Orchestrating the Future of Order Fulfillment

order fulfillmentIt seems no matter where we look these days, robots and other uses of artificial intelligence are not hard to find. From our cars and smart appliances to Alexa and Siri, the rise of AI technology has permeated our daily lives and is changing the way we operate. Warehouses and distribution centers are no exception. In recent years we’ve seen a dramatic increase in intelligent automation across the supply chain, a necessity to keep up with the 24/7 fulfillment demand created by the rise of ecommerce and omnichannel shopping. Without a doubt, automation has changed the way distribution centers operate, and as warehouse management needs evolve we will continue to see further advances. To keep up with the changing landscape, distribution center managers will require insight into all resources with the flexibility to optimize and orchestrate both the automated and human components of their operations.

Management Snapshot

Let’s start by taking a step back to examine the traditional platforms in place. Managers work with three key systems across the warehouse and distribution center: a warehouse management system (WMS), a warehouse control system (WCS) and a warehouse execution system (WES). Historically, the WCS has integrated with and taken cues from the WMS, executing on a fairly static plan that was built during a batch selection process or wave. For years, this was the de facto process for order fulfillment. WES systems were eventually implemented to address order level reprioritization and improve task optimization – a necessity, as no WMS provider was doing this. WCS providers were first to deliver this capability because that platform has insight into the mechanization level and can drive the right flow paths. Working across various systems in this manner, however, raises certain challenges. First, managers must ensure these disparate platforms are synchronized, which can be costly and cumbersome. Second, they must also ensure the WCS has insight into inventory levels and orders – without this information, the system cannot do its job. Failure to execute on one of these requirements could result in significant issues, including inventory shortages and order delays, which negatively affect the consumer.

Understanding Natural Resources

Now let’s look at the distribution center holistically. There are five main “natural resources” to consider in distribution center management: orders, inventory, labor, automation and the planned work. A WMS manages four out of five of those resources; the only one it has traditionally lacked is automation, which has historically been the domain of the WCS. The WES, which at its core is optimization logic built on top of a WCS, has no line of sight into the other four resources, which is why integration with the WMS has been so critical. As the distribution center landscape continues to evolve, however, it doesn’t make sense to have the WES drive optimization. These platforms are completely dependent on the WMS for insight into orders, inventory, labor and planned work, and this multi-system approach is cumbersome, redundant, expensive and error prone. As distribution centers continue to advance technologically and the pace of business continues to increase, the future of distribution center management is in an advanced WMS that has built-in execution capabilities and is not dependent on communication with a disparate WES.

Inventory and Growth

Of the five distribution center natural resources, it’s safe to say that inventory is the lynch pin. If inventory gets out of sync, the ramifications are massive. Too much inventory means money wasted, not enough inventory can mean unhappy customers, and incorrectly allocated inventory can mean both. Optimizing your WMS with native WES capabilities solves this problem because it creates one system of record that has visibility into all aspects of distribution center management, cutting out the cross-system communication that can produce these inventory errors.

Another consideration for the evolving distribution center is that in most cases, there are various vendor systems in place. As upgrades and growth occur, it’s natural to introduce different types of automation and different platforms. A sophisticated WMS with WES capabilities should be vendor and equipment agnostic and able to orchestrate work across all systems, as well as handle any level of automation and seamlessly assign work to human or automated resources, including the most advanced robots on the market. Advanced WMS systems with execution capabilities allow distribution centers to account for expansion or system changes, giving users the flexibility they need to grow and scale, no matter what equipment they need to incorporate.

The Big Picture

What’s the bottom line? Order fulfillment requirements will continue to increase, and to meet this demand every facet of distribution center operations must be optimized. Doing this effectively requires visibility into orders, inventory, labor, automation and the work itself. The WES capabilities offered by traditional WCS vendors lack this total visibility and are thus unable to effectively manage complete distribution center functions. As order fulfillment becomes increasingly complex and demanding, the traditional multi-system approach to distribution center management is also no longer viable. Management must be approached from a holistic, top-down perspective that considers and accounts for all resources, both human and machine, and enables complete flexibility for system additions and growth. Without this approach, it is impossible to optimize the distribution center as a whole.

Sophisticated WMS with built-in execution capabilities will eliminate the inventory and integration issues that can arise with the use of disparate systems as well as enable the flexibility needed to grow and thrive in today’s increasingly complex marketplace. Managers who continue to depend on the integration of separate WMS and WES solutions risk a whole host of inventory issues that could ultimately result in lost revenue, disgruntled customers and damage to the brand. An optimized WMS is the most efficient way forward for distribution centers and the best way to ensure optimization and orchestration across the entire operation.

Adam Kline is Senior Director of Product Management at Manhattan Associates. Adam has worked at Manhattan associates for twenty years in a number of job roles, including experience as a business analyst and quality assurance engineer. Adam also has direct experience with Warehouse Management, Transportation Execution, Supply Chain Intelligence, Transportation Planning, Order Management, and Labor Management applications.

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