F. Curtis Barry & Company Blog

If you have recently implemented a new Order Management System (OMS), Enterprise Resource Planning (ERP), Warehouse Management System (WMS) or any system for that matter; are you fully utilizing the new system’s capabilities?  Companies spend large capital investments on the system as well as the time and implementation costs to install the new systems. We often see new system's functionality being underutilized.  This is true even after being live on the new system for a year or more - for a variety of reasons.  One of the best ways to assess the utilization  of the functionality for a new system is to perform a post-implementation audit.

Many warehouses can benefit from the full spectrum of bar code applications, but you should do the necessary detail cost benefit studies to determine your Return On Investment (ROI). Our recommendation is to begin with the basics and move to more advanced applications if you have the luxury and desire to use a phased in approach. 

While there are many critical issues in implementing order management systems, warehouse management systems, or eCommerce platforms; we have chosen the 7 topics which from our experience are the most important: 

More and more companies today are using third party logistics providers to avoid making investments in that non-core area, or in technology necessary for it. We’ve also seen hundreds of start up eCommerce companies that simply don’t want to be in the fulfillment business. All of these companies are turning to third party logistics providers. With so much riding on it, it is very important that as a third party logistics provider, your order management system (call center, customer service, and marketing) and warehouse management system (warehousing, order management, and fulfillment) and technology give you a continuing competitive advantage. The systems you select will have significant ramifications for your personnel’s productivity, as well as how effectively you serve your customers and help them grow their businesses—and the management information these systems provide can help you grow your business. No matter what type of system you’re considering, the purchase is a long-term investment. In short, selecting the right order management system and warehouse management system for your third party logistics business is a major undertaking.

 

How many times does this happen in your company? You go to a meeting about sales performance, and Marketing says they think sales are up 3.5%, but the merchants disagree and say sales are up 6.3%. The specific numbers in this example aren’t important; the point is that the two figures aren’t even close. That’s the reality in most companies today.

Or, say management has tasked you with developing a report and you try and go back to prior results, maybe from a season or two ago. How many different versions of the sales, purchase and inventory plans are there? Which ones are the actual and which were prior versions?

Some might say "we could do a better job of controlling and eliminating versions of plans"—which is certainly true, and something every company should work toward. Or you may say "if we use only one enterprise system we can eliminate this dilemma". But that isn’t really the solution; such order management systems aren’t viable for most companies, and anyway, there are multiple data elements that are all valid for whatever processing order management system is being used. There isn’t a “single version of the truth”—one official set of figures for sales, inventory, plan, history, etc.

Take for example a product’s inventory. You can find sales plans on a user-derived Access system or Excel spreadsheets. A product’s inventory on hand in units and dollars occurs on your order management system. A separate best-of-breed warehouse management system will also include the same product on hand, but needs to be synched up daily. The finance system will also carry the total company inventory in dollars—probably not updated real time, but daily or weekly. You may also have a specialized standalone forecasting and inventory management system, to project inventory by promotion or catalog campaign.

Additionally, because the major transaction systems require a high degree of training, management does not use them as the source for their information. Management has to go to extremes to get what they need, either by requesting that department managers pull data or by using business analysts to come up with reporting. Because these are manual efforts using sources not originally geared to management’s needs, they are delay-riddled, error prone processes. And they still don’t deliver a “single version of the truth.”

You get the picture. There simply isn’t a “single version of the truth” for the major data elements used in many businesses. For management to have confidence in the integrity of the data they’re getting, I think the time has come to advocate and budget for projects that resolve these problems. Such problems are not new, and I believe they inhibit the effective management and growth of direct businesses.

Here is a hierarchy of solutions you should consider:

• Extract data from major transaction processing systems into Excel or other reports
• Access databases, and business analysts using OLAP tools
• Data warehouse products
• Business intelligence tools with dashboards and analytics

It’s time to advocate with management for solutions to this problem. Especially in this recovering economy, knowing exactly where you stand is essential. You can only control expenses and inventory and know which products and promotions are working—and which aren’t—if you have accurate data on which everybody across the company can agree on. In our experience, companies that used business intelligence tools to overcome such information problems have been successful in getting a positive ROI from these types of systems within 12 to 18 months. And in today’s business environment, that’s a “single version of the truth” on which all companies can agree.

Today’s warehouse operations are more complex than in the past and finding skilled employees who speak and understand one language can be a challenge. Continued pressure to do more with less, forces warehouse operators to look for ways to become more productive even with these constraints.  Many are turning to voice applications to meet their goals. Voice applications are not right for every situation, but given the right parameters, it can make a significant difference to the warehouse. 

As with any decision that affects the operation, you have to have a structured evaluation approach and do your homework. You have to make sure the application fits your unique operation and that you select the right vendor. A wide variety of industries are employing some form of voice technology today in a variety of ways. 

Voice applications, especially in the voice picking area, have been around for over 20 years and recent improvements and advances have eliminated or reduced earlier concerns about voice applications. Issues concerning background noise interference, language differences, and equipment durability have all been addressed satisfactorily. 

Applications involving pallet, case, and individual unit picking operations employ voice picking technology today. Generally, it fits best where a large number of SKU’s are involved and the pick density or frequency per SKU is relatively low. It is not a good fit for every operation and is used in many warehouses in conjunction with other technologies. The most common use today is in the picking function. 

Those warehouses that have employed voice technology have achieved benefits in the area of increased productivity, improved accuracy, and employee safety. Productivity improvements in the range of 10 – 15% are not uncommon. Accuracy metrics of 99.8% and higher have been achieved. Reduced employee accidents and improved overall staff morale have been reported also. These improvements are attributed to being a paperless, hands free, real time process with a relatively short training period required. 

As with any warehouse operation change, it is necessary to find a solution that is adaptable, scalable, configurable, reliable and cost justified.  As you evaluate options, the following list of considerations should be included. 

1. Make sure your requirements are detailed and understood by the vendors. Have them visit your warehouse early in the evaluation process. Identify any potential system modifications required and their estimated cost to implement. 

2. Any demos conducted should include showing the proposed solution in operation in your warehouse. Make sure the required functions are available today in the vendors proposed solution. 

3. Investigate thoroughly the infrastructure and backbone required. Ask who will complete a site survey, if required, and at what cost. 

4. Research and resolve any issues involved with integrating the voice applications to other existing warehouse technologies. 

5. Consider any future warehouse processes that might be potential applications for voice technology and determine the vendor’s capability to support them if needed in the future. 

6. Have the vendor participate in developing the Return on Investment (ROI) calculation. Developing the cost of a warehouse error and your current productivity metrics will be critical to developing a true ROI. A very rough estimate is to consider approximately $5,000 per user for budgeting purposes only. Most operations need 10 – 15 pickers to provide an acceptable ROI. Talk with others who utilize the technology to determine what savings they experienced. 

7. Select a few key warehouse employees to assist in the demonstration of the technology. Getting early buy-in is never a bad idea. 

8.  Investigate the actual response time involved with any integration you may require with other existing applications. 

9. Since there are usually a variety of picking types used in a warehouse, determine if the vendor can support these different types of picking logic processes. 

10. Most operations will incur some type of exceptions to the normal processing. Make sure the vendor can handle these exceptions without major difficulty. 

Remember that as with any technology, the critical factor for success is the planning and evaluation stages of the process. If you do your homework and spend the time it takes to make a good decision, the application of voice technology in the warehouse can be a very beneficial one. 

If you are considering voice technology and would like an objective, vendor-independent evaluation of your operations and processes to see if voice picking is a viable option for your operations, contact Jeff Barry at 804-264-8040 or email him at jbarry@fcbco.com.

Recently we have been involved in a series of warehouse consulting assignments that all have a common theme. That theme is the investigation of the potential application of a Warehouse Management System package to their warehouse operations. This is not unusual in and of itself, but the wide range of the clients struck me in that the issues addressed by a Warehouse Management System crosses over many business types. 

This post is #3 and #4 in the continuing blog post series of mistakes that we have seen clients make before or after we are “on scene” to assist them with their order management, warehouse management, or inventory management systems projects.

If you are out searching for a warehouse management system there are lots of options depending on the complexity of your business and your budget.  One option to consider is an on demand solution or software as a service (SaaS).