hues enterprise consultants gloco warehouse integration proposal presented by: stephen martino ella...

HUES Enterprise Consultants

GLOCO Warehouse Integration Proposal

Presented by:

Stephen MartinoElla BuitragoAlex Yermilov Bryan Kilpatrick


GLOCO Warehouse Integration Proposal • Business Case and Proposed Solution – Steve• Order Fulfillment Inefficiencies As-is & Resolution To-be – Ella• Inventory Replenishment Inefficiencies As-is & Resolution To-be – Ella• Business Benefit Justification – Bryan• Financial & Success Metrics – Bryan• Short Video

Technical Specification and Prototype• Automated Material Handling Decision – Steve• Order Fulfillment Data Flow – Steve• GLOCO WMS-MHS Solution Demonstration – Alexey

Implementation Plan• Project Timeline and Governance - Bryan• Business Process Redesign - Steve• Hardware & Software Design – Steve/Alexey• Non-Functional Components - Alexey• User Enablement and Training - Ella• Risk Management - Ella• Success Metrics - Bryan

Questions

Agenda


HUES Proposed Solution


GLOCO Warehouse Integration ProposalBusiness Case

Business Problem:• Inefficient Use of Employee Labor (70% Warehouse Walking)• Order Fulfillment Inefficiency (Single Order Picking)• Inaccurate Order Fulfillment (95% Order Fulfillment Accuracy)• Sub-Standard Inventory Control (Customer Dissatisfaction/lost sales)

Team ONE is recommending an Automated Material Handling System that solves GLOCO’s inefficient order fulfillment and inventory replenishment processes, resulting in reduced operating and capital expenses and will realize $12.3 million dollars of additional revenue for GLOCO.


GLOCO’s Inefficient Order Fulfillment ProcessPerson To Goods – As-Is

55 Minutes Total


GLOCO’s Automated Order Fulfillment System – Goods To Person – To-Be

22 Minutes Total


GLOCO’s Inefficient Inventory Replenishment System - As-is

130 Minutes Total


GLOCO’s Automated Inventory Replenishment System – To-be

25 Minutes Total


Business Benefit JustificationCustomer Order Fulfillment - Automation Business Benefits:

• Customer order processing will increase by 4x.

• Decrease average order-to-ship time by 1 day.

• Customer satisfaction will improve with GLOCO’s fast order-to-ship times.

• The profit margin per customer order will increase by 2% as a result of a higher fulfillment rate.

• The Material Handling System will cut the order fulfillment time by 5 minutes per order.

• New automation will reduce employee payroll by 60%.

• New efficiencies with the automated fulfillment system will eliminate capital designated for new warehouse construction.


Business Benefit JustificationInventory Replenishment - Automation Business Benefits for GLOCO:

• Customer Sales revenue will increase though improved In-Stock Inventory accuracy.

• A 5.4% increase in cash flow will be realized as a result of improving inventory management. • Inventory will be replenished faster resulting in reduced out-of-stock items by 5%.


Financial MetricsWarehouse Capital and Operating Summary

Capital Expenditures & Operating Costs 3 Year Comparison

Description QTY Yearly Cost 3 Year Total Old System

3 Year Total Automated System

Warehouse employees payroll (Total Number of employees)

100/40

$4,000,000/ $1,600,000

$12,000,000 $4,800,000

Land Purchase/Lease –Each Site 2 $1,000,000 $2,000,000 $0 New Construction / Each Warehouse 2 $1,000,000 $2,000,000 $0 Warehouse Operating Equipment 2 $500,000 $1,000,000 $2,025,000 Operating Expenses less Labor – Each Warehouse

2 $133,333 $800,000 $1,858,500

Total Warehouse Expenditures $17,800,000 $8,683,500

Total Operating Savings Old System New System

* Old warehouse yearly operating costs = $12,800,000

Savings of

$9,116,500

over 3 Years


Financial MetricsFINAL Capital, Operating and Revenue Benefits

Description Estimated Benefits

Total Capital & Operating Costs Savings (3 Year) - $9,116,500 Total Revenue Benefits (3 Year) $3,204,730

Total realized financial benefit from new solution $12,321,230


Success MetricsGLOCO Metrics GLOCO Goals

Increased Revenue Customer order processing will increase by 4 times.

Increased Revenue Increase order fulfillment accuracy from 94% to 99.9%.

Improved Customer Experience Decrease average order-to-ship time by 1 day.

Cash Flow Increase GLOCO’s cash flow by 5.4%.

Inventory Accuracy Increase the inventory accuracy from 94% to 99.9%.

Order Fulfillment Picking Rates Increase GLOCO’s Order Fulfillment rate by 5.4%.


Video if time permits: Kiva Systems

http://www.youtube.com/watch?feature=player_embedded&v=lWsMdN7HMuA


Technical Specification and Prototype


• Automated Material Handling Decision – Steve

• Order Fulfillment Data Flow - Steve

• GLOCO WMS-MHS Solution Demonstration – Alexey

Agenda


After an extensive RFP process of Automated Material Handling Systems (MHS) and in-depth

analysis of GLOCO’s order fulfillment and inventory replenishment business requirements,

GLOCO and HUES Enterprise Consultants have chosen Kiva Systems as its Automated MHS.

GLOCO’s Automated Material Handling System Decision

18

Customer Places Order on GLOCO Order

Fulfillment Web Portal

GLOCO Order Fulfillment Technology & Data Flow

01

Customer OrderStored on Amazon

Simple Storage Service

Amazon Messaging Service Alerts GLOCO ERP Of New Customer

Order

GLOCO ERP REST ScriptRetrieves

GLOCO XML Order

GLOCO ERP SoftwareUpdates

ERP Databases

GLOCO ERP SoftwareUpdates

WMS Module DatabasesGLOCO WMS Module Software Updates Kiva

MHS Databases

GLOCO ERP must be able to save the Customer’s order form (Web interface and API).

Required Functionality

MHS must be able to import and periodically update by request from ERP/WMS core data GLOCO ERP modules must support the import of XML documents by request.MHS should start to process new orders less than 30 sec after notification. MHS must notify WMS/ERP about order completion/inventory/shipping changes/events

Robots begin the picking process.

Kiva MHS Updates GLOCO WMS Module &

ERP Databases

Customer Order Event Message Sent To

Amazon Messaging Service

19HUES Enterprise Consultants

GLOCO WMS-MHS Solution Demonstrationhttp://hues.gloco.ermilov.com

http://hues.gloco.ermilov.com/


Implementation Plan

21

Complete Project Timeline

GO LIVE!10/4/2013

20 Weeks

22HUES Enterprise Consultants 22

Project Governance: Communications Dashboard

23HUES Enterprise Consultants

Project Team


Stakeholders

HUES Enterprise Consultants 25

Business Process RedesignManual Process Automated Process

Customer Order Entry Customer Order Entry Web Portal

Sales Order Entry Sales Order Entry Web Portal (Medical Devices Only)

Inventory Replenishment Database Stock Received Automated Inventory Database Update Upon Scanning

Customer Order Items Shipped Database Updates Automated Items Shipped Database Updates

Customer Order Pick and Pack Robotic Goods To Person and Pack

Sales Order databases updated with Customer Order dataCustomer Order Data will update from the MHS to the ERP Sales Order Database automatically.

Purchase Order databases updated with vendor received data

Purchase order received data will update from the MHS to the ERP Purchase Order database automatically

Calculation of and Reporting on order lines picked Automated order lines picked report

Responsible: HUES Business Analyst


Hardware Design

Hardware Design• Design Kiva Pod Layout• Robot Pathways• 2D Bar Code Sticker Layout• Wireless Access Layout

Responsible: Hardware Architect


Software Design

Tasks

Mapping of ERP Database fields to MHS Databases

Map ERP database fields to XML Order Document | Inventory Document

ERP Scripts Designed to reflect Database Mappings

Customer Web Portal Code Updated To Output XML

Sales Web Portal Code Updated to Output XML

Update Screen Interfaces for Medical Line

Order Lines Picked and Inventory Replenish reports

Involves designing an XML formatted “Customer Order Fulfillment Document” and an “Inventory Replenishment Purchase Order Document” that map to GLOCO’s ERP Database fields

Responsible: Data and Software Architect


Hardware and Software InstallationHardware• Installation of 2D Bar Code Sticker Grid• Kiva Pods• Picking and Replenishment Stations• Wireless Infrastructure• Move Inventory to Kiva Pods

Software• Install Kiva Material Handling Software (MHS)• Import Inventory Data to MHS from ERP/WMS• Install and Test MHS <-> ERP/WMS Integration

ScriptsResponsible: Kiva Engineer Responsible: Software Architect & Engineer


User Enablement and Training

As part of the professional services engagement HUES –KIVA will be responsible for:

• Standard Operating Procedure Training• Virtual Test System Training• Software and Hardware Initial Training• Consultative services after client “Go Live” events to

validate the training effectiveness

Responsible: HUES & Kiva Trainers

30

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User Enablement and Training

The training methods included in the plan are:

• Individual hands-on instructor training • Hands-On in classroom training Web Seminar • Computer Based training • Book Based

Responsible: HUES Business Analyst & Project Manager


Supporting Non Functional Components

Background Processes Health MonitoringScripts have been implemented to synchronize XML data between ERP and Amazon S3. Amazon’s Simple Queue Service (SQS) will provide the functionality to connect Amazon services to GLOCO’s IBM Tivoli Live Monitoring Service.

Responsible: All Roles On-Call


Project Governance: Risk ManagementArea Risk Description Likelihood Impact Management Strategy

Plan and Control Project progress not monitored adequately Low High

Consistent use of the project status dashboard on a weekly basis

RequirementsSystem Requirements not correctly identified Low High

Requirement checkpoints throughout the requirement gathering phase

Organization

Change in organizational environment during the project Medium Medium

Add enough buffer time in the project plan to allow for variability of project execution

User User Resistance to Change High HighStakeholder sponsorship , user training and enablement during all phases of project plan.

CloudNetwork Connectivity to AWS failure Low High

Specific network connectivity test will be performed during the system testing phase

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Success Metrics

GLOCO Metric GLOCO Goal

Increased Revenue 2%-3%.

Cost ReductionIncrease Order Fulfillment rate by 5.4% - realized efficiencies.

Improved Cash FlowIncrease cash flow by 5.4% - by reducing inventory on hand.

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Thank you Very Much!

Questions???

hues enterprise consultants gloco warehouse integration proposal presented by: stephen martino ella...

Documents

order fulfillment time

inaccurate order fulfillment

average order

automated fulfillment

glocos fast order

customer order processing

solution slide

minutes total slide