WMS ain't what they used to be
October 1st 2009

Demand-driven supply networks that embrace best-in-class technologies can be all things to all men, says Manhattan Associates UK MD,Allen Scott

Consumer goods supply chains everywhere are becoming significantly more complex. As retailers deliver products across an increasing number of channels to maximise revenue potential, customers in each of those channels are becoming ever more demanding. The supply pipeline in each of those channels is becoming increasingly global, as international sourcing seeks to exploit cheaper alternatives and wider choice, and order fulfilment is now about serving customers from many more regions and countries. These paradigm shifts in the way businesses are run, where customers and suppliers are located and how consumers behave means the role of warehouses everywhere is changing radically.

Leading manufacturers and retailers of all sizes and varieties now regard the organisation of their logistics as a major source of competitive advantage. They no longer regard the warehouse as a goods-in/goods out facility, nor as a cost centre as many have traditionally done. Instead, they see it as an opportunity to enhance revenue, customer satisfaction and ultimately shareholder value. Perhaps most important of all, they recognise that the software required to manage the warehouse and the wider supply chain has had to become a great deal more sophisticated to meet the requirements of growing supply chain complexity.

Increasingly, systems that run warehouses are not only becoming a lot smarter in the way they manage conventional warehousing processes by applying new technologies such as voice recognition and optimisation technologies like slotting and labour management. They also need to be seamlessly integrated to other supply chain management applications such as advanced planning, replenishment, transportation management, distributed order management, supply chain intelligence, extended enterprise management and reverse logistics management, as well as ERP systems. All of these systems together create the necessary infrastructure that delivers complete visibility of inventory across the supply chain and enables effective source-to-consumption supply chain management.

Ultimately successful supply chain management depends on the ability of an enterprise and its business partners to hook all of these systems together effectively to make available and deliver information instantaneously to parties along the supply chain that require data in real-time to optimise decision-making. Only a handful of supply chain solution vendors have embraced the idea of creating a supply chain solutions platform where solution components are integrated seamlessly with each other.

The demand-driven supply network (DDSN) Today's advanced Warehouse Management System is a single but vital component in a web of integrated and sophisticated supply chain and enterprise management solutions that is allowing companies to embrace new models of the supply chain like DDSN (Demand-Driven Supply Networks). Such supply chain models use IT far more extensively than traditional linear push supply chains and dramatically improve flexibility in manufacturing, distribution and retailing.What's the proof? The time to market for new products has been slashed 50 to 70 percent across industries in the last 20 years, inventory-to-sales ratios are less than half what they were, and the number of unique products is many, many times higher today than it was 20 years ago.

What does all this mean? Supply chain models like DDSN that embrace best-in-class technologies across all these business process areas including warehouse management will facilitate two realms of opportunity for growth. In the developed world, where consumers don't want more goods but better goods – faster and more environmentally-friendly cars, more affordable and better-tasting food, higher-speed communication tools, more affordable medical services – demand-driven supply networks will make these growth opportunities commercially viable and at the same time improve quality of life. In the developing world, where goods are scarce, but where arguably there is even more potential growth for businesses to exploit, demand-driven supply networks will allow companies to detect and react to demand with products priced and packaged to suit shoppers with less disposable income.

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