The Definitive Guide To Warehouse Management
The Definitive Guide To Warehouse Management
Warehouse Management
3. Consolidate SKUs as much as possible and manage products from different vendors with aliases.
Your warehouse needs to match your business and the first principle is to ensure the management goals within the
warehouse match the goals defined by your organization. Things to consider are:
Inventory levels cost money and use up space; the warehouse manager needs to balance having the least inventory
possible, but always having what is required by the customer. This process of managing the right inventory levels,
and at the same time making sure it is in the right place within the warehouse, is the second principle and requires
accurate forecasts and effective plans for resolving problems.
The layout of the facility and the location of the goods within the facility all help in controlling the movement of
goods within the warehouse. This principle is really the process of traveling the least distance possible to perform
the most work possible.
Efficiency and optimization are only valuable if the work is accurate and quality has to be the first and foremost goal
of the workers in the warehouse. Creating workflows that drive quality and self-correcting processes throughout the
facility ensure the quality of work within the warehouse.
Your warehouse management system (WMS) will either help or hinder your drive to the previous principles. Getting
the right technology and right technology partner to run your warehouse will make things far more simple and
attainable.
• Attain accurate cube data on all your items and units of measure.
• Get accurate cube data on all the locations in your warehouse — this does not mean the dimensions, but the
actual usable space of each location.
• Manage your cross docking and order staging with an eye to the dimensions of the goods.
Take for example a warehouse that serves a mid-sized distributor of hard goods; throughout the process of
managing the warehouse there are decisions that must be made and critical instructions that must be followed. A
WMS will track and manage these processes while ensuring 100% accuracy with the least amount of labor.
Receipt
This is the process of when goods arrive at the warehouse shipping dock. A WMS will efficiently help determine and
confirm the right product, in the right quantities, in the right condition, weight and dimensions all at the right time.
Putaway
The objective is to move goods received to an optimal storage location as quickly and efficiently as possible. During
the putaway process a WMS considers different factors (e.g., if the goods need refrigeration, if there is an order
already waiting for the goods, etc.) and calculates the location and best possible route to take when putting away the
items.
Storage
This is a critical process to ensure all available space in the warehouse is maximized without compromising
productivity. A WMS tracks if goods are in the best location, if the amount of goods is accurate or if a reorder is
necessary, if the goods have expired, etc.
Picking
This is the process used to retrieve goods in the warehouse and consists of picking by item, group or zone. The
WMS communicates and controls the picking task by providing explicit direction to the pick person via mobile data
devices, interactive voice and pick-to-light modules, and by controlling the quality of results with various forms of
automatic identification (e.g., barcode scanning, etc.). Directions will include details such as how many to pick,
what type of pack size is best to pick, which lot number to pick and if the item requires pre-work (e.g., price labeling,
tagging, assembly or similar).
Cross-docking
This is the management of goods in the warehouse that are received and shipped within a very short timeframe.
There is usually little to no on-hand inventory and the focus of a cross-docking operation is to eliminate storage
and retrieval tasks. This is applicable to the initial receipt of seasonal items, non-stock or pass-through items and
backordered items. The WMS helps ensure the product is received and staged for shipping in as few steps as
possible.
Distribution
This is the management of goods that have relatively low inventory levels and a high turn rate. The focus of a
distribution center operation is satisfying customer orders as efficiently as possible while holding the least inventory.
The WMS simplifies the order picker’s job by using appropriately sized and identified picking locations. Overstock is
usually kept near pick locations and there is an emphasis on the optimum slotting of items.
Warehousing
This is controlling stock items with high inventory levels and a low turn rate. The focus of a warehouse operation is
to maximize storage capacity and typically has a low SKU count, but high inventory levels. The WMS orchestrates
the product (e.g., imported items, emergency use items, production operation goods, etc.) from receipt to storage in
high-capacity locations.
This WMS is often referred to as an inventory control system. While simple to implement and low cost, it offers the
least amount of functionality and value.
ERP module
With similar functionality to a standalone WMS, this type of WMS is built as a piece of a much larger ERP system.
Hence, the solution provider typically places less investment on the WMS capability, so this type is not ideal for
complex warehouse operations.
This type of WMS is often split into cloud and on-premise implementations and can range from simple and targeted
to huge, broad and mature warehouse solutions. A supply chain warehouse execution system is usually integrated
into an ERP and OMS. It offers best-of-breed warehouse features for organizations that have outgrown the
standalone WMS and ERP module solutions.
Exceptional warehouse management is the key to growth and long-term success. This is possible through the right
approach to technology, which includes any necessary material handling equipment as well as a proven, feature-rich
warehouse management system. Only with effective systems underpinning your operations can you process the
growing volumes of orders, manage inventory and ensure your associates carry out each step of their directed tasks
properly every minute of the day. Accuracy and reliability are essential. There isn’t any room for error if you want to
stay competitive.
In today’s warehouse operations, we see more business volumes, more goods to move to multiple
channels, under tighter cycle times. Combined with labor shortages and stringent regulatory
requirements, the pressure on executives is greater than ever! As a result, they have no alternative but
to make a technology change to a robust and flexible WMS to keep up with their changing business
requirements. Given their business conditions, they need to do it at low-risk and low-cost, in other words,
get top WMS value at a low total cost of ownership. – Michael Mikitka, CEO of WERC (Warehousing
Education Research Council)
Below are some common reasons a business will upgrade. These are often determined by developing a business
case that fully explores all aspects of the business and future expectations from customers.
• The cost of staying on the current system is higher than it would be to move to a new system.
• The current system is now restrictive and cannot support organizational growth.
• The current system is not effectively serving existing customers or helping to win new business.
• The investment in a new system will support innovation and the opportunity to be more competitive in the
marketplace.
Some companies have elected to implement “WMS light” options designed with a reduced feature set. However,
these typically do not allow for the type of growth and the associated complexity in distribution requirements these
companies may ultimately require.
1. Functionality
It is essential to have a warehouse that is scalable and easily adaptable to your specific needs, market conditions or
unique customer requests. A top-notch WMS will have core warehouse features that go beyond the standard options
such as receiving, putaway, counting, letdown and picking. While these remain important capabilities, you need
functionality that enables you to meet industry-specific requirements such as value-added services; full lot, serial and
expiration track/trace and many more that will enter the picture as appropriate.
2. User experience
Labor is a critical element to a warehouse and it is important to provide workers with highly intuitive technology to
help them be as efficient as possible – right out of the gate. The WMS should be easily understood with step-by-step
instructions and visual cues to ensure accuracy and compliance. Particularly if temporary or seasonal workers are
important for your business, technology that is easy to adopt with minimal training will be the key to success.
3. Flexibility
The way your warehouse operates today might not be the same way it needs to operate in the next few years. Many
companies are making increasing use of cloud deployments to ensure the flexibility of their supply chain. A WMS
can scale and adapt automatically with elastic technologies and tools that are secure and continuously upgraded to
meet the needs of your industry and business.
Identifies where all inventory is located and individual key characteristics about that inventory such as lot number,
expiration date, etc.
Accepts goods into the warehouse and determines the optimum place to store them based upon usage, need, cube,
space available, etc.
Fulfills customer orders in the most efficient and accurate way possible. There are many techniques used to reduce
time and travel during the picking phase and usually a combination based upon the nature of the orders is most
effective.
Shipping
Manages common carrier and own fleet shipping with an embedded transportation management system (TMS) that
allows warehouse planning decisions and efficient picking and packing operations.
Tracks and controls where goods are in the yard and schedules dock appointments for both inbound and outbound
deliveries.
Offers key metrics with generated reports and dashboards to help measure warehouse performance and make
informed, strategic operational decisions for efficiency and resource use.
From receiving, putaway and inventory management to picking, packing and shipping, there are many ways you can
leverage automation to forego routine, manual processes. Assess your operations and determine where the low-
hanging fruit resides when it comes to what to automate first. A good place to start are the repeatable and time-
intensive activities, especially those prone to error. Do not forget to evaluate material handling equipment (MHE)
that can integrate with your warehouse management system to speed operations. Conveyors, pick-to-light systems,
automatic guided vehicles (AGVs), automated storage and retrieval systems (AS/RS) and more not only help your
workers complete assignments faster, but they can also improve safety and take the physical burden out of some of
the steps.
Finding and retaining a solid workforce is a growing challenge for many companies. A warehouse management
system that is easy to work with and simplifies the process of completing tasks accurately will make a world of
difference in your ability to hire, train and retain staff. If you are able to introduce automation as mentioned above,
you may find you can carry out the same tasks with fewer associates. However, this does not necessarily mean you
have to let workers go. It is feasible to offer additional training to some associates and redeploy them to other areas
where performance may be an issue. You can also use newfound employee bandwidth to implement offerings such
as personalized, value-added services that delight your customers.
Having too much inventory, not having enough or lacking the right kind of inventory all create financial stress and
customer service challenges for your organization. The first requirement to improving inventory management and
lowering your holding costs is having visibility into what is on the shelves and the rate at which it is depleted and
replenished. This is possible with a warehouse management system in concert with an inventory management
system that tracks the ins and outs as well as prompts cycle counting and reconciliation. The ability to forecast
demand is also an important step as you work to implement an optimum level of inventory to carry and lower
inventory holding costs over time.
Although supply chain experts have been developing best practices for decades, recent changes in distribution
models, technology and customer expectations have led to new insights into the best ways to run distribution
operations. A warehouse management system provider has a deep understanding of supply chain best practices
and can introduce efficiency into your distribution operation. Learn the latest best practices regarding facility layout,
how to leverage technology and manage your workforce in pursuit of meeting customer requirements and keeping
costs in check.
Measures performance
Best-in-class distribution operations of any size rely on accurate metrics and analytics for informed decision-making.
From labor productivity to fulfillment speed and shipping accuracy, intuitive WMS dashboards will help you get a
handle on which areas are not running efficiently, where cost spikes point to underlying issues and more. What
you seek is information that can help you take action, enabling ongoing improvement and cost reduction across
many areas. This may include dropping a product line that is not performing well, reallocating staff to address
performance issues or identifying expiring products and waste.
Finding a system that is ‘future proof’ is also important. Not only do you need core functionality to be in place today,
but you also need to be able to stay on the upgrade path down the road as new enhancements are released and you
want your warehouse management system to keep pace.
Adoption
Traditional: Long and complex implementations, formal training sessions run by the vendor.
Modern: Low risk and rapid to adopt, uses familiar technology which improves user experiences with user-driven
training and configuration.
Flexibility
Traditional: Any changes to the standard process require custom coding that makes upgrades expensive and
difficult.
Modern: Features and workflows can be adapted using scripts, configurations and workflow management tools by
super users who are semi-technical and do not require developers.
Traditional: Limited by the hardware and network locally available, once set is generally fixed.
Modern: Totally elastic solution for any size implementation; can flex along with seasonality requirements
throughout the year as needed.
Features
Traditional: Feature set is basic receive, putaway, letdown, count and pick.
Modern: Industry or process-specific features that are configurable by the role of the user.
Platform
Modern: The supply chain platform creates a common, stable and personalized environment that allows user-centric
change to the look and feel of the system without affecting the underlying solution. It also provides an integration
layer to simply and rapidly connect.
Cloud environments are tested and audited to the highest standards ensuring your data is 100% secure.
Reliability
Cloud solutions have service standards and constant monitoring tools to ensure your system is available all the time.
Performance
Generally backed by very large, international infrastructures, cloud solutions can ensure a minimum level of
performance for your warehouse system.
Scalability
Most cloud warehouse management systems offer automatic scaling of the cloud environment to balance load and
offer you more or less technology hardware as your demand rises and falls.
Compliance
Unlike in-house IT groups, cloud infrastructure is dedicated to ensuring it is compliant with any and all industry-
specific or regulatory requirements.
Recovery
With cross-regional and constantly monitored disaster recovery features, cloud warehouse management systems
ensure that data is never lost.
The most important part of any project is to figure out what are the key problems you need to solve and which
technology partner has the most relevant experience that fits your company culture best.
Introduce and explain the nuances of your operation to your technology partner and plan the end-to-end project —
understand both the staffing and timeline.
Define with your partner how your new system will work, making sure all the key processes and integration steps are
well documented and understood. Start to collect and cleanse the master data needed to run the system.
Create the solution configuration, load the master databases, build the integration, train the internal subject-matter
experts and create the test plans.
Step 5: Validate
Check everything and test how your system will operate. Closely examine the integration, stress test the system and
train the users by doing some dry runs. Finally, decide if you are ready to go-live!
Step 6: Deploy
When you are ready to go-live, transition to the new system and possibly do an inventory count. And do not forget to
support the users through the learning phase.
Step 7: Review
Complete a retrospective review post-implementation and create optimization plans to support your continuous
improvement processes.
Automation in the form of collaborative robots all the way to complex automated storage and retrieval systems
like AutoStore are being adopted to address these transaction, volume and labor issues. In addition, warehouse
management systems are getting smarter and applying machine learning technology to do the tasks needed to
make the warehouse floor the most efficient. Jobs like cluster building, task management and pick allocation are all
being managed in real time, revised dynamically by AI in ways that will build efficiency and change the warehouse
floor operation forever.
Your warehouse operation is your most vital asset to deliver on promises made to customers and achieve a high
level of customer satisfaction. In today’s world, a combination of best practices and platform technology helps
world-class distribution organizations achieve market differentiation, eliminate inefficiencies, improve order
accuracy, reduce operating costs and attain high levels of service. Undoubtedly, your warehouse is more critical than
ever.
For more than three decades we have helped hundreds of leading organizations solve their unique warehousing
and distribution challenges — landing us in the “Visionaries” quadrant of Gartner’s Magic Quadrant* for warehouse
management systems for the last ten consecutive reports. Since our founding, we have been lauded by a stream of
renowned organizations that have adopted our solutions.
Canon, Cleveland Brothers, DB Schenker, Delmar International, Humana, Intermountain Healthcare, Milton
CAT, Napoleon Products, Parkview Health, Rinchem, Robinson Home Products, Walter Surface Technologies,
Werner Electric Supply and many others.
* Gartner “Magic Quadrant for Warehouse Management Systems” By Simon Tunstall, Dwight Klappich, 30 June 2021
Aetrex
Aetrex is widely recognized as the global leader in comfort and wellness footwear. Originally known for the landmark
development of arch supports and medically oriented footcare products, Aetrex has come a long way to become one
of the leading footwear companies in the U.S. and around the world. To meet its goal of becoming a major brand in
footwear, fast-growing Aetrex needed a strong supply chain infrastructure to support its go-to-market strategy and
provide its management and customer service staff with the right information to better serve clients and distributors.
Aetrex selected Tecsys’ warehouse, distribution management and EDI applications to support its goals. The
company chose Tecsys due to its unparalleled customer care and responsiveness as well as the strength of its
applications. Since implementing Tecsys’ solutions, Aetrex has grown at an aggressive rate and achieved its
strategic sales and customer service goals. The results speak for themselves: Aetrex has increased volume by 80%
without additional staff, increased inventory accuracy by 70% and reduced cost by 24%.
At the end of the day, with Tecsys we are now miles ahead in our execution abilities and management of
our supply chain. – John Mattessich, Director of Distribution
LSL has achieved substantial automation with Tecsys’ supply chain management solutions such as scalable,
perpetual inventory, significant improvement in labor management with system-directed putaway and picking, as
well as unprecedented real-time visibility. The company has also realized the following benefits: 99% fill rates and
99.97% inventory accuracy with the right products delivered at the right price without sacrificing quality.
We have a reliable IT infrastructure that can be tapped anytime, from anywhere, securely … it is like
“googling” into a supply chain network of applications, giving us and our customers peace of mind and
visibility of what is happening…– Richard Beeny, Co-founder and Chief Executive Officer
www.tecsys.com
[email protected]
Phone: 514-866-0001
Toll Free: 1-800-922-8649