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SCP and SCE Need to Collaborate for Better Fulfillment Part Two: Vendor and User Recommendations.

Written By: Predrag Jakovljevic
Published On: November 14 2003

Vendors Addressing WMS

Vendors addressing warehouse management systems (WMS) have lately shown the ability to provide their clients with a strong standard product set that requires limited modifications, making it easier and more cost effective to upgrade and to realize the strong value proposition and new features in the upgrade. The fact that WMS software (particularly the legacy instances) tends to be among the most customized of enterprise applications, often makes it more affordable for companies to forego the upgrade process and just install newer more out-of-the-box functional WMS applications.

The following vendors have had their WMS products covered in recent TEC articles:

RedPrairie, together with its bullish nemeses, Manhattan Associates (see Logistics.com Becomes The Newest Of Manhattan Associates), Provia, G-Log, HK Systems, HighJump, and Yantra (see Yantra Leader in Distributed Order Management, But Wait There's More), has been thriving in part because it provides many "part and parcel" components of supply chain execution (SCE), which has apparently been growing faster than its supply chain planning (SCP) counterpart, given that back-to-basics logic driven projects nowadays have been aiming at low-hanging fruits that provide hard benefits within quick deployments.

While the above vendors have many common threads within their success stories, they all do have some specific differentiating value propositions. Otherwise, how else would one explain the ongoing plight of some publicly held SCE vendors like EXE Technologies (see SSA GT To EXE-cute (Yet) Another Acquisition), Industry-Matematik International (IMI), and Catalyst International (see SAPped Catalyst Warns in Wake of CEO Departure) if just a mere SCE designation would be a guarantee of success without keeping products abreast of the latest trends or without good execution?

This is Part Two of a two-part tutorial.

Part One discussed how SCP and SCE need to address WMS.

Examples of Meeting the Customer's Challenges

As mentioned earlier, RedPrairie's solution for the first time enables both private and third party logistic providers (3PLs) to meet the needs of multiple vertical industries within a single WMS solution. These providers face special challenges because their customer base may include companies in multiple verticals, each having unique distribution requirements. For example, consumer goods and food and beverage companies need detailed tracking of catch weights, aging profiles and expiration dates, multiple overlapping holds, and other lot control criteria while high tech companies are more interested in nested serial numbers, kitting and de-kitting services, and other assembly or light manufacturing requirements. Having one system that can meet all of these needs could provide a competitive advantage to 3PL users.

On the other hand, the solution caters to the key logistics flows that run through the logically grouped supply chain processes of "source" (including inbound logistics and supplier collaboration), "make" (including manufacturing logistics and inventory management) and "deliver" (including order fulfillment, outbound transportation, and productivity management), with a powerful set of capabilities that can be deployed stand alone to solve specific problems, or together to solve complex challenges and achieve the benefits of integrated logistics operations.

As mentioned in Part 1, due to the SCE software's capability to handle these complex requirements, there has been a trend of postponing many light manufacturing operations (e.g., final assembly, customized packing, labeling, engraving, etc.) from shop floors to warehouses and distribution centers (DCs), and a WMS package plays a key role in the company's postponement strategy to delay the customization of products until after the products, or a set of common components, have left the manufacturing plant. To that end, introducing the value-added services capability (e.g., kitting assembly and disassembly, multiple bills of material [BOMs], special instructions and labeling) within the Warehouse Advantage, which was HighJump's apt answer to helping its customers reduce the costs associated with their supply chains, where one of the most significant facilitators is postponement, and that is where kitting helps because it allows enterprises to keep their products in a more generic state for as late as possible.

Further, HighJump's full function warehouse management system also includes a cartonization tool, Container Advantage, to plan and optimize the organization of items into shipping cartons. This packing optimization feature saves time for packing materials (i.e., cartons/pallets/containers) and reduces shipping expenses in the picking and packing of customer orders. Container Advantage improves picking efficiency by selecting the number and size of cartons needed to pack orders for shipment based on each item's dimensional cube, orientation restrictions, stacking factors, weight and compatibility with other items.

The vendor offers many other capabilities within its WMS functionality such as Slotting Advantage, determining the optimal slot size and place for any SKU based on data such as demand (i.e., whether it is a fast or slow-moving item), product groupings and physical characteristics, to also keep picking operations smoothly despite frequent promotions and changes to product mix. Doing this manually is almost impossible in environments where hundreds of SKUs get added and deleted every week. HighJump provides both reactive and proactive re-warehousing methods and algorithms for example, optimize space, labor, or many other factors. Also powerful is the support for task interleaving (i.e., letting one person perform more than one task in order to reduce "idle" time, such as picking something up while returning from a put-away task) capability by utilizing dynamic work queue management, and by applying user-configured, either priority-, task-, or proximity-based algorithms.

Another company offering WMS solutions is Provia, which as part of its logistics strategy has added new products to its suite. This reflects on Provia's continued success in both attracting new customers and marketing into its client base with new solutions. Provia credits a part of its success to the above-mentioned fact that warehouse management system software (particularly the legacy instances) tends to be among the most customized of enterprise applications, which often makes it more affordable for companies to forego the upgrade process and just install new more out-of-the-box functional WMS applications.

Challenges

In addition to the feedback to SCP shortcomings mentioned in Part 1, most SCE/WMS vendors have to address some of the shortcomings of current SCE systems that still mainly automate and not necessarily optimize operations within short-term optimization timeframes and consequently, full savings are often not realized. For example, the vendor will try to offer the products that would determine optimal order flow such as maximum throughput, lowest cost, or service level, and based on the possible constraints like labor capacity, order complexity (kitting, cluster picking, etc.), service level commitments (i.e. order dates), transportation time/cost, and inventory availability.

User Recommendations

When considering an advanced WMS/SCE, users should look at the complexity of warehouse processes, as well as the velocity and diversity of activities. A center that picks 200,000 orders over 50,000 SKUs with a great deal of value-added services is an example of complexity that must be addressed. Users should not only consider transaction volumes, but the level of processing needed, and collaboration or customer compliance issues (e.g., protection against unauthorized access to activity logs, inactivity timeouts, original authentication and re-authentication, as major points of FDA compliance). Other considerations should be ease of use and the ability to pull data from outside sources like a small parcel shipper, combine and manipulate the information with one's own data, and issue a consistent reports. Before buying a global logistics collaboration and visibility system, carefully scrutinize the integration ramifications and ascertain whether your trading partners will be willing to build out to and from their current back-office systems. Global logistics service providers, which can offer enterprises the ability to leverage the connections and partnerships they already have in place, will be winners in the long run.

The benefits of using manufacturing postponement to achieve mass customization vary by industry, manufacturer, and the product nature, but in general any business that has an inverted (V-shape) bill of material (i.e., a small number of raw materials, a slightly larger number of semi-finished products, and a very large number of finished product configurations based on customers' preferences) will probably achieve worthwhile benefits. Industries such as CPG, retail, and high tech would be good postponement candidates.

Small Parcel Shipment Management

Moreover, due to the way warehouses are increasingly shipping orders with lower quantities, but with increasingly growing line items, small parcel shipment management systems may be even more important than full-fledged WMS/TMS systems for some businesses, particularly for those doing high volumes and complex order profiles. To that end, look for a system that determines where products are going and which shipper to use (e.g., FedEx, UPS, DHL, etc.), and creates the appropriate label during picking. Conversely, the traditional WMS approach would involve extra steps since it performs picks, moves them to shipping, and then generates labels.

Other notable features for small parcel shipment would be integrated WMS check/pack dialog, carrier compliant labeling, parcel rating, on-line carrier manifesting, combined carrier/compliance label, pre-print labels for cluster picking, cash on delivery (COD) support and multiple rate servers. Another buzzword applicable both for SPS and WMS would be "cartonization" to automatically determine the best way to box and package orders (e.g., how many products or boxes will fit in a bigger box, factoring in component weight and size).

 
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