WMS: Making Sense Of A Warehouse Mess
Quick, efficient and accurate. These adjectives describe the benefits distributors expect to receive from their warehouse management systems (WMS).
There are several warehouse management systems available today. Basic systems begin with inventory control — including receiving, picking and shipping — and the more advanced systems add functionalities that enable managers to control the tasks performed by employees, as well as provide value-added services.
One of the most important requirements of WMS is that it have real-time order-tracking capability through the use of radio frequency identification (RFID) technology, says Steve Banker, service director of the ARC Advisory Group, Dedham, Mass., a research and advisory firm in manufacturing and supply chain solutions. Systems that don’t utilize RFID are simply inventory systems that report where products are in a warehouse and print lists of what needs to be picked and shipped that day.
“A warehouse management system gives you perfect accuracy or close to perfect accuracy on what’s actually happening in the warehouse,” says Banker.
In daily practice, WMS works something like this: a worker grabs his radio frequency gun that tells him to go to row “X”, slot “Y,” and pick “Z” cases of product. The worker then scans the bar codes on the cases and takes them to shipping.
“Now, you know that you’re getting perfect order fulfillment,” says Banker. “You are doing exactly what you were told to do. You picked inventory from the right location and you’re driving the perfect order. You know exactly how much inventory that you have in the warehouse and are making sure that the inventory is where it’s supposed to be.”
Real-time inventory also offers superior efficiencies, according to Bob Shaunnessey, executive director of the Warehousing Educational and Research Council (WERC), Oak Brook, Ill. First, it eliminates the need for an order to go through several departments for processing.
With WMS, when a product is unloaded, it immediately enters the system, versus having the driver drop a piece of paper off with a clerk, who makes sure the order is correct, and then sends it to the front office where someone enters into the computer system. This can take anywhere from four to 24 hours, Shaunnessey says, and that whole time, the company is unable to place orders against the product, even though it is technically in stock.
“Today’s systems are far more efficient,” he says. “Inventory turns much faster and there is less labor required to run the warehouse.”
Bar coding and RFID have been available to warehouses for a good 25 to 30 years now, Banker says.
While most distributors are seeing the value in having RFID in their warehouses, few have caught on to the benefits of adding Labor Management Systems (LMS) to their WMS solution, according to Shaunnessy.
LMS essentially lets managers know how employees are spending their time. First, managers determine the most productive way certain tasks should be done, developing standards based on the results they expect to receive from the task. Using LMS software, managers can determine how much time it should take an employee to do a certain job.
“Start to have people reporting how much time it takes them to do the various tasks, and you’ll get more productivity,” says Shaunnessey. “You’ll wonder, ‘Jeez, why is it taking so long to do this?’ You start to look at it and you find out, well, this is dumb, we’re doing this [task] and undoing it and redoing it.”
WMS All Grown Up
“Twenty or 30 years ago, if you weren’t a billion-dollar company, you didn’t have WMS,” Banker says. Since then, the technology has become less expensive because the software codes themselves have gotten better, and because more companies offer the software, which drives down costs.
There are three main ways companies obtain WMS capabilities: having a custom-designed system built for the specific company, purchasing software or paying on-demand.
Custom-designed systems are typically the most expensive, says Banker, and are not used much anymore. “It’s like buying a custom-built house versus a house that has been pre-designed that comes together modularly,” Banker says.
Though custom designed systems are more pricey, Shaunnessey says they are becoming more affordable because they are typically not built from scratch like they used to be, and they have amended to handle new technology. They also offer the ability to change components how you want, when you want.
“There are definitely advantages to it, but today, the costs of writing software have gone down such that the cost to purchase is less than the cost to build,” Shaunnessey explains.
Many small- to mid-sized jan/san distributors look for a basic, no-frills type of warehouse management system. Banker suggests these businesses find an Enterprise Resource Planning (ERP) solution — a system that integrates all data from a company’s departments into one system — and implement a real-time WMS solution as a part of the overall system.
Shaunnessey concurs that using an ERP as a backbone for WMS is a popular option. “What a lot of people look for is a warehousing system that matches how they want to run their operation, and then they build it into the ERP,” says Shaunnessey.
Smaller distributors who wish to invest little in WMS have the option of “outsourcing” their solution. “Instead of buying the software, you pay a very small amount,” Banker explains. “You don’t own the solution, but you are paying as you need it.”
Companies that offer on-demand WMS to distributors will provide them with the necessary RFID technology and a way to link to the software through the Internet. The companies typically charge a monthly or per-use fee for the service.
Banker says outsourcing WMS is a good option for smaller distributors because there may not be an information technology staff or even an IT employee. Through on-demand solutions, the provider is constantly making sure the software is current and working correctly.
WMS In Action
Crawfordsville Paper Products (CP Products), Crawfordsville, Ind., a mid-sized distributorship, uses a modular WMS that integrates with an ERP solution. Todd Douglas, vice president of CP Products, says it is a fairly simple system run off of the company’s server.
There are a few features that stand out in his mind that have provided efficiencies since the system was implemented five years ago. First, there is a “safe level” feature included. “If you want to be sure to have 10 of a certain item on the floor at all times, the system will tell you when you need to reorder,” says Douglas.
He also likes that the system is scalable. Some systems will only sell in case levels, but at times, Douglas says products need to be broken out of cases either for replacement or demonstration purposes. The WMS Douglas’s company uses allows them to break a case and have an accurate amount of product in the warehouse.
The efficiencies that are provided by WMS allow the company to spend more time focusing on its customers. “It allows us to bring more value to other areas where time is better spent,” Douglas explains. “It enables us to take care of customers’ needs instead of trying to keep up or catch up with warehouse issues.”
While Douglas says his company is pleased with the system it uses, he realizes there are some companies the system just would not work well with. “I would say a company with a dozen or more branches might not want to use my system,” says Douglas.
Picking The Right System
Knowing that there is no such thing as a one-size-fits all WMS is very important, says Shaunnessey. Distributors should look at their current operation and the steps that would be required in implementing a new system.
“The trick is to go through and identify the individual tasks and see how they’re done,” says Shaunnessey. “Then you can look at the specifics of the system to see what the system will allow you to do and what the system won’t allow you to do.”
To ensure that you choose the right system, your best bet is to have someone with software knowledge — either in-house or through a consultant — go through and decide which system is best for your company.
Banker agrees that each company will have specific needs, but says the bigger your company, the more functionality you will need. “Not everybody is going to be willing to spend more than $100,000 on software and $200,000 on implementation,” says Banker. “For smaller guys, that’s a big investment. But, this is the kind of investment where you can grow into it. You can start small, and grow it bigger with certain types of solutions.”
|WMS Provides Quick Return On Investment |
The decision to implement a warehouse management system comes with the understanding that there will be a return on investment.
WMS can help save money in several ways. Inventory control is the obvious money-saver because no business wants to be stuck with too much — or too little — product. It also makes the best use of employee’s time. “If you have 100 percent accurate reporting as to the locations of everything, and the system directs everyone on where to go to get it, you don’t have people driving up and down the aisles of the warehouse looking for something, wasting time,” says Bob Shaunnessey, executive director of the Warehousing Educational and Research Council (WERC), Oak Brook, Ill..
Companies that add Labor Management Systems (LMS) — the technology that measures the time it should take to properly do a task — can realize even more savings. “When you add LMS to your operation, the historical average [in labor savings] is about 20 to 25 percent,” Shaunnessey notes. “It’s pretty substantial.”
There are differences in payback periods (the time it takes for a company to see a ROI) for companies that implement real-time WMS as compared to warehouses with paper-based solutions is substantial, says Steve Banker, service director of the ARC Advisory Group, Dedham, Mass. Large warehouses typically have a payback period of two years, with most savings coming from reducing the amount of labor needed to get the work done.
For smaller companies, ROI is usually even faster. “Small companies that are buying very low-priced solutions have payback periods that are often less than a year,” Banker says. “That payback comes from just having that real-time view into your inventory.”
When deciding on WMS, it is important to look five years down the road to determine what aspects of the system you will probably develop in the future. “Look down the path five years so that you can buy something that’s got the flexibility you need and the ability to be integrated with other pieces you may add in the future,” says Shaunnessey.
ISSA And OSHA’s Internet Partnership
ISSA and the U.S. Occupational Safety and Health Administration (OSHA) have collaborated to create a Web site intended solely for protecting the health and safety of workers in the cleaning industry.
The site, www.issa.com/osha, is a result of the organizations’ recent health and safety alliance.
Five topic pages focus on: exposure to blood-borne pathogens; cleaning chemicals in the workplace; injury and illness recordkeeping; personal protective equipment; and slips, trips and falls in the workplace.
The site also contains information on compliance, regulations, checklists and frequently asked questions.
GCU Takes Industry Back To School
The Green Cleaning University (GCU) Web site was recently launched by the Ashkin Group LLC, Bloomington, Ind. The online university, which can be accessed at www.greencleaninguniversity.org, will serve the industry as a professional development tool and resource on green cleaning and healthy building maintenance.
GCU aims to make training available 24/7, unlike other training programs where participants have to alter their schedules to meet trainers’ class times. New material will continuously be added to the site; initial “classes” focus on how to maximize the sale of green products
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Make sure you are in the know about all of the industry’s events, trade shows and training opportunities by visiting www.cleanlink.com/calendar.
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