Chain of complexity

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CAN the WMS cope with picking goods in-store – or would the EPOS system be more appropriate – or something else entirely? The world of supply chain execution is becoming more complex. Malory Davies investigates.

This article first appeared in Logistics & Supply Chain, April 2016.

This article first appeared in Logistics & Supply Chain, April 2016.

Radical change in the retail world is having a dramatic impact on how companies do logistics and the systems they use. Nowhere is that more apparent than with supply chain execution systems.

For many years in retail, these designed around store based retail sales. Picking was by the case and goods were despatched by the truckload. Today SCE systems are having to cope with item picking and despatch. And then there is a whole new world of store-based inventory management and picking, which might be controlled by an in-store IT system.

And then there is pressure for better integration of systems across the supply chain to provide better visibility and added functionality, such as load planning, route planning returns, delivery confirmation, yard management, and carrier load tendering.

“The most common driver for companies to deploy SCE applications is the evolution of omni-channel or internet-based order fulfilment,” says Tom Kozenski, vice-president of industry strategy at JDA Software.

“The vast increase in fulfilling small, single-unit customer orders has driven great interest in using tools that will increase worker productivity and facility throughput. Additional drivers boosting the need for new solutions are Food & Drug Regulations, Driver Availability and the Replacement of older Legacy systems.”

Alex Mills, sales and marketing director at Chess Logistics Technology, highlights the fact that orders are being accepted later in the day for overnight/next day delivery. “SCE must be able to manage workloads to accommodate same day, next day and budget (generally longer term) delivery time frames and allocate tasks accordingly. Different options on the chosen day (eg before 9am, before lunch, anytime, and allocated slots) add to the complexity. Prioritisation to meet critical objectives (for example ensuring the most expensive-to-fail or service-focused tasks are always prioritised) is also essential.

“Customers – business and consumer – want better visibility of stock availability, lead times, delivery options and tracking information, some or all of which is reliant on the SCE, before making a purchase decision. Orders are also becoming far more varied. For example, whereas in the past a customer might order one pallet or case a week they might now order one or two small items. SCE/WMS must therefore be capable of managing far more variety in items from single SKU to case to pallet to full load. All of this must be achieved by suppliers while reducing costs.”

Alex McPherson, solutions consulting manager at Manhattan Associates, points out that just a few years ago customer expectation was that click and collect was a next day service. Today the customer often wants a same day service – sometimes a one-hour service.

These developments have had an impact on the retail systems used to manage stock. Three to four years ago, retailers were wedded to the traditional view of the distribution centre using a warehouse management system.

Increasingly goods are now being picked in-store. This has a number of advantages. Stores can be used to increase speed to the customer and ship-from-store can be a relief valve to siphon orders that the fulfilment centre cannot handle during peak selling events. Used strategically, store fulfilment enables creative digital selling strategies to drive store sales and inventory turns.

And this is leading to a dilemma of which systems should manage this. Do you try and use a WMS – or do you rely on the EPOS system. Some suppliers now offer specialist in-store systems for this.

Picking in store has its own challenges, not the least of which, is the fact that consumers are also going round the store picking up goods. This can slow the progress of the store pickers. A browsing consumer might pick up a product and then put it back in a different place slowing down the work of the store pickers. And there is always the risk that goods can suddenly go out of stock.

For the SCE user there is also a big decision to be made in terms of whether to go down the route of cloud computing. Kozenski says that many of JDA’s clients now run all their SCE operations in the cloud. The size of today’s networks (even for high-volume SCE operations) can handle the throughput requirements for sharing data to & from the cloud. The applications that end up staying on-premise are commonly associated with the warehouse control systems that support communications with automation, like intelligent conveyors.

But Mills points out that there’s nothing inherent to SCE that makes cloud favourable.

Changes in SCE technologies fall into three main categories, says JDA’s Kozenski: User Experience, New Processes, and Application Integration.

“The User Experience is a key area for us, as these SCE applications continue to grow in sophistication. We intentionally design the user interaction to be simple and intuitive. This helps with training and usability. Today’s applications can proactively notify users when they need to act, rather than wait for the user to figure it out for themselves.

“New Processes include capabilities to support workflows such as “goods to packer” where automation plays a stronger role in the movement of inventory to the packing stations. Another new process that is growing in popularity is ‘zone-skipping’, where small parcel shipments are combined into a full trailer shipment that is sent directly to a Parcel depot many miles away. This saves freight costs over traditional methods of shipping each of these parcels individually.

“The third area is Application Integration where WMS and TMS applications begin to process orders and execute tasks in an iterative manner. For example, rather than have the TMS send down all orders for a day in a single closed loop to the WMS for execution, the TMS and WMS can interact throughout the day, optimising and re-optimising as new orders are released, or when inventory is shorted, or when carriers do not arrive…”

For retailers and their carriers, delivery is a competitive weapon. There is pressure for later and later cut-off times as well as narrower delivery slots and better time prediction. McPherson says there is a planning issue at the warehouse to ensure that cut-off times are met. One of the concerns of the users is when are they going to finish, for example – they might not finish before an 8pm deadline unless someone acts now.

Mills highlights customer demands for better delivery time prediction and narrower guaranteed delivery slots. “Offering them will be a key for those that invest in the right solutions. Same day services, especially in cities, are increasing and this will place additional burdens on supply chains that will inevitably be supported by more advanced technical solutions in conjunction with new distribution models. For example, larger retailers are investing in smaller frontline “dark store” warehouses in town and city centres to manage same-day deliveries. However, these sites have little capacity and may be little more than forwarding stations fed from traditional facilities on the edge of town. This adds another level of complexity that will need to be managed to ensure stock is available for delivery as soon as possible after it is ordered.”

Looking further ahead, developments such as robotics, the internet of things, and augmented reality are all expected to have an impact.

Mills says: “There is clearly a trend across industry towards automation and “robotics”.

SCE/WMS has been here before of course with RFID and smart tags etc but the emergence of “The Internet of Things” will surely lead to new technologies to identify and track items through the supply chain and beyond with more detail than ever before.”




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