Stop your WMS becoming a slippery slope
10 January 2014
Negotiating information flows within logistics can feel like skiing downhill at speed. Refusing to swerve the big issues, HSS editor Simon Duddy asks how obstacles to implementation can be overcome.
Cloud-based WMS can help companies save money, but not all small businesses are confident about the technology. How worried should they be?
"It is all too easy for SMEs to dismiss the option of automating their warehouse on the grounds they are not large enough to warrant it. However for the SME, cash flow and costs are just as critical as for a large corporate”, says Gavin Clark, commercial director for Snapfulfil.
While small companies should not worry unduly about cloud-based WMS, they should still make sure they lay the appropriate groundwork for such installations. It pays to take care of the basics. Make sure the warehouse is laid out in an efficient manner. Use product velocity and pick rate to streamline worker flow. As most vendors have designed dozens, maybe even hundreds of warehouses, make sure to tap into that experience and ask them what groundwork they think is needed to proceed.
Clark adds: "When selecting a vendor, as with all potential suppliers to your business, check their credentials thoroughly. Have they always specialised in WMS, or are they a more general vendor? Was the system you are evaluating specifically written and architected for online/cloud deployment or is it deployed through a potential middleware chokepoint?”
The benefits of cloud based WMS are clear but let‘s recap the main points. The SaaS (Software as a Service) cloud-based model allows companies to replace upfront hardware and software costs with a pay as you go subscription model.
"This way the businesses are not locked into a rigid three to five year payback period that is typically associated with traditional software,” says Clark.
Optima Warehouse Solutions MD Chris Roberts is also keen to dispel concerns and adds that nominating a committed employee to manage the project helps.
"We have been offering this type of solution since 2005,” he says. "A high proportion of our existing client base and almost all of our new customers have chosen this option.
"As for implementation, the steps you need to take are the same as planning for any change to your working practices – ask your supplier for advice, draw up a detailed plan and nominate one keen, committed employee from your organisation to manage the project.
"Just be more ambitious with your timescales, SaaS solutions take less time to get up and running, weeks rather than months.”
Simon Fowler, MD of Advanced Computer Software Group says a few simple precautions can typically provide the necessary safeguards, if companies are worried about internet connection reliability or security.
"Was the system you are evaluating specifically written and architected for cloud deployment or is it deployed through a potential middleware chokepoint?”
"Companies can, for example, implement a backup connection with an alternate ISP. This means if one goes down, there’s a fail-safe system in place to make sure business can continue as usual. The likelihood of both being down simultaneously is slim. The same applies to data and server replication.”
The move to cloud-based WMS should represent the beginning of exciting new opportunities, but it is also worth considering what happens at the end of the deployment.
Logistex business development director Derek Kay says: "Review your expected growth forecasts, the last thing you want to do is deploy a cloud WMS and 12 months later find you need to upgrade to something more substantial.
"Ask the supplier what arrangements are in place for you to get access to your cloud-based data if you choose to change your WMS.”
It also pays to review the Service Level Agreements (SLAs) proposed to check they provide the level of cover you need when you need it.
Chess Logistics sales & marketing director Alex Mills emphasises the importance of planning, suggesting companies make any changeover during a quiet period if possible.
He also suggests using the opportunity to simplify work processes if the technology will allow it and to keep things simply by not over-specifying equipment.
"When making any transition make sure that you input the best available data at the start,” he adds. "Many businesses complete full stock checks to coincide with the introduction of their new systems. This will often (but does not necessarily need to) coincide with a financial year end.”
WMS can help you negotiate the minefield of stock availability. In theory. Is it hard to achieve in practice? Not really say the WMS vendors but trust helps and real time information is essential.
Gather around for the good news ladies and gentlemen, because visibility of inventory within the warehouse and supply chain is relatively easy to achieve.
"Creating visibility is not hard to achieve,” says Rob Hodgson, divisional manager (Supply Chain Solutions) at Access Group. "However, it is essential to work with real-time information.”
The crux here is being able to react quickly to changes on the ground as they happen.
Domenico Piantelli, senior partner at Reply further explains the ease with which strong visibility can be achieved.
"A decent WMS and solid processes will give you that,” he says. "With cloud-based supply chain tools, visibility and collaboration are within the reach of even the smallest companies and trading partners. The limiting factor is not technology, it is that most basic human commodity: trust.”
But allowing a little trust to come into play (which should be deserved of course) can lead to considerable benefits.
As you move further upstream to supplier and downstream to customers, visibility takes on significant added value, enabling, for example, the planning of inbound deliveries from suppliers, therefore understanding early what impact this could have on customer order picking or production schedules.
Piantelli continues: "Further benefits include the reduction or elimination of gatehouse or dock door bottlenecks, accelerated/single scan receiving into the warehouse, the facilitation of effective response to customer orders (including cross dock or direct shipment opportunities) and full traceability of and rapid response to any product claims or recalls.”
Which just goes to show it pays to know what’s going on. As you will all well know, you are working in the information business, as well the box shifting business.
"Typically stock is held in a warehouse for less time than ever before. Inventory visibility helps get items in and out more quickly.”
Chess Logistics sales & marketing director Alex Mills succinctly summarises the benefits of good visibility.
"Typically, stock is held in a warehouse for less time than ever before. Inventory visibility helps get items in and out more quickly.”
Many organisations are moving to systems where stock is available for sale as soon as it enters the warehouse and is registered on the WMS and sales systems (which usually happens very quickly thanks to electronic pre-delivery advice, in-bound scanning and application integration).
Mills continues: "This can mean that stock is allocated or picked for an order and transferred to despatch areas before there is any need for conventional "putaway” storage. This reduces warehouse movements, storage capacity requirements (or makes space available for other uses) and helps to minimise costs.”
The second benefit can be increased sales. Items that are available sooner provide a greater window of opportunity for customers.
The other main beneficiary is customer service. Wholesalers, retailers and consumers (in the case of eCommerce) can see what items are in stock before placing an order. This reduces the probability of failed deliveries and promotes confidence.
A consistent frustration with IT is different systems within the business, or with partners, ‘not talking together’. But effective integration and transfer of information should be a priority for any logistics operation.
"As the saying goes, the problem with standards is there are so many of them,” says Logistex business development director Derek Kay.
Therein lies the problem. There are almost as many ways providing WMS and related IT technologies as there are companies supplying them. It is sometimes more costly to be locked into one supplier only, so most logistics operations use a variety of ‘best in breed’ solutions. But then the challenge is making sure data flows effectively throughout the system.
Kay continues: "Standard interfacing transport systems such as web services, FTP or TCP/IP are only part of the solution, having clear and verifiable interface schemas defined in XML will alleviate a lot of the confusion when connecting systems together.
"Also, when selecting third party systems work directly with the development team, who can map the data between interfaces easily, without necessarily having to modify source code.”
If IT systems are not talking together effectively, then it’s time for a system review, says Rob Hodgson, divisional manager (Supply Chain Solutions) at Access Group, which has through development and acquisition pieced together software offerings for a full range of logistics functions under one umbrella.
"We believe it’s best to source modules for various capabilities and tasks within the distribution function from the same supplier, that way you have far faster and closer integration with a more cohesive and coherent result.
"However, WMS is always going to be integrated into a third party, such as an ERP system. So it’s critical to make sure you are working with someone that can deliver.”
For companies that must frequently integrate new tools to create business advantage, a top performing integration capability is more important.
"Integration needs to be re-established as a core competence,” says Domenico Piantelli, senior partner at Reply. "We have helped many of our clients establish two key foundational blocks: an Integration Centre of Excellence where the core competence enables agility and a capability led roadmap identifying which initiatives will be reliant on integration.”
Toy company Flair Leisure faced a significant integration challenge when it wanted to link its eCommerce arm (Flair Direct B2C) with finance, stock control and sales order processing functions. Proteus Software was the incumbent IT supplier and took on the integration challenge.
"A decision was made to interface their existing systems together, reducing duplication and giving full stock integration, visibility, automatic reporting and traceability,” says Proteus Software CEO David Gray. "They also wanted to interface the new eCommerce system for Flair Direct into their third party operation, still keeping control of all the financial aspects of the business. We took care of the intricacies.”
"Integration needs to be re-established as a core competence as it enables agility.”
The process resulted in the automation of a great deal of Flair’s internal sales ordering processes; resulting in hardly any human intervention from point of order, through to despatch, to the allocation of invoices, and the subsequent updating of the financial ledgers.
Gray continues: "The integration allows directors to base strategic business decisions on the information afforded to them from a control tower perspective of the operation.”
IT integration plans can be complex so all interested parties should meet early to discuss options and assign responsibilities.
Advanced Business Software MD Simon Fowler says: "Consider the boundaries of data ownership, maintenance and support agreements. The latter is particularly important because when a problem arises a business needs to know whose responsibility it is to fix the issue.”
In terms of nuts and bolts practicalities, it may be a good idea to start with a flow diagram, to help all parties understand how data is flowing. This can then be used to identify important ‘touch points’.
Gavin Clark, commercial director for Snapfulfil explains: "You can use these techniques to, for example, remove certain connections, by improving the data handling and storage within key systems. For instance, you may ask does my transport management system need to talk to the WMS, or can it more efficiently go through my ERP?”