Thursday 22nd Jun 2017 - Logistics Manager

Time to bin the paper

Are you at the cutting edge using artificial intelligence, robots and the internet of things – or does your warehouse still rely on pen and paper? Perhaps it’s time to re-evaluate the technology used to manage your inventory, says Malory Davies.

This article first appeared in Logistics Manager, March 2017.

This article first appeared in Logistics Manager, March 2017.

Is there anyone in the world not using a warehouse management system today? They have been around for so long, and the technology is so mature, that surely it is perverse to ignore it.

But apparently, there are still a lot of companies, both large and small, that are running their warehouses with a paper-based system.

Eric Carter, solutions architect at Indigo Software, says: “This tends to occur either among manufacturers who consider a separate WMS unnecessary because they have very limited WMS modules within their ERP software, or much smaller companies who are in early stages of growth and not making best use of technology because they are burdened by day to day trivia of meeting daily sales orders. In both cases, they are missing out on the automation and traceability benefits that a specialist WMS solution can offer.”

And even companies that have a WMS in place are not always taking full advantage of the capabilities available. For example, says Alex MacPherson, solution consultant manager at Manhattan Associates, “very few organisations are embracing optimisation components as part of the WMS they have in place – this can relate to labour management, employee performance or slotting optimisation, all of which help improve and enhance the utilisation of warehouse resources.”

Often, says, Andy O’Donnell, managing director of Red Ledge, points out that while some companies invest to gain advantage over their supply chain competitors, “in truth much of their investment is driven by their own clients: ‘for us to do business with you, you need to do this’ – and they comply.

And yet, there are significant savings to be made. Eric Carter says: “The return on investment for companies who do make an investment in a WMS is very significant. Recent research across Indigo’s customer base highlighted that on average, customers were able to shave an average £126,000 per year off the costs of running their warehouse operations. Across all industry sectors, individual savings were reported by customers in goods receiving; put away, picking, stock counting and general warehouse administration operations, leaving them with a budget surplus to invest in further business improvement projects.

“The total amount saved across all customers was in excess of £1.7m over the past 12 months, representing a significant budget surplus having been achieved. This is enough money for each company to invest in 7 reach trucks, 520 metres of racking and 12 pedestrian operated pallet trucks, based on second hand equipment prices, to further improve warehouse operations,” says Carter.

Jonathan Bellwood, founder and chief executive of Peoplevox, points out that to take full advantage of WMS, companies must take a more holistic approach to how they fulfil and deploy their WMS accordingly.

“This must also encompass optimising warehouse layouts,” he says. “For example, e-commerce warehouses favour mezzanine layouts to allow operatives to move around unimpeded as they have to pick from a large and varied SKU base. This requires multiple numbers of pick bins on mezzanines to aid picker agility and productivity. Putting this into perspective, 60 – 80 per cent of warehouse personnel overhead is on pickers so the more efficient you can make them the better. A key part of ensuring maximum productivity also includes the use of gravity feed materials handling equipment rather than a reliance on powered machinery, for reasons of reliability, time to fix, not to mention energy savings,” says Bellwood.

He also highlights returns as an area where retailers are wasting time and money by not taking a holistic approach to WMS and fulfilments. “By integrating their WMS with a collections service such as CollectPlus will not only provide greater visibility and intelligence on the number and types of items being returned, but also help allocate sufficient staff to receive and process returned goods more quickly.”

In addition, he says, modern WMS can also make use of mobile devices such as Android tablets or phones. “This places operatives right at the point of activity which improves productivity, accuracy and money. For example, an Android Pack Pod app on the device will help retailer warehouses deal with unplanned demand more efficiently,” says Bellwood.

Simply understanding how these technological developments can be used can be an issue. Red Ledge’s Andy O’Donnell says the company’s consultancy arm can give a broad introduction to all the technologies, to help companies make an informed choice. “Some technologies that are appropriate for one client are not appropriate for another. A company’s uniqueness may be what gives them an advantage in their marketplace, and the technology they choose can be used to leverage this.”

The move towards best practice typically focuses on storage optimisation, task optimisation, and labour management, says Matthew Butler, director, solution strategy at JDA Software.

“Storage optimisation is easily achieved with accurate forecast data and allows system intelligence to drive efficiency through reduced travel time. However, the data used to slot locations or areas can quickly deteriorate as seasons change and trends evolve. Therefore, data maintenance is a critical aspect to ensuring continued performance. Task optimisation through directed work is quickly employed in some high value areas such as case/each picking, but broader opportunities related to expanded use across other areas, especially regarding interleaving opportunities as a fully directed approach is embraced, are often left unrealised.

“Labour management is perhaps the greatest value opportunity, but organisational commitment to the program must be maintained. Otherwise, the gains will often ebb or retreat if the program regresses only to labour reporting, as opposed to a continued use of the tools for measuring and providing feedback to associates. Beyond this trifecta of productivity tools, expanded adoption of tools like voice technology, layer picking, automation, and general process improvement – often deferred to ‘phase 2’ remain unaddressed,” says Butler.

Of course, applications should always be implemented to meet specific business requirements, and Alex Mills, sales and marketing director at Chess Logistics Technology, points out that inevitably there will be a lag between an innovation being available and a customer choosing to implement it.

“Many businesses have still to discover the benefits of voice applications even though this is an established and proven technology. Similarly, many businesses could probably do more to integrate various business applications (including WMS) to provide an end-to-end platform to support their operations. In general there is often an advantage in introducing any technology which improves efficiency and productivity, the seamless processing and flow of information throughout the supply chain or which enhances customer service,” says Mills.

The emergence of cloud-based WMS systems has led to speculation that the days of on-premises systems numbered.

Gavin Clark, commercial director of Snapfulfil, points out that with many of the largest software companies channelling investment into their cloud offerings, the writing’s on the wall for most on-premise applications.

“Adoption of cloud and SaaS WMS has lagged behind the adoption of other cloud-based applications, however, all the evidence points to cloud WMS reaching a tipping point. Although many large corporations still have on-premise WMS, many are adopting cloud strategies to support the future development of their distribution networks and we expect to see more and more instances of on-premise and cloud WMS co-existing within the same organisation – a shift to ‘cloud first’ strategies is only a matter of time.

“Concerns about the security and functionality of cloud applications have largely been addressed and, with the exception of all but a very few of the largest organisations who still prefer to host their WMS on their own servers, cloud is the all-round better bet. Offering functional parity with on-premise WMS, along with rapid implementation and inclusive support and upgrades, today’s cloud WMS solutions deliver faster return on investment and lower total cost of ownership.

“On-prem also used to be to ‘go-to’ deployment method for companies who wanted to capitalise their investment in WMS, however, in addition to the SaaS model, progressive vendors like Snapfulfil are also offering a wider range of payment and deployment options,” says Clark.

It’s a view that resonates with Peoplevox’s Jonathan Bellwood: “Yes, the days of on-premise systems only are numbered. In ten years they will have disappeared. To enable and hasten the migration away from on-premise systems requires innovation, such as overcoming the FUD factor over Internet Connections, by providing users with WMS systems able to operate offline as well as online.”

Nevertheless, there is still a strong body of opinion supporting the continuation of on-premises systems. There is room in the market for both, says Andy O’Donnell of Red Ledge. “But we are talking about mission-critical solutions, high transaction rates and complex picking: so to support a real-time environment users need 100 per cent confidence in local connectivity to the cloud, or traditional file servers as an alternative.”

And Chess’s Alex Mills points out that while cloud-based systems offer some benefits for larger customers, many warehouse operators prefer to retain traditional hosted or managed systems for reasons of control, privacy, data ownership or security.

Martin Frijters of Kewill say: “Both on-premise and dedicated cloud will be considered. Many companies making the choice between cloud and on-premise still have valid reasons for deploying the solution in-house. The size of the company and their warehouse will play a role in this decision.”

And Touchpath’s David Myers says: “Cloud-based systems are fine where bar-coding and scanning are the limit of the technologies use but as WMS solutions become more integral to the physical processes within the warehouse I can see this trend being reversed.”

Where are the real innovations?

Eric Carter, Indigo Software: Slow uptake of robotic systems in particular – it’s down to the costs involved, which can run into the millions. Added to this is the question of the amount of time needed to make the adjustments while at the same time, ensuring the business can operate as usual during the implementation phase.

Andy O’Donnell, Red Ledge: Passive RTLS, real time locating solutions have been out there for some time and are typically proprietary, active tags that are battery-driven and expensive. But passive solutions are now coming onto the market that use UHF RFID technology. This development opens up a previously proprietary systems environment, freeing the user from software companies that are pushing their own tag solution.

Gavin Clark, Snapfulfil: We recently received a grant from Innovate UK to develop a solution which will allow our Snapfulfil WMS to deliver robotic levels of efficiency without the high levels of capital expenditure and fixed capacity associated with traditional warehouse automation technologies. Our next generation system will use a network of sensors to supply accurate, real-time 3D locations of both pickers/trolleys and stock in the warehouse and include sophisticated routing and scheduling algorithms to dynamically optimise the location and movement of people and goods within the warehouse.

Matthew Butler, JDA: Next generation user interfaces have been designed to be persona-based, delivering an intuitive, process-based approach to recognise tasks needing attention or exception conditions. The interaction with the system provides the data required to resolve the issue and push the work forward to ensure service levels commitments will be met.

Alex MacPherson, Manhattan: Returns management has always been seen as the Cinderella of the supply chain as it is usually pushed back and not really seen as a priority, but now it is becoming a key consideration.

Jonathan Bellwood, Peoplevox: Wider adoption of mobile devices in the warehouse. We are seeing the rise of ‘On Premise Cloud’ providers, delivering machine/device intelligence where the Cloud is purely used to push real-time data and information to operatives’ mobile devices at the point of activity. This is really the dawn of the AI empowered warehouse manager who will finally be able to progress from being a fire-fighter and doer of often more menial tasks, to a manager and leader of people.

Alex Mills, Chess: “Automation: processes throughout the supply chain are being automated, whether through intelligent processing or increased use of robotics, smart identification and other technologies. WMS should (and the best do) support these advances by providing the platform for the data storage, processing and exchange required to interface with various other systems.

Andy O’Donnell, Red Ledge: Warehouse control systems. More companies are now looking at an Amazon type environment in which automated warehouse control links automated conveyors and sorters, for example, with more traditional WMS systems. When the WCS is driven by the same WMS it allows for better integration and more efficient use of the warehouse.

Martin Frijters, Kewill: “Larger organisations will be able to increase their efficiency and profitability by using robotic systems, as they’re already halfway to full automation. As a result, the main players in the WMS market will play a major role in making such systems more mainstream. We will then see them begin to trickle down to the rest of the market.”

Matthew Butler, JDA: Mobility, allowing the supervisors to disconnect from their offices and walk the floors, using system visibility and real-time interaction with the associates to ensure efficient work is being performed in line with operational objectives.

Andy O’Donnell, Red Ledge: Collecting big data from both inside and outside the box: for example the Internet of Things allows you to track temperature-sensitive assets in near real-time, using their data as part of the same warehouse management function that moves the asset. So the IoT allows you to collect information from inside the box and associate it with what’s happening outside the box.


 

Game changers

There are three things that are fundamentally changing the WMS market: smart devices, operating systems like Android and IOS, and demand for truly mobile applications that can switch seamlessly between wi-fi and GSM, says Indigo’s Eric Carter.

“Users now expect touch-screen functionality, which is fundamentally changing the landscape of what hardware in a warehouse looks like. Traditional rugged devices like handhelds now look very out of date and have very limited functionality compared with the look and technical capabilities of a smart device,” says Carter.

“One of the things we’re seeing more commonly within warehouses is the adoption of a more continuous picking methodology called order streaming,” says Manhattan’s Alex MacPherson. “Order streaming is about the ability to manage more complex pick sequencing, typically found in high volume e-commerce warehouses, and is going to be key for successful warehouse management operations in future. Also, as I mentioned before, usability and mobile usage is going to be a huge game changer for the market this year.”

Andy O’Donnell of Red Ledge believes that the drive for greater efficiency and visibility, and optimum customer support will dictate any emerging technologies. “WMS systems integration now should incorporate UHF RFID technology and be focused on the IoT and IIoT.”

The internet of things is also highlighted by JDA’s Matthew Butler. “Supply chain digitisation and the internet of things advances will bring a whole new element of proactive issue recognition and prescriptive exception handling to the supply chain, including the warehouse.

“Machine learning will usher in new methodologies for anticipating fulfilment requirements that the distribution networks will be expected to internalise and take action upon.”

David Myers of TouchPath International picks out the capability to track the position of not only goods but assets such as trucks and personnel with accuracy in centimetres rather than metres.

“It will soon be possible to have real-time visibility of the physical activity in the warehouse to improve safety as well as efficiency.”