Maximising your warehousing systems

Infor Global Solutions (ANZ) Pty Ltd
By Stephen Reid
Saturday, 13 March, 2004



The last decade has seen a shift towards smaller orders, more often. This trend puts the onus back onto the distributor to ensure that enough stock is being held or can be sourced quickly enough to support the variable demand.

Certain trends that will escalate are consignment inventory and vendor-managed consignment inventory (VMI), to reduce stock holding costs.

This puts the burden of inventory cost back onto the distributor. This also requires the distributor to be better at forecasting/collaborating with suppliers and customers and more efficient at storing, picking and shipping stock.

EDI orders have in some cases eliminated the customer service gatekeeper and therefore are not intercepted by anyone. This is both a benefit and a problem. If the order is outside the normal quantity/timeframe/product range for a customer, this will impact the ability to supply in the required timeframe.

However, distributors may not know about this order until it is too late, thus having a detrimental effect on customer service levels. Conversely, with EDI, orders are processed more quickly. By utilising the flow-through process, orders can be received by the ERP system and appear on the picking operator's radio frequency (RF) queue without having to be double or triple handled.

The growing number of collaborative arrangements can place tremendous pressure on warehouse managers to increase accuracy levels, reduce order turn-around time and increase cost stabilisation whilst reducing costs.

E-commerce can cause huge problems in a warehouse. Most warehouses are not equipped to cope with the increase in the number of orders for small quantities. Regulatory authorities are putting pressure on warehouse operators by increasing requirements for lot tracing, serial number tracking, storage and handling restrictions for different product classes. In addition are environmental considerations such as spillage prevention and enhanced fire prevention.

The growing number of collaborative arrangements can place tremendous pressure on warehouse managers to increase accuracy levels, reduce order turn-around time and increase cost stabilisation while reducing costs.

The growing number of collaborative arrangements can place tremendous pressure on warehouse managers to increase accuracy levels, reduce order turn-around time and increase cost stabilisation whilst reducing costs.

The warehouse management system (WMS) needs to support processes such as lot/batch tracking, FIFO, raw material issues and finished good receipts and adapt to new trends such as lean manufacturing. There needs to be a level of flexibility and scalability in a WMS to allow for manufacturing process changes.

The WMS that is selected must be designed around RF. Processes must be optimised for RF - they are very different to those used by paper-based WMS. The WMS must also allow multi-mode utilisation to allow it to be functional in different operational areas. A good WMS will also prioritise, sequence and assign RF tasks easily and allow a user to define RF tasks such as maintenance, sweeping, packing and kit building. A good WMS will not require middleware to facilitate RF.

Goods inbound

ASN receipts

By receiving ASNs (advanced ship notices) direct from suppliers, receipts can be scheduled with increased visibility.

PO receipts

Expected receipts can be generated by PO (purchase order) release and Shop Order release to enable receipt scheduling and planning.

Receipt dock scheduling

The receiving process can be completed without the need for traditional data entry, direct from the unloading dock using RF terminals with built-in barcode scanners.

RF receiving

Receiving with RF enables the receipt dock supervisor or even the unloading forklift operator to initiate the receipt process, confirm the receipt quantities, generate the putaway location assignments, generate lot/batch or serial number records, assign dispositions to received stock, etc.

With RF enablement, staging of receipted stock is managed entirely by electronic means. Stock can be dropped at receipt staging docks for additional work or testing prior to actual putaway, all as part of the RF process. In addition, all transactions can be monitored/managed on the RF queue.

RF putaway

RF putaway is usually to pre-assigned locations with a WMS. These assignments are allocated by the system based on the user-defined rules entered into the system. These assignments can be based on a number of different characteristics.

The rule sets must allow for a putaway operator to over-ride the assigned location and to choose the location themselves.

The putaway process requires the operator to confirm via RF the location, the item number and the quantity as well as the batch ID or serial number where appropriate. This accurate putaway is the basis for accurate picking.

Internal processes

Internal processes generate transactions on the RF queue, which can then be managed and prioritised. In addition, these tasks then form the basis of Operator Utilisation reporting and KPI generation.

Cycle counting

Most WMSs support various methods of cycle counting. Cycle counts can be triggered automatically based on a number of user-defined criteria such as count when empty, count when short picked. Random cycle counts can also be triggered on the spot using RF.

Cycle count sets can also be defined to enable periodic counts by item or class, group, range, locations, zones and so on. This allows such things as more frequent counts of fast moving or high value items.

The administrator can also define the number of recounts required for errors, whether an operator can re-count their own errors and under what circumstances the counts can update inventory. In addition, full warehouse stocktakes can also be set up.

Replenishments

Replenishments can be triggered in a number of ways including min/max triggers on fixed picking locations or demand based on requirements to satisfy a pick plan.

In addition, independent replenishments enable out-of-hours replenishing of picking locations to limit aisle congestion. This can be accomplished by creating replenishment sets to look at the min/max in fixed picking locations or min/max by product groups.

Capacity management

Processes to enable the consolidation of part pallets can also be defined in WMS. These include consolidation on receipt or consolidation sets or jobs that can be run independently of other processes.

These independent consolidation processes can be utilised out-of-hours during quiet times or when storage space is critically short.

This same process is used to consolidate block stacks or other storage types. The consolidation sets can be simulated and limited to a number of transactions or products or groups. Lot/batch control issues are also considered.

Kitting

In most WMSs, kitting involves taking quantities of two or more existing SKUs and packing them together to create a new SKU. Typically there is a BOM and some instructions. Pick instructions for the components are generated based on the number of the new SKU required. These pick tasks are written to the RF queue and are picked by the designated operator.

As the new SKU is created, they are confirmed into the system and putaway transactions are generated on the RF queue. As these putaways are completed, the stock is made available for picking for sales orders.

Goods outbound

Pick and pack

Picking and packing loose items is typically a headache in most warehouses. Determining which cartons to pack into, how to control this process and then confirm the quantities in each carton can be managed by WMS. Some systems include carton packing algorithms to determine which cartons to use and which items to put in them. A quality WMS will optionally allow the picker to determine what goes into each carton.

Both these methods create carton manifests, which in turn create the SSCN code sent as an Advanced Ship Notice to the customer. Typically, the WMS will include rules for auditing parcels prior to shipment.

Batch picking

WMS will enable batch picking with just one pass through the pick faces for picking into a tote, for multiple orders, and for taking the picked items to a packing area for packing into cartons. This requires fewer visits to the pick face but requires double handling of the items. WMS will also cater for batch picking to a trolley.

Crossdocking

Crossdocking is the process of assigning picking requirements to a dock where goods are expected to arrive soon to satisfy the pick requirements. This eliminates the requirement to put received stock away into a storage location only to be picked again for the order. When locations are assigned at receipt initialisation, AWMS looks for demand on the crossdock and assigns the exact quantity from the receipt to the crossdock location. The picker then confirms the pick from the crossdock. This process is entirely managed by the system, with transactions appearing on the RF queue.

Labelling

Labelling stations are defined around the warehouse, where label printers are situated. Typically, a picker stops off at the label printer on his way to the shipping consolidation area, prints the required shipping label(s), affixes the label and continues on to the shipping consolidation area.

Order consolidation

Orders where different products are picked from different zones by different pickers are consolidated in dock floor areas or shipping lanes.

Dock/lane confirmation

If picking a single SKU requires more than one operator or step, then ownership of the transaction should be passed between operators at pick and drop stations. This is usually used where a high-rise or wire-guided forklift passes a picked item to another operator who then carries the item to the shipping dock.

In these situations, operators must confirm the picked items or parcels into the shipping consolidation area by scanning both the parcel ID and the dock ID. Only when all parcels for the order are confirmed in the dock, can the order be ship confirmed.

Truck confirmation

An additional process in WMS allows orders to be scanned through a dock door onto a truck for final confirmation.

Advanced ship notice

Typically an ASN can be generated for transmission to the customer at the time of shipment confirmation.

Integrated materials handling

A good WMS will contain interfacing structures to enable two-way interfacing with materials handling systems such as carousels, sortation and palletising systems and pick-to-light systems.

Many warehouse operations take on WMSs that have a lot of functionality, but lack the flexibility to cater for their specific SKUs or processes. This consideration has to be combined with the need for a warehouse operation to scale up or down depending on demand.

Finally, a WMS must deliver a low cost of total ownership to the organisation. If a WMS is inexpensive upfront but requires significant implementation or support, which compromises its total cost of ownership, then it is not going to deliver the ROI required.

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