The warehouse is not a glamorous part of a distributor's business. Even the cleanest and most organized are still noisy, cold in the winter and hot in the summer. But without the warehouse team's hard work and commitment, the business will not be profitable. This is where the rubber meets the road; this is where your commitment to excellent customer service becomes a reality.
Operating at peak optimization is challenging because small problems can grow to create service gaps and ultimately hurt the bottom line when mistakes like shipping the wrong item to a customer cause rework. According to Frank Hurtte, River Heights Consulting, Davenport, Iowa, “The high cost of rework is eight-times the service cost of the original customer order.” Avoiding errors requires constant vigilance over the order fulfillment process, including double-checks before orders are packaged for outbound shipping.
As business complexities increase, so does the need for automated tools like wireless warehouse management software for reading barcodes with AIDC (automatic identification and data capture); scanners to ensure items are tracked throughout warehouse; and support logistics work-flow processes.
Product Barcode Identity
The key to monitoring product movement from the manufacturer's shipment to the delivery of the product to the distributor's customer relies on accurate barcodes that integrate with distributor ERP systems' product identity keys. Barcode schemas may use the products' UPC (universal product code) or GTIN (global trading identification number), catalog numbers or a custom identity key.
While most people are more familiar with UPC (11 or 12 digits) rather than a GTIN (14 digits), standards organization GS1-US replaced the former with the latter back in 2006. Distributors using a wireless warehouse barcode system can benefit by converting to the GTIN-14 because the extra digits represent packaging levels for that item in the manufacturer's product line (pallets, cases, boxes, cartons and individual units). However, it will be awhile before all manufacturers are populating the GTIN-14 for all of their packaging levels. While they ramp up, you may want to do the same. For more information about this, contact your data service provider: either IDEA for those using the IDW or Trade Service Corp.
Even when using the radio frequency (RF) gun to scan a GTIN-14 barcode off a manufacturer carton, the software can mask any barcode digits not used within the distributor's ERP system. Occasionally the barcode is not available and in this case, the distributor creates their own barcode, labeling the item and the slotting location if it's not a transfer to another branch.
Some barcode systems include a second identity attribute sometimes called a license plate or lot number. One benefit is for labeling products where quantities are broken down by the distributor for sale to their customers, such as wire cuts or for large items like conduit. Another benefit is when you need to know exactly which unit was sold from a box of five with the same catalog numbers or for quality oversight on in-house assembled kits.
Wireless Warehouse Management (WWM)
While “wireless warehouse management system” (WWM) has some overlap with “warehouse management system” (WMS) modules, the latter lack the barcode AIDC technology and require typing to confirm each completion, which invites errors.
WWM systems typically include several benefits:
- Real-time visibility of the inventory and the warehouse operations
- Data capture of new process data
- Better inventory accuracy (reduced errors)
- Improved task, labor and location management
Kovalsky-Carr Electric Supply Co., Inc., Rochester, NY added the Eclipse wireless warehouse management module to their Eclipse ERP system in 2003. “With real-time inventory counts and less than a 1% error rate, customer orders are shipped complete and on-time and employees get more work done with fewer mistakes,” says Jerry Turner, operations manager. “Another plus is faster training. New employees can be productive within an hour instead of two weeks of training before we felt comfortable having them pick customer orders.”
Replenishment and Picking Accuracy
Troy Bannister, regional customer service manager, Electrical Equipment Co. Inc., Raleigh, N.C., says, “We are using the TWL wireless warehouse software integrated with our SX Enterprise ERP system in our Richmond, Va., distribution center where typically warehouse staff receives their picking work instructions from their Radio Frequency (RF) guns, including the item and bin location. Data collected during daily operations provides oversight of the work load and task completions, so we have a pretty good idea when we need to hire another person to meet our customer service commitments.”
Wireless warehouse software shows picked or partially picked orders, orders waiting to be picked, orders for cross-docking, number of items picked or put-away today, bin usage, plus other variables.
Just knowing what errors occurred is not enough. Companies need systemic tools to identify contributing factors and all the better if this information is captured in real-time for same-day review. Says Electric Equipment Co.'s Bannister, “With the wireless warehouse, we can effectively track our picks and shipments along with any errors and then use root-cause analysis to identify the source of the problem and get it fixed.”
Distributors doing in-house work for OEMs may wish to use barcode scans for work-in-progress milestones to track project completions, traceability for quality control and also for recording labor and materials used during the project.
Inventory Layout Management
Inventory placement using the wireless warehouse module is based on three strategies:
- Product slotting
- Velocity per product
- Cube (dimensions)
All three strategies increase the efficiencies for warehouse staff in replenishing stock from inbound shipments or picking inventory for customer orders or transfers. Considerations for product slotting include reducing the travel time in the picker's daily route or reducing the need to bend or reach to handle frequently ordered items. Other strategies include identifying velocity for all SKUs in addition to determining the ideal cube (three dimensions) for the item or the item's package size. With these in place it will be much faster and easier to do replenishments or pick orders. Place the “A” velocity code products near the front on easy-to-reach shelves. “B” velocity code products are then placed on slightly higher shelves, or on aisles just after the “A” velocity code items. The objective is time and motion efficiency to fill customers orders as fast as possible.
It's still possible to have errors if the picker scans the right product but picks the wrong product. “To make this less likely to occur, we locate similar “A” velocity items separately,” says George Millison, V.P. of supply, Colonial Electric Supply, King of Prussia, Pa.
The wireless warehouse software recommends when shelves or bin locations need be checked due to what the program identifies as increased activity (sales) or due to embedded business rules to safeguard against mistakes or theft. Instead, rolling or cycle-count inventories are taken. These consist of a manual count of selective bins and sections to compare the count to the computer's data with no work stoppage while picking customer orders simultaneously.
“Our ASC wireless warehouse software fully integrates with our custom ERP system so we have the functionality to pick more than one order at a time while keeping the orders segregated,” say Millison. “There is enormous flexibility for storage capacity and cross-docking products more efficiently in the warehouse because we understand where that product is with each touch in the warehouse. We can see real-time material movement with great accuracy. This helps us prevent errors and operate with a 99.98 percent fill rate.”
Warehouse and Logistics Data Analysis
The second best value of the wireless warehouse is using the data capture to create new process data relative to other factors in your warehouse and logistics operations including: products, people, equipment, environment, locations, timestamps and sessions. Frank and Lillian Gilbreth, who pioneered time-and-motion studies back in the 1920s, might be envious of the depth of this data capture. They improved production by removing repetitive steps for various jobs. The wireless warehouse data capture, simply put, provides distributors the capability to test warehouse efficiencies, speed, productivity and success (as defined by the distributor's business rules or tolerance ranges) for any combination of factors. Some users may choose to add attributes from their ERP systems or seek to combine the new process data with related data from external sources.
Whether the wireless warehouse system data is used immediately or if it is aggregated and analyzed, this data capture is continuously beneficial for distributors.
There are ancillary databases for warehouse or transportation that might be helpful as well. Jerry Hempstead of Hempstead Consulting, Orlando, finds that many companies do not realize they can receive electronic data files about their shipping book of business for free from their carriers, including United Parcel Service and Federal Express. This rich source of detailed data includes recipient details, dates, weights, shipping-box dimensions, freight charges and more. “By collecting this data over time, shipments totaled by weights and zones provide the analytics to see how the new 2011 changes in shipping costs and strategies compare and how it will impact your business,” he says.
Check out the sample software tool available at www.hempsteadconsulting.com.Warehouse and logistics service providers are other good external sources of data to sharpen your lens and improve your view of your business.
Summary
Distributors using WWM software and barcoding have valuable information about virtually every aspect of their warehouse and inventory management and best of all, it has continuous value. Take advantage of using your new process data for warehouse operations optimization.