Supply Chain Execution Systems

Warehouse Management Systems

Lecture Resource

Adapted with permission from presentations by John Hill, 2002, 2003 John M. Hill, ESYNC

Supply Chain Execution Systems (SCES)

Manage inventory, space, material handling

equipment, labor, and transportation resources
in real time to assure timely, error-free
fulfillment, delivery, and visibility of order status
throughout the supply chain
Matching material and information flow

SCES Impact Areas

Fulfillment
Delivery
Visibility
Responsiveness

Fulfillment and Delivery

Material handling and controls

Right condition
AutoID and data collection
Right material
Supply chain execution systems
Right time
People
Necessary for all of the above

Responsiveness

The best decision making is executed on the

basis of events as or before, not after, they
occur
Responsive logistics systems provide discipline
and control that is based not only upon plans
and performance goals, but also upon the
dynamics of actual operations

SCES Components

Warehouse and Labor Management

Transportation Management
Yard Management
International Trade Logistics
Supply Chain Visibility and Event Management

THE SYSTEM HIERARCHY

ENTERPRISE SYSTEM
Customers
Suppliers
Carriers

ADMIN/FINANCE MANUFACTURING
Purchasing
Order Management

EDI /
WEB

MRP
MES

PLANNING

Demand Mgmt
APS

EDI /
WEB

Enterprise Network

LABOR
MANAGEMENT

WMS

YARD
MANAGEMENT

Receiving Storage

Inventory
Mgmt

Order
Process

Picking
Replen

TMS
Staging Shipping
Loading

Lo c a l Ar e a N e t w o r k

Data Entry Devices

Customers
Suppliers
Carriers

Material Handling Device Control

Task
Mgmt

Warehouse Management Systems

Manages warehouse inventory, space,

equipment, and labor resources to direct the
flow of materials and information from receiving
and putaway to light assembly, order picking,
value-added processing and shipment

WMS History

1975: First WMS installed at J. C. Penney.

1986: First WMS installation in C on a UNIX platform.
1990s: Hundreds of new stock locator & WMS
systems; Windows NT platform emerges.
1995: MHIA WMS product section formed.
1999: First WMS company reaches annual revenues of
$100 million.
2000: Expanded suites with TMS & SCV.
Today: User-configurability & scalability remain key
differentiators.

WMS Functions

Receiving

Putaway

Blind
ASN/EDI
Conventional or Automatic
Dedicated, Random or Hybrid
Location Selection: System or Operator
Put Confirmation

Picking and Shipping

Pick by Order, Batch, Wave

Pick Confirmation
Shipping Check Lists
Manifests, Bills of Lading

WMS Differentiators

Order Planning &

Scheduling
Unit of Measure
Conversion
Location Management /
Slotting
Inventory Allocation
Shelf Life Monitoring
Lot & Serial Number
Tracking

Cartonization
Cycle Counting
Replenishment &
Consolidation
Task Assignment &
Monitoring
Reverse Logistics
Scalability & Configurability
Upgrade Support

WMS Setup

Product Files

Location Files

Descriptions
Dimensions
Units of Measure
Bills of Material
Substitutions
Numbering / Sequencing
Dimensions / Capacity

Equipment Files
Employee Files

Employee Task Prioritization

Workload Management

Equipment Profiles

Material Profiles

Location Profiles

Operator / Equipment Matrices

Operator / Task Priorities

Labor Standards

Workload Management
TASK
TASK ALLOCATION
ALLOCATION

New Tasks
2137

RFDC

9873
4532
5471

Job Completions
Work Requests

RFDC

Priority
Priority
Operator
Operator Authorizations
Authorizations
Equipment
Equipment Type
Type
Current
Current Location
Location

1234 3679

Tasks in Memory

Task Manager

source |dest | time-req

req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.
source |dest | time-req
req | load type | etc.

Work Queue

Task

RFDC Link

Material Handling Interfaces

Conveyor
Sortation
Palletizer
AGVs
Pick (Pack)-To-Light
Carousel
AS/RS

Systems Interfaces

Purchasing
Order Management
MRP / MES
Labor Standards / LMS
Load Planning
Freight Rating / TMS
Slotting

Receiving

ASNs / Purchase Order Receiving

Carrier Appointment Scheduling
Pre-Tagged Receipts
Blind (Unanticipated) Receipts
Load Tagging/Labeling
Quality Assurance
Returns

CARRIER SCHEDULING

Receiving
Operator Assigned to Receiving
Bar Coded Pallet ID (Scan or Key-Enter)
(Verify Product, Quantity & Condition)

RFDC

Stage
Crossdock
QC Move
Putaway

Key-Enter Order Number,

Product ID, Quantity &
Condition
(Pre-Printed License Plate)

WMS

Match LP to ASN or Retrieve PO

Validate Receipt
Resolve Exceptions
Check Demand
Issue Task
Update Inventory Records

RFDC

(Print & Apply LP)

Stage
Crossdock
QC Move
Putaway

Reverse Logistics
HOLIDAYS 2000
eSales:
$6 Billion
Returns:
$900 Million
Source: BizRate.com

Warehouse
Wasteland or
Competitive
Edge?

Storage and Putaway

Location Selection
Override
Location
Confirmation
Crossdocking
Relocation
Consolidation

Putaway and Move

Operator Assigned to Putaway / Move
Scan License Plate

Move to Designated Location

Scan Location Bar Code

RFDC

WMS
Destination
Storage
Crossdock
Quality
Returns
Other

Validate Location
Check

Resolve Demand
Exceptionsfor

Product
Issue Drop Instruction
-
- -Issue
- - - - - -Move
- - - - - -Task
-------- Update Inventory
Issue Next Task

RFDC

Confirm Drop
Await Next Task

Inventory Management

Lot, Date Code, and Serial Number Tracking

Shelf-Life Monitoring and Rotation

Catch Weighing

Routine and Exception Cycle Counting

Full Physicals

Replenishment

Forward Pick Locations

Floating Forward Pick
Replenishment Trigger Controls
Demand Replenishment
Batch Replenishment
Reslotting

Pick Planning

Host Download Format and Frequency

Wave and Batch Planning
Material Allocation
Order / Shipment Release
Changes and Cancellations

Picking
Operator Assigned to Picking
Ready for Next Pick Task

RFDC

Display Pick Location

Move to Location
Scan Location Bar Code

WMS
Validate Location
Issue Pick
------------------ Validate Item / Quantity
Resolve Exceptions
Update Inventory
------------------ Issue Next Pick

RFDC

Scan Item Bar Code/LP

Pick / Confirm Quantity
----------------- Await Next Pick

Staging and Shipping

Trailer Scheduling / Processing

Staging Location Management
Staged Load Confirmation
Door / Truck Verification
Shipping Labels
Manifests / Bills of Lading
Shipment Confirmation

WMS Cost Breakdown

COMPONENT

% TOTAL COST

Computer

RFDC

24

Bar Code Label Applicators

Hardware Subtotal

39

WMS License

WMS Enhancements

10

Host Interface

Other Software Licenses

Software Subtotal

28

Location Labels

WMS Installation Services

21

Project Team Costs

Implementation Subtotal

33

WMS Benefits

Potential Improvements in:

Inventory accuracy and turns

Space utilization, stock
rotation
Order, lot and serial number
tracking
Backorder handling
Crossdocking
Resource planning and
scheduling
Labor and equipment
productivity
Performance measurement
Customer service

Potential Reductions of:

Damage/Shrinkage
Lost stock
Safety stock
Search times and
deadheading
Paperwork
Human error
Physical inventory taking
Labor, equipment and utility
costs
Courier/Delivery costs
Outside warehousing

WMS Justification

Direct Labor

Pre-receiving
Receiving
Returns
Putaway
Replenishment
Pallet picking
Case/Piece picking
Value-added processing
Shipping
Overtime

Indirect Labor

Floor supervision
Expeditors
Inventory control
Training
Overtime
Other

Administration

Shipment planning
Inventory management
Traffic
Overtime
Other

WMS Justification

Other Tangible Savings

Space utilization
Transportation
Expedited delivery
Reduced paperwork
Reduced operating costs
Damage
Shrinkage
Perishable loss reduction
Storage/picking/shipping
errors
Physical inventory costs

Intangible Savings

Order cycle times

Customer service
Inventory turns
Reduced obsolescence
Lost orders
ABC facilitation
Performance measurement

WMS Benchmarking

Order Fulfillment
Inventory Management
Warehouse Productivity
Transportation Performance

Order Fulfillment Measures

On-time Delivery
Order Fill Rate
Order Accuracy
Line Accuracy
Order Cycle Time
Perfect Order Completion Percentage

Inventory Management Measures

Inventory Accuracy
Damaged Inventory
Days On Hand
Storage Utilization
Dock to Stock Time
Inventory Visibility

Warehouse Productivity Measures

Orders per Hour

Lines per Hour
Items per Hour
Cost per Order
Cost as % of Sales

Transportation Performance Measures

On-time Deliveries
Damage
Demurrage Cost Percentage
Assessorials Cost Percentage
Missed Appointments Percentage
Freight Bill Accuracy
Cost per Order
Cost as % of Sales

Creating a Responsive WMS

Use contemporary ADC technology and systems to assure

Accurate execution of receiving, storage, and move tasks

Error-free picking, replenishment, and shipping
Traceability

Provide seamless interfaces to other corporate systems to assure

Real-time visibility of inventory availability

by SKU, quantity, lot number, serial number and shelf life by location

Real-time order confirmation and status for customers

Event-driven exception handling

Facilitate a quick match of available resources to current and

expected inbound, replenishment, and outbound workload

Select the best operators and equipment for tasks based upon
proximity, skill sets and priority
Task operators to immediately store or cross-dock receipts

Creating a Responsive WMS

Support returns processing and reverse logistics

Use task interleaving to minimize deadheading
Improve order consolidation, wave planning, inventory allocation, and pick
sequencing
Identify consolidation opportunities to free space and reduce outside
storage requirements
Support bill of material, work order, and value-added processing
Update inventory records as events occur
Provide accuracy that allows replacement of full physicals with scheduled
cycle counts
Time stamp each transaction and identify the operator who performed it
Provide feedback to the workforce and support performance measurement
Measure supplier and carrier performance

WMS Trends

Further industry consolidation as well as

alliances with enterprise systems providers
Activity based costing and management
Embedded profiling tools for space use analysis
to facilitate relayout and inventory slotting
Object-oriented tool kits for requirements
modeling and WMS development