warehouse management system Archives

Powering the Smart Warehouse

Guest Commentary | By Matt Butler • 09/27/2018

Consumer behaviors are evolving in an increasingly digitalized marketplace with substantial impacts taking hold in the warehouse, including accelerating service levels, shifting order profiles, and increased personalization and value-added services. The need to respond to these challenges is provoking heightened interest in warehouse management system (WMS) platforms with a focus on preparing for market challenges that lie ahead.

Vendors are preparing for the next level of customer expectations in a digital supply chain landscape by delivering differentiation focused on flexibility while incorporating upgradeability, machine learning, and autonomous orchestration of operations. Meanwhile, our customers are assessing key features available in warehousing platforms and how these features will drive profitability and a competitive edge. (See Webinar: Powering the Smart Warehouse)

Visibility vs Efficiency

Driving operational efficiency through advanced optimization is the first qualifier in narrowing a search to a short list of qualified warehousing solutions. Nearly all vendors support efficacy in basic warehousing operations, but there is a range of maturity levels in delivering and vetting optimization capabilities for efficient product storage, work creation and orchestration across the facility. Basic tools and processes take on exponential complexity as vendors expand their reach across industries and facility sizes. While vendors may be able to address concepts, it often takes iterations of specific industry experience to meet expectations at scale. Labor management tools also evolve over time to support best practices – tracking productivity and empowering a more robust reporting and feedback mechanism.

These tools have material impacts on productivity and can influence labor requirements and operational costs. Due to continuing labor challenges, the first determination when evaluating vendors should be the tools that are warranted, followed by the level of complexity needed to deliver the required efficiency. Best-of-breed vendors are often prioritized for their experience and scale of optimizing in these complex environments.

Agility

Manufacturers, 3PLs, distributors, and retailers are increasingly evaluating channel and product line expansion to remain competitive. At the same time, executives are redefining corporate strategies in other ways that directly impact the warehouse. A WMS must incorporate flexibility to meet these challenges in today’s dynamic business environments. Level of specialization and changes in business requirements are another important consideration. Dedicated WMS SaaS offerings are increasingly attractive for basic, stable environments. In contrast, more complex, dynamic environments require deeper evaluation of configurability for specialized requirements. Most providers offer architectures that can be modified in some way to meet requirements. But the methodology may require users to diminish their system’s supportability and upgradeability to obtain these advanced capabilities.

Usability & Ownership

The desire and ability to implement and support the software is another critical consideration for long-term success of a WMS program. The organizational size, scale, and culture have substantial influence over the best fit solution and vendor.

Ease of configurability impacts implementation speed and quality, as well as the potential disruption in the post-implementation stabilization period. These impacts are exacerbated for multi-site rollouts, and the ability to adapt for continuous improvement initiatives and to meet new requirements are also affected.

While user experience drives organizational adoption, there are also other factors to consider. Vendors focused on dynamic environments have delivered open platforms and policies or rules engines, so customers can independently configure, rollout, and even extend solutions to meet their unique business goals. Training curriculum and partner strategies further extend this culture and collectively represent vendors as being focused on their services offering; often apparent when considering their reliance on this revenue stream.

Upgradeability

Upgradeability and long-term cost of ownership are qualities that clearly affect the success of WMS solutions on the market. Low-end SaaS offerings are gaining momentum in simple environments, while complex environments that historically buckled under the legacy of customizations have driven best-of-breed vendors to deliver improved configurability for a lower cost upgrade cycle. As employee and customer data privacy becomes an organizational priority, maintaining a current platform is top of mind across the C-Suite.

Organizational commitment and the ability to use native software without implementing modifications are essential to establishing a more readily upgradeable environment. In complex environments with heavy specialization requirements, diligence must be used in determining the solution’s flexibility and capacity to efficiently support the business (and extended use cases) without enhancement. Some best of breed vendors have a history of delivering for such environments and this is reflected in their breadth of implementations across industries that have seen adoption flourish.

Automation, Innovation, & Digital Orchestration

Organizations that consider the role of WMS across their supply chain landscape tend to put a premium on the value of upgradeability and the solution’s design principles and software maturity that support the upgrade process. The ability to evolve in an expansive, increasingly automated and digitized ecosystem will be critical, and as such, the ability to stay current on software is gaining focus as it allows the consumption of new capabilities and the use of resources focused on the latest technologies.

Communication mechanisms, integration libraries, and an open partner ecosystem are factors that reveal how well vendors are positioned to respond in dynamic environment. The role of the WMS for these ecosystems is transforming, providing an opportunity to participate in the orchestration. Danger exists in strategies that remove the WMS from a dedicated SaaS environment, limiting or preventing access to IoT, Control Tower orchestration, and SaaS capabilities.

The evolving digital landscape and emphasis on comprehensive visibility and orchestration bring pause in considering the range of vendor portfolios. A natural convergence of supply chain applications is unique to a few Enterprise Resource Planning (ERP) and BoB vendors. These vendors can deliver agility, further differentiating the areas of focus on interoperability of the planning and execution solutions while the digital ecosystem evolves to orchestrate a rapid response to supply chain disruption and a machine learning / AI driven approach to continuous improvement.

Cost of Ownership

The more established WMS players will be the primary contenders when prospective WMS buyers develop selection requirements for agility and efficiency. Logically, considering the impacts of different approaches to optimization and extensibility will help buyers evaluate how vendors deliver these capabilities. A WMS that offers configurability for specialized requirements also allows for easier support and upgrades in the future. This removes the need for dedicated IT development staff and reduces future expenses and total cost of ownership. Similarly, TCO is also reduced by removing the need to hire the WMS vendor to implement changes in system requirements that accompany unavoidable changes in business processes.

Summary & Closing Thoughts

The surging disruption to the business and technology environments makes evaluating WMS providers position for the future a critical consideration. The focus on specific warehousing capabilities versus comprehensive digital strategies will depend on your immediate and long-term business needs.

It is imperative to understand the history and experience of the various providers. Vendors are often defined by their customers, as the solutions are vetted for specific industries, business processes and scale. Newer solutions to market (arriving in the past 10 years) have largely focused on “checking the boxes” in an RFP but struggle mightily when facing adversity in an implementation. Explore the presence of the solution relative to comparable businesses, and the experience of the implementation community (direct and partner services) that can ensure implementation in accordance with best practice and the fastest possible return.

WMS implementations are a commitment. If there’s one piece of advice I can provide it is to ensure your vendor has the ability and dedication to success relative to your business needs, with a forward-looking approach to propel your innovation into the future.

Matt Butler, Director, Industry Strategy at JDA Software ,is a supply chain professional with 20+ years of experience in Supply Chain Execution where he has worked extensively with complex organizations to establish best practices and drive innovation in SCE programs, both domestically and globally.

Guest Commentary: A New Best Friend for Santa’s Elves: How a WMS Drives Efficiency in Omni-Channel Retail

Guest Commentary | By Gary Nemmers • 12/05/2013

This time of year, many children have high expectations for what they hope will be delivered for the holidays. For those of us adults who are buying for them or anyone, our expectations aren’t any lower: We want the ability to purchase however and wherever we want, and receive it as fast as possible in the most convenient location.

For retailers that don’t have an army of elves to cater to the needs of each customer, the right supply chain management technology can efficiently and quickly manage the fulfillment of orders online, in-store, and deliver the goods to the consumer in multiple ways. Some companies are already pushing the envelope in delivery strategies: Wal-Mart offers in-store pick-up for orders placed online, and Sears and K-Mart will bring the online purchases out to a customer’s car in some locations.

A warehouse management system (WMS) can be the central tool for many omni-channel retail efforts. It bridges the online and in-store consumer experience to optimize the shopper’s time and serves as the primary integration point between the online and in-store activities, as well as between the retail store and warehouse environment.

Here’s how it works:

In-store employees are directed to pick items at a specific time to ensure they are ready for the customer, but minimize disruption for shoppers in the building. Once the items are selected, the cart is packaged and ready for pick-up when the customer arrives. The nature of a WMS allows for any item in the store to be ordered, picked and delivered this way – avoiding the trade-off of consumer choice for convenience. The WMS can also be triggered to provide product photos to optimize order picking, manage the receive, shelf fill and refill operations, and integrate with existing systems such as online shopping, point-of-sale, store planograms and distributed order management systems that manage and direct omni-channel orders.

Turning a retail team into a personal shopping team of sorts doesn’t mean a retailer has to sacrifice margin or the value of getting a consumer into their store. Accurate and timely fulfillment by the WMS minimizes labor cost and keeps profits on track. If your WMS is adaptable and configurable, it can continue to support your dedicated fulfillment center in the event that your online business outgrows in-store fulfillment.

Consumer demands are changing and the expectation of being able to buy, fulfill and return anywhere means that retailers are getting creative and increasingly proactive in their logistics strategies. For those omni-channel retailers with an adaptable warehouse management system, the integration of in-store activities with varying order sources can drive efficiencies that will not only make their holidays brighter, but fulfill the high expectations of both the gift buyer and receiver.

Gary Nemmers is the senior vice president and general manager, supply chain execution group, at HighJump Software. He is responsible for all operations pertaining to the supply chain solutions group, including strategy, general management, sales, professional services and marketing. His role encompasses growing and servicing the supply chain management offering through direct and indirect channels worldwide.

Warehouse Management System Supplier Selection

Warehouse Management Systems | By Steve Banker • 06/17/2013

Earlier in the year, ARC developed a supplier selection tool for Warehouse Management Systems. Our goal in developing this tool was to have it enable the cross functional, end-to-end process of developing supplier selection criteria, sending those criteria to suppliers, getting responses, evaluating the responses, and making the final selection.

I did not develop the process flow tool, but I did come up with the criteria for judging WMS solutions and suppliers. I found that process interesting and would like to share a few thoughts on what I learned.

The best known tool in the market is Gartner’s Magic Quadrant and they also have a tool for WMS evaluation. Gartner has some very smart analysts and I know they work very hard in putting these reports together. I also know suppliers pay a great deal of attention to these reports. But there are some cons associated with Gartner’s approach.

First of all, it is a black box. If you are a Gartner member, you can call up the analyst, get an hour on the phone, and ask questions about criteria specific to your industry and situation. I’m not sure how far one hour gets you toward tailoring the selection process to fit the specific needs of your company.

So my goal, and the goal of other analysts at ARC developing supplier selection criteria for other technologies, was to come up with criteria that would allow a company to pick a solution tailored to its specific needs. Think about that! Some companies have small and simple operations, others are big and complex. Then layer on top of that all the needs by industry, type of warehouse, and degree of automation. Wow, that is a big list!

So one conclusion we came to pretty quickly was that an all-encompassing approach did not make sense. Instead of trying to develop thousands of criteria, we developed about 100 to 150 criteria to create a “starter kit.” The tool is designed to allow companies to kill criteria that don’t fit their needs, add new criteria, and weigh those criteria (for example, criteria one is worth 10 points, criteria two is only 5 points) in whatever way makes sense.

The other problem with black box tools is that assumptions are hidden. Which path makes the most sense? Buying from a best-of-breed supplier, a supplier with a great suite of supply chain solutions, or an ERP supplier? Typically, the IT department and operational departments have very different feelings about these potential supplier selection paths.

Also, does a SaaS solution or traditional software solution make more sense? There are pros and cons with different paths.

We decided it was not up to us to tell companies which path to follow. But it was up to us to help explain the pros and cons of the different paths. The result is that my list of criteria actually has contradictory criteria: one criterion gives points for selecting an ERP supplier; a conflicting criterion gives points for working with a supplier of deeply functional supply chain suites.

But for me, probably the most interesting challenge was developing criteria that truly differentiate. It is pretty common to get requests for proposals (RFPs) back from suppliers where every supplier has checked everything. Questions need to be written in such a way that something like cross docking is not just a “yes we do it” or “no we don’t” style of answer, but a continuum where suppliers get some points for partly being able to support it and more points for being able to support it in a more holistic manner.

Later this year, I’m tasked with putting together a transportation management system selection guide. Then next year, I get to update the WMS and TMS guides we have. Supplier selection is going to become a bigger part of my day-to-day life.

Yard Management Solutions Impose Control on an Inherently Chaotic Process

Transportation Management Systems | By Steve Banker • 10/29/2012

As Chris Jones from Descartes said in a Logistics Viewpoints column, the Forrest Gump quote — “Life is like a box of chocolates; you never know what you’re gonna get” — applies to the challenge of managing a yard, particularly inbound dock operations.

A yard management system (YMS) controls the yard attached to a warehouse or distribution center (DC). YMS functionality includes dock door scheduling, check in and check out, location of trailers in the yards, trailer asset management, and efficiently moving trucks and trailers to and from dock doors. A YMS can save companies money through reduced detention fees, improved yard labor efficiencies, and better warehouse utilization.

There are four distinct groups of YMS vendors. First off, there are standalone vendors. Some are more focused on deep software functionality, such as Zebra Technologies and C3 Solutions, and others are more focused on providing real time location asset visibility, such as PINC Solutions and Exotrac.

I was briefed recently by both Zebra and Exotrac. What impressed me about Zebra’s solution was the intuitive, easy-to-use configuration engine that Zebra uses to accomplish complex yard optimization. Exotrac, in turn, provides a low-priced system that is well suited for 3PLs, with a real time location system based on GPS.

Several warehouse management system (WMS) vendors also provide YMS solutions, including RedPrairie, Manhattan Associates, HighJump Software, SAP, and Oracle.

An ARC client mentioned that they had seen a detailed demonstration of RedPrairie’s YMS capabilities and were impressed. Basically, RedPrairie has taken the task management, inventory management, and waving capabilities that are core to its WMS and extended them out to cover yard activities. This has allowed RedPrairie to have the kind of robust yard functionality historically associated with a Zebra or C3 solution.

Transportation management system (TMS) vendors also offer a subset of YMS functionality; most offer web based dock scheduling. A robust dock door scheduling system does not hard schedule a truck for a particular dock door. Rather, the YMS should fill the open time slots in such a way that the dock doors are fully scheduled, but also allows for more flexibility later if trucks arrive early or late.

Most TMS suppliers offer web based dock scheduling. However, Descartes and JDA Software both offer more holistic solutions to the dock door scheduling problem. Descartes calls its solution “Logistics Flow Control.” Descartes argues that retailers that use a web-based dock scheduling portal will often have synchronization problems. Here is how Chris Jones described it in his guest commentary:

The LTL carrier typically cannot schedule an appointment until it has knowledge of the shipment, which typically means goods in hand and evaluation all of the deliveries it needs to make. At that point, because of DC capacity constraints, the retailer/distributor’s schedule may not offer a delivery window that makes the contracted date. Or the LTL carrier is not aware of the impact of “slight” changes to the delivery date, and changes it to allow more deliveries to be consolidated before scheduling an appointment. In the end, the goods fail to show up on time and depending upon the contractual agreement, fines are levied on the bewildered supplier.

JDA, in turn, has recently released a more granular, constraint-based dock door scheduling solution than I have seen from other YMS suppliers. With existing transportation management systems, if the dock manager changes the dock schedule, the optimization in a TMS begins to unravel. By attempting to preserve the freight savings associated with a transportation plan, JDA’s solution can potentially save companies more money than a traditional YMS would achieve.

Finally, the last category of yard solution involves managed services. C.H. Robinson, for example, offers dock scheduling managed services from the shipper’s perspective. The problem shippers face, particularly consumer goods companies, is that the retailers they work with all have different appointment scheduling systems, which makes scheduling tedious and inefficient. Several of C.H. Robinson’s clients have decided they don’t want their transportation planners engaged in appointment scheduling for two reasons. First of all, transportation planners can get busy putting out fires. When this occurs, planners often do not get around to appointment scheduling until late in the day, at which point the slots they want might be gone. Secondly, transportation planners make a good salary, so it is less expensive to outsource this task.

In conclusion, there is a lot going on in the yard solutions space, far more than I suspected when I began researching this article.

(Note: C.H. Robinson, Descartes Systems, HighJump Software, JDA Software, Manhattan Associates, Oracle, RedPrairie, and SAP are ARC clients and/or Logistics Viewpoints sponsors).

DC Managers: Use the Right Kind of Metrics to Protect Your Job

Metrics and Standards | By Steve Banker • 10/22/2012

ARC Advisory Group surveyed 52 logistics executives and asked them if their companies were using any sort of warehousing costs per unit measurement, defined as “total warehousing costs/total units shipped.” Thirty-seven percent of the respondents were not using this this metric type, which is far too low. Ideally, if a company is doing pallet shipments, it would measure “cost per pallets shipped” to evaluate that zone of the warehouse; if it is building mixed-case pallets, it would also measure “cost per mixed cases pallet shipped” for that portion of the warehouse, and so forth.

Having such metrics in place, and actively monitoring them, helps companies ensure that the productivity benefits associated with their Warehouse Management System (WMS) implementation do not begin to slip. These metrics also allow a WMS to serve as a platform that can help companies measure the effectiveness of continuous improvement programs. Finally, and perhaps most importantly, such metrics are an important tool for protecting the job security of a warehouse manager.

The final point, cost per unit metrics as a form of job security, needs further explanation.

When logistics executives put together their annual budget, the simple approach is to begin by looking at warehousing costs as a percentage of total revenues. Then the distribution manager looks at the demand forecast for the coming year, factors in wage inflation, and produces the budget. The CFO will then generally pressure the executive to reduce the budget, and some back and forth takes place before the departmental budget is approved. If a manager does not hit his budget numbers, then at the very least he looks bad, but the manager may end up in a situation where he is looking for a new job.

This can be unfair. If the warehouse manager is not using cost per unit metrics, he can end up not hitting his budget, despite achieving targeted levels of labor productivity. It costs more to pick mixed-case pallets than pallets, and more to pick cartons or individual units than mixed-case pallets. If the company’s order profile changes, a warehouse manager that uses simplistic budgeting can look bad.

In contrast, visualize a manager that forecasts “We will do this many pallet picks, which will cost this amount, and we will pick this many mixed pallets, which will cost this amount, and we will do this many each picks, which will cost this amount.” At the end of the year, if the manager has exceeded his budget numbers, he can look at the actual number of pallet, mixed pallet, and carton shipments and justify his performance. Further, the trend is toward more frequent but smaller shipments. Order profiles are unlikely to change in ways that will make a warehouse manager look good.

The Dreaded Platform Upgrade

Warehouse Management Systems | By Steve Banker • 07/16/2012

A while back I wrote a posting where I claimed that if a top-tier Warehouse Management System (WMS) has not been too heavily customized, the costs associated with an upgrade would be about 15-20 percent of the original implementation cost. But this is only true if we are not talking about the dreaded platform “upgrade”.

What is a platform upgrade?

Things change. And things in technology change particularly quickly.

I won’t list all the significant shifts in technology I’ve seen in my career. That is not the point of this article. The point is that a software vendor’s technology and product development teams eventually get to a place where they feel they are falling behind what the market is demanding, or that they cannot take their product to the next level, unless they make some fairly drastic changes to the core architecture. The software vendor comes out with a new product that in theory should be a major step forward, rather than just providing incremental enhancements. But the installed base is faced with a tough choice: go through a platform upgrade or go off maintenance.

Why is deciding to go through a platform upgrade a tough choice? Because you are not just installing patches of new software code supporting product enhancements, you are doing a totally new install.

I recently spoke with Joe Knausdorf, Senior Director of Technology at Lineage Logistics, about his experience in this area. Lineage Logistics has one of the largest networks of cold storage warehouses in the United States. Joe mentioned that Lineage had gone through an upgrade with its previous WMS vendor, and as you would expect, it cost about 15-20 percent of the initial implementation. The company experienced significant issues for the first six months, which led to painful business operations. And more than a year later, the company was still having problems.

Then about 12 years after Lineage had started working with this vendor, the vendor announced that it was coming out with a platform upgrade. The team at Lineage realized that they would be faced with a long implementation that would rival the costs of the initial implementation.

If a project is going to cost about the same as a brand new implementation, many companies decide they might as well explore other solutions, and in many cases, they end up switching software providers, which is what Lineage did. The company bought and installed a solution from HighJump Software (a Logistics Viewpoints sponsor) in 2008.

And then, HighJump announced a platform upgrade a couple of years ago. Switching from HighJump’s 9.x to 10.x versions would require a brand new install. But Lineage did not have a painful platform upgrade experience. The early days of planning began in December of 2011; the project was to be completed in May of 2012. This included two complete iterations of testing all business functionality.

When you see a six month project, you might think it was a big project, but it really wasn’t. The cost was only 5 percent of the initial HighJump implementation.

Further, once Lineage went live, the company experienced very few problems. Lineage has an internal metric that tracks defects related to an upgrade. This metric looks at all business processes touched by a system and measures support issues that are reported following the upgrade. Lineage had a 95 percent success rate on this metric. And the support issues reported were very minor; for example, forgetting to configure a printer during set up.

Joe reports they did not discover any bugs, and that after a couple of days all issues were resolved.

The smoothness of this upgrade also impressed one of Lineage’s key clients — one of the world’s largest retailers known for its technology savvy and process discipline. The retailer works with other 3PLs and has seen painful upgrades that impacted its service levels. The retailer demanded daily conference calls with Lineage where all fulfillment issues related to the technology were discussed. The first call lasted 10 minutes. The retailer complemented Lineage for having such a clean cut over and said no further calls were necessary.

Joe did make the point that he was very proud of his team and the thoroughness of their testing. But he also complimented the HighJump product. One core HighJump marketing message is that its WMS architecture allows its customers’ IT teams to take ownership of the product without requiring a lot of costly services from HighJump. Lineage’s experience would support those claims.

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