WMS Best Practices for Warehouse Management Transformation

When considering WMS best practices, success in the marketplace is frequently measured in time to the customer. Companies face the challenge of maintaining an adequate inventory level while carefully anticipating the level of demand.

A robust and efficient Warehouse Management System (WMS) enables companies to meet the demands of the marketplace and helps maintain market share in an increasingly competitive – and faster – global marketplace.

While robotics has become a significant contributor to the efficient warehouse, a human workforce is still necessary in the foreseeable future.

WMS best practices involve a strategic approach to business process transformation.

Challenges Facing Manufacturers

The first challenge for any purveyor of a commercial product is to design a product that consumers need or want. Then it must be produced with a high level of quality and finally it must be priced well so that consumers identify it as a good value.

Meeting those challenges is daunting enough. But solely meeting those criteria is not enough to ensure success. The successful company must be able to deliver the product when and where the customer wants.

Ideally, the company would be able to accurately anticipate demand and order the raw materials to meet that demand. It would spend little time sitting in inventory before shipping to its ultimate destination with the consumer. However, ideal conditions aren’t always what companies face and a WMS helps juggle those variables and efficiently manage the production and fulfillment process.

WMS Best Practices: Core of the Warehouse Management System

At its simplest level, a WMS needs two critical pieces of information:

• The number of each item available
• Where each item resides in the warehouse(s)

What used to be handled by 3×5 cards and a spreadsheet is now easily managed by leveraging the power of connected devices and RFID technology. They not only identify products in diverse locations within multiple warehouses but also help to efficiently manage the products into retail locations, which is increasingly more common. A WMS provides the tools that enable the management of the complex ecosystem and collaborates with users in diverse locations, including mobile users.

Setting up a WMS

As independent ERP consultants, it’s our take that the first consideration is determining how data will enter the system. While a small operation with limited SKUs may be satisfied with fixed terminals or PCs, any organization of size requires some form of wireless technology. Advantages of a WMS are varied and obvious to any manufacturer:

• Wireless systems, consisting of bar code or RF scanners, provide far greater efficiency and throughput as more orders are produced.
• More flexibility is realized as fixed storage locations are not required. Items can be stored wherever space is available. Quantities and locations sent back to the server are available to all users.
• Employee training is reduced since the wireless devices pickers are using tells them where to find the needed items and quantity to pick.
• Real-time, on-hand inventory is available to all users, both on-site and remote. This data can also be made available to consumers. This allows users interacting with the ecosystem to know the status of available products which results in more accurate decision-making.
• Inventory data can be entered more rapidly and with fewer errors.

WMS and Business Functions in the Warehouse

There are multiple business functions within the WMS that can be broken down into separate tasks.

1- Receiving

In terms of WMS best practices, it all starts with receiving an item and verifying its style and quality. The modern WMS scans the incoming bar code and prints labels with SKU and other relevant information, such as vendor name, order number, etc.

Optimal WMS performance will:

• View the details of single receipts or multiple receipts from the same vendor.
• Assign storage locations based on inventory or bin characteristics.
• Create a matching purchase order for items ordered without a PO.
• Receive similar items against multiple POs.

It’s critical to work with your suppliers to assure that you are receiving the necessary data to fully leverage the benefits of the modern WMS.

2- Slotting

Slotting determines where items are stored and distance needed to travel for SKU retrieval. Multiple strategies are engaged to ensure optimal slotting:

• By velocity – Put high volume items closest to the shipping dock.
• By velocity with bulk picking – Put high volume, small items in the same area close to shipping.
• By fit – Maximize the use of cubic space.

Careful analysis is required to ensure that SKUs are delivered in the most efficient, least time-consuming fashion.

3- Putaway

Three major choices are made in putaway and each has its pros and cons.

• Unload an entire trailer/container and move to the same location.
• Unload the trailer/container and sort the boxes by item to put away like items together.
• Unload items and move directly to their storage location.

The correct choice depends on quantity and how soon the material is needed. Analyze the variables and implement a strategy that minimizes double handling, long travel distances and other wasted effort.

4- Picking

Strategies for picking are split into four major categories, each with its own advantages:

• Fixed Location Picking – Material handlers are shown the items to be picked on a mobile device, including their storage location.
• Batch Picking – Items are consolidated to minimize total travel time or to assure the likelihood that all items for a shipment will be picked together.
• Zone Picking – Material handlers are assigned to warehouse zones. They are assigned items to pick simultaneously for a given order from each zone. Items are delivered to an assigned area for consolidation and packaging. For large warehouses, this approach can significantly reduce the time to pick an individual order.
• Wave Picking – A combination of zone and batch picking, wave picking works best for operations that have many SKUs and many picks for a given order.

For members of the ERP project team, an important design consideration is that the layout of the warehouse and the software support the chosen strategy.

5- Cycle counting

The warehouse management software fulfills a vital function in organizing and assigning cycle count tasks. ERP systems enable a cycle count program to be defined in the most advantageous method: daily, weekly or some other defined frequency.

Categorizing inventory and cycle counting allows a company to determine that high cost and/or high-volume items are counted more frequently than items that can be easily replaced on short notice. This approach helps minimize lost time as employees look for items in multiple locations.

Mobile devices capture counts in real-time which can be uploaded to the ERP system for analysis. Modern ERP systems can hold transactions in abeyance during cycle count activities and process after the counts are completed.

As the cycle counting process matures, annual physical inventories can frequently be eliminated.

6- Kitting and Subassembly

It sometimes is most efficient to create a subassembly area which could include light assembly and packaging prior to shipment. Specific locations can be configured in the WMS so that material handlers can be directed to deliver items accordingly.

Most WMS solutions include some type of labor management module which tracks labor efficiency and captures the data for reporting and analysis.

WMS Best Practices for True Transformation

Transforming the WMS process is part of business process improvement. It requires identifying waste in the current system and inefficiencies that are caused by poor processes or obsolete technology.

Read the white paper entitled “Getting Maximum Value from Your Warehouse Management System.” You’ll see that the ideal planning process includes determining the desired future state as well as identifying weaknesses in the current state of the operation.

When this proven approach to WMS best practices, transformation of this key function follows – as does business performance improvement.   Contact the Ultra team to learn more.