Time to take stock

As the growth of e-business accelerates, the need for manufacturers to maximise the efficiency of their storage and distribution systems becomes ever-more pressing

A company can manufacture the best product available on the market but if it cannot meet customer demand by shipping the goods on time then there is every prospect that its bottom line performance will be disappointing.

And, according to Tony Berry, business manager for ABB’s Warehouse Management Systems division, manufacturing industry is jeopardising its chances of increasing profits by its failure to adopt warehouse management systems (WMS).

`If you are not shipping anything you are not making any money, it’s as simple as that,’ he says. `You can have a phenomenal order book but if you can’t get the goods out of the warehouse or you don’t know where they are you are not generating any cash.’

WMSs have been around for nearly 20 years and in their basic form they control the stock and the movement of stock within the warehouse ensuring that space is utilised as efficiently as possible.

Over the years major changes in WMSs have come about with the increase of computer power, which has allowed them to become fully integrated with ERP systems.

`A modern WMS takes control of the goods right from the point of receipt. It handles quarantine control, allocation within the warehouse or direct shipment to the despatch area,’ Berry explains. `It then locates them in the most efficient way for the customer, whether that’s by fast moving zones or weight, or size.’

Linking with ERP

`The WMS can decide where to put the goods in the warehouse – for example a high volume item would be placed in a fast-moving zone. It will control the batch numbers and monitor best-before dates. It will control all the movements within the warehouse and will try to optimise the space available so that the warehouse is always working at peak efficiency.’

WMSs can link closely with the business system which has an overview of the business. But very often ERP systems do not care where stock is or how it is being stored. All it will know is that there are 10,000 of a particular item.

In a traditional set up the ERP system will handle the order side of the business. It will know what stock is in the warehouse and whether it can satisfy the demand either of external customers of for in-house production, but not much more than that. But if it is run in tandem with a WMS it will pass the orders down and the WMS will handle all the scheduling, picking, routing information and shipping documentation. It will then update the host ERP system.

With the expansion of e-business the importance of WMSs is even more apparent. Berry says: `The big problem is that at the end of last year many companies rushed to establish very slick front-end internet sites to take orders. End users or customers could go online and look at what was available and order it. But they would often not receive the goods for a couple of weeks.

`There is a big drive to improve the fulfilment side of the business now and to really maximise the efficiency of warehouse operations to make sure the goods get out as quickly as possible. You don’t want to order something in five minutes and then spend a week waiting for it, you want it as soon a possible. It’s all about customer expectation.’

Moving up to WMS

`A lot of people have managed to get by with what they have been doing for years. There’s a school of thought which says you can use a manual system and keep throwing people at it and be able to cope with a large warehouse and picking line. But a lot of businesses are realising that manual systems are just not good enough and are making the move to a WMS.’

One of ABB’s most recent installations was at baby food manufacturer Nutricia. The factory in Wells, Somerset, produces up to 600,000 jars of three varieties of baby food every 24 hours. The system stores information on all stock that enters or leaves the warehouse ensuring that there is always a supply of each variety to meet the demand from the distribution centres.

The system handles over 2,000 goods in and out transactions each week and holds details on 11,000 pallets of finished stock. It is based on a Windows NT server and can be accessed by Techlogix radio data terminals (RDTs) linked with Nutricia’s host ERP system.

When a batch of jars comes off the production line, its barcode is scanned by an RDT into the WMS. Using the information from the barcode the system can then allocate stock to a particular despatch area, according to criteria such as product variety, and production date.

`The system saves us a great deal of time and we need far fewer people to run the warehouse,’ says Adam Lusby, operations manager at Nutricia. `Our forklift truck operators can use their RDTs to find out exactly where stock is stored which enables them to quickly pick out the required items.’

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