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Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John M. Hill, ESY

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Page 1: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Supply Chain Execution Systems

Warehouse Management Systems

Lecture Resource

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

Page 2: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

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

Page 3: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

SCES Impact Areas

Fulfillment Delivery Visibility Responsiveness

Page 4: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

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

Page 5: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

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

Page 6: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

SCES Components

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

Page 7: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

THE SYSTEM HIERARCHYTHE SYSTEM HIERARCHY ENTERPRISE SYSTEM

PLANNING

Demand Mgmt APS

CustomersSuppliersCarriers

CustomersSuppliersCarriers

E n t e r p r i s e N e t w o r k

ADMIN/FINANCE

PurchasingOrder Management

EDI / WEB

EDI / WEB

Material Handling Device ControlData Entry Devices

L o c a l A r e a N e t w o r k

Task Mgmt

Order Process

Inventory Mgmt

Shipping Receiving Storage StagingLoading

PickingReplen

MANUFACTURING

MRPMES

WMSWMS LABOR LABOR

MANAGEMENTMANAGEMENT

YARDYARDMANAGEMENTMANAGEMENT

TMSTMS

Page 8: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

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

Page 9: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

WMS History

1975: First WMS installed at J. C. Penney. 1986: First WMS installation in “C” on a UNIX platform. 1990’s: 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.

Page 10: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

WMS Functions

Receiving Blind ASN/EDI Conventional or Automatic

Putaway 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

Page 11: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

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

Page 12: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

WMS Setup Product Files

Descriptions Dimensions Units of Measure Bills of Material Substitutions

Location Files Numbering / Sequencing Dimensions / Capacity

Equipment Files Employee Files

Page 13: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Employee Task Prioritization

Page 14: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Workload Management

Equipment Profiles

Material Profiles

Location Profiles

Operator / Equipment Matrices

Operator / Task Priorities

Labor Standards

Page 15: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Task ManagerTask Manager

2137

New TasksNew Tasks

9873

4532

5471

36791234

Task

RFDC Link

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

Tasks in MemoryTasks in Memory

Work QueueWork Queue

TASK ALLOCATIONTASK ALLOCATION PriorityPriority Operator AuthorizationsOperator Authorizations Equipment Type Equipment Type Current LocationCurrent Location

TASK ALLOCATIONTASK ALLOCATION PriorityPriority Operator AuthorizationsOperator Authorizations Equipment Type Equipment Type Current LocationCurrent Location

Job CompletionsWork Requests

RFDC

RFDC

Workload Management

Page 16: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Material Handling Interfaces

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

Page 17: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Systems Interfaces

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

Page 18: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Receiving

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

Page 19: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

CARRIER SCHEDULINGCARRIER SCHEDULING

Page 20: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

• StageStage• CrossdockCrossdock• QC MoveQC Move• PutawayPutaway

• (Print & Apply LP)(Print & Apply LP)• StageStage• CrossdockCrossdock• QC MoveQC Move• PutawayPutaway

RFDC

• Key-Enter Order Number, Key-Enter Order Number, Product ID, Quantity & Product ID, Quantity & ConditionCondition• (Pre-Printed License Plate)(Pre-Printed License Plate)

RFDC

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

WMSWMS

Match LP to ASN Match LP to ASN oror Retrieve PO Retrieve PO Validate ReceiptValidate Receipt Resolve ExceptionsResolve Exceptions Check DemandCheck Demand Issue Task Issue Task Update Inventory RecordsUpdate Inventory Records

Receiving

Page 21: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

HOLIDAYS 2000HOLIDAYS 2000 Warehouse Warehouse Wasteland or Wasteland or Competitive Competitive

Edge?Edge?

Warehouse Warehouse Wasteland or Wasteland or Competitive Competitive

Edge?Edge?

Source: BizRate.com

eSales:$6 BillioneSales:

$6 Billion

Returns:$900 Million

Returns:$900 Million

Reverse Logistics

Page 22: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Storage and Putaway

Location Selection Override Location

Confirmation Crossdocking Relocation Consolidation

Page 23: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Check Demand for Check Demand for ProductProduct Issue Move TaskIssue Move Task

DestinationDestination• StorageStorage• CrossdockCrossdock• QualityQuality• ReturnsReturns• OtherOther

• Confirm DropConfirm Drop• Await Next TaskAwait Next Task

RFDC

• Move to Designated LocationMove to Designated Location• Scan Location Bar CodeScan Location Bar Code

• Operator Assigned to Putaway / MoveOperator Assigned to Putaway / Move• Scan License PlateScan License Plate

RFDC

Validate LocationValidate Location Resolve ExceptionsResolve Exceptions Issue Drop InstructionIssue Drop Instruction- - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - Update InventoryUpdate Inventory Issue Next TaskIssue Next Task

WMSWMS

Putaway and Move

Page 24: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Inventory Management

Lot, Date Code, and Serial Number Tracking

Shelf-Life Monitoring and Rotation

Catch Weighing

Routine and Exception Cycle Counting

Full Physicals

Page 25: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Replenishment

Forward Pick Locations Floating Forward Pick Replenishment Trigger Controls Demand Replenishment Batch Replenishment Reslotting

Page 26: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Pick Planning

Host Download Format and Frequency Wave and Batch Planning Material Allocation Order / Shipment Release Changes and Cancellations

Page 27: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

• Display Pick LocationDisplay Pick Location • Scan Item Bar Code/LPScan Item Bar Code/LP• Pick / Confirm QuantityPick / Confirm Quantity - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - • Await Next PickAwait Next Pick

RFDC

• Move to LocationMove to Location• Scan Location Bar CodeScan Location Bar Code

• Operator Assigned to PickingOperator Assigned to Picking• Ready for Next Pick TaskReady for Next Pick Task

RFDC

Validate LocationValidate Location Issue PickIssue Pick - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - Validate Item / QuantityValidate Item / Quantity Resolve ExceptionsResolve Exceptions Update InventoryUpdate Inventory - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - Issue Next PickIssue Next Pick

WMSWMS

Picking

Page 28: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Staging and Shipping

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

Page 29: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

WMS Cost BreakdownCOMPONENT % TOTAL COST

Computer 6

RFDC 24

Bar Code Label Applicators 9

Hardware Subtotal 39

WMS License 8

WMS Enhancements 10

Host Interface 6

Other Software Licenses 4

Software Subtotal 28

Location Labels 6

WMS Installation Services 21

Project Team Costs 6

Implementation Subtotal 33

Page 30: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

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

Page 31: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

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

Page 32: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

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

Page 33: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

WMS Benchmarking

Order Fulfillment Inventory Management Warehouse Productivity Transportation Performance

Page 34: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Order Fulfillment Measures

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

Page 35: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Inventory Management Measures

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

Page 36: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

Warehouse Productivity Measures

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

Page 37: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

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

Page 38: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

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

Page 39: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

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

Page 40: Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John

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


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