Provia Tackles RFID in a Twofold Manner Part Seven: WMS Market Impact

WMS Market Impact

These days when radio frequency identification (RFID) is constantly on everyone's lips, and when every relevant enterprise application vendor is hedging its bets towards becoming RFID-ready or is even convincing the market that its RFID-compliant solution is exactly what the doctor (such as, Wal-Mart, Target, Albertsons, the US Department of Defense [DoD]) ordered, the typically quiet Provia Software (www.provia.com), a privately-held provider of supply chain execution (SCE) software solutions, naturally feels the time has come for it to be more vocal about its RFID endeavors, albeit after it has already put so much effort in terms of the proof of concept in the field.

At the end of May, Provia announced at the Distribution/Computer Expo 2004 in Chicago, Illinois (US) that its ViaView event/alert management and decision support product plays a key role in offering visibility to supply chain data for companies supplying RFID-tagged products to Wal-Mart and other retailers.

Further, at the end of March, Provia announced that it has aligned itself with its parent company for over fifteen years, Viastore Systems, a leading provider of automated storage and retrieval systems (AS/RS), and material handling control systems, with over 3,000 cranes installed worldwide.

As for the products' functional enhancements, at the end of 2003, Provia announced the release of FourSite 4.4, an upgrade of its fulfillment solution oriented towards third party logistics (3PL) providers. Industry-wide globalization is a major factor affecting logistics and supply chain management businesses.

Generally speaking, WMS applications traditionally automate activities falling within the four walls of a warehouse, such as receiving, put-away, serialization, picking, packing, and shipping. The software market for WMS has consequently become more and more competitive as the technology has evolved to address the lion's share of customer requirements. This includes more intricate advanced shipping notice (ASN) and RF receiving; lot/expiration control; location and carton selection; wave building; labor planning; advanced kitting; wave templates; material selection; compliance labeling; picking and packing; cluster/batch picking; serial number capture; catch-weight capture; cycle counting; task management; replenishment; container tracking; cross docking; report generation; shipping paperwork; automated rule checking; carton selection; etc. Like any software technology that has been reaching a plateau in the maturation curve, WMS products have evolved to a point where there is little differentiation among them.

This is Part Seven of an eight-part note.

Parts One through Five detail recent announcements.

Parts Six and Seven discuss the market impact.

Part Eight will note challenges and make user recommendations.

Parts One through Four were published between August 11 and 14.

Part Five to Eight will be published August 18 to 21.

WMS Package is Key

Still, since the warehouse is no longer merely a static storage facility, it now has to use real time data to closely match supply to demand, eliminate the need to hold excess inventory, and increase the flow of goods throughout the supply chain. Therefore, due to the SCE software's capability to handle these complex requirements, there has been a trend of postponing many light manufacturing operations (such as, final assembly, customized packing, labeling, engraving, etc.) from shop floors to warehouses and DCs. 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 an advanced kitting capability within the ViaWare WMS was Provia'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 long as possible. Accordingly, Provia's advanced kitting capability allows users to have generic products assembled ahead of time with the option to assemble and configure them "to order", based on last-moment customer requests, which should keep inventory levels lower and increase material velocity. In turn, this overall reduction in inventory reduces costs within the supply chain, and also, the better service provides a higher level of customer satisfaction, as has been the case with Provia's high-profile customers TaylorMade Golf and Lanier.

During these days of careful cash flow and asset management, more and more manufacturers are attempting to get rid of unnecessary inventory, and the place to start is with finished goods inventory. Postponement indeed allows manufacturers to limit their finished goods inventory by postponing production of the final product as long as possible, in the ideal case until the order is in hand, and then it is shipped out immediately.

If one can build the sub-components to the most generic level and harness a WMS that can take an order and explode it into a bill of material (BOM), with the components being the generic SKUs, pick the components of the exploded BOM, deliver it to a kitting station, and then have it assembled for final distribution, this would be a very effective method of mass customization and inventory reduction for the manufacturer. Consequently, the need for these light manufacturing activities in warehouses rather than on the shop floor has forced WMS vendors to include more functions in their packages that would previously have been considered manufacturing functionality, such as BOMs creation for kits, assembly work plan and instructions, kit assembly user dialogs, kit-to-stock, kit-to-order, de-kitting, special packaging and labeling, accessories (non-stock items) processing, and reporting of completions against manufacturing steps, so that the enterprises can postpone the production of their finished goods and decrease their own costs.

Products such as cans or bags of food; boxes of cigarettes or candies; bottles of pills or drinks; or luxury watches and giftware usually have multiple packaging configurations or labeling requirements. From an inventory management point of view, each of those different packaging configurations or labels is a separate SKU and a separate unit of finished goods inventory. But if the underlying basic product is the same for all those configurations, a manufacturer could postpone the customization by producing the generic product, and performing the final packaging and labeling as orders are taken and shipped. By doing this, they also avoid the need to forecast what individual demands will be for each SKU. Rather they will forecast the aggregate demand for all the unfinished generic products (i.e., product families or sub-assemblies), where the margin of forecast error is usually much lower. As a result, there are fewer deviations from forecasts and the manufacturer does not run the risk of accumulating excess or obsolete inventory of any of those packaging configurations.

Benefits of Manufacturing Postponement

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) BOM (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. By providing all the above advanced kitting functionality, and more, Provia often stands out amongst its peers during software evaluations.

Also powerful is the serial number capture and tracking throughout the entire distribution chain so that, for example, a cell phone body and its battery serial numbers and their whereabouts are traceable up- and downstream. Without these capabilities, one could hardly expect the likelihood of a successful RFID compliance achievement. Namely, serial number tracking comes in handy when a bulk scan is made, by enabling the item-level data from the scan to be recorded. This capability has been delivered by Provia years ago to accommodate scanning of conventional barcodes advanced with ASNs, which hold detailed data on entire shipments.

YMS Integrated with WMS

Possibly the best in its class could be Provia's yard management system (Provia YMS) with browser-based graphical drag-and-drop control of yard activities (such as, yard control—including trailer tracking, trailer contents, trailer movement, and graphical yard presentation; appointment scheduling—including inbound and outbound time, service time, resource requirements, and equipment requirements; and carrier performance tracking like on-time and correct equipment aspects), and its seamless integration with WMS, thereby extending the WMS' functionality beyond the four walls of the warehouse into the yard. For instance, each trailer that comes into the DC is checked in through the YMS, which then triggers activity throughout the WMS, including wave planning, trailer loading, and cross-docking.

The YMS and WMS communicate continuously as the YMS helps direct trucks to the proper dock door for loading while the WMS prepares the orders to be shipped out. The YMS then checks out trucks as they leave the facility and automatically informs the ERP back-office system in place. A color-coded, graphical view of all trailers in the yard is a nifty feature that yard managers find intuitive in pinpointing bottlenecks, as operators can see color changes if trailers are beyond an appointed time, or see where loads have not even been started. A landmark Provia customer's testimony in this regard is from Owens Corning.

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, ViaWare SPS determines where products are going and which shipper to use (for example, FedEx, UPS, DHL, etc.), and it 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 the SPS module 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 is "cartonization" to automatically determine the best way to box and package orders including, how many products or boxes will fit in a bigger box, factoring in component weight and size.

This concludes Part Seven of an eight-part note.

Parts One through Five detail recent announcements.

Parts Six and Seven discuss the Market Impact.

Part Eight will note Challenges and make User Recommendations.

Parts One through Four were published between August 11 and 14.

Part Five to Eight will be published August 18 to 21.