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Posts Tagged ‘Warehouse Management Systems’

A 6-Part Series on Excellence in Order Fulfillment Through WMS

In this 6th in a series of six consecutive posts we detail key findings from Aberdeen Research’s surveys of over 130 firms that employ warehousing.  What are their challenges, what actions are they taking to improve, where are they investing, and ultimately, what does it take to be nearly “perfect” when it comes to warehouse order fulfillment?  Read on…

In this final post on fulfillment excellence in the warehouse, we look at the actions Aberdeen Research has concluded are necessary for any firm to improve its operating efficiencies.

Whether you’re in the top 20% of all warehouses surveyed – meaning you deliver 98% of your orders “perfectly” and have actually reduced unit labor and overall warehouse costs year over year… or you’re in the “average” (middle 50%) category… or if you’re a “laggard” delivering more than 8% of orders “imperfectly” and lagging behind 80% of other, better warehouse operations… there are lessons to be learned by everyone.  These were determined, by category, as follows:

For the Laggards

Start with the picking process.  That’s half your direct labor.  Can you pick multiple orders concurrently?  Do you have interactive information regarding puts – commonly available by using RF (radio frequency) handhelds integrated with WMS software to manage your picking, packing, put-aways and shipping?

Use labor management to compare task performance with standards.  Put labor standards to work, and measure your performance to improve.

For the Average Firm

Besides the above… can you switch employees dynamically between functions (picking, replenishment, etc.)?  Can you do it in real time?  This is called task interleaving, and it improves labor efficiency in the warehouse.

How well do you manage containers, and the orders and lines they contain?  Explore ways to incorporate carton management or confirmation to increase service.

And Even for the Best in Class Firm

Leverage 3rd Party Logistics (3PL) providers.  Sometimes, outsourcing is the most economical alternative to order fulfillment when you’re running near current capacity, and capital is scarce.

Leverage emerging automation and mobility solutions.  This works in companies with high volumes of small direct-to-consumer shipments.  Solutions here include real-time technologies embracing voice, mobile warehousing and advanced material handling as long-term platforms for growth. 

 

All companies today can benefit from the move from paper-based, batch systems to today’s fully automated, real-time, RF-controlled, event-driven WMS solutions.  They can, as Aberdeensums it up, “reap rewards in the form of reduced labor costs and improved customer service, while becoming more agile under today’s multi-channel logistics requirements.”

** END of Series **

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A 6-Part Series on Excellence in Order Fulfillment Through WMS

In this 5th in a series of six consecutive posts we detail key findings from Aberdeen Research’s surveys of over 130 firms that employ warehousing.  What are their challenges, what actions are they taking to improve, where are they investing, and ultimately, what does it take to be nearly “perfect” when it comes to warehouse order fulfillment?  Read on…

Companies need to be prudent enough to select the right technology investments that maximize their ROI bang for the buck.  The challenge lies in aligning the right technology or solution to each operations-specific need, then comparing cost/benefits.

Aberdeen Research took a look at where over 130 survey respondents said they were planning to invest their warehouse management technology dollars.  Here’s what they found…

  • 94% of all firms said they would invest in “event driven processing” (real-time interactive activities in picking and replenishment).  This includes the broadest range of options, everything from auto-ID to Warehouse Management Systems to Labor Management Systems.  It also integrates Material Handling, Radio Frequency devices, even voice.  In short, this was the catch-all category.  Respondents were saying, in other words, Yes, we’re going to invest in electronic technology to better pick, put-away, track and expedite our order fulfillment.  Again, nearly all respondents said they were planning to do this. 
  • 88% narrowed their selection down simply to selecting a WMS
  • 83% indicated that auto-ID (mostly, bar-coding) was their highest investment priority.
  • All the other choices (Materials Handling; Labor Management Systems; Voice; and 3rd Party Logistics) registered under 62% of respondents reporting they would invest in these areas.

In effect, companies in surprisingly large numbers are saying that they are investing in warehousing technology, and the associated RF hardware — in huge numbers. 

These involve significant capital outlays, but because the benefits in labor productivity and resource efficiency are so high, significant ROI is produced.  In fact, over one-third of respondents said “it can self-fund” within one year.  Overall there is an average ROI expectation of merely 18 months.

Moreover, statistics showed that future investments in WMS technology overall are predicted to increase by 35% in 2012.  Companies today are upgrading in overwhelming numbers to newer equipment.  Companies are extending WMS into advanced picking and replenishment methods, and generally upping their game in terms of replenishment and fulfillment automation.

The results are in, and the investments in warehouse automation are growing dramatically. 

In our next and final post on this topic, we’ll take a look at “required actions.”  Whether you’re among the best-in-class, or worst, we’ll look at the actions you need to take to improve your warehouse performance now.

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A 6-Part Series on Excellence in Order Fulfillment Through WMS

In this 4th in a series of six consecutive posts we detail key findings from Aberdeen Research’s surveys of over 130 firms that employ warehousing.  What are their challenges, what actions are they taking to improve, where are they investing, and ultimately, what does it take to be nearly “perfect” when it comes to warehouse order fulfillment?  Read on…

In this fourth post in our series on improving warehouse operations, based on findings by Aberdeen Research, we look at specific actions taken, and where the “best-in-class” firms (those with the highest percentage of “perfect” order fulfillment) outshine the “other 80%”.

These include (minus the WMS jargon, instead in plain English):

  • Automatically assigning inbound receipts to outbound orders without a put-away step.
  • Utilizing advanced picking methodologies (batch put-away, zones, etc.)
  • Switching employees between functions
  • Ability to mix and match order additions or changes to in-process work
  • Central direction of processes (vs. letting operators plan/direct their own work)
  • Executive management level involvement in major decisions on solutions
  • Tracking warehouse transactions to specific employees
  • Tracking actual time to complete tasks vs. benchmarks or system-calculated time
  • Confirming transactions electronically (barcode, RFID)
  • Directing order picking through the use of handheld mobile devices
  • Using warehouse management software

In virtually all the cases of action noted above, the firms who deliver the most on-time, the most efficiently (the 20% of warehouses judged “best-in-class”) are on average about one-third to one-half more likely to take these actions, than the “laggards”. 

Simply put, the warehouse that does most of these things is going to blow away the one that doesn’t in terms of order fulfillment rates, “perfect” delivery likelihood, reduction of overall warehousing costs and reduction of labor.

Those who don’t may have an unsustainable position in the future.

In our next post, we’ll look at where companies are making their investments when it comes to warehouse management.

But first, for the world of lovers… Hey, Happy Valentine’s Day!

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A 6-Part Series on Excellence in Order Fulfillment Through WMS

In this 3rd in a series of six consecutive posts we detail key findings from Aberdeen Research’s surveys of over 130 firms that employ warehousing.  What are their challenges, what actions are they taking to improve, where are they investing, and ultimately, what does it take to be nearly “perfect” when it comes to warehouse order fulfillment?  Read on…

As we ended our previous post, we noted that companies have a tough time balancing warehouse workload demands, getting visibility into order flow and tasks, and ultimately, delivering perfect orders.  We also noted that “best-in-class” companies have succeeded in these areas.  Let’s investigate how, based on the most recent findings from industry analysts Aberdeen Research.

Aberdeen’s survey of over 130 firms indicates that visibility over order flow is only part of the solution.  Having the right tools and processes that allow warehouses to dynamically realign are needed to improve efficiency and productivity. 

They found that over 70% of companies are tracking events at the employee level.  But only about half of these track actual time to complete against a system-calculated time.  Thus, many simply do not correlate “actual” to “plan.”  The result is limited capacity to measure performance.  And as we’ve often said, you can’t improve what you don’t measure.

Two actions help:

1.) Warehouse capacity assessments that evaluate overall labor efficiencies: what are your labor capabilities and process requirements in the warehouse?

2.) Proper technology ROI considerations.  You have to maximize labor allocation and productivity to balance capacity and meet ROI targets.  In other words, you have to apply technology, like labor and warehouse management systems, in order to more dynamically shift people and tasks and automate more of the fulfillment system.

In some cases, third party logistics companies get called into play when a firm is short of space or labor.

The best companies know, because they measured, what they can handle, how much they can process, where their labor constraints exist, and how quickly they can respond to demand.  They have visibility over receiving versus shipping (from inbound receipts to outbound order fulfillment), they can balance their labor force’s workload, and they use technology, like bar-coding to amplify throughput and results.

In our next post we’ll look at some Best Practice key metrics that the “best-in-class” warehousing operations use.  In other words, what are the “best” companies doing to improve order fulfillment – to get into the 98% perfect zone?  Stay tuned…

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A 6-Part Series on Excellence in Order Fulfillment Through WMS

 

In this 2nd in a series of six consecutive posts we detail key findings from Aberdeen Research’s surveys of over 130 firms that employ warehousing.  What are their challenges, what actions are they taking to improve, where are they investing, and ultimately, what does it take to be nearly “perfect” when it comes to warehouse order fulfillment?  Read on…

 

We noted in our previous post the competitive challenges facing today’s warehouse managers, noting in particular the disparities between the best and worst of them, and the unsustainability of the “laggards” who are fulfilling orders less than “perfectly” over 8% of the time.

 

Let’s take a look at a few of the things companies are doing to surmount the competitive challenges of needing to manage multiple channels and better utilize resources, according to a recent survey done by the folks at Aberdeen Research.

 

Three key actions were cited as necessary for improvement:

 

  • To better integrate order and operating flows
  • To improve throughput via WMS automation
  • To improve efficiency and productivity by reassessing management software

 

The best of companies make sure they can do several things:

 

  • Track warehouse transactions to specific employees
  • Direct processes from a central point
  • Use advanced pick methods including batch, zone or cluster
  • Manage and track by labor or task
  • Dynamically task interleave, that is, switch employees between functions
  • Employ dynamic real-time order dispatch

 

And to enable these capabilities, three-fourths or more do the following:

 

  • Confirm transactions with automatic data capture, like bar-coding and RFID
  • Confirm put-aways in real-time
  • Direct order-picking with mobile devices (RF handhelds)
  • Track attributes (lot and serial no’s, sizes, etc.) in real-time
  • Use warehouse management software & hardware

 

Overall, companies are indicating a strong “focus on integration, productivity and throughput within the warehouse,” reports Aberdeen.  The trick is that the ability to juggle the various demands of the warehouse varied considerably between the “best” companies and all the others.  We’ll have some insights into that next…

 

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A 6-Part Series on Excellence in Order Fulfillment Through WMS

In February, we’ll devote most of the month’s posts (six of ’em) to a key topic for our manufacturing and distribution customers and partners: Warehouse Management, and in particular, how to attain excellence in order fulfillment.  Let’s begin…

In this series of six consecutive posts we detail key findings from Aberdeen Research’s surveys of over 130 firms that employ warehousing.  What are their challenges, what actions are they taking to improve, where are they investing, and ultimately, what does it take to be nearly “perfect” when it comes to warehouse order fulfillment?  Read on…

Even under the best of circumstances, warehouse management requires a careful balancing of competing objectives… space vs. resource utilization… picking speed vs. accuracy… throughput vs. labor costs… and so on.

Add to that today’s increased competitive pressures brought on by same-day web ordering and direct-to-consumer models, which now affect a majority of companies, not to mention today’s economic realities, and you have all the makings of a complex challenge.

In this and our next five posts we’ll take a look at how some of today’s best warehouse managers are utilizing technology to manage competitive pressures.

According to a recent survey by Aberdeen Research, executives from over 130 firms engaged in warehouse management cited four key pressures in warehousing and fulfillment.  These were:

  • Need to manage multiple channels or locations
  • Proliferation of sizes and packaging
  • Need for better utilization of resources
  • Customer demand for value-added services

They note that whether a company is deemed “Best in Class” (top 20%) or “Average” (middle 50%) or “Laggard” (bottom 30%) these were all key issues.

More precisely, the first 3 issues most affected the “best” warehouse managers.  The other 80% were most challenged by the last item, customer demand for value-added services.  These could include special repackaging requirements, special pack or lot sizes, private labeling, and so on.

The challenge for all, and especially the latter, was enabling warehouse management systems to perform these tasks, or help the enterprise to perform better overall by making these challenges manageable.

For reference sake, the “best” companies delivered “perfectly” nearly 98% of the time.  They used WMS (Warehouse Management Systems) and related technologies to decrease labor costs per unit by nearly 4%, and were good enough to be the only group to actually decrease their warehousing costs (vs. budget).

At the opposite end of the scale, companies that failed to adequately perform, or who did not or could not fully utilize WMS to improve their performance, had “perfect” delivery rates below 92%, decreased their labor costs by much less, and actually saw warehouse costs overall increase

And by the way, “92% perfect” just means that 8 out of very 100 orders shipped were NOT perfect (“average” companies ran about 95%).  8% imperfection, even 5%, is not sustainable.

So, what are these companies doing to improve performance?  We’ll delve deeper in our next post and look at some actions and enablers that Aberdeen uncovered.

 

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Over the past year or two, we’ve published so much information from so many leading sources — coupled with our own insights and twenty-plus years’ experience — on the topic of manufacturing software and ERP.  During that time we’ve released over a dozen posts (or series of posts) on topics of interest to manufacturers who want to know how and why ERP improves profits, and how companies use it to do just that.  Additionally, we’ve posted quite a few more articles about a related topic: warehouse management.

Over the course of these articles, we’ve looked at top-flight analysis and research… explored examples… talked about costs and payback, as well as benefits and value… and tried to guide readers to insights about how automation improves business  productivity.

So, it only makes sense from time to time to aggregate those posts into a single convenient table.  We believe that inside the content of our articles, culled from various sources and points of view, lies a wealth of information that is of value to manufacturers and distributors looking to improve their competitve advantage.

That being said then, following are quick ‘shortlinks’ to topics we think you’ll find of interest, culled from previous posts geared at helping make your business better.  Simply click on any of the topics in the table below to open a browser window that will take you directly to that post.  At the top of each one, you’ll see links to the next (and previous) post in each series.  You’ll find a wealth of good information below…

Manufacturing Topics Include…

The Continuing Evolution of ERP (First of Two Parts)
A Good Cheat Sheet: Questions To Ask When Evaluating an ERP Solution
Service Oriented Architecture in ERP
Thinking About Upgrading Your Software?  Plan First!  (Part 1 of 2)
ERP: Sure It Works… But What’s the Catch? [Part 1 of 3]
Why ERP Systems Are Important
How Satisfied Are Companies With Their ERP Systems?
Using Business Process Reengineering to Become “ERP Friendly”
ERP Implementation: How Much and How Long? (1st of 2 Parts)
Five Critical Points for ERP Success
Manufacturing Takes the Lead (Part 1 of 5)
InsideERP’s Mid-Market Buyer’s Guide – Part 1 of 5
On Manufacturing – Drum-Buffer-Rope: Part 1 in a Series of 7
Manufacturing Constraints: When Scheduling and Capacity Don’t Meet
Software That Matters: Part 1 of an 11 Part Series (Re-edited later and made into a PSSI White Paper)

 Warehouse Management (and WMS) Topics Include… 

Why WMS? [Part I of IV]
Getting Started with a Warehouse Management System (WMS) [Part I of IV]
Getting Specific About Warehouse Management Savings (Part 1 of 3)
THIS is Why Businesses Need Warehouse Management (Part 1 of 6)



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