Posts Tagged ‘RF handhelds’

We touched in previous posts upon the benefits of WMS, and we’re now looking at the basics of getting started.  As implied in the prior post, the planning phase is the most critical, and often the most daunting task.  While beyond the scope of a blog, our tips were aimed at getting your creative juices flowing in terms of what you need to consider before deployment.

As your plan develops, you need to consider the hardware elements.  Fortunately, in many respects, this is ‘the easy part.’

In a typical WMS layout, most of the work will be done by plant/warehouse floor workers equipped with radio-frequency (RF) handheld mobile computing units.  Each person charged with putting inventory in or out of the bins on a regular basis will need one, or at the least, you will need one for each defined section of the warehouse.

To use our experience as an example, we like to use Dolphin 9500 Windows based units which, with battery and charging cradle run about $2,000 complete.  These are essentially handheld computers that run on RF and are optimized for warehouse use.  The number you need will be determined in your planning phase, but start small.  A couple units should get you started as you work your way through deployment.  You can always add more later.

You will need a file server for your WMS software.  This is typically located inside the office, and is not directly accessible by the handhelds.  Rather, the handhelds connect wirelessly to their own server – in our case, it’s a web-browser interface.  Handheld functionality is limited to what the program dictates.  The idea is to keep it simple.  The less functionality on the handhelds (to a point), the fewer mistakes can be made. 

For the RF web-server, you don’t need anything high-end or special.  Companies often have a spare, relatively new PC lying around that will usually do.  For the WMS file server, which speaks to the RF web-server, a standard PC file server will suffice.

You’ll need access points at high points in your warehouse, which typically run about $200 to $300 apiece, and there are a few cabling issues, but nothing your I.T. staff or outside provider can’t handle.

A good ballpark figure for the hardware for getting started in an average warehouse is probably around $10,000.  Again, this can vary widely based on, mostly, number of handhelds and, less so, the size and density of your warehouse (and thus, the number of additional access points required).  But generally, you can at least get started for around $10,000.  Later, you add components (mostly more handhelds) as you deem necessary, or as more people become engaged with the system.

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In our previous post we took an overall look at what it takes to get started in automating the warehouse with RF handhelds for improved order processing flow.  In the series of four articles before that, we looked at why you would do this (hint: saving big money).  In this and the next two posts, we’ll look at where you will be investing in the process, as briefly alluded to in our prior post.

As we noted, there are three areas of WMS investment: planning, hardware, and software.  Today let’s look at planning.

As in so many disciplines, the 5-P Principle prevails: Prior Planning Prevents Poor Performance.  The full planning process for implementing a WMS is well beyond the scope of a simple blog entry, but some key considerations follow.

First, according to an Andersen Consulting study done in 1998, but probably still valid today, three major tips for WMS success are:

1.) Utilization of outside consultants doubles the chances for a very successful outcome.

2.) Identifying, tracking, and testing for the promised benefits during and after the implementation are the only way to ensure that they are delivered.

3.) Executive management commitment and involvement has a significant impact on the success of the WMS installation.

Beyond these ‘boundaries’ there are the practical considerations:

How large is your warehouse, and how densely packed?  This will affect hardware and access point considerations.

How many people need to use handhelds to pick and pack?  Can several share a device staged in a fixed location?  These answers affect overall hardware costs, as RF handhelds are effective, but not necessarily cheap.

Do you have a well defined receiving, pre-put-away and put-away process?  Do most of your products come into the warehouse already bar-coded?  If so, under what symbology?  Will your products need to be labeled or re-labeled upon arrival?

Do you assign specific slots or bins for specific items?  Can items be placed in multiple storage areas?  Is there overstock storage? 

Do you have a well defined purchase receipt system?  How do purchase orders relate to sales orders?  Do you ship complete… partial… allow back-orders?  In all cases, these dictate how your WMS will act (and possibly interact with accounting) as orders are moved through the warehouse.

Do you ship internationally?  Do you use bills of lading?  The list goes on… The point is, you need to sit down with your provider and work through the mapping of the process from the time product comes in the back door (or is manufactured in your plant) to the time the product leaves and is invoiced.  This planning process is probably why Andersen concluded over a decade ago that you need outside consultants to raise the likelihood of a successful implementation.  They may have been self-serving, but they were also accurate.

As noted at the outset, the planning topic is far beyond the realm of a mere blog.  It is also the single most important consideration in the entire WMS deployment process.  And it’s the only way to determine what your actual costs – and hence, payback timetable – will honestly look like. 

Consider the front-end planning phase to be the single most critical aspect of any WMS deployment.  Expect to invest in 100 hours or more in consulting time (sometimes much more, depending on size and complexity).  Your provider should be able to ballpark the planning requirements phase costs for you before you actually spend any money.

Next up, a look at the hardware costs…

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In Parts I, II and III of this series we looked at the key cost-savings to be gained from a well-implemented warehouse management system in terms of labor, inventory and facilities.  Now, let’s look at a few final, less tangible considerations.  (These additional benefits were aided by some research done by an organization called HK Planet.)

Some other, more intangible benefits that result from WMS implementation include:

Process Improvement: Implementing a comprehensive WMS facilitates standardization of inventory movements, picking methods, and inventory locations. This standardization helps to minimize reliance on informal practices, resulting in reduced training costs and lower error rates.

Enhanced customer service: By streamlining processes from order to delivery, companies can more accurately determine product availability and realistic delivery dates. A WMS can automatically identify and release back-ordered inventory and also can reduce returns as a result of increased shipment accuracy. Customers can receive up to the minute visibility to order statuses along with electronic Advance Shipment Notification (ASN) which can significantly streamline the receiving process at their facility.

Effective management control: WMS enables you to proactively manage your operations instead of fighting fires reactively. Real-time reports and alerts notify you of potential problems (e.g., order shortages, labor imbalance, etc.) while historical productivity reports give you a management tool to recognize good employees and identify and coach sub performing individuals.

Real-time accuracy and enterprise-wide visibility: Effective enterprise wide decisions such as order sourcing, inventory allocation, inventory order levels/sourcing, etc. can only be made through real-time and accurate view of the inventory.

To HK Planet’s list above, we would add one more of our own:

Staffing flexibility: Our experience with WMS is that, with the right system, warehouse staff can be trained to be up and running very quickly.  The RF handhelds they use lead to far fewer mistakes.  Jobs can become more interchangeable.  All the knowledge of the warehouse is not reliant on what’s in the head of a key staff member or two.  New staff and replacements can be brought up to speed quickly, and taught to use the RF and WMS systems in short order.  One person can often fill in for another on short notice.  You become less dependent on key staff, and more dependent on an interlocking fabric of procedures, software and quickly trained staff that will pick, pack and ship your orders with greater accuracy and efficiency, with fewer errors and at less cost, than you were ever able to do before.

Once again, it’s all about driving down costs through better technology – in other words, building the smarter company.

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In Part I we looked at the key labor cost-savings to be gained from a well-implemented warehouse management system.  In Part II, we looked at the improvement in reducing inventory carrying costs.  Now, let’s look at the warehouse facility.

A Warehouse Management System can sometimes eliminate the need for expanding an existing warehouse facility, or having to add a new one.  Sometimes, companies can eliminate the costs of utilizing outside storage facilities, or back-up stock storage, as well.  It all translates into greater facilities utilization.

Typically, we see reduced safety stock requirements, better tracking of obsolete items, and the ability to free up space that comes with both.  Moreover, sometimes the very act of physically implementing a WMS and its accompany processes and procedures starts a re-thinking process that cascades into multiple efficiency gains through improved space utilization, better vertical layout, improved order fulfillment flow, and just cleaning up the old.

WMS systems can also enable you to look at new ways to store inventory.  Do you need a dedicated place to put stock?  RF can help with directed put-away.  Are you a candidate for a more randomized put-away scheme?  Are other improvements to layout and storage a better fit for the types of product you pick, package and sell?

With RF handhelds directing pre-put-away, put-away, item location and picking, materials and products can often be comingled in shared locations without jeopardizing order, lot or serial number integrity.  And of course, WMS assists in ensuring that in all events, the right items are put into the right bins – and then does the same for you when picking orders later.

Next up, we’ll look at a few of the less tangible benefits of a WMS.

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In Part I we looked at the key labor cost-savings to be gained from a well-implemented warehouse management system.  Next up, inventory.

Improved inventory accuracy is probably the leading reason companies decide to take the plunge into WMS.  (The labor costs are a separate benefit that are usually realized a bit later.)  The improvements come largely in the areas of reduced mistakes, fewer back-orders, improved fill rates, and better customer service.  These in turn will almost always lead to nominal improvements in inventory turns. 

One big hidden surprise (of the positive variety) is that with improved inventory accuracy comes fewer year-end inventory discrepancy surprises, which often results in a lower tax bill on income at year-end.  Big inventory swings (in either direction) are never welcome, but especially not when they suddenly skew the owner’s tax expectations in the wrong direction!

As you improve your inventory reliability with a WMS, you can gradually start to safely reduce your safety stock.  This in turn leads to the improved inventory turns noted earlier, and thus an overall lowering of inventory carrying costs.  Studies show that the typical improvements here are in the range of 10-12%.

And then of course, reduced inventory levels essentially ‘grow’ your warehouse automatically.  You have more places to put stuff, and thus your overall storage capacity can grow without expanding the footprint of the warehouse.

Generally, inventory valuation and accuracy are measured via a year-end physical inventory.  Nowadays, generally accepted accounting principles (GAAP) recognize inventories registered by WMS systems with RF barcode scanning technologies.  This is largely because periodic, real-time cycle counts are easily and accurately performed.

Our experience has been that companies that previously did monthly physical inventories now do only annual counts, with periodic (and quick) cycle counts, or ABC counts, in between.  And those year-end physicals are always closer to the accounting figures now than they ever were before.

Up and down the line, inventory costs are improved, continuously, under the auspices of a well managed RF-based WMS.

Next up, we’ll look at some of the implications of WMS on your warehouse facilities.

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A properly implemented warehouse management system can be both a blessing to your warehouse team and a needed boost to your bottom line.  A WMS can improve inventory turns, reduce carrying costs, lower labor costs, make better use of existing space, and validate the accuracy of the link between warehouse and accounting.

In this series, we’ll take a brief look at some of the reasons behind, and the advantages of, a WMS.

In our experience, we’ve seen WMS solutions enable our clients to either increase throughput of deliveries while maintaining current staff levels, or in many cases, reduce warehouse labor staff (and thus costs) through improved efficiencies in the pick, pack and ship process.

Order picking involves about two-thirds of total warehouse labor hours in the typical warehouse, so any labor efficiencies gained here are an immediate boost to the bottom line via lowered warehouse labor costs.

With the use of today’s handheld, radio-frequency (RF) devices, a WMS ensures that the right item has been put away, picked, or returned to a bin.  RF helps ensure accurate delivery to storage (bin) locations so that product is thus available for picking.  Improved accuracy in this stage alone can result in 10% to 25% improvements in efficiency. 

Think about it: when you pick (or put away) the wrong item, you create two errors: you’ve picked the wrong item (with all the inherent downstream costs of that error) and you’ve failed to pick the right item – which you’ll have to go back and do again later.  It’s not hard to see how improvements in picking efficiency of up to 25% are common.  RF handhelds make these improvements in speed and accuracy possible.

RF devices within a WMS also aid in quickly directing a pick path, eliminating time wasted in product searches (wandering around the warehouse).  They validate that the right item has been selected, in the right quantity or configuration.  Lot and serial tracking can be enforced when appropriate (but be careful what you wish for…), and multiple orders can be staged in a single warehouse pass.

These are just some of the labor efficiencies to be gained from WMS.  In our next post, we’ll take a look at some of the other inventory-related benefits of an automated, RF-based warehouse management system.

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