Warehouse Management Systems

Warehouse management system

Definition
⚫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
 Warehouse management system

⚫Definition 2
⚫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
 Warehouse management system

⚫Contemporary WMS checks labor and equipment

resources for receipts processing, cross docking,
storage, picking, value added processing, staging and
shipping.
⚫A WMS directs and tracks each move within the
facility to speed material flow and guard inventory
integrity.
⚫The key to success in warehousing lay with speeding
the flow of materials from receiving through storage to
picking and shipping.
⚫ Clearly that’s part of the solution -- but what about
the other part, VISIBILITY?
⚫ How do we know that we’re speeding the flow of the
right materials in the right quantities at the right time
to the right destination?
 WMS impacts

⚫Fulfillment
⚫Delivery
⚫Visibility
⚫Responsiveness
 Fulfillment and Delivery

⚫Material handling and controls

⚫AutoID and data collection
⚫Supply chain execution systems
⚫People
 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
 WMS Components

⚫Warehouse and Labor Management

⚫Transportation Management
⚫Yard Management
⚫International Trade Logistics
⚫Supply Chain Visibility
THE SYSTEM HIERARCHY
ENTERPRISE SYSTEM
Customers Customers
Suppliers
ADMIN/FINANCE MANUFACTURING PLANNING Suppliers
Carriers Purchasing Carriers
MRP Demand Mgmt
Order Management MES APS
EDI / EDI /
WEB Enterprise Network WEB

LABOR

WMS TMS
MANAGEMENT

YARD
MANAGEMENT

Inventory Order Picking Staging Shipping Task

Receiving Storage
Mgmt Process Replen Loading Mgmt

Local Area Network

Data Entry Devices Material Handling Device Control

⚫ A properly configured warehouse with a finely-tuned WMS,
solid labor management - and yard management, if
appropriate - will support error-free order fulfillment -
assuming inventory availability
⚫ But that’s just the beginning - and the basis for our contention
that users today must look further as they fashion their plans
for enhancing overall logistics performance.
⚫ That doesn’t mean that the warehouse is not critical to supply
chain performance.
⚫ Indeed, unless the warehouse is equipped to meet its targets
for throughput and accuracy, the chain will break.
⚫ “The company must ensure that the WMS is complemented
with the other tools necessary for meeting customer
requirements from order placement to final delivery”.
 WMS Functions

⚫Receiving
-Manual or automatic receiving
-Comparison with the invoice
-Difference from the invoiced quantity

⚫ Put away
⚪ Dedicated put away system to monitor the received goods
⚪ Location Selection: System or Operator
⚪ Put Confirmation

⚫ Picking and Shipping

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

⚫ A WMS system often can help you design the best picking

strategy based on your order patterns. However we’ll go over
the most common picking concepts below.
⚫ Discrete Picking
⚫ Batch Picking
⚫ Zone Picking
⚫ Wave Picking
 Discrete Picking

⚫ This is the simplest and most common form of order

picking.
⚫ Discrete picking is also referred to as single
order, individual, or piece picking.
⚫ In this method, a picker goes through one order at a time,
grabbing an item line by line before moving onto the next
order.
⚫ Simple example workflow of a single order pick. Most
businesses that discrete pick are low order volume, or have
large/heavy products.
⚫ When order volume becomes high, the most common
bottleneck in order throughput is picker walking time.
 Batch Picking

⚫Batch Picking
⚫Batch picking can also be referred to as consolidated
or multi-order picking. With this method, a single
picker grabs items with the same SKU for multiple
orders at the same time.
 Zone Picking

Zone Picking
⚫Zone picking is typically more expensive than batch.
⚫With zone picking, SKUs are divided into separate
areas, or zones. Each picker is assigned to pick from
a single zone per shift.
⚫If an order requires items from multiple zones, an
order box moves down (often using a conveyor) to
next zone. This is also called “pick and pass” or
“sequential zone picking.”
⚫Zone picking often reduces picker congestion in
high volume environments.
 Wave picking

⚫Wave picking is conceptually similar to batch picking.

Like batch, ordered items are queued and grouped
(batched) into combined pick lists.
⚫Traditionally, batch picking is done once per day and
solely focused on maximizing the amount of product
overlap between orders. Wave picking, on the other
hand, is executed multiple times per day (or shift) and
balances more factors than product overlap.
⚫In addition to maximizing product overlap, wave
picking balances pick list capacities, product weight,
shipping schedules, worker shifts and more.
 Other Picking techniques

⚫ Barcode/RFID scanners - Pickers use a mobile scanner to scan

a barcode or RFID to ensure the right products are selected.
Packers can also use the mobile scanner to double check the
accuracy during the packing process.
⚫ Pick-to-light - Light guided systems use lighting to signal what
aisle, shelf, bin pickers need to access. Useful for organizations
with multi-lingual pickers. Can be confusing in congested picker
environments.
⚫ Voice picking headsets - Pickers use headsets that instruct
where to go and what to grab. Often pickers can verbally confirm
collection of items, making for a paperless and hands free
environment.
⚫ Vision picking - Pickers wear augmented reality glasses that
instruct where to go, what to grab, and automatically scans
product tags. Also makes for a hands free environment.
 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
⚫ Location Files
⚪ Numbering / Sequencing
⚪ Dimensions / Capacity
⚫ Equipment Files
⚫ Employee Files
 Workload Management
⚫ With tables based upon the profiles and user-configurable
rules based upon business priorities, the WMS facilitates
workload planning and task assignment on the basis of
anticipated receipts and shipments
⚫ Equipment Profiles
⚫ Material Profiles
⚫ Location Profiles
⚫ Operator / Equipment Matrices
⚫ Operator / Task Priorities
⚫ Labor Standards
 Material Handling Interfaces

⚫ Conveyor
⚫ Sortation
⚫ Palletizer
⚫ AGVs
⚫ Pick (Pack)-To-Light
⚫ AS/RS
 Systems Interfaces

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

⚫ Purchase Order Receiving

⚫ Carrier Appointment Scheduling
⚫ Pre-Tagged Receipts
⚫ Blind (Unanticipated) Receipts
⚫ Load Tagging/Labeling
⚫ Quality Assurance
⚫ Returns
 Staging and Shipping

⚫ Trailer Scheduling / Processing

⚫ Staging Location Management
⚫ Staged Load Confirmation
⚫ Door / Truck Verification
⚫ Shipping Labels
⚫ Bills of Lading
⚫ Shipment Confirmation
CARRIER SCHEDULING
 Storage and Putaway

⚫ Location Selection
⚫ Override
⚫ Location Confirmation
⚫ Crossdocking
⚫ Relocation
⚫ Consolidation
 Inventory Management
⚫ Lot, Date Code, and Serial Number Tracking
⚫ Shelf-Life Monitoring and Rotation
⚫ Routine and Exception Cycle Counting
⚫ Full Physicals

⚫ Additionally, some WMS permit lot and serial number tracking and
allocation to orders and monitor shelf life to eliminate or reduce
obsolescence.

⚫ Finally, the ability of the WMS to update inventory status by location

anywhere within the facility as transactions occur precludes the need for
facility shutdown for physical inventory taking. Indeed, many users have
been able to use the WMS’ cycle counting capability to eliminate full
physicals altogether.
WMS Cost Breakdown

COMPONENT % TOTAL COST

Computer 6
Radio frequency scanners 24
Bar Code Label Applicators 9
Hardware Subtotal 39
WMS License 8
WMS Enhancements 10
Host Interface 6
Other Software Licenses 4
Software Subtotal 28
Location Labels 6
WMS Installation Services 21
Project Team Costs 6
Implementation Subtotal 33
 WMS Benefits

⚫ Potential Improvements in: ⚫ Potential Reductions of:

⚪ Inventory accuracy and turns ⚪ Damage/Shrinkage
⚪ Space utilization, stock rotation ⚪ Lost stock
⚪ Order, lot and serial number
⚪ Safety stock
tracking
⚪ Backorder handling ⚪ Search times and deadheading
⚪ Crossdocking ⚪ Paperwork
⚪ Resource planning and ⚪ Human error
scheduling ⚪ Physical inventory taking
⚪ Labor and equipment productivity ⚪ Labor, equipment and utility
⚪ Performance measurement costs
⚪ Customer service ⚪ Courier/Delivery costs
⚪ Outside warehousing
 WMS Justification

⚫ Direct Labor ⚫ Indirect Labor

⚪ Pre-receiving ⚪ Floor supervision
⚪ Receiving ⚪ Expeditors
⚪ Returns ⚪ Inventory control
⚪ Putaway ⚪ Training
⚪ Replenishment ⚪ Overtime
⚪ Pallet picking ⚪ Other
⚪ Case/Piece picking ⚫ Administration
⚪ Value-added processing ⚪ Shipment planning
⚪ Shipping ⚪ Inventory management
⚪ Overtime ⚪ Traffic
⚪ Overtime
⚪ Other
 WMS Justification
⚫ Other Tangible Savings
⚪ Space utilization
⚪ Transportation
⚪ Expedited delivery
⚪ Reduced paperwork
⚪ Reduced operating costs
⚪ Damage
⚪ Shrinkage
⚪ Perishable loss reduction
⚪ Storage/picking/shipping errors
⚪ Physical inventory costs
⚫ Intangible Savings
⚪ Order cycle times
⚪ Customer service
⚪ Inventory turns
⚪ Reduced obsolescence
⚪ Lost orders
⚪ ABC facilitation
⚪ Performance measurement
WMS Benchmarking
 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 technology and systems to assure
⚪ Accurate execution of receiving, storage, and move tasks
⚪ Error-free picking, replenishment, and shipping
⚪ Traceability
⚫ Provide seamless interfaces to other corporate systems to assure
⚪ Real-time visibility of inventory availability
⯍ 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