AS IS/TO BE Process Mapping versus Warehouse Audits

When companies decide that their present warehousing operations are not what they should be, and that they need to either implement a warehouse management system (WMS) or outsource their warehousing operations to a 3PL, they need to work toward putting together a request for proposal (RFP).

If that pre-work for putting together a RFP includes a very detailed and granular AS IS/TO BE Process Map, in my view the company is going about this selection process in the wrong way.  The “AS IS” represents documenting the warehouse processes as they exist. The “TO BE” represents the process that the company decides they want to move to.  The TO BE is too granular if it becomes a step by step definition of the process – first an associate will do this, then they will do this.  In summary, if you are mapping TO BE processes at a recipe level of detail – pour in half a cup of sugar, one quarter cup of diced apples – you are going too deep.

Fundamentally, I disagree with a deeply granular AS IS/TO BE methodology when it comes to fulfillment in manual facilities.  I believe that objectives should be developed and instantiated in measurable metrics.  Solution providers should not be told what their processes should be, but asked to prove that they can attain target objectives.  Solution providers should be allowed to use their expertise to develop process flows that attain the target objectives.

Specifying process flows too granularly just increases the odds that WMS customization will be required.  Customization drives up implementation and maintenance costs, and increases the likelihood for the need of a brand new implementation within five years.  The goal should always be a vanilla WMS implementation.

While I believe AS IS/TO BE methodology is the wrong approach, I do believe that warehouse audits are worth doing to build intelligent objectives.  For the purposes of avoiding the internal politics, it can make sense to have an outside consultant involved in this process.  If ARC was asked to do a warehouse audit, here is how we would go about it.  The company we were working for would be asked to subscribe to the Warehouse Education Resource Council (WERC) in order to attain their benchmark data on warehouse performance.  The next step is to make sure the team understands the WERC metric definitions, and pull data from their IT systems to calculate how they are doing on these metrics.

Checks and balances need to be in place to assure metric integrity.  Line managers need to be reassured that although “benchmark” data is being collected, management understands the difficulty in comparing warehouse performance from facilities operating in different industries, with differing amounts of material handling equipment, and operating with very different volumes.  Nevertheless, these metrics are very important in developing and weighting criteria that will be used in supplier selection.

There is a less granular form of AS IS/TO BE, which does not get down in the weeds, which can be very helpful.  CSCMP sells a document they call Deliver Processes:  Supply Chain Management Process Standards.  While it could be referred to as a high level AS IS/TO BE mapping solution, I think it is fairer to call this a tool for conducting a warehouse audit.

This booklet has what it calls “Suggested Minimum Process Standards” and typical “Best-Practice Processes.”  So for example around slotting, minimum process standards would be to employ a slotting strategy where products are assigned to locations based on product velocity and physical characteristics, slotting assignments are static, and so forth.  While the best-practice process states that “slotting assignments are reviewed monthly, and are also adjusted in advance for seasonality,” and goes on to list another four factors to look at.  Actually, when ARC uses the CSCMP booklet, that is just a starting point, we have additional things we are looking for.  But it is a good starting point.

Additionally, doing this audit allows an outside consultant to see every part of a warehouse, talk to a wide variety of associates, and this process inevitably improves the resulting RFP.

The one place where a heavy duty, granular AS IS/TO BE process makes sense, is for a company considering moving to a highly automated warehouse – i.e. miles of conveyors, AS/RS, etc.  In this case, a simulation tool is employed.  The AS IS process is quantitatively – by “quantitative” I mean thinks like pick rates by zone – mapped into the simulation tool, and then various material handling scenarios are mapped into the tool, and the resulting throughputs of different material handling scenarios are compared to AS IS throughputs.