Today’s competitive pressures mean no one can afford for any part of their business to be operating sub-optimally. With manufacturing and distribution industries recognising that every aspect of the supply chain can contribute to more profitable operating, the spotlight has inevitably fallen on the warehouse.
The warehouse is an essential link between supply and demand. On the supply side there must be efficient handling, inventory management, product flow, transportation and delivery. From the demand point of view the warehouse must meet all customer-specific requirements quickly and with maximum flexibility. While it was previously viewed as far less important than sales or manufacturing, many companies are increasingly finding that an efficient, integrated warehouse – whether owned or third party – is a critical part of their success.
Technology in the warehouse
Business competition based on supply chain efficiency is becoming prominent in many markets, especially in the manufacturing and distribution sectors. “It is important that warehouses contribute strongly to supply chain excellence,” says John Moses, Managing Director of Syscom PLC, “and that businesses take advantage of what is out there to help ensure this.”
Specialist warehouse technology has been developed as one step on the path towards warehouse optimisation. Companies can now make use of everything from wireless barcode scanners and Radio Frequency Identification RFID inventory tracking to voice directed picking. This can facilitate better use of space, reduced pick and put-away times and enable fast, consistent and accurate feedback without paper chasing.
“One of our customers, Weird Fish Clothing WFC, are focusing on automating their warehouse,” says John. “They are rapidly expanding and recognise that retaining their reputation as excellent suppliers is key to this.”
WFC, a Cheltenham based supplier of branded women’s, men’s and children’s wear, have their own in-house design team and, like many other clothing companies, production is outsourced to Turkey and the Far East. “They are very successful,” says John “and this is partly because they see that optimising their supply chain is essential to delivering outstanding customer service.”
Tracking physical assets, inventory, and personnel with automated systems such as barcodes or RFID tags can save money and improve operations. Barcode scanners are an inexpensive and reliable way to gather data with the ease of “point and click”. Barcode stickers or tags can cost less than a penny each.
WFC’s barcode readers will gather the necessary information at the point of activity to allow inventory to be updated quickly and accurately. At each operation, scanning the barcode will create a transaction record that can be stored in a database. The resultant mitigation of human error is vital in ensuring more efficient operations in the dynamic, and sometimes hectic, environment of the warehouse. Businesses can use wireless scanners which upload data to the host as it is scanned or portable, battery-operated batch scanners which store data in memory for uploading to the host at a later time.
Radio Frequency Identification is another automatic identification method that can be used to improve inventory accuracy. This stores and remotely retrieves data using RFID tags which are applied to or incorporated into a product. RFID systems work in very much the same way as barcode systems, except that a “line of sight” between the tag and the reader is not needed because radio waves can travel through many materials.
Voice technology can also be used to improve productivity in order picking, goods receiving, pallet put-away and stock checking. In this case warehouse operatives use a wireless, wearable computer with a headset and microphone. Speech recognition and speech synthesis technology then allows them to receive instructions by voice and verbally confirm their actions back to the system.
This system is reported to provide up to 99.9% accuracy and order picking productivity usually improves by 10% - 20% when moving from a paper-based system to voice directed picking. Not only does the hands-free and eyes-free operation speed up picking, trips back to the assignment desk are eliminated and the radio communication enables real-time stock updating.
The key to streamlining
“WFC’s barcode scanners will be fully integrated with Microsoft Dynamics AX,” says John. “This software solution even has a module specifically designed to help streamline the warehouse. It gives the flexibility and control needed to optimise warehouse processes and layout according to a business’s individual requirements, increasing efficiency. It also allows for a complete overview of inventory to help improve customer service.
"When entering a sales order, for example, you have access to all the latest information in your database about price and important product specifications. You can cross-reference any vendor, customer or internal code and find the corresponding item, as well as find alternatives with the latest price and quantity on hand. You can even reserve items for customers, including items from a specific location or batch, while entering a sales order. This reservation is recognized by all functions in Microsoft Dynamics AX, including inventory counts and planning of production, to help ensure that customer demands are satisfied.”
However, ensuring efficient order fulfilment methods within the four walls of the warehouse can only have limited results. While warehouses often need technologies all of their own, they are inextricably linked to manufacturing operations and the customers they supply. In tackling warehouse improvements, an organisation must recognise that the warehouse is only important as part of business operations overall.
Making use of specialist warehouse technology is often a key step in successful warehouse management, but this alone is not enough to ensure warehouse optimisation. In fact, a system that is good for your warehouse operations may cause more work for your purchasing, sales and finance departments if it is not integrated. In order to fully harness the benefits of warehouse technology a more holistic approach is needed.
The benefits of an integrated warehouse
It is an old maxim, but delivering the right goods to the right customer at the right time and at the right price remains more important than ever. Because supply chains have to constantly adjust to changes in supply and demand for the products they handle, monitoring and control of operations is essential for achieving the desired performance.
Integrating the various aspects of a business not only allows for streamlined procedures and performance monitoring, it gives the coordination needed for a responsive supply chain. John Moses points out that: “In the interest of optimising available technology, most manufacturing and distribution businesses have extended their gaze beyond warehouse operations to supply chain management and activity coordination.”
A warehouse tightly integrated with suppliers mean shipments can be scheduled to ensure an optimum balance of parts is available at any time. Integrating the warehouse with the demand part of the chain through sales gives real-time information on inventory status and orders so that delivery dates can be predicted, the progress of orders can be traced and lot or serial numbers can be used for recall or quality control. An integrated Enterprise Resource Planning (ERP) system also allows for real-time matching of demand and supply and collaboration among multiple parties. “This assists in the continuous prioritisation and reprioritisation of shipments in and out of the warehouse,” says John, “enabling companies to build supply chains that have a competitive advantage in their markets.”
Getting your warehouse in the picture
Many manufacturing and distribution businesses have discovered that maximising the benefits of warehouse technology through integration needn’t be a trial. “We would come in to see any potential client and discuss their exact requirements to ensure the system we provide is the one best suited to addressing their needs” says John Moses. “Once we have demonstrated how the system would work and have provided a quote, if the company is happy to go forward we would work together on creating a project plan. As well as implementing the system we would offer training for staff and provide ongoing maintenance and support.”
Here are John Moses’ top 5 tips for making the most of warehouse technology:
1. Find a software supplier with extensive experience of your industry who will understand the issues that matter to your business.
2. Make your life as easy as possible. Choose software that will be easy to use, will be quickly taken up by staff and that you won’t have to replace in a few years time. “Our customers like Microsoft Dynamics because it has a familiar, logical interface and integrates with everyday tools such as Word and Excel. Not only is up-take usually quick, new staff only need minimal training to be able to use the system. And, of course, with the billions that Microsoft spend on research and development, customers know that they are investing in a system that will always be supported and updated.”
3. Use a company that has good business relationships with hardware suppliers as they will also be able to provide you with the hardware you may need. “Working with IBM and HP,” says John “means we can source hardware for our clients and configure, implement and support this hardware.”
4. Make the most of the internet. The benefits of new technology stretch beyond the warehouse - the Web can be used to exchange accurate and up-to-date information with your vendors, sell products and services, exchange information with consultants, and configure complex products. Web-based inventory and warehouse management means your sales team, for example, can access, view, and update customer and company information anytime, anywhere. “Some software, such as Microsoft Dynamics AX, is built for the internet so you can extend your business processes to the internet immediately.”
5. Integrate your warehouse with the rest of your business to improve overall performance. “Having an integrated system provides a fast and powerful way of gaining a competitive advantage,” says John. “Software that coordinates the warehouse with many other areas, such as Logistics, Production and Trade, supports real-time connectivity across your business and business community.”
The message, then, is clear – it is the holistic approach that works when it comes to using technology to optimise your warehouse.
