Warehouse management keys to success

Posted on 10 Jan 2011 by The Manufacturer

Manufacturers are optimising business processes across increasingly complex distribution networks. Companies have to battle to balance tight inventory with speedy response, make-to-order and increasingly outsourced supply chains.

As manual systems are replaced by automation, real time order visibility is required by supply chain partners. Outsourcing has created a need for more flexible warehouse management system (WMS) applications that can accommodate new process requirements supporting multiple customer demands.

Unfortunately there’s no one-size-fits-all solution.

Some WMS solutions are general purpose, some are integrated within ERP, some are add-ons, and others are specially tailored. There is also a new breed of hosted versions, offering a pay-as-you-go option.

@Logistics Reply UK, a member of the Italian Reply Group, is introducing a hosted WMS service using cloud computing, that promises significant cost savings compared with traditional WMS packages. Jez Tongue, partner in @Logistics Reply, says the hosted solution can be set up in weeks (rather than months traditionally) with cost-peruse based on business volumes. “This promises significant savings for sectors like food and beverage which may be seasonal,” he says. “There are no expensive upgrade costs, and support is built in. The system also integrates with RF and voice technology, as well as host order management/ERP systems, as @Logistics Reply is a partner of SAP, Oracle and Microsoft Dynamics.” Gerry Daalhuisen, global product manager at Kewill also believes the future lies in a serviceoriented architecture (SOA), for communications and contracts between parties as opposed to traditional batch oriented data exchange. The Kewill Service Bus acts as backbone for integration of paternoster systems in Japanese spare parts supplier NSK’s European distribution centres.

Daalhuisen maintains WMS must be flexible enough to optimise multiple warehousing systems, including pick to light, conveyor, sorting, paternoster, and high bay. Kewill ver 6 features a combination of Transport Management System and WMS. “SOA offers transaction-based, handshake integration for real time feedback and online integration, for fast and fluent order and transaction management,” he says.

“If inventory is tight and accurate, you can reduce working capital significantly,” remarks Steven Hargreaves, group product director at Solarsoft. He sees three main drivers for WMS: first, the need for high accuracy using ‘directed put-away’ e.g. correct handling for chilled or frozen goods in the food sector; improved batch traceability; and speedy data collection. He claims companies can achieve 20-40% productivity gains with accelerated data acquisition, in addition to reduced error rates and returns. Solarsoft version 4.0 features a graphic, real time console and more advanced procedures for pick pack and dispatch.

Manchester-based cable tie manufacturer Hellermann Tyton switched from using an Infor 21 WM module to Solarsoft ‘because of the complexities of batch control as a major automotive supplier,” according to inventory, planning and control manager Scott Mayne. “We operated a FIFO (first-in, first out) rule and needed to pick lots of different boxes of cable ties from different pallets.”


At the time, the Manchester plant changed from being a stockist of about 3,500 pallets to a European end-of-line manufacturer shipping products to sister companies worldwide.

“Solarsoft’s Agility WMS allowed us to move seamlessly from a make-to-stock business to make-to-order”, he says. Key benefits included better control, improved traceability and accelerated throughput (cut from 24 hours to minutes). Stock accuracy rose from mid-80s to 99%. On the downside, Mayne admits, the Solarsoft system sits on top of Infor 21 ERP, so inventory data reconciliation programmes now have to run every night. “As a make-to-order business we no longer have a huge amount of stock sitting in different locations, but move new production off machines into a dispatch lane through a very slick cross docking function,” he says.

Mark Tredgold, senior business consultant warehouse management at Infor, reckons “The warehouse market is under pressure to supply on time, under budget, with high accuracy and flexibility across the entire supply chain.” He says the key is improving visibility of inventory and resources, in terms of staff and equipment. Furthermore, “many value added services, like light assembly, are now carried out in the warehouse rather than on the shopfloor.” Consequently there is demand for automated task assignment, focussed on building a picture of what’s in the warehouse, staffing, goods status, equipment and space availability, with respect to picking, put-away, receiving, replenishment, etc. Tredgold mentions a poultry food producer that has cut order processing from four hours to one using Infor WMS, raising inventory order accuracy from 97 to 99%, and coping with 25% order increase.

Dominic Regan, Oracle’s senior director for value chain execution in Western Europe, also reckons companies are looking to deliver higher throughput, flexibility and agility. “Manufacturers need to look at optimisation from a process rather than product perspective. You need to look at the whole process of logistics and fulfilment in the context of sharing data across the process, rather than individual operational areas.” The key to success is building flexibility, while integrating warehouse and transport management at a product and process level to deliver incremental value. Consequently there has been a move to distributed warehousing with WMS giving a single view of inventory. “Integration is required with all flavours of warehouse automation, from automated guided vehicles, to high bay, sortation, carousel, pick and light, RF and external RFID and barcoding,” he says. Since Oracle Release 12.1, WMS functionality is offered as a standalone, distributed application, independent of the ERP solution.

Manhattan Associates argues the case for a blended channel distribution model. “The directto- customer model requires multi-modal picking, so customers as well as the storage facility have visibility,” explains Chris Maynard, director of Professional Services. Companies like Clarkes Shoes and Halfords use Manhattan’s distributed order management system, which links with warehouse management decision points for distribution.

Manhattan also offers extended enterprise management, which allows component suppliers to gain online visibility into the incoming supply chain of a distribution centre.

Andrew Kirkwood, executive director of Red Prairie also emphasises the need for accurate traceability in the food, beverage and pharma sectors. He cites the example of Bradbury Cheese which has to respond to different rules on shelf life, manufacturer and code dates as well as specific packaging. They previously relied on a paper-based approach, which has now become fully automatic since adopting Red Prairie WMS, resulting in 20% productivity improvement. “Generally, as supply chains lengthen there’s demand for WMS to be closely integrated with a supply chain synchroniser and distributed order management,” says Kirkwood. Red Prairie is introducing a flow costing module that allows manufacturers to take point-of-sale data directly from retail customers to plan production for make-to-order.

Ian Scott, solution principle for Supply Chain Management at SAP sees increased use of control automation, voice activation and picking, and collaboration. SAP Extended Warehouse Management 7.0 works well with voice devices and offers graphical workhouse layout, integration with transport management and global trade services. “There’s more call for collaboration with outsourced manufacturing partners, as companies like AstraZeneca move towards acting like brand managers, shipping direct to customers from outsource partners rather than sending products to a European warehouse,” he says. “This demands real time visibility throughout the supply chain.

There is also closer sharing of demand signals from customers, working at a very low level of granularity, with deliveries a few times a day rather than one large ‘bucket’. This level of granularity requires a good planning system, resilience in execution systems, and real time collaboration for data exchange.” “No one wants to hold high levels of working capital in inventory today,” says Julian Mosquera, director at LPC Consulting. Shelf life is critical in food, pharmaceuticals and fashion, with need to refresh frequently. “The big challenge for manufacturers who have to address customers directly is the demand for allocating and ring fencing existing inventory. Responsiveness and real time traceability is important, which requires high levels of connectivity, visibility and reliability.” Basically, paper-based, batch systems are redundant. Responsiveness is key, with high levels of automation able to handle pallets and mini-loads, increased storage density, reduced manpower and high data capture, interfaced with manufacturing and back office systems. “Functionality has to be carefully defined, and WMS is by no means designed to fit all horses for courses,” Mosquera concludes.