Decisions about the location and design of warehouses are critical to shaping modern supply chains, but without effective warehouse management systems to run them they cannot possibly operate efficiently.
In Europe there is a boom in warehouse construction. New consolidation centres to cope with an influx of goods from lengthening international supply chains are springing up throughout the EU, but especially in France and the Netherlands. At the same time there is a rising demand for smaller, ”proximity” warehouses closer to local markets.
”As we continue to see volume growing at 12-15 per cent each year, we are now supplying an increasing number of retail customers across an increasing number of countries, all with different requirements,” acknowledges Henrik Larsen, supply chain manager at Danish sports and leisurewear maker Buksesnedkeren.
”This is making our supply chain more international and making the order fulfilment process much more complex because we need to plan further ahead in order to deliver on time and as expected.”
The internal dynamic of warehouses is changing rapidly too. These days, warehouses must support several different modes of distribution at once, often combining home delivery with distribution to stores or to intermediaries.
In this scenario monomodal warehouse systems designed for particular types of goods or industries are too cumbersome, particularly for third party logistics providers who must support a wide variety of different clients.
”The consequence is that you need flexible systems to manage both the pick faces and shop floors,” says Philippe Bentz, senior business consultant at software company Kewill. ”This involves dynamic location management which may change with seasonal fluctuations.
”Warehouse management systems were stand alone. Now they need to be integrated with transport so that you can do backward scheduling, preparing orders for individual trips. More and more there is a need to be integrated and work with partners so that everyone has visibility in the supply chain.”
Transport management systems, enterprise resource planning (ERP) systems and warehouse systems need to cooperate to support warehouse operations that may range from cross docking pallets to picking individual items with very short lead times.
”The typical express company involved in replacing lost or broken mobile phones within two hours has to be extremely flexible. For small picks like this voice may be more attractive than other alternatives,” says Bentz.
Electrical distribution firm Schneider is one company that has recently upgraded its warehouse management system. Schneider was running 10-year-old software supplied by CDC at its Telford distribution centre.
Schneider upgraded to CDC”s cWMS system without having to stop operations at Telford. The new system is intended to allow Schneider to continue to expand its logistics operations.
”We needed to upgrade our warehouse functionality and systems to support our growing business volume and new distribution service in a multi-brand environment,” comments Andrew Holdroyd, logistics projects manager.
”The new system go-live was completely transparent from our front office point of view and the implementation was carried out with no negative impact on our customer service levels.
”While the initial go-live covered an ”as-is” upgrade, the latest version of cWMS allows us to work towards implementing additional functionality that will drive additional productivity, efficiency and profitability benefits for the organisation. These include capabilities such as cartonisation, which will help improve efficiency, picking accuracy and overall quality control.”
With the increase in new warehouse facilities, many owners are going through the task of setting up a warehouse management system for the first time. Often they want to get a warehouse operational as quickly as possible, but face 3-9 months of set-up time.
3M Supply Chain Solutions, which has developed the HighJump warehouse management system recently launched WA45, a management system that the supplier says can be got up and running within 45 days.
”It”s a complex process and one that you don”t go through very often, because the lifecycle of a system is five to ten years,” says Leo Valentin, general manager EMEA, 3M Supply Chain Solutions. ”We recommend companies use a playbook – a guide as to how to get the base data loaded. WA45 also has a wizard that enables you to set up aisles, zones and standard processes.”
Valentin emphasises the need for software to be scalable in terms of both the volume of goods it can handle (WA45 can handle from 1,000 to 60,000 lines per day) and its ability to cope with extra functionality such as voice, touch screen input and radio frequency identification (RFID).
Scalability and the ability to add new functions easily can have a big impact on the total cost of ownership, the new buzz phrase for warehouse managers. Total cost of ownership involves looking beyond the initial set up costs of a system to the additional investment that may be required for upgrades, maintenance, new interfaces and so on.
”People need to take a five year view,” says Valentin. ”They need to say “show me a five year plan. If I want to implement six change orders how much might that cost”.”
Specifying warehouse management systems can be a time consuming business. However, a service from American company Industrial Data & Information could ease the load. The company has developed a request for proposal service for warehouse management systems which allows potential purchasers to fill out a form, send it to suppliers and get a set of comparisons.
”Most warehouse operations are not simple,” says Philip Obal, president of Industrial Data & Information, ”The complicated warehousing operation and the sophistication of 3PL issues are precisely targeted by WMS RFP.”
A Belgian postal service warehouse, spread over three separate buildings, and storing stationery and other supplies for the country”s post offices recently upgraded its WMS to RedPrairie”s Warehouse Management system in a bid to improve flexibility.
Getting a grip
Over the past year the postal service says it has improved productivity by 50 per cent and moved to same day dispatch for orders received before noon. Paperwork has been virtually eliminated and the organisation has a better grip on inventory levels.
”Each building used to have a separate system to manage inventories,” says Kurt Persoons, supply chain manager at De Post- La Poste. ”We had to allocate one person full time per warehouse just to prepare the order picking tasks and define routing. Because there was no coherent system to the location of goods, our working methods were slow and resulted in frequent errors and no clear overview of inventory levels.”
The system now handles all inbound stocks, warehouse management, and picking order processes. Incoming goods are automatically allocated to a position in the warehouse based upon the frequency of demand.
High rotation items are placed so that they can be easily accessed by the picking staff. Even before goods arrive, their placement is known, so no time is wasted looking for an appropriate spot. ”The same system is now used in all three warehouse buildings, greatly increasing flexibility: staff can easily be switched from one building to another to cover peaks in demand,” says Persoons. l”The same system is now used in all three warehouse buildings, greatly increasing flexibility: Staff can easily be switched from one building to another to cover peaks in demand”
Warehouse management systems were stand alone. Now they need to be integrated with transport so that you can do backward scheduling, preparing orders for individual trips