In the modern warehouse you do not just need a system that can handle; inbound goods, labour management, billing, inventory, picking, packing and shipping, you need a system that can adapt to your business operations and provide a relatively quick return on your investment.
Jim Rivera, vice president, product management for Cape Clear says: “We are clearly seeing a maturing in the attitude of business management, in retail, distribution and transport towards IT investment. The historical failure of “rip and replace” approaches and even green field projects to deliver value and the disappointments of the dot com boom, have prompted a new agenda where the prime motivation for management is to maximise the performance of current infrastructure – particularly when extending its capabilities through new projects.”
Sterling Commerce, a multi-enterprise collaboration company, was recently highlighted in a second report from Forrester Research, as having a unique approach to retailer WMS systems. Sterling saw that warehouse management systems have undergone a great deal of change in the past few years and provide a key differentiator against competitors on customer service, lead times and costs. As warehouses have become larger, the logistics processes have become more complex, meaning that managing this efficiently has become a much more challenging task.
Charlotte Graham-Cummings, marketing manager EMEA applications for Sterling Commerce says: “The requirement came out of our customer base, largely around logistics companies business getting more complicated. They’ve moved from being basically asset based to being more service based business. The competitive landscape for them has got smaller and much more competitive.”
They are expected to offer an increasingly broad range of services and therefore need a system that can support that range. Having a global presence, is also contributing to greater complications in running inventory locations.
Graham-Cummings says: “Where we started out was with our order management system which was both Java and service based. The WMS is on the same structure and can give that unique view, partly because it shares some of the order management functionality, and extends beyond the reach of the WMS.”
This allows a network warehouse management structure giving much more flexibility.
The Forrester report says that Sterling had taken a unique approach to retailer warehouse management systems, by focusing on how WMS fits within an integrated logistics strategy. The result was a product that offers strong inbound visibility.
“Between evolving consumers and consumer channels, convergence between retail and consumer product supply chains, and technology advances in warehouse management systems, a lot of change has come to warehouse management in a relatively short amount of time. Companies evaluating WMS solutions for consumer goods supply chains need to strike a balance between manufacturing-driven needs, consumer-driven needs, and distribution’s role in an extended supply chain when making their selection.”
Hugh Murphy, business manager UK & Ireland and Stan Chew, director of international, Europe at 3M agree that companies are under increasing pressure to get more out of existing systems rather than invest in new IT infrastructure.
Chew says the pressure comes from several different areas. Firstly, the general competitiveness of business today, the on-time in-full expectancy and secondly, reaching the expectancy level at the lowest possible operating cost.
“If I’m striving to a 99 per cent on-time in-full measurement, but it’s costing me more money, or my operating income is shrinking, at some point there’s a tipping point.”
The pressure on IT professionals really comes from a managing director’s quest for a very high on-time in-full percentage and a very low cost of operation.
“If you really look at the IT professional, it places them in a conundrum which is around moving the system and the response of the systems to the operational requirements to optimise (saving cost) as well as accelerate (on-time in-full).”
Chew says WMS systems are becoming more complicated for a number of reasons. “Warehouse management solutions are morphing into broader solutions relative to postponement manufacturing and value added services.” Much of the work on finished products, coming in from manufacturers is now being pushed into the distribution centre. Components coming into distribution centres are adding value in the fulfilment area, which is dramatically expanding the complexity of applications but saving companies a great deal of cost and decrease wasted component bills.
Chew accepts that companies are generally slow to adopt new technology. “Distribution requirements and customer ordering profiles have changed.”
Obsolescence looms large in the UK IT industry. For example, platforms like Hewlett Packard 3000 and Windows NT are no longer supported and Chew says there are other platforms that are now candidates for obsolescence.
Murphy says that logistics is still not fully accepted as a differentiator in all boardrooms. “Some of the more enlightened companies, who see logistics as a differentiator will invest.”
Martin Hiscox, managing director and business leader of RedPrairie International says that within RedPrairie’s business they see a lot of people changing and upgrading their systems. Some markets are expanding faster than others but supply chain execution in general is seeing a moderate growth. Staff optimisation and resource management had seen a much faster growth area and RedPrairie is rolling out a new system for John Lewis.
Retail is a key factor in driving the technology. Hiscox says that, in part, this is coming from the ‘pull’ effect from consumers. He says warehouse systems themselves are not necessarily getting more complicated but rather that distribution operations are. Many companies still use older systems although some are changing.
“SAP and some of those older systems work quite well where the box is square and sits on the shelf evenly and it is easy to move in bulk.” He says companies need a financial reason to change their systems. He says they can be ‘sticky’ where systems can not be simply replaced because they are heavily integrated and are “entrenched in business process and are difficult to change.”
“Seldom do we see things changed for technology’s sake. People don’t easily change and update these systems.” He says this is because people tend to evaluate things very carefully.
“The business drivers that affect organisations are; their customers, and the requirement to change from the historic push environment to a customer driven pull environment. That will increase people’s requirement to change technology.”
He points out that internet shopping and use of home delivery will drive technology forward.
40pc boost for River Island
Manhattan Associates’ warehouse management system has helped River Island handle an increase of some 40 per cent in the volume of goods passing through its warehouse. The River Island Clothing Company selected Manhattan Associates’ software as part of a programme to replace all of its legacy computer systems.
“The smooth running of our distribution centre is very important,” says Ben Lewis, operations director of River Island. “It is at the core of our business so the solution we use to run the distribution centre must be both reliable and scalable. Our distribution centre comprises 400,000 sq ft of storage space and serves every one of our stores, so our choice of warehouse management system was very strategic.”
“When we first implemented the Manhattan Associates solution, we needed to do so with minimal disruption to our working practices,” he says.
“The new solution allowed us to upgrade without throwing our workforce into disarray, and adapted easily to our pick-by-shop approach, whereby goods are dispatched directly to stores according to requirement. It is also easy to use, which is essential for peak seasons when our workforce has to expand rapidly.”
In addition to the core warehouse management software, the company has also implemented Manhattan Associates’ workforce optimisation solution, Labour Management. Lewis says: “The solution has enabled us to optimise the operating patterns of our workforce. With around 300 employees in the warehouse, we now have significantly faster job allocation”
Integrating the latest technology
Advanced voice picking and radio frequency processes have been incorporated into a warehouse management system, implemented by Chess for DHL Exel’s distribution contract with JD Wetherspoon. Chess integrated some components from its latest Empirica warehouse management system with an earlier product in use at DHL Exel.
New functions were introduced to support fresh produce picking, load composition, improved customer data exchange and reporting.
DHL Exel’s JD Wetherspoon national distribution centre in Daventry, operates 24/7 to provide consolidated distribution of frozen, chilled and ambient food and drink items to more than 650 pubs throughout the UK and Ireland.
Chess had implemented voice and RF based solutions at other DHL Exel contracts and was chosen for the new site because they shared similar operations.
Empirica, using truck-mounted and hand-held RF terminals, manages all pallet movements. The voice picking solution issues instructions directly from the warehouse management system. Picking efficiency is maximised because staff work hands-free at all times without reading paper or on-screen instructions.
A key system requirement was support for data exchange. Chess devised routines for the application to translate incoming orders into loads and picking lists and assess the number of cages required to complete the order based on weight, size and quantity of products to be picked.
This necessitated new links with an existing routeing and scheduling application. When loads have been authorised the WMS issues its instructions to pickers. The system also generates EDI files with information about goods received, purchase orders and despatches to ensure synchronisation of data with the customer.
Elite solution for Peters & May
Third-party logistics provider Peters & May has been using the EliteSeries WMS from Tecsys, since October 2005. The company made the switch from its old system after its warehouse operations began attracting more customers and it found its existing technology was unable to support the new growth.
Tecsys says that Peters & May was handling a variety of goods and had a limited ability to predict fluctuating volumes or the nature of goods that come through the warehouse. Peters & May made the switch and signed the contract in July 2005. It says that since implementing the new system it has seen improvements in locating stock for receiving, put-away, picking, packing, replenishment, shipping and cycle counting. It says that manual paperwork has been substantially reduced and it is now able to handle peak periods more efficiently with existing staff, rather than bringing in temporary workers.
It says the old operation was very labour-intensive. “Employees were keeping individual customer records on spreadsheets, and then we had to extract information for billing. The role of employees on the warehouse floor should have been to pick, pack and get goods out the door, but a lot of time was spent on manual stock location sheets and other paperwork. So our regular warehouse operatives became part and parcel of our record keeping.” The implementation took around three months.
Peters & May operates through a number of divisions that offer a wide range of 3PL services including; freight forwarding, dangerous goods handling, boat transport, courier services and event logistics.
InBond chooses RedPrairie
InBond is using RedPrairie’s DutyMaster software, which enables it to manage HM Revenue & Customs requirements as part of everyday warehouse management operations, avoiding the cost and complexity of managing multiple systems. It is also using RedPrairie’s DLx warehouse software, in an effort to reduce cycle times for its depot management processes.
RedPrairie’s DLx system replaced InBond’s legacy warehouse and duty management systems that were manual, spreadsheet-based. RedPrairie says that much of the data held in the company’s depot management system was inaccurate, resulting in order errors and time- and labour-intensive processes.
Manual stock taking of inventory held for each client took up to three days, during which time no orders could be processed for that customer.
Chris Boothman, IT manager for InBond says: “In addition to the impact on cost and efficiency our legacy systems had on our operations, our staff had little confidence in them, which affected morale.”
RedPrairie’s team completed the project in two months. This was followed by a further two months of system testing and training for users of both systems. After the obligatory HMRC inspection, attended by RedPrairie, the system went live.