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Supply Chain Execution Systems

Warehouse Management Systems Lecture Resource

Adapted with permission from presentations by John Hill, 2002, 2003 John M. Hill, ESYNC

Supply Chain Execution Systems (SCES)

Manage inventory, space, material handling equipment, labor, and transportation resources in real time to assure timely, error-free fulfillment, delivery, and visibility of order status throughout the supply chain Matching material and information flow

SCES Impact Areas

Fulfillment Delivery Visibility Responsiveness

Fulfillment and Delivery

Material handling and controls Right condition AutoID and data collection Right material Supply chain execution systems Right time People Necessary for all of the above

Responsiveness

The best decision making is executed on the basis of events as or before, not after, they occur Responsive logistics systems provide discipline and control that is based not only upon plans and performance goals, but also upon the dynamics of actual operations

SCES Components

Warehouse and Labor Management Transportation Management Yard Management International Trade Logistics Supply Chain Visibility and Event Management

THE SYSTEM HIERARCHY


ENTERPRISE SYSTEM
Customers Suppliers Carriers

ADMIN/FINANCE MANUFACTURING

PLANNING Demand Mgmt APS

Purchasing
Order Management

MRP MES

Customers Suppliers Carriers

EDI / WEB
LABOR MANAGEMENT YARD MANAGEMENT

Enterprise Network

EDI / WEB

WMS
Order Process Picking Replen

TMS
Staging Shipping Loading Task Mgmt

Receiving Storage

Inventory Mgmt

Local Area Network

Data Entry Devices

Material Handling Device Control

Warehouse Management Systems

Manages warehouse inventory, space, equipment, and labor resources to direct the flow of materials and information from receiving and putaway to light assembly, order picking, value-added processing and shipment

WMS History

1975: First WMS installed at J. C. Penney. 1986: First WMS installation in C on a UNIX platform. 1990s: Hundreds of new stock locator & WMS systems; Windows NT platform emerges. 1995: MHIA WMS product section formed. 1999: First WMS company reaches annual revenues of $100 million. 2000: Expanded suites with TMS & SCV. Today: User-configurability & scalability remain key differentiators.

WMS Functions

Receiving

Blind ASN/EDI Conventional or Automatic

Putaway

Dedicated, Random or Hybrid Location Selection: System or Operator Put Confirmation


Pick by Order, Batch, Wave Pick Confirmation Shipping Check Lists Manifests, Bills of Lading

Picking and Shipping

WMS Differentiators

Order Planning & Scheduling Unit of Measure Conversion Location Management / Slotting Inventory Allocation Shelf Life Monitoring Lot & Serial Number Tracking

Cartonization Cycle Counting Replenishment & Consolidation Task Assignment & Monitoring Reverse Logistics Scalability & Configurability Upgrade Support

WMS Setup

Product Files

Descriptions Dimensions Units of Measure Bills of Material Substitutions Numbering / Sequencing Dimensions / Capacity

Location Files

Equipment Files Employee Files

Employee Task Prioritization

Workload Management

Equipment Profiles
Material Profiles Location Profiles Operator / Equipment Matrices Operator / Task Priorities

Labor Standards

Workload Management
New Tasks RFDC
5471
1234 3679 2137 9873 4532

TASK ALLOCATION
Priority Operator Authorizations Equipment Type Current Location
Tasks in Memory
source |dest | timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc. source |dest| timereq | load type | etc.

Job Completions Work Requests

RFDC

Task Manager Task

Work Queue

RFDC Link

Material Handling Interfaces


Conveyor Sortation Palletizer AGVs Pick (Pack)-To-Light Carousel AS/RS

Systems Interfaces

Purchasing Order Management MRP / MES Labor Standards / LMS Load Planning Freight Rating / TMS Slotting

Receiving

ASNs / Purchase Order Receiving Carrier Appointment Scheduling Pre-Tagged Receipts Blind (Unanticipated) Receipts Load Tagging/Labeling Quality Assurance Returns

CARRIER SCHEDULING

Receiving
Operator Assigned to Receiving Bar Coded Pallet ID (Scan or Key-Enter) (Verify Product, Quantity & Condition) Key-Enter Order Number, Product ID, Quantity & Condition (Pre-Printed License Plate)

WMS
RFDC
Match LP to ASN or Retrieve PO Validate Receipt Resolve Exceptions Check Demand Issue Task Update Inventory Records

RFDC

Stage Crossdock QC Move Putaway

(Print & Apply LP) Stage Crossdock QC Move Putaway

Reverse Logistics
HOLIDAYS 2000
eSales: $6 Billion Returns: $900 Million
Source: BizRate.com

Warehouse Wasteland or Competitive Edge?

Storage and Putaway


Location Selection Override Location Confirmation Crossdocking Relocation Consolidation

Putaway and Move


Operator Assigned to Putaway / Move Scan License Plate Move to Designated Location Scan Location Bar Code

RFDC

WMS
Destination Storage Crossdock Quality Returns Other Validate Location Check Resolve Demand Exceptionsfor Product Issue Drop Instruction - - -Issue ------ - - - - Task ---------Move Update Inventory Issue Next Task

RFDC

Confirm Drop Await Next Task

Inventory Management

Lot, Date Code, and Serial Number Tracking


Shelf-Life Monitoring and Rotation Catch Weighing Routine and Exception Cycle Counting Full Physicals

Replenishment

Forward Pick Locations Floating Forward Pick Replenishment Trigger Controls Demand Replenishment Batch Replenishment Reslotting

Pick Planning

Host Download Format and Frequency Wave and Batch Planning Material Allocation Order / Shipment Release Changes and Cancellations

Picking
Operator Assigned to Picking Ready for Next Pick Task
Move to Location Scan Location Bar Code

RFDC

WMS
Validate Location Issue Pick ------------------ Validate Item / Quantity Resolve Exceptions Update Inventory ------------------ Issue Next Pick

RFDC

Display Pick Location

Scan Item Bar Code/LP Pick / Confirm Quantity ----------------- Await Next Pick

Staging and Shipping


Trailer Scheduling / Processing Staging Location Management Staged Load Confirmation Door / Truck Verification Shipping Labels Manifests / Bills of Lading Shipment Confirmation

WMS Cost Breakdown


COMPONENT Computer RFDC Bar Code Label Applicators Hardware Subtotal WMS License WMS Enhancements Host Interface Other Software Licenses Software Subtotal % TOTAL COST 6 24 9 39 8 10 6 4 28

Location Labels
WMS Installation Services Project Team Costs Implementation Subtotal

6
21 6 33

WMS Benefits

Potential Improvements in:


Potential Reductions of:


Inventory accuracy and turns Space utilization, stock rotation Order, lot and serial number tracking Backorder handling Crossdocking Resource planning and scheduling Labor and equipment productivity Performance measurement Customer service

Damage/Shrinkage Lost stock Safety stock Search times and deadheading Paperwork Human error Physical inventory taking Labor, equipment and utility costs Courier/Delivery costs Outside warehousing

WMS Justification

Direct Labor

Indirect Labor

Pre-receiving Receiving Returns Putaway Replenishment Pallet picking Case/Piece picking Value-added processing Shipping Overtime

Floor supervision Expeditors Inventory control Training Overtime Other Shipment planning Inventory management Traffic Overtime Other

Administration

WMS Justification

Other Tangible Savings


Intangible Savings

Space utilization Transportation Expedited delivery Reduced paperwork Reduced operating costs Damage Shrinkage Perishable loss reduction Storage/picking/shipping errors Physical inventory costs

Order cycle times Customer service Inventory turns Reduced obsolescence Lost orders ABC facilitation Performance measurement

WMS Benchmarking

Order Fulfillment Inventory Management Warehouse Productivity Transportation Performance

Order Fulfillment Measures

On-time Delivery Order Fill Rate Order Accuracy Line Accuracy Order Cycle Time Perfect Order Completion Percentage

Inventory Management Measures

Inventory Accuracy Damaged Inventory Days On Hand Storage Utilization Dock to Stock Time Inventory Visibility

Warehouse Productivity Measures

Orders per Hour Lines per Hour Items per Hour Cost per Order Cost as % of Sales

Transportation Performance Measures


On-time Deliveries Damage Demurrage Cost Percentage Assessorials Cost Percentage Missed Appointments Percentage Freight Bill Accuracy Cost per Order Cost as % of Sales

Creating a Responsive WMS

Use contemporary ADC technology and systems to assure

Accurate execution of receiving, storage, and move tasks Error-free picking, replenishment, and shipping Traceability
Real-time visibility of inventory availability

Provide seamless interfaces to other corporate systems to assure


by SKU, quantity, lot number, serial number and shelf life by location

Real-time order confirmation and status for customers Event-driven exception handling

Facilitate a quick match of available resources to current and expected inbound, replenishment, and outbound workload

Select the best operators and equipment for tasks based upon proximity, skill sets and priority Task operators to immediately store or cross-dock receipts

Creating a Responsive WMS


Support returns processing and reverse logistics Use task interleaving to minimize deadheading Improve order consolidation, wave planning, inventory allocation, and pick sequencing Identify consolidation opportunities to free space and reduce outside storage requirements Support bill of material, work order, and value-added processing Update inventory records as events occur Provide accuracy that allows replacement of full physicals with scheduled cycle counts Time stamp each transaction and identify the operator who performed it Provide feedback to the workforce and support performance measurement Measure supplier and carrier performance

WMS Trends

Further industry consolidation as well as alliances with enterprise systems providers Activity based costing and management Embedded profiling tools for space use analysis to facilitate relayout and inventory slotting Object-oriented tool kits for requirements modeling and WMS development