By Katrina C. Arabe

New innovations are streamlining the supply chain and increasing the efficiency of today’s technologies. Every warehouse stands to benefit.

Many of the latest warehousing solutions mix the old and the new. The old: technologies such as warehouse management systems, which have been around for a while. The new: software and information technology enhancements. In fact, these innovations are not only giving old technology new efficiencies, but they are also tweaking direct-to-customer distribution and fulfillment activities.

Pick-to-light systems have been given the IT makeover. Newer versions of pick-to-light systems are virtually touch-free. Previously in pick-to-light, the picker had to push a button when he had finished the task. Now newer systems of this long-standing technology have sensors, which detect when the picker’s arm is in a pre-designated spot in the picking area. Some even feature RF scanning, which doubles the accuracy.

Warehouse management systems (WMS) have also significantly gained in functionality and now provide solutions to current challenges such as downsizing inventory. This is a big concern because of two factors. First, warehouse managers are operating in a buyer’s market, with customers demanding quicker delivery with value-added service. Second, buying patterns have shifted—orders are smaller and more frequent. New warehouse management systems address these issues and trim the supply chain. They are not only more functional, but they can easily interface with other technologies. Many WMS applications enable automation while working with both ordering and shipping systems and logistics routing programs. These capabilities ensure the smooth flow of merchandise. At Helzberg Diamond Shops Inc. in Missouri , the WMS receives fulfillment recommendations based on the business activity at each of its 235 jewelry stores. The WMS then gives data to all the warehouse automation. “For us, automation vastly increases accuracy and speed,” says Orlando Jagoda, IT vice president at Helzberg.

Even small warehouses can benefit from IT improvements. Small operations can bring partial automation to their facilities through emerging Internet-based services. Application service providers (ASPs) are driving this phenomenon. They let thousands of small warehouses execute operations which were previously not possible without complicated and expensive warehousing technologies. “An ASP is a Net-based system whereby the user pays per transaction,” says Ken Ackerman, president of the Kenneth B. Ackerman Company, an Ohio-based supply chain management service. “It’s the same idea Xerox came up with 40 years ago when the company sold copies in lieu of copy machines. ASP is still very much in its infancy, but it will open IT to small warehouses. There are people selling this right now, and over time it will have a revolutionary effect on the industry.”

Material handling solutions that are on the IT edge include wireless technologies such as Palm Pilots and Ethernet bridges that can connect several locations to one network. In addition, robotics and automated picking technologies are easier to use, more compact and more efficient. Automated pallet loaders now use driverless vehicles or embedded platforms that elevate before releasing loads inside a trailer. In fact, most automated picking equipment moves around guided by rails. They pick products from shelves and place them in containers. Since experts say that approximately 60% of all picking activity consists of travelling, these robotic advancements greatly boost productivity by eliminating unnecessary strolling.

Voice or speech recognition is also gaining in popularity. This warehouse option frees both hands of the worker, boosting his productivity. It’s becoming easier to use. Workers no longer have to adjust vocal inflection so that the program can identify what is being said. Instead, users give speech samples to the system to memorize. In fact, the latest versions of this technology can interpret a range of languages and accents. Speech recognition may even make warehouse radio frequency (RF) technology obsolete, assert many material handling experts. Parcel delivery services already show this trend. At Conney Safety Products, a safety equipment distributor in Wisconsin, speech recognition is the preferred choice. With RF, “you have to stop what you’re doing, scan the item, and pick the ticket,” says John Swartz, vice president of operations. “That’s a big negative time-wise, so big that we’ve decided not to go the route of RF at all. With voice recognition the worker doesn’t have to scan anything.”

Radio frequency may avoid becoming outmoded because of its own IT advancements. RF identification tags have successfully tracked trailers, rail cars, marine containers and other costly items. Embedded or attached RFID tags contain data, which can be retrieved by low-wattage radio waves. This can be sent to a computer or saved on other digital devices to be uploaded later. RFID will work even without direct line of sight, and non-metallic objects such as trees will not obstruct radio wave transmissions. “RFID holds great potential for material handling,” says John M. Hill, principal of Ohio-based eSync International, a supply chain systems consulting and integration company. “The trouble is it’s far too expensive right now. You can afford to spend $50 or $100 on an RFID tag if the object is to identity rail cars, and be willing to spend a little less if you’re tracking automobiles. But the price per tag in a warehouse will have to be less than five bucks if there’s going to be a payoff.”

Total interoperability is a fast approaching IT reality. The material handling industry has tried in recent years to achieve interface standardization so that different equipment and information systems can “talk” to each other. Experts say this would be a tremendous step, removing the need to adjust software every time there is new hardware. While total interoperability may be a few years away, task interleaving has already arrived on the warehouse floor. This new technology combines warehouse management jobs to decrease travel time. For example, warehouse forklifts, which pick up pallets and take them to another part of the warehouse, can be programmed to complete another task on their way back instead of returning empty-handed.

Data warehousing is another IT-driven warehousing solution. Data warehousing notes trends and what SKUs are selling over a period of time. Then utilizing trend analysis and statistical process control, it makes recommendations about where merchandise should be placed in the warehouse. Items in high demand are made more accessible while slower-moving ones are consigned to less-explored places. “We’re at the stage with this stuff now where many fundamental problems have been licked,” says Larry Shemesh, vice president and principal of Gross & Associates, a New Jersey-based material handling consulting firm. Total automation, he says, is “doable, but it won’t happen overnight.”

Streamline All Warehouse Processes and Reduce Errors

Developed by Naxtor Technologies, the Wireless Warehouse Management Solution (WWMS) streamlines all warehouse processes - receiving, picking, inventory operations, cycle counting, and adjustments.

Capabilities

• Enables distributors to improve customer service by helping ensure they get the right products out on time, every time, while improving operating efficiencies through directed warehouse activities

Benefits

• Streamlined warehouse process
• Immediate feedback
• Improved control over warehouse tasks
• Improved customer service

A small wireless handheld device communicates with Naxtor WWMS solution, sending information about who picks what inventory activity and when, in real-time.

Because the Wireless Warehouse Management Solution is fully integrated with Naxtor WWMS, distributors can implement one technology solution for all of their needs, and since the system offers a graphic user interface (GUI), it is easier to navigate than most character-based RF offerings.

Accurate Inventory

Wireless functionality enables on-the-fly inventory adjustments when discrepancies are found, and a fully integrated audit trail tracks all changes. Inventory movements within the warehouse are also immediately confirmed within the system.

WWMS also offers self-directed and system-directed methods for inventory management. The system-directed method automatically suggests up to six bins, giving users the option of choosing an alternative bin location.

WWMS includes a ranking system similar to ABC classes, but based on the number of hits a bin receives. Primary bin, bin ranking, along with weight and volume of bins and items can be used to calculate optimum placement in your warehouse. When a user locks a damaged bin location or indicates a full bin, the warehouse manager will receive an alert.

Receiving

With Naxtor WWMS, one or more users may receive against the same purchase order or warehouse transfer. The solution sums up the receipt line quantities as the user processes the transaction. If a distributor has multiple package sizes for an item or runs a random warehouse where more than one item or lot is in the same bin location, then a system of license plating or tagging is an available option, with the ability to create lot numbers and traceable tags on the fly.

During the receiving process, users may identify serial, lot, and lot attributes. If required, tags for individual pallets, cases, or boxes can be applied with recursive identification for several boxes on a pallet. Directed put away is part of the receipt process.

Picking Features and Benefits

Naxtor WWMS allows for the picking of a single order, multiple orders for different customers, and transfer orders in a single pass through the warehouse. The system directs the picker via the wireless handheld device to the appropriate bin locations, and ensures the correct bin is scanned, the correct item is scanned, and lot/serial is correct. Users have the ability to pick by zone or to pick the entire pick ticket, which enables multiple pickers to simultaneously pick the same ticket or by a pick-and-pass method.

Enhanced bin functionality allows picking sequences to be associated to bin locations. The picker has a “What’s Left” function that indicates the lines of the order left to pick. The user also has the ability to add multiple pick tickets to a “Group Ticket” and then pick either by zone or for the entire ticket.

You Can Count On It

Naxtor WWMS works with either a wireless device, or a batch-oriented PDA initiated from a PC, for cycle counting and physical inventory. The count is created and the user uploads the count to the PDA or enters the count number on the wireless device. Physical count selection allows you to count all bins for a single item or single bin location. The user then enters the count number and the system prompts the user with the bin and item to scan. By having the user verify the item and bin, it ensures the correct items/bins are being counted. The final count quantity is entered and the count updated. Lots and Serials can be adjusted on the device too. The PC user approves the count once any discrepancies have been investigated.

Inventory Operations

Item-lot quantities or individual tags can also be consolidated onto other tags or into other bins if needed. Similarly, item-lot quantities in large pack sizes can be broken down to smaller quantities and identified with individual tags before being dispersed within the warehouse, and all inventory movements can be immediately verified.

For more information on Naxtor Wireless warehouse Management System(WWMS) enterprise software solutions, please visit our website.

The foundations of accurate order picking begin with a warehouse management system and end with an improved bottom line.

By Bob Trebilcock, Editor at Large — Modern Materials Handling.

Successful order fulfillment sounds easy: You deliver the right quantity of the right product at the right price to the right place at the right time.

It doesn’t get more basic than that. Yet far too many warehouses and DCs are still 60 to 70% accurate in their order picking because they’re running their operations with paper-based picking systems, says Craig Welch, senior application engineer for Daifuku America Corp.

That’s true despite that fact that order picking errors can ruin the bottom line. “I worked with one customer who was being fined $50 by Wal-Mart for every pallet with an error,” says Welch. “That was more than the product on the pallet was worth.” That company was in the red before factoring in the costs of reverse logistics, double handling and the potential loss of a customer.

How can a company turn a positive into a negative? Welch says there are at least six best practices that can improve order picking accuracy from 70% to 96% or more.

Foundations of Accurate Order Picking

WMS is fundamental: “A warehouse management system (WMS) is the starting point,” says Welch. “Even if you still do paper-based picking, a WMS is going to give you more accurate inventory.”

Automatic identification: Wireless bar code scanning, voice technology or pick-to-light technologies can build on the productivity and accuracy improvements generated by a WMS. They also drive accountability, says Welch. “It’s not just automatically collecting data that leads to improvements,” says Welch. “We’ve found that employees who know they are being tracked by the system are as much as 25% more productive.”

Receiving counts: With a WMS and data collection systems in place, the next step is to develop processes that drive accuracy at the receiving dock. “Accurate order picking begins with competent receives who understand the part numbers and product descriptions of what they’re receiving and make sure they get put away where they’re supposed to go,” says Welch.

Adding automation: Automated materials handling systems, like conveyors, sortation systems and automated palletizers use photo eyes, RFID readers, camera-based imaging systems and automated bar code readers to add another layer of confirmation before an order is picked.

Scales: WMS systems can collect size and weight information of every product stored in a DC. An automatic scale at the end of a picking line can flag a carton that weighs too much or too little based on the weight of the products associated with an order.

Cycle count: Even with a WMS in place, it’s still important to cycle count the quantity of product at a storage location or pick face, says Welch. “That’s where you find out if a product was misidentified coming into the system; if someone took out the wrong quantity; or if damaged or out-of-date product was removed from the storage location by not from the system,” says Welch.

By Katrina C. Arabe 

If you think a feature-packed warehouse management system (WMS) is out of reach, think again. Low-cost packages, with high-end features, are now available for small and mid-sized companies.

Warehouse management systems (WMS) are not just for the heavyweights anymore. Now, small and medium-sized companies can get their hands on affordable packages because WMS vendors are finally courting the low-end market. They are paying attention to this long-overlooked segment because Fortune 1,000 companies already have applications in place. That means that vendors must scramble to maintain revenues by pursuing other markets, and they’re doing so by scaling down their offerings and dangling attractive prices to entice small and mid-sized firms.

Penetrating new segments is important because the North American WMS market declined by 12% between 2000 and 2001, says Steve Banker, service director of supply chain management for ARC Advisory Group in Boston. Worldwide WMS software and service revenues may have hit $738 million in 2001 and is expected to climb to $1.17 billion by the end of 2006, but ARC anticipates that overseas markets will drive most of that growth. “The North American WMS market is mature,” says Banker. “Most of the 10% growth we’re forecasting over the next five years will occur outside of North America.”

Such projections have spurred WMS vendors like J.D. Edwards and Ann Arbor Computer to create low-end, Windows NT-based WMS packages for the small-to-medium firms. Companies with modest budgets can now choose from basic, software-only packages to feature-laden turnkey solutions that include the application, implementation and even hardware. Most systems are priced around $100,000, although some go for as low as $40,000 or as high as $300,000, depending on which features they integrate.
“WMS vendors are looking for ways to add more revenue to the bottom line,” says Tom K. Ryan, who runs his own supply chain consulting firm in Chicago. “They have the expertise and knowledge, so they’re taking the time to make the systems more applicable for small, simple operations that don’t need all the bells and whistles.”

Software vendors now offer several versions of their low-cost WMS solutions, from the very basic to feature-laden, increasing in price as they pack more functions. For example, Radio Beacon Inc. of Toronto has three versions of its low-end system—Radio Beacon Lite, Full and Pro. “They all do warehouse management, they just do more as you pay more,” says Dale L. Jeffries, Radio Beacon president.

Another vendor that is targeting smaller users is Washington-based Intek, which offers its Warehouse Librarian product for $50,000-$75,000 for 5 to 10 users. The exact price depends on hardware requirements, but all software and services related to the system are already included, according to Intek president Stan McLean. He says the package is ideal for manufacturers and distributors with yearly revenues in the $10-25 million range. The system tackles such warehouse functions as receiving, putaway, order management, shipping replenishment, order picking, and cycle counting.

North Carolina-based V3 Systems has also come out with affordable WMS solutions—the SCM and iSCM packages, which range from $40,000-$80,000. And because the systems are based on the same V3 architecture used by the vendor’s advanced and scalable solutions for larger companies, the low-cost packages can meet a company’s increasingly complex requirements. “Small to mid-sized businesses typically have looked to deploy the V3 solution in one or more distribution centers and scale the solution as their logistics needs grow or change,” says C. Ashley Campbell, V3’s president and CEO.

Even the biggest vendors, which have made their name with high-end, costly systems, are now pursuing smaller companies. For example, Denver-based J.D. Edwards & Co. offers a “foundation” product called Warehouse Management, which tackles warehouse basics and integrates financial software for accounts receivable, general ledger and other functions, for under $100,000.
Other large technology vendors with lower-end offerings are Manhattan Associates and Majure Data Inc., both based in Atlanta. Manhattan Associates makes PkMS Pronto, a system that integrates inventory management and radio frequency and starts at $75,000. Meanwhile, Majure Data offers RF Navigator complete for $150,000-$300,000. “It truly is a full-scale WMS,” says Patrick Majure, company vice president. “From replenishment to picking to loading trucks and everything in between, RF Navigator handles everything that needs to be done in a warehouse.”

Universal Supply Co., in New Jersey, can certainly attest to that. The wholesale building material distributor and supplier purchased and rolled out RF Navigator a year ago in its 100,000-square-foot warehouse with 9 workers. The company spent just under $200,000 for the entire system and has already made its money back, says Dante LaSasso, Universal Supply’s materials manager. “Our inventory has gone from being 85% accurate to 99.77% accurate,” says LaSasso. “Plus, we’ve reduced our warehouse staff by three full-time and one part-time workers, which means a $10,000-a-month savings in manpower alone.”

Indeed, such results are impressive, but before snapping up a low-cost WMS system, consultant Tom K. Ryan says that companies should address the following questions:
1) Does the low-end package fulfill your operational and functional needs?
2) Do you have to undertake various or difficult “workarounds” to make the system match your warehouse requirements?
3) Does the cheaper system integrate radio frequency and automatic data collection? These two features drastically reduce operator error.
4) Is the low-cost solution scalable?
5) Can the WMS meet growing needs?
6) Will it be able to manage increased transaction volumes or more complicated warehouse operations?
7) What support is the software vendor likely to give over the next few years?
Is the vendor financially stable?
9) What type of assistance will the vendor offer during the implementation of its software in the warehouse?
10) Can the vendor refer you to a third party for support with the system if necessary?

Also keep in mind, says Ryan, that lower-end WMS solutions are best suited for companies with 5 to 10 WMS users. They also work well with simpler operations, which can receive tremendous efficiency boosts from an automated pick, pack and ship system, particularly from automated inventory control. “A small operation can only reduce the number of employees by so much,” says Ryan. “But an even bigger benefit for such companies lies in the inventory control and inventory-level reduction that comes from an automated WMS system.”

And while every WMS package can manage warehouse basics such as picking and shipping, ARC’s Banker points out that not all low-end packages possess the features of their high-end counterparts. Small and mid-sized companies should also be aware that baseline software prices don’t cover hardware or implementation services, although some companies do include such services for a flat fee.

Overall, however, low-end packages have significantly advanced, packing many high-end features and often coming in at under $100,000. Vendors may offer widely varying features, service levels and prices, but the quality of these systems tends to be high because of three factors—a saturated high-end market, the ruptured technology bubble and vendors’ readiness to integrate complex features in their low-end products. In fact, according to Banker, most affordable solutions available today are real-time, RF-enabled, and execute the warehouse functions that companies find the most essential—receiving, putaway, picking and shipping.

By Katrina C. Arabe

Companies are discovering how to better maintain inventory and fill orders with powerful new tools and best practices. Find out how they’re making drastic cuts like 30% less inventory look easy.

When managing warehouses, companies aim to reduce costs in two major operations—maintaining inventory and filling customer orders. To make both more efficient, they are not only adopting new technology solutions but also implementing “best practice” procedures. While the high-tech approach involves utilizing new software tools (think “collaborative visibility” and “inventory optimization”), the “best practice” tack entails arranging items in the warehouse or distribution center in the most expedient manner.

One new technology approach is collaborative visibility, which is helping manufacturers work more effectively with suppliers to avoid excess inventory.

“What we found is (that) companies have been working on the top-tier suppliers to take out the waste and create new efficiencies,” says Bill Linquist, a business unit leader for New Jersey-based Ingersoll-Rand Co. Ltd. “But companies aren’t working on the bottom tier suppliers (the remaining 20%) where you still see transactions and inventory waste.”

To help companies better collaborate with these suppliers, Ingersoll-Rand, along with Massachusetts-based software developer SupplyWorks Inc. and Illinois-based third-party logistics provider Roberson Transportation Corp. last year launched The 21st Supplier, a business-to-business service that optimizes discrete manufacturing procurement.

To improve supplier-manufacturer collaboration, the service gives suppliers insight into manufacturers’ inventory levels in real time. “When we provide visibility, inventory naturally goes down without doing anything else because suppliers realize for the first time what is out there,” says Linquist. In fact, he claims that the service has reduced inventory by 10-20% “in every case.”

“When you start to collaborate with your suppliers, it helps them think about what they can do to become more efficient, more effective and how they can execute better,” he says. Through collaborative visibility, suppliers can determine how long inventories will last and can forecast demand. In addition, they can study their own patterns and learn how much and how often they can ship. This will also allow them to cut down their own inventories.

Another cutting edge solution is inventory management optimization. For example, Boston-based Optiant Co. lets firms like Southern Novelties Co., a South Carolina-based packaging company, calculate the correct inventory levels at the correct locations. Its inventory management optimization software helped reduce inventory by maintaining it more strategically.

With Optiant’s software, Southern Novelties figured out that it made sense to hold more inventory upstream—before its metal ends are manufactured for specific products and become more affected by market forces. As a result, the company cut down inventory on its metal ends product line by 30%.

Inventory optimization also aided Arizona-based Dial Corp. Because inventory figures took time to calculate, Dial Corp. was hampered by both excess inventory at the end of every month and too many stock outs at the retail level. To remedy the situation, the company collaborated with New Jersey-based IMI Americas on a software tool that tackles customer fulfillment and affords a real-time view into its manufacturing and distribution network in North America .

“The (key) issue is how you manage the exception—not just planning and execution,” says Henry Bruce, a vice president of IMI Americas. He points out that many companies are skilled at forecasting product demand, but get stumped by day-to-day exceptions.

By gaining insight into its network, Dial was able to handle volatility in product demand planning. “Dial generates demand through promotions which would drive the volatility,” says Bruce. “They have insight now into that demand because they know how much they shipped to retailers (in past) promotion. We capture that and manage against it in the context of the promotion.”

As a result, Dial has been able to even out its demand flow, minimize stock outs and avoid having to dramatically discount extra inventory at the end of every month.

Inventory visibility also helps companies save on inventory costs. For example, customers of Connecticut-based NewRoads Inc., a business process outsourcing firm that offers order fulfillment and other services, can save on inventory costs by receiving products straight from the manufacturer.

For instance, if 60% of the customer’s inventory is fast moving and 40% is slow to leave the shelf, then the company’s overall inventory costs will go up because of the laggards. Through inventory visibility, NewRoads can offer to have the slow-movers shipped directly from the manufacturer to the customer, without stopping at NewRoads’ Kentucky warehouse. “This way our customers don’t have to incur the cost of storing the (slow moving) product here,” says Sally Miller, information technology director at NewRoads.

Another cost-cutting, high-tech approach is creating the “just-in-time” warehouse, which integrates a yard management system with a warehouse management and a transportation management system. The yard system allows companies to streamline the movement of products-laden trailers from yard to dock—including their unloading.

For example, New Hampshire-based ES3 LLC, a third-party distribution provider for the grocery industry, recently built a “just-in-time” warehouse that uses a yard management system from California-based WhereNet Corp, employing wireless, real-time locating system (RTLS) technology. “A lot of the yard maintenance management is gone,” says Geoff Davis, ES3 executive vice president. “We don’t have (those costs) and we don’t have to bill our manufacturers or retailers for it.”

As this example illustrates, receiving provides a huge opportunity to improve order fulfillment. “As we become more effective supply chain managers and get smaller and more frequent receipts, you have to pay attention to receiving,” says Jim Apple, a director and co-founder of The Progress Group, a logistics consulting group. “That’s the process of receiving efficiently; dock to stock time becomes more critical because the less of the stuff I have the more likely it is that what’s coming in the door is needed. I can’t afford to have five trailers sitting out in the yard that I haven’t gotten to yet.”

Improving order fulfillment doesn’t have to involve deployment of the latest technology either. For example, a well-established technology such as bar coding can result in huge efficiency gains. Progressive Distributor magazine looked at inventory costs for over 50 distributors from December 2001 through November 2002 and found that in warehouses where bar coding is used for receiving, picking and tallying up inventory, the cost of carrying inventory was on average 27.6% less than in those where such functions are manually completed.

Another highly effective approach is optimizing warehouse layout. Most distributors continue to store similar products close to each other, reserving warehouse areas for particular product lines. With this layout, finding products may be simple, but order pickers may often have to travel all the way to the back of the warehouse for popular items while slow moving products are needlessly stocked near the shipping, staging and receiving area.

To avoid productivity-draining travel, companies should position the most frequently picked items in the most accessible bins. In this manner, picking can be faster and more efficient, mostly taking place in a small area of the warehouse. In fact, in their study of 50 distributors Progressive Distributor found that less than 50% of stocked items make up 95% of hits (product requests). This means that the remaining half of products that are requested only 5% of the time can be placed farther away from the shipping, staging and receiving area without incurring too much extra travel.

Distributors can also further improve warehouse operations by following some additional layout guidelines. For one, they can store products that tend to be ordered together close to each other. Also, they can consider the order in which items should be pulled from stock in choosing bin locations. For example, if heavy products are usually at the bottom of a pallet, then they should be stored in lower bins or in locations where they can be picked first.

Indeed, when it comes to inventory management and order fulfillment, both high-tech and low-tech solutions can help your company drastically cut costs and dramatically improve efficiency.

By Katrina C. Arabe

Vendors are currently courting the warehouse management field with a new line of web-based management software. Before you rush into a purchase, be sure the software is really what your business needs — and if you even need it at all.

As the vendors of warehouse management software begin offering web-based packages to their clients, warehouse managers have the option of putting their operations online. For some warehouses, especially those of smaller and mid-size companies, there are advantages in doing so. Software upgrades are much easier and quicker with web-based systems. The software is located in one central place rather than having to be installed repeatedly in separate PCs. The software is simply installed on the main server and accessed through the browser. Managers can use the system from anywhere in the network, running warehouse reports whenever, and wherever, they are needed.

Another advantage of web-based warehouse management software is that it eliminates problems that are typically associated with multiple platform use. For the program to run on different platforms, the user needs only to have compatible web access software. This umbrella accessibility makes it easier to distribute programs over the Internet and throughout the network. The relative ease of navigation is another plus. End users usually find that they can get around the system with little more than pointing and clicking.

Warehouse managers seem to appreciate the ability of web-based software to transmit and receive information in real time. This helps them better allocate time and labor to specific tasks. The fact that data acquisition is immediate on the web-based system allows up-to-the-minute analytics that were impossible prior to the software’s availability. In the words of Reg Bryant, warehouse director at L.G. Zenith, “At any point in the day, we can look to see how much work is left on the floor. We used to have to coordinate lots of reports and then guess at the figure. Now the system considers how much work is left that day and how many people are on the floor to work on it, and it tells us how quickly we can get the work finished.”

Of course, web-based warehouse management software may not be right for everyone. Generally, the software is more favorable in a small warehouse setting. These companies simply do not have the critical mass to build an infrastructure to run their own management software, a condition that makes them ideal for web-hosted systems. Large companies, on the other hand, are more likely to assume their own systems. In addition, it is the view of some professionals that web-based software is actually better suited to transportation management and other supply chain functions than to warehouse management. In their opinion, warehouse management is a strictly an internal operation so there is little need to involve an external enterprise.

For those that do adopt web-based software, they may wish to bring their customers into the fold. Giving clients access to the system would improve their visibility of the supply chain and facilitate better planning and scheduling on both ends. For many warehouse managers this is the way to go and web-based software helps them get there. In the words of Zenith’s Bryant, “We’re going to that next step so that we can allow our distributors to look at our deliveries and know what’s available and what isn’t within our warehouse.”

By Katrina C. Arabe

A distributor’s warehouse can be made more efficient and effective by implementing a warehouse management system. The results? Happy customers and increased business.

Without an efficient, cost-effective warehouse, a distributor may not have a business. A well-run warehouse allows the distributor to ship products to customers completely, correctly and on time. The cost of not doing so is high, from the sales force’s time to apologize and correct the error, to staff time to duplicate work, to the risk of losing a customer. In addition, the ability to do so at a profit is critical. Warehouse management software systems can be the lynchpin that makes the business work.

A recent survey by Industrial Distribution asked readers about their use of warehouse management software (WMS). While only 22% of the respondents indicated that they planned to purchase WMS this year, over 30% indicated that they already use such systems. The remainder were not planning on purchasing the systems due to cutbacks or changes in IT priorities this year, or had no plans to purchase.

There are three main objectives of those who plan to invest in a system in 2002. The objectives are tracking inventory levels, increasing productivity, and reducing shipping errors. The distributors are also interested in automating and streamlining picking, automating billing, and automating tracking.

All of these things can be achieved if the company is dedicated to making the system work. “It’s so dependent upon management saying ‘we’re going to put this investment in and we’re going to put a man on the ground to see that we get some benefit from it.’” Says David Allais, president of Pathguide Technologies. For example, Jeffrey Ramras, a vice president of billion-dollar distributor Applied Industrial Technology, is in charge of tracking the progress of his company’s warehouse management system. The new warehouse management program included conveyor and automated sortation systems and a software system that uses radio frequency bar coding. The company also re-designed its warehouse space. The results were increased productivity, personnel reductions of almost 15%, lowered error rates, and increased accuracy to 99%.

For the average distributor, a company that implements a warehouse management system in 2002 will begin to see return on the investment by 2003. Payback of the warehouse management systems will be seen in not only increased productivity, error reduction, and inventory accuracy but also reduced training time, improved picking procedures, and better utilized storage capabilities. Everything depends on the company’s management deciding to make the investment and then have someone analyze the results.

Jim Beckstein, the president of the construction and general-line distributor Mill Supplies, Ft. Wayne , Ind. , has two locations with a total of about 60 employees. Two years ago the company decided to install a system that uses a real-time warehouse management system with radio frequency bar coding. According to Jim Beckstein, the payback is very simple: you don’t have errors – more automation and fewer people equals less chance for human error.

A warehouse management system can be costly, which is a common complaint for many smaller companies. For example, a system that includes software, hardware, training and installation for a typical industrial distributor with annual sales of about $10 million and a single warehouse facility, could cost around $125,000. Small distributors with talented workers who are familiar with the warehouse and don’t make mistakes, probably consider it unnecessary to purchase such an expensive system. Small companies interested in rapid growth and companies of ten or more employees with high turnover that can lead to inefficiency and mistakes should consider looking into purchasing systems.

To have the most effective warehouse management program, it is vital to integrate it with the company’s overall operating system. This allows all parts of the business to “speak” to each other, making the whole facility more efficient. With management investment and commitment to the program any company can utilize a warehouse management system effectively and successfully.

Source: More Than a Storage Facility

May 2002

Industrial Distribution

Victoria Fraza

Automated warehousing applied to part or all of a distribution centre operation can provide a wide range of benefits including space savings, lower building costs, improved productivity, more efficient material flow, less people, safer operations, reductions in inventory, increased reliability, reduced running costs, better ROI and lowest lifecycle cost.

Automated warehousing systems provide the maximum possible usage of available floor space and building height.

In some cases, this enables companies to increase storage capacity by up to 400% compared to conventional forklift operations. Where space is limited, switching to an automated warehousing solution can free up additional space for other activities, such as manufacturing.

And because automated warehousing solutions make the most effective use of space, building costs can be kept to a minimum. Significant cost savings are possible through the need for less land and a smaller building. Because Automated Warehousing systems do not require special floors or expensive in aisle guidance systems. further savings can be achieved.

Automated storage and retrieval machines also weigh a lot less than comparable narrow aisle trucks further reducing construction requirements.

Improved Productivity

Automated warehousing systems also offer tremendous performance in terms of productivity.

Not only do they work faster than forklifts and narrow aisle trucks, they can also operate 24 hours a day, 7 days a week, keeping product on the move.

With automated storage and retrieval machines, there are none of the delays associated with putting away or retrieving pallets from high locations. Every pallet is picked up and deposited at the same speed regardless of where it is located within the system.

Automated warehousing systems can also enhance the efficient flow of materials through a manufacturing facility or distribution centre. By integrating the system with production materials handling systems, raw materials, tools, parts, work-in-process, and finished goods can all be efficiently delivered to where they are required just-in-time.

The systems can also be set up to provide a buffer storage function on assembly lines, and can service multi-floor applications.

By using automated storage and retrieval machines the need for drivers/operators is eliminated. Compared with conventional methods, and calculated over the life of the machine, savings can be substantial and the ROI can be highly attractive.

The machines operate within fixed aisles protected by safety fences so the risk of people being injured in a collision is minimised. The need for operators to physically lift heavy products, or even heavy empty pallets, is also eliminated.

Reductions in Inventory

With integrated location and inventory control software combined with faster throughput, it is possible to reduce stockholdings.

Inventory can be accurately tracked at all stages, maximising stock availability. Stock control can also be improved, with the software enabling goods to be automatically picked on a First In First Out basis, or by ‘use-by’ date etc. Intelligent location control ensures goods are located in the most appropriate zone depending on their usage within the Automated Warehouse.

Once the automated warehouse has been set up, ongoing operating costs are minimised. Typical warehousing costs involving refueling or recharging of batteries, regular mechanical and electrical maintenance, and staffing, lighting are also minimised.

The Company
Hideaway Beds – Wall Bed Company offers the Latest Designs wall beds. Wall Beds have been around since 1918 in American and Europe. The company ships their products to approximately 100 retailers in Australia as well as taking online orders directly from individual consumers.

Key Benefits

• Order accuracy increases from 80% to 99.9 %
• Order picking times reduced by one third
• Real-time visibility into warehouse inventory Levels.
• Unit items shipped per day up from 50 to 200.

The Challenge
Hideaway managed 8,000 square-foot warehouse using a paper based system. All the assembly items required to make final products i.e. beds are done in the warehouse. Lots of subassembly items come into the warehouse required to assemble the end items. The real challenge is the lack of system since most of the picking and receiving of assembly items are done using Microsoft Office, in which manual logs were kept noting the location and movement of goods throughout the facility. When it came time to provide reports for the senior management team, the reports were built manually on an excel spreadsheet- a laborious and potentially error prone process. This cumbersome process results into late orders and deteriorating customer service levels. A system is needed to streamline the logistics situation and improve the bottom-line profits.

The Solution
Naxtor warehouse management solution (WMS) was selected to solve Company challenges.

“Several systems were explored during the initial search for a perfect fit,” explains Von, Managing Director. “We are not a large company and the cost /benefit analysis couldn’t justify a huge investment, so cost played a considerable role in our decision to go ahead with Naxtor WMS”.

With the implementation of Naxtor WMS , Hideaway immediately saw an increase in productivity, processing picking and receiving of assembly items were done in half the time it had taken previously. Warehouse staffs were equipped with wireless handhelds to pick order for assembling. Once the final product is ready it is then shipped to customer and all phases of their assembly processes are thereby recorded into the warehouse management system. There was no longer a need for paper recording or manual data entry. Using RF handhelds and barcode technology Naxtor WMS allow Hideaway to track and trace every item as it is received, put-away , picked and shipped. Each member of the warehouse staff became an expert on stock and assembly location and warehouse processes.

Hideaway beds at times also required generating their own barcodes, and with Naxtor WMS with a click of a button the application generates EAN32 and many generic barcode read by most of the barcode reader. The printed labels are then attached to the incoming assembly items ready to be put away to their respective locations.

“Having the warehouse system in place means that instead of product location and warehouse layout sitting in someone’s head, it’s now in the system, and that makes it much more transferable so that every staff member is an expert,” says Von

After only three week installation and training process, the warehouse was able to leverage the full capabilities of Naxtor WMS. The company was able to equip warehouse staff with PSC falcon line or wireless data collection and printing technologies.

The Company
A Sydney based company is a distributor of books, artifacts, cards, antiques and other contemporary gift items and house wares. The company ships their products to approximately 700 retailers around the world as well as taking online orders directly from individual consumers.

Key Benefits

• Order accuracy increases from 70% to 99.9 %
• Order picking time down from 30 minutes to 4 minutes
• Real-time visibility into warehouse inventory Levels.
• Unit items shipped per day up from 300 to 1000.

The Challenge
New Age & Beyond managed a 10,000 square foot warehouse using a paper based system. Ten warehouse staff had to rely on their memory to find products needed to find their orders, and inventory tracking was done using MYOB Accounting System.

“Everything in our warehouse was categorized by product type and the order fillers had to search through the aisles for products similar to what they were trying to ship,” says Jason . “Relying on our staff to locate product by memory proved to be an ineffective way to operate. We recognized that we needed a system that would help us better manage our inventory and increase customer service levels”.

As the business grew, the manual system began to pose significant threats- orders typically took 30 minutes to pick and order accuracy was measured at about 70%. The company started to struggle with inventory control issues, with no accurate way of tracking the many, and varied products company’s distributes. Safety stock control was a serious problem and back order logs were created.

Not just that most products like gifts and artifacts are difficult to distinguish. Very often the size, shape and even color of the products are the same, the only marked differences being wording and unique barcodes. Because manual paper based system does not allow for picking by barcode , staff members were struggling to find the products the needed to fill the orders- This challenge was negatively affecting both revenue and customer service levels.

With no electronic way of tracking the picking lists once they had been printed, the company was also challenged by lists that would go missing. Sometimes the same list would be accidentally printed twice, leading to duplication of work.

The Solution
After months of operating the traditional way the company realized that its current system would not be able to support its growing business. Company chooses to implement Naxtor warehouse management solution (WMS) to solve these challenges. Naxtor WMS is a cost effective yet feature rich warehouse management system (WMS) designed for small to mid sized wholesale distributors like New Age & Beyond.

The company is able to optimise warehouse operations by automating the pick and receive and various productivity reports and tools at staff disposal create a paper-free (paperless) warehouse environment.

The warehouse was also integrated with company MYOB accounting system to track backlog orders as well as safety stock levels thus improving significantly inventory situation. Where previously the staff team would use traditional means such as sticky notes and paper, the system is now updated in real time as products leave or arrive on the warehouse floor.

The WMS has also turned into a powerful benchmarking tool for the organization. Now the warehouse manger able to accurately track its productivity levels throughout the day, and is able to strategically schedule the staff to ensure order completion during the busiest times.

After only one week installation and training process, the warehouse was able to leverage the full capabilities of Naxtor WMS. The company was able to equip warehouse staff with PSC falcon line or wireless data collection and printing technologies.