Improving Warehouse Productivity Without Resorting to Tier 1 TechnologyWithout Resorting to Tier 1 Technology
What is “Tier 1” Technology?
The term “Tier 1” is frequently used, but is a gross over‐simplificationgross over‐simplification
Conjures up images of “expensive” technology
“Overkill”
“The Cadillac”
Often used in context of WMS vendors
| 2Image source: General Motors
Tier 1 Technology Isn’t Bad
For many large, complex operations, the only path tooperations, the only path to supply chain improvement involves making a large capital investmentinvestment
Many of the technologies which we consider “Tier 1” have been th i d l i ttithe pioneers – developing cutting edge technology that improves efficiency
This technology then get adapted and trickles down to mid‐tier providers over time
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An Alternate Title for our Presentation…
"How can I improve myHow can I improve my warehousing problems without a major capital j p
investment?“
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But how?
Isn’t this asking to get something for nothing?something for nothing?
No.
There are two basic ideas which are under‐exploited by many enterprises today:1 Leveraging new advances in1. Leveraging new advances in
technology which they may not be aware of
2 Sharpening the saw stepping2. Sharpening the saw – stepping back and making fundamental process changes to improve the operation
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the operation
Common Challenges
Whether their capital budget is 5 figures or 8 figuresis 5 figures or 8 figures, companies face the same basic set of challenges:– Reduce labor costs
– Improve accuracy
– Improve space utilizationp p
Secondary challenges:– Meet regulatory compliance
mandatesmandates
– Meet retail compliance mandates
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No Shortage of Solutions…
There are countless solutions available to address these challengeschallenges…
Conveyor‐based pick modules Pick‐to‐Light Systems SpeechWMS Conveyor based pick modules Pick to Light SystemsWMS
Carousels AS/RS Robotic Handling Warehouse Control Software
| 7Image sources, clockwise from top left: Intermec, Abel‐Womack Integrated Handling Solutions, Lightning Pick,
Voxware, Remstar, Diamond Phoenix, TGW Ermanco, Kiva Systems, FORTE Industries
/ obot c a d g(WCS)
Process‐Centric Approach
Rather than jumping immediately to technology let’s look at several strategies totechnology, let s look at several strategies to address these challenges…A. Pick more efficiently
ff lB. Put‐away more efficiently
C. Pack and ship more efficiently
D. Reduce walking
E. Improve labor productivity
F. Improve accuracy
G Improve space utilizationG. Improve space utilization
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Process‐Centric Approach
Each strategy has a set of execution tactics…1 Cluster picking 16 Pick restriction1. Cluster picking2. "Tandem" picking3. Receiving staging by zone4. Clustered put‐away 5 P b bl i
16. Pick restriction 17. Large quantity override 18. Min/max replenishment19. Demand‐based replenishment 20 Sl h h5. Put‐away by movable unit
6. Implement specialized packing processes
7. Pre‐manifesting 8 D i l b l li i
20. Slot the warehouse more effectively
21. Basic productivity tracking22. Advanced productivity tracking23 T k i l i8. Dynamic label application
9. Cartonization 10. Palletization11. Seal cases more quickly
23. Task interleaving 24. Pick confirmation 25. Cycle counting26. Track product by lot #
12. Weight‐based accuracy confirmation
13. Create a forward pick area14. Two‐tier bin system
27. Pick product by lot #28. Track serial numbers29. Track country of origin30. High density storage
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15. SKU Mirroringg y g
Focus on Mid‐Tier WMS
Mid‐Tier WMS has been in use for at least 15in use for at least 15 years
Generally, mid‐tier means a more limitedmeans a more limited set of functionality for a lower priceOft id ti WMS Often, mid‐tier WMS systems had some key gaps which made them
i l fnot practical for many users with special requirements
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The SaaS Model
In the last 5 years, the Software‐as‐a‐Service (SaaS) model has become
l f d l i WMSa popular means of deploying WMS With the SaaS model, the software
vendor hosts the WMS application on their own server and deploys iton their own server and deploys it via a web connection
True SaaS is multi‐tenant: multiple users are on the same instance of the software
Customers do not pay an up‐front license fee – just a monthly usage feefee
Upgrading and remaining on the current version of the software is much easier
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much easier
What are the TRUE Capabilities?
Commonwealth Supply Chain Advisors conducted a surveyAdvisors conducted a survey of three of the top mid‐Tier WMs providers to assess the
h h f lextent to which functionality gaps have been plugged in recent yearsy
Two providers offer only SaaS‐based WMS
The third offers both traditional, licensed WMS and a SaaS WMS
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What are the TRUE Capabilities?
We created a list of 30 functionality points which have traditionally been challenging for mid‐tier WMS providers
Challenges Strategies Tactics Enabling Technology
Level of support from Mid‐Tier WMS
Cluster picking ‐ pick multiple orders at the same time and put them in discrete containers by order
WMS 3
WMS 2Double‐length electric pallet
jacksn/a
Pick more efficiently "Tandem" picking ‐ when case picking, two different orders can be picked at the same
time utilizing a double‐length electric pallet jackg g pto address
We asked each vendor to indicate whether this functionality was:– Standard Functionality
jTugger vehicles n/a
Receiving staging by zone ‐ at receiving, direct that inbound product be staged on a pre‐defined movable units based upon it’s destination zone
WMS 1
Clustered put‐away ‐ allow multiple SKUs to be put away in the same trip through the warehouse in a logical pick path
WMS 2
Put‐away by movable unit ‐ allow multiple SKUs to be placed on a license plated movable unit; allow the movable unit license plate to be scanned once at put‐away, and direct put‐away of all SKUs on that movable unit in a logical pick‐path
WMS 2
Implement specialized packing process Process change n/aPre‐manifesting ‐ Calculate weight and quantity of all the multi‐SKU pallets on an order before picking
WMS 3
Dynamic label application: Apply a retail‐compliuant label to cases at time of picking with scan confirmation
WMS 2
Put‐away more
efficiently
– Standard Functionality– Configurable Functionality– Customization Required– Not Available CurrentlyW l k d b l
Cartonization ‐ determine the optimal size shipping container based on the cube and longest dimension of the items which are to be picked for an order
WMS 2
Palletization ‐ prior to case picking, determine the number of cases to be picked to each pallet based on cube
WMS 1
Tape dispensers n/aCase sealer n/a
Weight‐based accuracy confirmation ‐ weight a carton or a pallet and compare it to a database of the actual weights ‐ verify if the carton or pallet is within tolerance
WMS 1
Create a forward pick area n/aTwo‐tier bin system ‐ the same SKU can exist in two different bins in the distribution center
WMS 3
SKU Mirroring ‐ the same SKU can exist in two different bins in the same ZONE WMS 3Pick restriction ‐ the system can limit picking only to bins designated as "forward pick
WMS 3
Reduce labor costs
Pack and ship more
efficiently
Seal cases more quickly
We also asked about actual usage amongst their client base. Was the functionality:– Currently in‐use with referenceable clients
bins"WMS 3
Large quantity override ‐ if a single pick exceed x quantity and will drastically deplete the forward pick area, the system will direct the pick to be made from the overstock bin
WMS 2
Min/max replenishment ‐ replenish to a bin if the quantity falls below a pre‐set minimum level
WMS 3
Demand‐based replenishment ‐ proactively replenish to a bin if known demand for the item will exceed the quantity in the bin, EVEN IF the bin is not currently below it’s minimum stocking level
WMS 1
Slotting software n/aSlotting spreadsheet n/a
WMS 2Labor management software n/a
Reduce walking
Basic Productivity Tracking: Track lines picked per hour by worker regardless of pick type
Slot the warehouse more effectively
– Available but not currently in use– Not available
The vendors responded on the condition that they not be identified by name in
WMS 2
Labor management software n/a
WMS 1
Labor management software n/aPick confirmation ‐ confirm that the correct product was picked based on a bar‐code scan of the item or bin
WMS 3
Cycle counting ‐ allow incremental cycle counting in lieu of physical inventory WMS 3Track product by lot # WMS 3Pick product by lot # WMS 3Track serial numbers WMS 3Track country of origin WMS 3
Improve labor productivity
Improve accuracy
Accuracy is poor
Advanced Productivity Tracking: Track lines picked per hour by worker by pick type (i.e. distinguish between piece picks, case picks, pallet picks)
Task interleaving ‐ combined put‐away/picking cycles ‐ when full pallet is put‐away, search for full pallet picks which need to occur in proximity to the put‐away bin and place this pick as the next task in queue
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that they not be identified by name in this presentation
Track country of origin WMS 3Push back rack n/a
Double deep rack n/aVery narrow aisle (VNA)
storagen/a
Mobile storage rack n/a
Improve space utilization
The DC is out of space Improve storage density
The Rating System
Three levels…
Level: 3 Generally available
Level: 2 Available but often
Level: 1 If available at allGenerally available
with minimal customization required
In use by at least some referenceable
Available but often with some customization required
Might not be currently in use by
If available at all, customization is required
Might not be currently in use by any companies
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some referenceablecompanies
currently in use by any companies
any companies
The Tactics…
1. Cluster picking2 "Tandem" picking
16. Pick restriction 17 Large quantity override2. Tandem picking
3. Receiving staging by zone4. Clustered put‐away 5. Put‐away by movable unit6 Implement specialized packing
17. Large quantity override 18. Min/max replenishment19. Demand‐based replenishment 20. Slot the warehouse more
effectively6. Implement specialized packing processes
7. Pre‐manifesting 8. Dynamic label application9 Cartonization
effectively21. Basic productivity tracking22. Advanced productivity tracking23. Task interleaving 24 Pick confirmation9. Cartonization
10. Palletization11. Seal cases more quickly12. Weight‐based accuracy
confirmation
24. Pick confirmation 25. Cycle counting26. Track product by lot #27. Pick product by lot #
k l bconfirmation13. Create a forward pick area14. Two‐tier bin system 15. SKU Mirroring
28. Track serial numbers29. Track country of origin30. High density storage
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1. Cluster picking
Definition: pick multiple orders at the same time and put them in discrete containers by
WMS Availability Assessmenttime and put them in discrete containers by
order
Level: 3 Generally available
with minimal customization required
In use by at least
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use by at eastsome referenceablecompanies
2. "Tandem" picking
Definition: when case picking, two different orders can be picked at the same time
WMS Availability Assessmentorders can be picked at the same time
utilizing a double‐length electric pallet jack or tugger vehicle
Level: 2 Available but often
with some customization required
Might not be
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Might not be currently in use by any companies
Deep Dive: Pick Methodologies
Which style of picking is best?
Discrete Order Picking Cluster Picking Batch Picking
Zone Pick: Pick & Pass Zone Pick: Pick & Consolidate
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Deep Dive: Pick Methodologies
• Pro’s:– Simple for operators– Less error prone– Little/no technology requiredMay be the only practical method to
Discrete Order – May be the only practical method to pick very high‐cube items
• Con’sPicking
– Very high levels of walking– Operators return to home‐base after each order is pickedeach order is picked
– Each order requires a trip through the entire warehouse
Deep Dive: Pick Methodologies
• Pro’s:– Dramatically reduces walkingDramatically reduces walking– Possible to do on a limited scale
without a high degree of technology– Each order is only touched onceCluster Each order is only touched once– Orders are ready‐to‐ship as soon as
picking is done• Con’s
Cluster
PickingCon s– Hard to pick a large group of orders
without real‐time instructions– Orders may travel significant distances y g
without any picks being performed– Travel distances are excessive in large
warehouses with many SKUs– Increased likelihood of errors
Deep Dive: Pick Methodologies
• Pro’s:– Reduces walking in larger distribution g g
centers– Each order can only be routed to zones
where there are picksp– Orders are ready‐to‐ship as soon as
picking is done
• Con’s
Zone Pick: Pick & Pass Con s
– Almost impossible to manage without real‐time warehousingZ ti l b d ith– Zone routing can only be done with complex conveyor systems
– All of the SKU’s in the order travel thro gh the entire DCthrough the entire DC
Deep Dive: Pick Methodologies
• Pro’s:– Reduces overall travel distances for the
SKU’s in the order– Well‐suited for orders with diverse sizes
and shapes of SKU’sZone Pick: Pick p– Well‐suited for mixing case and piece
picking on the same order
• Con’s
& ConsolidateCon s– Very complex for software to manage
consolidation processR i l b d t t– Requires labor downstream to consolidate orders
– Requires space to buffer product
Deep Dive: Pick Methodologies
• Pro’s:– Well suited for instances where the
same SKU appears on a large number of orders
– Well suited for single line single pieceB h Pi ki Well suited for single line, single piece orders
• Con’s
Batch Picking
– Only suits a limited order profile
– Requires additional downstream handlinghandling
– Can be complex to execute
3. Receiving staging by zone
Definition: at receiving, direct that inbound product be staged on a pre‐defined
WMS Availability Assessmentproduct be staged on a pre‐defined
movable unit based upon it’s destination zone
Level: 1
Inbound
Zone 1 Zone 2 Zone 3 If available at all,
customization is required
Might not be currently in use by
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currently in use by any companies
4. Clustered put‐away
Definition: allow multiple SKUs to be put away in the same trip through the
WMS Availability Assessmentaway in the same trip through the
warehouse in a logical pick path
Level: 2 Available but
often with some customization requiredMi ht t b
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Might not be currently in use by any companies
5. Put‐away by movable unit
Definition: allow multiple SKUs to be placed on a license plated movable unit; allow the
WMS Availability Assessmenton a license plated movable unit; allow the
movable unit license plate to be scanned once at put‐away, and direct put‐away of all
h bl i i l i l i kSKUs on that movable unit in a logical pick‐path
Level: 2MU #
T‐745 Available but often
with some customization required
Might not be
T 745
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g t ot becurrently in use by any companiesZone 1
6. Implement specialized packing process
Definition: separate the less skilled packing functions from the more skilled manifestingfunctions from the more skilled manifesting functions
10‐step process
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7. Pre‐shipping
Definition: Calculate weight and quantity of all the multi‐SKU pallets on an order before
WMS Availability Assessmentall the multi‐SKU pallets on an order before
picking
Level: 3 Generally available
with minimal customization required
In use by at least
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use by at eastsome referenceablecompanies
8. Dynamic label application
Definition: Apply a retail‐compliant (or other) label to cases at time of picking with
WMS Availability Assessmentother) label to cases at time of picking with
scan confirmation
Case label
Level: 2 Available but often
with some customization required
Might not be
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g t ot becurrently in use by any companies
9. Cartonization
Definition: determine the optimal size shipping container based on the cube and
WMS Availability Assessmentshipping container based on the cube and
longest dimension of the items which are to be picked for an order
Level: 2 Available but often
with some customization required
Might not be
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g t ot becurrently in use by any companies
Image source: Tetris
10. Palletization
Definition: prior to case picking, determine the number of cases to be picked to each
WMS Availability Assessmentthe number of cases to be picked to each
pallet based on cube
Level: 1 If available at all,
customization is required
Might not be currently in use by
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currently in use by any companies
11. Seal cases more quickly
Definition: speed up the case sealing process without adding excess laborprocess without adding excess labor
| 33Image sources: Betterpack, 3M
12. Weight‐based accuracy confirmation
Definition: weigh a carton or a pallet and compare it to a database of the actual
WMS Availability Assessmentcompare it to a database of the actual
weights ‐ verify if the carton or pallet is within tolerance
Level: 1 If available at all,
customization is required
Might not be currently in use by
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currently in use by any companies
13. Create a forward pick area
Definition: stock a smaller supply of many SKUs in a high‐density area of theSKUs in a high‐density area of the warehouse
8 SKUs stored on 8 pallets = 32 walking feet
vs.
Smaller supply of the same 8 SKUs stored in carton flow
rack
8 SKUS = 8 walking feet*
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8 SKUS 8 walking feet
*(Can be increased to 32 SKUs per walking foot)
13. Create a forward pick area
Storage mediums include:carton flow– carton flow
– static shelving
Image source: Borroughs Corporation, Frazier Industrial Company | 36
14. Two‐tier bin system
Definition: the same SKU can exist in two different bins in the distribution center
WMS Availability Assessmentdifferent bins in the distribution center
OverstockOverstock
Level: 3 G ll il bl Generally available
with minimal customization required
In use by at least
Forward pick
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some referenceablecompanies
15. SKU Mirroring
Definition: the same SKU can exist in two different bins in the same ZONE
WMS Availability Assessmentdifferent bins in the same ZONE
OverstockOverstock
Level: 3 Generally available
with minimal customization required
In use by at least
Forward pick
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use by at eastsome referenceablecompanies
16. Pick restriction
Definition: the system can limit picking only to bins designated as "forward pick bins"
WMS Availability Assessmentto bins designated as forward pick bins
OverstockOverstock
Level: 3 Generally available
with minimal customization required
In use by at least
Forward pick
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use by at eastsome referenceablecompanies
17. Large quantity override
WMS Availability Assessment
Definition: if a single pick exceeds x quantity and will drastically deplete the forward pickand will drastically deplete the forward pick area, the system will direct the pick to be made from the overstock bin
Level: 2 Available but often
with some customization required
Might not be
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g t ot becurrently in use by any companies
18. Min/max replenishment
Definition: replenish to a bin if the quantity falls below a pre‐set minimum level
WMS Availability Assessmentfalls below a pre‐set minimum level
Level: 3 Generally available
with minimal customization required
In use by at least
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use by at eastsome referenceablecompanies
19. Demand‐based replenishment
Definition: proactively replenish to a bin if known demand for the item will exceed the
WMS Availability Assessmentknown demand for the item will exceed the
quantity in the bin, EVEN IF the bin is not currently below it’s minimum stocking level
Level: 1 If available at all,
customization is required
Might not be currently in use by
i
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any companies
20. Slot the warehouse more effectively
3 Methods of Slotting:– Level 1: Determine the correct
Slotting Tools:Spreadsheet tools
STORAGE MEDIUM– Level 2: Determine the correct BIN
#l l
– Spreadsheet tools
– Specialty slotting software
– Level 3: Dynamic slotting
Factors influencing slotting methodology:– Demand volatility– Product lifecycle– # of new product introductions
per yearper year– Stackability requirements– Segregation rules– Family grouping rules
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– Family grouping rules
Image source: Rubic’s
How to slot with a spreadsheet…
Create Item Master– SKUSKU– Description– Length– Width
Item Master
Width– Height– Overall cube
Conveyabiility
SKU Description Current Location Overall Cube
Qty. on Hand, 2008
Non‐Conveyable?
– Conveyabiility– Pack size info
Determine Current Quantity on H d
TG511A1000 THERMOSTAT GUARD 05050C0601 176.83 N 189SC16124 16X12X4 SCREW COVE10040E0101 835.52 N 46HGM‐SZ SINGLE ZONE REFRIGE 08010D0202 5,751.18 N 14AT150F1022 50VA TRANS 120/208/ 08010E0101 76.62 N 197
Hand Determine rationalization
strategy for current QOH
220B BRASS FLOW SENSOR 07010B0601 444.35 N 47RIB2401B SPDT POWER RELAY 2403070B0601 73.32 N 306UCP‐422‐43 MA/PSI XDUCER W/PS07020E0601 193.69 N 124T‐PB202‐0 24VAC POWER SOURC03040B0601 161.76 N 180
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How to slot with a spreadsheet…
Define variables:Velocity Variables– Velocity Variables
– Growth Rate Variables
– Bin Variables, Primary Pick Area
– Bin Variables, Overstock
– Tote Variables
– Current Storage Capacityg p y
– Current Bin Box Used by Client
– Pallet Rack Bays Available
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How to slot with a spreadsheet…
Establish multiple replenishment intervalsreplenishment intervals…
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How to slot with a spreadsheet…
Create storage medium rules
Calculate theoretical qty on hand Calculate theoretical qty on hand
Rationalize against actual qty on hand
Determine optimal storage medium
Summarize results:Summarize results:– # of units of each storage medium
required
– “walk‐back” bays requiredwalk back bays required
– Impact of various replenishment intervals
– Changes over time
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Changes over time
21. Basic Productivity Tracking
Definition: Track lines picked per hour by worker regardless of pick type
WMS Availability Assessment
worker regardless of pick type
Level: 2 Available but often with Available but often with
some customization required
Might not be currently in use by any companies
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22. Advanced Productivity Tracking
Definition: Track lines picked per hour by worker by pick type (i e distinguish
WMS Availability Assessmentworker by pick type (i.e. distinguish
between piece picks, case picks, pallet picks)
Level: 2 Available but often
with some customization required
Might not be
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g t ot becurrently in use by any companies
23. Task interleaving
Definition: combined put‐away/picking cycles ‐ when full
WMS Availability Assessmentcyc es e u
pallet is put‐away, search for full pallet picks which need to occur in proximity to the put‐away bin and
3. Pick outbound pallet
2. Put‐away
inbound palletthe put‐away bin and
place this pick as the next task in queue
Level: 11. Pickup inbound pallet 4 Stage
If available at all, customization is required
Might not be currently in use by
pallet 4. Stage outbound pallet
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currently in use by any companies
24. Pick confirmation
Definition: using some form of automatic data capture technology to confirm that the
WMS Availability Assessmentdata capture technology to confirm that the
correct item was picked (at the time of pick)
Level: 3 Generally available Generally available
with minimal customization required
b l
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In use by at least some referenceablecompanies
25. Cycle counting
Definition: counting portions of the inventory each day to ensure bin and item‐
WMS Availability Assessmentinventory each day to ensure bin and item‐
level accuracy
Level: 3 Generally available
with minimal customization required
In use by at least
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use by at eastsome referenceablecompanies
26. Track product by lot #
WMS Availability Assessment
Level: 3 Generally available
with minimal customization required
In use by at least
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use by at eastsome referenceablecompanies
27. Pick product by lot
WMS Availability Assessment
Level: 3 Generally available
with minimal customization required
In use by at least
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use by at eastsome referenceablecompanies
28. Track serial numbers
WMS Availability Assessment
Level: 3 Generally available
with minimal customization required
In use by at least some referenceablecompanies
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companies
29. Track country of origin
WMS Availability Assessment
Level: 3 Generally available
with minimal customization required
In use by at least
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use by at eastsome referenceablecompanies
30. Improve storage density
D bl d t3 Under‐Utilized Storage
Double‐deep storage Systems…
Mobile storage rack
Push‐back rack
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On‐Demand WMS: What does it cost?
Cost estimates…– Vendor #1
• Ongoing monthly cost: Averages $3,000‐$4,500 per month, but could be as much as $6,000.
• Implementation cost estimate: $20,000 ‐ $40,000– Vendor #2
• Ongoing monthly cost: Averages $1,700 – 2,500per month• Implementation cost estimate: $4,000 (editorial note: Commonwealth feels
this is a significant under‐estimate)– Vendor #3Vendor #3
• Ongoing monthly cost: $0• Implementation cost estimate: Under $100,000 for license and
implementation for a moderate‐complexity project
Hardware: The above prices do not include: Hardware: The above prices do not include:• Installation of wireless network in the DC• Handheld computers• Bar‐code printers
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WMS: Keys to success
Don’t rush it!Allow 12 18 months for selection and implementation– Allow 12 – 18 months for selection and implementation
Evaluate all the options (even Tier 1!)
Document EVERYTHING about the current state– Al normal processes
– All exceptions
T t th hl Test thoroughly
Train
Assign ownership Assign ownership
Ensure visibility & reporting exist
Conduct an honest readiness assessment
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18 Steps to Success
Strategy Solution Selection
Execution Management
WMS VendorDistribution WMS
V
WMS Vendor Selection
RFI: Determine Vendor Pool
Optimization
Detailed Discovery with Data Analysis
Implementation
Functional Alignment
is
Round 2: Scripted
Round 1: RFP (Written Bids)
Define Current State
Design Future Test
Build
io
pDemos
Round 3: Site Visits
gState
Project Future Savings
Test
Train
n Negotiation & Selection
Estimate Implementation Costs
Build Business Case
Convert
Go‐Live
| 61Optimize
In Summary…
Improved distribution efficiency IS within reach, providing a company is willing to make at least SOME investment incompany is willing to make at least SOME investment in processes or technology
Savvy companies who conduct a thorough evaluation of technology can often find that improvement is not as expensive as they thought
Don’t rush the process take the time required to design the Don t rush the process – take the time required to design the solution correctly the first time.
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