Supply chain software: Getting more from your WMS

Even if you're not ready to invest in a new warehouse management system, you can leverage your existing investment by adding new functionality. Here's how.

By Bob Trebilcock, Executive Editor -- Modern Materials Handling, 5/1/2009

After years of consistent growth, the warehouse management system (WMS) market contracted in 2008. That comes as little surprise to Steve Banker, service director for supply chain management at ARC Advisory Group (781-471-1000, www.arcweb.com). "You're looking at a five-year payback for a complex materials handling solution and a 2-½ year payback for a traditional WMS," says Banker. "In normal times that's acceptable, but in a down economy, people want a one-year payback or less."

End users may not be willing to invest in a system upgrade or a new system in this environment, but they may be willing to invest in new modules that will leverage the investment they've already made in technology while extending the functionality of their existing system.

Labor management uses labor standards to plan the right amount of labor for a group of orders.

Some WMS vendors say that message is resonating with the market.

"We're seeing customers and prospects who are interested in making incremental investments for incremental gains, whether you're talking about warehousing, transportation management or supply chain planning," says David Landau, vice president of solutions strategy for Manhattan Associates (770-955-7070, www.manh.com). "They're looking for ways to squeeze more juice from an orange."

What's more, says Landau, if end users look closely at their existing systems, they may find they have functionality already on the shelf that they haven't yet turned on.

We asked five suppliers for ideas on how end users can get more from their WMS systems.

Task interleaving or task management: According to Landau, task interleaving is one of the most commonly underutilized applications in a Tier 1 WMS. What is task interleaving? It's an application that directs an associate who has just completed a task to the next closest available task. A lift truck driver delivering a pallet to the dock, for instance, might be directed to pickup a pallet at the dock for putaway rather than to return empty to a picking area. But to really do task interleaving properly, you have to map out the various paths in your warehouse at a detailed level. "Often times, that level of configuration requires a fair amount of time that customers don't have when they're implementing their WMS, so they put it off," says Landau. "But task interleaving offers a fair amount of savings."

Cubing: There aretwo levels of cubing. The first is known as volumetric cubing, where the system calculates which product should go in which carton based on the cubic size of the product. Most users are doing that. The next level is 3D or geometric cubing. "Geometric cubing allows you to look for opportunities to save space by doing things like nesting bowls in a carton," says Landau. "If you have a sophisticated WMS, there are opportunities to save on your shipping costs through better cartonization."

Rating and routing:Transportation management can deliver real savings to large shippers. But, what if you're a small shipper spending in the $5 to $10 million range? For you, adding rating and routing functionality to a WMS can deliver real savings, says John Pulling, senior director of product management for Infor (800-260-2640, www.infor.com). "Rating and routing is an extension to the WMS that will allow you to manage the transportation rules you already have in place and to do a better job of carrier selection, load consolidation and carrier rating," says Pulling. "It's a very tactical application, but the savings are real."

Labor management: Anyone using a best-of-breed WMS probably thinks they're already using a labor management system (LMS). After all, a WMS directs the activities of associates on the warehouse floor in a disciplined way, often leading to a 30% improvement in productivity. A full-blown labor management system builds on those improvements by creating engineered standards for the best way to perform a task.

Voice technology enables efficient hands-free picking.

"The management that goes along with a labor management program can take another 20% out of your labor costs," says Pulling. Conventional wisdom used to be that labor standards were only appropriate for the largest facilities. But Pulling says a warehouse with as few as 30 or 40 associates can pay for a LMS in as little as six months. "We urge customers to start with their highest labor areas like picking," says Pulling. "Why worry about the speed of your lift truck drivers if 80% of your labor costs are associated with case picking?"

Slotting: Like task interleaving, slotting is functionality that is often included in a Tier 1 WMS system that hasn't yet been turned on. The solution examines the demand for each SKU and then determines the best way to store it in the warehouse. "You get your ROI from minimizing the walking time of the picker," says Tom Kozenski, vice president of product strategy for RedPrairie (877-733-7724, www.redprairie.com). While gains will vary, average end users can get an 8% improvement in picking after reslotting.

Parcel manifesting and rate shopping: Like rating and routing, parcel manifesting and rate shopping can be added to a WMS, or even operate as a standalone application, by shippers who aren't big enough to implement a full-blown transportation management system (TMS) but want to reduce their shipping costs. "Often, a customer dictates the carrier and service level they want you to use," says Kozenski. "But, sometimes an order comes down just with a service level. With a parcel manifesting application, you can look for your best rate to meet that service level. And, if you have a longer lead time, you can shop for the best way to get it there by the due date, regardless of mode."

Voice recognition: Labor management isn't the only way to improve productivity in your facility, says Chris Goldsmith, director of product strategy for HighJump Software (800-328-3271, www.highjump.com). Adding voice recognition technology to your WMS, especially in case and each picking areas, is another way to optimize labor in the warehouse. "The productivity gains come from having your hands free," says Goldsmith. "There may not be much advantage if you're just scanning pallets, but if you're picking a lot of cases or widgets, you'll improve your productivity."

Supplier enablement: One way to improve your operations, and your cash flow, is to work more closely with your suppliers. "You can improve the use of your working capital, as well as your operations, by collaborating with your suppliers," says Goldsmith. Many systems allow you to extend your WMS functionality to your trading partners, especially to those who may not be able to afford an investment in technology on their own. Trading partners, for instance, can scan or manually enter order shipment information that acts as an advanced ship notification (ASN); or, you can provide compliant labeling data that they can download, print and apply from a desktop PC. Both will streamline receiving when the order reaches your facility. Supplier enablement also allows you to provide your vendors with visibility into your inventory levels so that they can do vendor managed inventory (VMI).

Incident tracking: This application allows a warehouse manager to identify those incidents that cost money and increase operating costs, and then automatically track them, says Eric Allais, president and CEO of PathGuide (888-627-9797, www.pathguide.com). The system can send an alert when such an incident occurs to key decision makers who can address the issue in real time and create an audit trail. "Let's say there is an inbound receiving discrepancy," says Allais. "An associate can report the issue on an RF terminal and alert everyone from a supervisor to the purchasing department. If you've just sent an incorrect shipment outbound, you can send an alert to a customer before they even receive the order."

Priority picking: WMS systems often operate on the 80/20 rule. They automate the 80% of what you do every day in the normal course of business. But some facilities, especially distributors, are faced with customers who show up at a will-call counter and need immediate attention. Too often, those orders are filled manually by pulling an associate off the job they're working on and sending them out to fill the special order. Priority picking automates that process, says Allais, by identifying the associate who can best fill the order, directing the fulfillment of the will-call order, and then working the associate back into the order flow when the priority order is picked.

"The ROI for priority picking is not as easy to quantify," Allais says. "But if you're in a very competitive area, where customers can choose from several distributors, maintaining a high level of customer service can help you keep your customers."

Priority picking allows you to fill special orders without slowing down.

Talkback

We would love your feedback!

»MORE

Featured Company

Motorola

Motorola is a global leader in providing integrated communications solutions and embedded electronic solutions. These include: Software-enhanced wireless telephone, two-way radio and messaging products and systems, as well as networking and... more