DC operations in many companies are becoming more complex and changeable, with new business requirements, which are now coupled with new forms of modular automation and robotics. There are also many companies in the industry who have grown successfully and organically, that are still operating as they did when they were much smaller, simpler entities. These companies face critical decisions in upgrading and enhancing their operations to continue to be competitive.
The prevailing wisdom, or traditional pitch to warehouse and DC execs is that companies that want to stay on the leading edge of DC operations should invest in an all-in-one WMS system that encompasses every aspect of warehouse operations including order and inventory management, labor management (LMS), voice-directed picking, AI-based predictive analytics, slotting, and warehouse execution (WES) for manual and automated processes.
But in peeling back the layers to understand the whole story there has been a divergence in the WMS market between the high-performance, complex and sophisticated end of the market and the mass market where less expansive solutions can yield dramatic improvements and faster ROI.
This is not because companies choose to sacrifice functionality. It’s because, globally, the preponderance of warehouse operations are at a lower level of complexity. Also, WMS systems are no longer the central, all-encompassing operating systems for warehouses and DCs that they once were. Instead, because of technological advances and enhanced interoperability, operators are relying more on modular optimization and execution systems that provide advanced capabilities on top of the basic inventory management and control functions of the WMS.
Scalable automation that optimizes core warehouse functions
Rather than upgrading or installing an all-new WMS to adapt operations to this new environment, DC operators can achieve best-in-class performance faster by adding AI-based process optimization and advanced execution software alongside their existing WMS.
In this approach, the WMS provides core warehouse management and inventory control functions (good enough WMS) that is extended by modular, flexible best-in-breed execution and optimization software. This flexible, less comprehensive WMS strategy reduces risk, accelerates digital transformation, improves long-term flexibility, and gives companies immediate access to the technologies they need to compete for the long haul.
For example, a distributor challenged to improve productivity, reduce the costs for picking low unit of measure (LUM) items, and increase picking accuracy added voice-directed, AI-driven optimization software to supplement their RF-based process. Still utilizing their legacy WMS, they were able to enhance overall DC productivity across all activities, including receiving, replenishment and other tasks that were unchanged by 10 percent.
Our experience is that DCs can more readily optimize their operations using supplemental, affordable, integrated solutions rather than attempting to do it all in their WMS. Many warehouse and DC operators have used software and other modular solutions to implement best practices across DCs using different WMSs, while others leverage it as a means to prolong the life of an older WMS or as a bridge to a new system.
Maximize and extend the life of your current WMS
Highlighting this use case, a storage and organization retailer, with stores throughout the U.S. and a growing online channel, was using RF scanners to pick orders both for store replenishment and direct fulfillment, through their legacy WMS. The process was cumbersome and also raised safety concerns as employees were required to look down at screens and handle scanners in busy warehouse aisles.
Rather than replace the WMS, the organization undertook an initiative, working with Lucas, to streamline picking processes, reduce complexity and improve accuracy while extending the life and functionality of the WMS. Implementing voice-directed mobile applications for store replenishment (case and bulk picking) and direct fulfillment (batch piece picking to cart) and a management console to provide assignment and task management, system configuration, and management reporting paid quick dividends. They improved net warehouse productivity 10-15% within six weeks, minimized picking set up time, and drastically reduced new employee training and ramp up time.
One might say, an all-in-one WMS eliminates the costs and risks of integrating your WMS with external systems. The more points of integration with external systems, the more points of potential failure and more difficult it is to maintain those integration points. By using multiple solutions, users have to use different systems rather than having one unified view of operations, inventory, etc. But a WMS can take six to eight months to implement, depending on complexity, data quality and necessary integrations, causing at least a fair amount of disruption to operations. Some AI-based process optimization solutions can begin showing real results in 30 days. Add to that the usual payback period for a full scale WMS generally stretches into years, rather than months, and the rationale to look for at least a few less-than- full-scale alternatives becomes compelling.
DCs looking to add advanced warehouse optimization capabilities should also explore seeking best-in-breed solutions that supplement their current WMS, rather than replacing or upgrading a WMS that otherwise meets their current needs. This less aggressive, but dramatically effective approach preserves significant previous investments in WMS systems, while gaining access to new capabilities that can be delivered more quickly and economically than a WMS upgrade.
By learning about alternatives to replacing their WMS, operators may be able to save time, reduce risk, and accelerate their return on investment.
Simon Dunlop is a Solutions Architect & Project Delivery Manager, EMEA working out of Lucas Systems UK office. In this role, he works directly with Lucas’ international customers to identify opportunities to optimize their workflow and improve associates experience in the warehouse, resulting in higher productivity levels and improvements to stock accuracy and service levels.
Simon’s foundational capabilities are built on nearly two decades of experience in 3rd party logistics in the healthcare and retail sectors, initially in various operational management roles and more recently in business transformation, delivering strategic projects with both Warehouse and IT stakeholders. Utilizing his operational knowledge and experience he works closely with technical application vendors through requirements gathering, solution design, planning and delivery of warehouse optimization projects and enhancements.
A consistent and objective technical manager with strong operational background, who has demonstrated the ability to manage several complex projects concurrently, Simon excels in the delivery of warehouse implementation systems including WMS roll out, managing strategic operational initiatives.