and distribution facilities (www.trommerinc.com). Don has 20 years’ experience in the design and implementation of distribution systems for various industries, which include the automotive aftermarket manufacturers and distributors, sporting goods and apparel, industrial supplies, electronics components, and drug wholesalers. Prior to joining Trommer & Associates, he was director of project management, materials manager and systems sales manager for a material handling design/build firm in Cleveland. Don has a BSIE from Purdue University and an MBA from Baldwin-Wallace College. Currently, he is president of the Northeast Ohio WERCouncil. He was a speaker at the Simulations Solutions Conference, 2001.