Warehouse Management System

Warehouse is considered to be a strategic facility in supply chain. Not only does a warehouse serves as an inventory buffer against short-term fluctuations of demands or supplies, but its location is also essential for value-added activities, such as freight consolidation and final assembly. Currently, Thailand is in a warehousing information-technology crossroad as businesses have been affected by high labor costs and integrated information requirement from customers. Many large enterprises have embraced these changes and improved their warehouses by implementing Warehouse Management System (WMS), a dedicated information technology that enhances information and resources management at the operational level within a warehouse. Nevertheless, the investment in implementation of WMS is expensive and time consuming. As a result, the purpose of this article is to introduce WMS in terms of its potentials to solve major warehousing problems for small-and-medium entrepreneurs, and to present its differences from a traditional inventory system. Based on literature reviews of global WMS implementation and our visits to leading warehouses across Thailand, we summarize the business indications and recommendations to an enterprise whether WMS is suitable for its warehouses or not.

• Location Management: A main function of a WMS is to maintain a positive location record of each product in the warehouse.Many systems will also support dynamic location assignment including lot control and zoned putaway.Cube optimization logic is also available as part of many WMS products so that the overall warehouse space cube utilization can be maximized.Location management should also identify empty bins and slots so product can be re-located and consolidated easily for increased space utilization.
• Inventory Management: A major benefit of a WMS is inventory control, the ability to know where stock is and how much is available.The system facilitates tracking product movements while reducing inventory mistakes and shrinkage.The system can also identify the need for product rotation of date-sensitive product.Most WMS systems also accommodate cycle counting of products on a location and entire product count basis.
• Replenishment: A WMS makes product replenishment to picking and manufacturing locations faster and more accurate.The system can direct the replenishment activity by tracking on hand balances and usage ensuring product is available when needed.
• Order Management: The WMS should allow for multiple methods of order release (single order, multi-order, order consolidation, wave and zone picking) to the pick area.If orders are managed on another system, the interface between the systems must be seamless allowing transactions and information to flow between systems.
• Picking: Picking and packing product to a customer order should be managed by the WMS.It should interface with material handling and automated equipment used in the pick process.This may include pick-to-light, carrousels, automated retrieval systems, automated sortation and conveyors and voice recognition systems.The system should print all required labels and documents for product picking.
• Shipping: Most WMS products support basic shipping functions including the output of shipping documents/labels and shipment manifesting.The WMS should also interface with transportation carriers' systems to provide shipment tracking and proof of delivery.
• Productivity and Metrics Reporting: The WMS should aid in the tracking of performance and cost analysis.
RF interfaces allow transactions to take place at the point of processing.Most WMS products allow RF remote data terminals and RF voice recognition technology to be used to process transactions.This capability is an important element of the productivity enhancements that WMS brings to warehouse processes.

Output
Document output, especially in support of shipping processes, should be a seamless and integrated process.The system should automatically produce all required labels and documents.The WMS package should support barcode and AutoID (RFID) label output and interface with any equipment required to print or read the labels.

Flexible Communication & Interfaces
Many Warehouse Management Systems have expanded capability, either integrated into the software, as additional modules or as interfaces with other software.Some of the more popular capabilities are: Transportation Management Systems (TMS) aid in the efficient and economical routing, scheduling and carrier selection.
Yard Management Systems (YM) support the movement and scheduling of trailers for delivery and pick-up.
Labor Management Systems (LMS) help companies optimize labor in the warehouse.
Order Management Systems (OMS) support the order flow from customers.These programs my also include web interfaces that customers can use to place and track order progress.
Supply Chain Inventory Visibility (SCIV)/Supply Chain Event Management (SCEM) software that focuses on tracking products across the supply chain and allows for multiple supply chain stakeholders to interact and exchange information.
Enterprise Resource Planning (ERP) Systems typically support inventory, procurement, order management and financial functions.Many have expanded offerings that include WMS functions and many WMS packages now include functions that are found in ERP systems.
Manifesting Systems automate shipping manifests with carriers, reducing documentation errors and improving tracking.
Automation Support and interfaces allow equipment to be interfaced with the WMS for data transfer and control.
System Interface Tools ease interfacing with other software, EDI messaging and links to carrier systems to form seamless information flow across all software packages.
Value Add Capabilities such as returns management, postponement and order configuration, customization, kitting and de-kitting and other industry specific processes may be included in some WMS software.

System Management
Customer and product data must be rigorously maintained in the WMS.Accurate product data supports optimized storage, slotting and picking.Accurate customer data and requirements facilitate picking and shipping and will ensure that orders are in compliance with customer requests.
The ability of your WMS to keep pace with and adapt to changing business requirements, driven by the market and by your customers, and to keep pace with changes to technology is important.System management and updates should be performed regularly to keep your WMS current.Avoid if you can customizing code that may make upgrades more difficult and burdensome to manage and implement.

STEP 1. WMS Process Benchmarks
As you review this table, consider your WMS processes as they relate to the listed attributes.You can check off or highlight the description that sounds most like your operation.

Percent of orders shipped complete
Complete means that all lines / units ship with the order.
# of orders shipped with all lines & units / total number of orders shipped

Percent of orders sent damage free
This measures the fact that the customer got their product in good and usable condition.
# of orders shipped damage free / # total orders shipped.**Note -this can be based on a statistical quality sample and extracted.

Percent of orders with correct documentation
The portion of total orders for which customers received an accurate ASN / invoice with the order # of orders with correct invoice / # of total orders

On time delivery
The percentage of orders that arrive at their final destination on the date agreed upon.

Perfect Order Index
An order that meets all of the following criteria: complete, on-time (as defined by customercould be on time delivery or on time shipment), perfect documentation, perfect condition.
% of on time orders x % of complete orders x % of damage free orders x % of orders with accurate documentation as defined by customer (e.g.invoice, ASN, labels)

Increases Picking, Reduces Errors, Lowers Return Rates and Manages Seasonal Peaks
Plow & Hearth is a national catalog, retail and Internet company specializing in "Products for Country Living."The company began in 1980 with a small retail store and produced their first catalog in 1981.Today, the original Plow & Hearth catalog offering unique, high-quality products for country living continues to thrive-and two additional catalogs, HOME and Problem Solvers, have been launched.The company also has four retail stores and two catalog outlet centers.
Since its humble beginnings in rural Madison, Virginia, Plow & Hearth has grown tremendously.The company received a spot on INC. magazine's list of the 500 fastest-growing companies in America for four consecutive years.In 2002, Plow & Hearth mailed more than 65 million catalogs and exceeded $100 million in sales, establishing the company as a true leader in the catalog industry and the premier source of products for country living.
This enormous growth posed numerous challenges to Plow & Hearth's distribution process.In early 2000, an assessment of the company's DCs located in Madison, Virginia, and Vandalia, Ohio, revealed that the company's operations were restrained by a lack of inventory visibility and an inefficient use of space.The company was concerned that the legacy WMS would be unable to keep pace with Plow & Hearth's growing level of transactions.

The Implementation
Plow & Hearth installed Manhattan Associates' Warehouse Management solution for both inbound receiving and outbound order processing.At receiving, orders arrive as both individual orders and full pallets of product.For each receipt, the purchase order detailing the shipment's inventory and associated case number(s) is verified against the original order.Most receipts are then moved directly to a reserve storage location.During an average month, outbound orders number about 40,000.However, business ramps up tremendously during the peak season between Thanksgiving and Christmas, when Plow & Hearth ships 10 times the number of orders.Resourceful slotting and an efficient picking/packing process make it possible to meet this tremendous demand.
Similar to the way slotting optimization groups items for picking, Plow & Hearth's outbound orders are grouped into pick waves according to rules determined by the products' locations."Ship-alone" items, frontline conveyable goods and "large-racking" merchandise (shoes, cushions, etc.) are grouped into distinct zones according to physical attributes like size and weight.As waves are compiled, they are released to order selectors and as each order is completed, it is placed onto a conveyor to be transported to a shipping location.Manifesting and invoicing occurs at the end of each day.
Because Plow & Hearth's product mix and demand fluctuate throughout the year, the company's slotting process requires ongoing maintenance-which is greatly simplified using the WMS solution.Keeping fast-moving items front and forward within each pick zone is the key to shipping orders within 24 hours of receipt.To do so, Plow & Hearth runs a forecast every two weeks and continually balances its pick layout against this data.

The Benefits
Since implementing Manhattan Associates' Warehouse Management solutions, Plow & Hearth has experienced a significant gain in productivity.There has been an average increase in picks per hour of 11%, yet this number has been as high as 28% in a given month.And, for the first half of Plow & Hearth's current fiscal year, the average increase in picks per hour was 15%.Picking and packing errors have been reduced by one-half; in fact, returns this past holiday season were well under projections and can be directly tied to dramatic improvements in order accuracy.
The ability to efficiently manage seasonal peaks has been a major benefit for Plow & Hearth.Seasonal labor demands are satisfied through temporary help with little time to learn about the company's unique products and distribution processes.By optimally organizing picking zones, Plow & Hearth can limit each order selector's picking area and keep the fastest moving merchandise within easy reach.The result is a seasonal workforce that can be productive from day one.
Additionally, the WMS solution has enabled Plow & Hearth to make the most of their facilities' size constraints.Being able to locate the right product, at the right place, at the right time, greatly expands the facility's volume throughput.

The Future
A lot has changed for Plow & Hearth over the past 22 years, but the company's belief in the values of country living is as strong as ever.It is these values and the spirit of country living that guide Plow & Hearth's business today.The company treats its customers like neighbors and friends.They offer only products they would use themselves and they offer them at fair prices-guaranteed without conditions.

A
fully functional WMS provides flexible management reporting and customer based performance reporting.Management reporting should include: Order statistics, tracking and status repots Receiving accuracy and statistics Inventory availability, accuracy, turnover and statistics Warehouse utilization, location status Picking statistics and tracking/status of pick jobs Shipping statistics and tracking reports, carrier utilization and cost reports Labor utilization, statistics, and resource requirements Performance metrics must measure both what the customer sees and what drives improvement in warehouse processes.Key performance metrics should be available from the WMS.Good metrics are ones that are linked to customer satisfaction, are documented with operations definitions and used to drive improvement.

Warehouse Management System -Process Benchmarks Process Group Poor Practice Inadequate Practice Common Practice Good Practice Best Practice
Rank your processes against the WMS Benchmark Table.Use this table to rank your process groups.In some cases, you may find that you fall between rankings and you can add 0.5 to the lower rank.Once each process is assessed, total the values for the group.
Directions:Directions: Use this table to compare your self-assessment score TOTAL to the WMS section score rankings listed here.

Key Performance Metrics for WMS The
table below provides quantitative benchmark data on a selected number of KPIs relevant to a WMS.Each KPI is scaled from Major Opportunity to Best in Class.The values provided are from a recent WERC Benchmarking Study.