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Conceptual Overview


Reduce Cost & Increase Productivity
Solution vs. System
Warehouse Management Systems


To some, a warehouse may still suggest a great cavernous facility with products sprawled on shelves that march regimentally north, south, east, and west. It bristles with workers charging about on forklifts, fulfilling the bawling orders of a “boss”, who balances a cigar in one hand and a clipboard over-laden with shipping and receiving bills in the other. Better yet, it’s by the water. In today’s world, this image is a little… hackneyed.

Warehouses are now sleek facilities that cater to businesses that need products on demand (or at least they should be). They are well ordered with containers that are bar coded, telling you what’s inside down to the size, number, and color. Radio frequency technology is utilized to tell a forklift operator where to pick up a container and where to take it.
Behind it all is a powerful Warehouse Management System (WMS), which combines leading edge computer hardware and software technology. It uses a three dimensional model to locate containers within .10 of a foot.
The WMS tracks who is doing what, when, where, and how much. It tracks the travel time of a forklift and the amount of time it takes to grab the item. Its omniscient eye takes all this information, and more, and puts it into a database that gives you real-time analysis of activities within your distribution center. While it is referred to as a Warehouse Management System, it is actually better thought of as a solution, since it integrates the multiple technologies and principle mentioned above. Taking a non-technical view of a WMS, let’s review the five related, yet autonomous components: 
RADIO FREQUENCY TECHNOLOGY – Radio frequency is another name for a wireless terminal network. It uses technology similar to that of a cellular telephone to connect your computer to user terminals. These terminals are usually of two varieties: handheld and vehicle mounted. In both cases, the terminals move about the distribution center (inside and out) while communicating with the warehouse management software. 
BARCODE TECHNOLOGY – Encrypting an identifying code into a symbol is a technology that surrounds our everyday life, the most common use being the UPC codes on consumer products. In a warehousing environment, barcode help you identify locations, items, and orders. Attaching a scanner and printer to a radio frequency terminal allows you to verify information and virtually eliminate manual data entry.
AUTOMATED TASK DISPATCHING – The WMS software keeps track of workers and tasks to be performed. By comparing the worker’s profile – what tasks can be done, in what priority, and where – with the task waiting to be executed, the dispatching software instantly assigns a new task as each is completed. There is no opportunity for workers to indiscriminately pick work assignments. The warehouse supervisors use a “scoreboard” display monitor to supervise the work in process and may re-deploy workers on a real-time basis if load leveling is required. 
LOCATOR SYSTEM – While it doesn’t require a computer, establishing rules to control the flow of people and products is often left undone or incomplete in a manual environment. A WMS incorporates the rules specific to each distribution center and enforces conformity. By defining the types of product racking, methods of put-away, replenishment and picking, the WMS efficiently controls the movement of products from receiving to shipping. 
PROCESS REENGINEERING – It is often stated, and observed, that much of the benefit of a computer system is derived from the analysis that goes into its design. If you did the research and analysis for a project, implemented the process changes, but never developed the software, a significant percent of the benefit would still be realized without the trauma of implementing new computer systems.
To make the undertaking less traumatic, call in an expert. But, be aware that the key to success is in selecting an integrator with the skill required to manage the human element as well as being able to manage the technology.
The actual installation of a WMS presents the opportunity to reduce operating expenses and improve productivity and resource utilization. It can increase sales while reducing expenses. A WMS can increase sales in several ways:
IMPROVING FILL RATE – In many distribution centers, overstock is tracked with some form of manual locator system, usually handwritten labels or cards. Too often product is lost or inaccessible during order picking. A WMS always remembers the product’s location and will dispatch bin replenishment prior to depleting inventory. 
IMPROVING ORDER QUALITY – The elimination of handwritten information and the use of scanned bard codes ensures that the correct item is shipped and the correct order quantity is recorded. 
REDUCING ORDER TURNAROUND TIME – Paperless order picking enables an immediate dispatch of work assignments. An order can move from the customer’s computer, through order processing, and into the hands of the order picker in a seamless flow of information. 
INCORPORATING UCC-128 COMPLIANCE – Compliance with UCC-128 container marking presents the opportunity to provide customers with sophisticated electronic commerce services. 
ADOPTING CONTAINER LABELING – The ability to comply with your customer’s unique requirements for carton labeling is a service that can help your organization differentiate itself from your competitors. 
REDUCING LOST INVENTORY – Warehouse Management Systems use a bar coded or RFID encoded license plate to track all pallets and/or cartons. As a result, the WMS knows at any given moment the location and disposition of your inventory. Each location in the distribution center is assigned a unique bar code to quickly direct the worker to the proper location. 
INCREASING WORKER PRODUCTIVITY – A WMS controls the dispatch of work assignments, eliminates indiscriminate picking and alleviates down-time between tasks. In addition, the WMS records statistics on worker performance to provide productivity trending reports. The adage “if you want to make something better, measure it” applies a thousand fold here. 
ELIMINATING YEAR-END PHYSICAL INVENTORIES – The WMS facilitates a cycle count process. By combining manual cycle counts with those generated and assigned by the system, year-end physical inventories may be eliminated. Once the rules have been defined, usually in conjunction with the financial auditors, the WMS controls the execution throughout the year. 
ELIMINATING PAPER – Radio frequency technology provides the immeasurable benefit of real-time information, allowing adjustments to be made accurately while the work is in process. This technology also eliminates the paper usually associated with each task. When annualized, the cost of these multi-part custom forms are considerable – not to mention the cost of document storage and retrieval. 

The benefits of a WMS are apparent. However, business owners and managers often assume a conservative course – especially when integrating new technologies into what they view as tried and true systems. It is this conservative posture that may provide them the “temple of doom” perspective when it comes to their distribution centers. 

While you may enjoy incremental growth and perceive stability within you operation, your competitors are out there positioning themselves for quantum sales leaps and significant increases in market share.