Building the smarter WMS with business intelligence

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 2/9/2006

Of all the new software, business intelligence (BI) solutions that provide real-time analysis may be the ones end-users are clamoring for most.

“I talk to 150 supply chain executives and distribution center managers a year,” says Steve Banker, service director, supply chain management, ARC Advisory Group (781-471-1000). “If you want to get these guys going, ask them about how they’re measured and whether those metrics make sense. They are all looking for tools that will give them better real-time data and better decision-making tools.”

While business intelligence solutions have been commonplace for the financial side of the business for years, they are just now being adapted for the supply chain.

That domain expertise is important for anyone trying to look for value in the millions of transactions generated each day by the typical supply chain execution system as it receives, puts-away, picks and ships inventory.

“BI derives meaning out of all that information that has value,” says Ron Riggin, chief technology officer, MARC Global (866-703-8279). “The tools synthesize the information to show you trends in the past, the activities in the present and forecast where you might end up if you continue that trend.”

Riggin says business intelligence tools feature four functions.

The first is analysis. By filtering information from execution systems, as well as other enterprise systems, the BI tools identify meaningful trends and forecast results.

The second is visualization. The system delivers personalized views of key performance indicators and operations that are important to specific users in real-time.

The third is alerts. Once a user of the system has defined operational norms that are important to that user’s job, the system can deliver real-time predictive alerts that indicate any deviation from the norm.

Finally, the systems allow users to easily create or modify reports.

While many supply chain execution systems can deliver key performance indicators (KPIs) to an end-user, a BI system can tie a value to that information, says Riggin.

“A WMS with a KPI dashboard can tell a 3PL that the employees did 20,000 picks that day or even alert the facility manager that they are ahead or behind of schedule,” says Riggin. “A BI engine can tell you what the value of those picks was to the enterprise, or what kind of margins were earned on them.”