Warehouse Management

Warehouse management system (WMS) is an important element of any supply chain execution backbone. Therefore a successful WMS implementation is crucial for keeping your customers satisfied, keeping the supply chain costs low and complying with industry standards and documentation norms. WMS implementation failures can be catastrophic for the company's balance sheet as well as for the careers of those involved in the project. Some well publicized WMS implementation failure that can be found on the internet are as follows:

1. Adidas: WMS implementation at the new DC is full of glitches. Adidas can not fulfill 80% of the orders and looses market share that persists for a long time

2. Toys R' Us.com: WMS can not fulfill orders in time during Christmas even though sufficient inventoy was available. Eventually decides to outsource efullfillment to amazon.com

3. J. Sainsbury:  $700 million WMS automation project is a failure and most of the supply chain team is shown the door

Clearly a WMS implementation project carries severe consequences in the event of a failure. What are some of the things that one could do to make implementation of WMS successful? In the next post I will try to put together a list of things that are common among successful WMS implementations.

In Part 1 of this post I blogged about WMS implementation projects and the severe consequences of failure. What is the mantra for a sucessful WMS implementation? What makes a WMS implementation project a failure or a success? Here are some thoughts:

Build a Team for Success

A failed WMS project has organizational issues from its inception. The project team either does not have the authority to make decisions about the project or lacks the expertise in WMS and/or warehouse processes. Absence of executive sponsorship also hampers the project.

A successful WMS project gets the team building part right. This is the first critical step for a WMS implementation project. Most successful projects have an executive sponsor,  usually a key executive from the operational side of the business who has a stake in the success of the project. The executive involvement is necessary to get necessary resources, resolve conflicts as well as handle contingencies. Besides its also important to dedicate resources for important roles such as project manager, WMS experts and business champions. While the project manager could be an internal resource, it may be necessary to staff the WMS experts from outside. They could be either consultants or new employees who have successfully "been there and done that" elsewhere. However it's very important to staff this team with internal business champions. These are end users who have the trust and respect of the warehouse employs and is familiar with the warehouse environment. Chosen carefully they can act as powerful change agents. These are the people who will own the system after go-live when the consultants and contractors have departed.

Begin with the end in mind

A failed WMS project has the characteristics of old wine in a new bottle. People responsible for the project succumb to the natural tendency of implementing the new system the old way. The project team either lacks the foresight or has other agenda besides success of the project.

A successful WMS project team knows that gaining operational efficiency is after all the #1 reason for implementing WMS. Their approach is forward looking. The new WMS processes are designed after careful scrutiny of the current processes. The team looks out for inefficiencies in the current process and how WMS can help resolve it. A successful WMS implementation team does not rely on WMS features alone to deliver the benefits. While looking at software features is a good idea, it's also important to pay attention on things such as warehouse layout, warehouse storage policies, work assignments, resources and automation equipments, etc. WMS implementation project as an opportunity to get things right from the very beginning. This opportunity should not be squandered. A successful project also considers the future growth of the enterprise while designing processes today.

Manage Expectations

A failed WMS project starts with unrealistic expectations about the project. Other times these projects start with no clear-cut criteria for project success. Either way it's a recipe for failure.

A successful WMS project starts with manageable set of expectations. Most successful WMS projects start with modest goals. The project team does not oversell the benefits early on as it's so much better to underpromise and over deliver than the other way around. While some features may appear to be cool, it's important to rationalize if they are feasible for your warehouse. Do you have all the data that is needed, is the date accurate, what will be the impact on productivity if additional data input is needed, does the technological infrastructure exist to support the feature, how reliable is it?

Minimize Customization

A failed WMS project attempts to customize the product to suit its current processes. While customization itself is not a bad thing as many WMS projects need some degree of customization. It's the customization that works around the best practices ingrained in WMS or compromises the maintenance or upgrade aspects of the system that is bad.

A successful WMS project has minimal customization. A successful WMS project treats customization as the last resort. When nothing else such as change in processes or work around would be feasible. The customization is also carefully planned. Only the public APIs or Open interface tables are used. Customization is authorized only after a careful cost benefit analysis.

Document Everything

A failed WMS project has poor knowledge management policies. The warehouse policies, procedures and process are not documented while the project is on-going. When an important project member leaves the project, critical information about the project also walks out the door.

A successful WMS project treats documentation of procedures with utmost importance. Documents are prepared for warehouse processes and policies, configuration document, technical architecture, change management and patching policy and user training. These documents are formally assigned to project team members who are responsible for maintaining it.

Formulate a Change Management Policy

A failed WMS project does not have a well laid out change management and patching policy. Configuration changes and patches are often applied without testing. Worse the patching may occur with total disregard to warehouse schedules.

A successful WMS project has a 3 system approach. Changes are rolled from development instance to test instance for QA. Only after changes or patches pass muster are they rolled into production. A successful WMS project also looks at recommended patch list available on Metalink and applies these patches prior to go-live..

Do not underestimate Testing

A failed WMS project underestimates the importance of testing.

A successful WMS project tests the hell out of WMS before they go live. Any configuration changes such as profile options, rules changes are tested before they are rolled over to production environment. Successful WMS project also do a "day in the life" testing. This is a mock run of an actual go live environment. The testers are the end users themselves. This is a good way to test system stability, ability of the system to withstand volume, technical and network infrastructure. It also tells you if the end users are adequately trained in the system or just shooting the breeze.

Plan Adequately for Go-Live

A failed WMS project does not adequately plan for Go-Live. They either choose a wrong time to go-live, fail to anticipate problems and often start with incorrect inventories.

A successful WMS project diligently plans for the D-date by doing the following:

1. Go-Live Date:  It sets a realistic date for WMS go live. This is done well in advance. The go-live is usually scheduled on a weekend or a holiday (if its not a 24X7 operation). If the warehouse observes seasonal variations in demand, the go-live is scheduled during lean times

2. Facilities Planning: Physically mark your warehouse areas prior to go-live. Use barcode tags and mark the aisles prior to go-live.

3. Set help Desk: It's realistic to expect problems in the first few days. A help desk is setup to resolve these issues. The people manning the help desk are experts from the project team. They know if an issue is user/training issue or a configuration issue or a genuine technical issue for which a TAR needs to be opened.

4. Inform trading partners: It's essential to keep vendors, customers, carriers etc informed about your go-live schedules. This is all about managing expectations. That way any delays or changes will not come as a surprise to them. Its also a good idea to close all open transactions prior to go-live.

5. Perform physical inventory: With a new WMS, you want to start with a clean slate. You don't want your warehouse operators to distrust the system from day 1. Therefore go ahead and do a wall-to-wall physical inventory prior to go live.

6. Equipment Planning: Equipments such as handhelds, label printers, desktops are placed where they should be. Employees are trained to handle them, recharge them and troubleshoot basic issues. 

7. Contingency planning: If shit can happen, it will. Question is what will you do if it does? What are you going to do if network infrastructure is down? Handheld devices are not working? Carousel isn't spinning? System performance is abysmal? It's important to have a contingency plan. It could just be as simple as manual picking and shipping. Important thing is to be prepared for such an eventuality.

Continuous Improvement

A failed WMS project ends with go-live. The next project is initiated only when the current system is unstable, unusable or out of support.

A successful WMS project knows the importance of continuous improvement. Most successful WMS projects start with modest goals and continually refine their usage of WMS. They are up to date with patches and new WMS releases. Features are implemented and system is patched round the year.

Did I miss anything? Your thoughts are welcome.

Inventory inaccuracy is a nightmare for any warehouse. If left unchecked, inventory inaccuracy can lead to a negative feedback cycle of declining productivity and increasing inaccuracies. A downward spiral where warehouse productivity declines and feeds even more inaccuracies in the system. Left to itself, inventory inaccuracy erodes profitability and warehouse efficiency in a big way:

a. Poor customer service when a wrong product is shipped to a customer or a wrong delivery date is promised

b. Increase in Backorders because ATP system thinks there is plenty of stock

c. Lost productivity when operators run around looking for missing products

d. High product obsolescence when the missing products are "found" but too late to be of any use

f. High inventory levels because you need the extra safety stock to hide the inaccuracies

g. Inefficient warehouse usage when you need to stop warehouse operations to carry a physical count in order to satisfy auditing requirements

Here are some steps that you can take in Oracle WMS to improve accuracy:

1. Use RF devices to transact on the spot. This is the easiest way to improve inventory accuracy. When transactions are recorded on the spot in real time, there is less chance of error. This means going paperless and using task management in WMS to convey pick instructions to operators.

2. Train Warehouse Personnel to follow documented procedures when exceptions occur in the warehouse. The warehouse workers should be familiar with the procedure when an exception occurs e.g. if a product is not found as suggested by the system or damaged, the operator should know how to log exception and follow the steps. 

3. Find and fix root cause when exceptions occur in the warehouse. Task execution using RF is a great way to record exceptions in real time as they occur. Analyze exception data in warehouse control board to see where and why exceptions are occurring? Are more exceptions being recorded for certain items or certain employees? Why? If a shipment of wrong product was detected, where did that pick come from and was the inventory corrected for the original item? Was wrong putaway the cause for a pick exception?

4. Storage Policy of items in your warehouse also impacts accuracy. To avoid picking the wrong items, make sure that items similar in appearance are stored apart from each other. Commingling items in the same locator is also a recipe for shipping inaccuracy. You also need to make sure that locators properly marked and physically distinguishable. When slotting items in the locator make sure that the locator corresponds to the item velocity and has enough space to store the maximum quantity of item specified. If a locator stock is overflowing into warehouse aisle, its usually not a good sign. If you have negative inventory allowed flag enabled in your warehouse, you need to question really hard as to why is it needed?

5. A counting policy is a must for every warehouse. Cycle counting a great way to gradually improve inventory accuracy. While eliminating yearly physical count is a noble goal, it can only be achieved when the warehouse has reached a certain threshold of accuracy level.

6. Bar codes or RFID are great auto-ID technologies to improve accuracy. Barcodes have an error rate that is significantly lower than human data entry. Additionally DFI feature in WMS can further improve accurate data entry.

7. Checks in warehouse processes to ensure accuracy. Example of such checks could be an additional packing step to scan items prior to putaway or shipment, a weighing scale linked to a divertor to weigh and compare standard and actual weight of LPNs bound for storage or staging, etc.

8. Check Digits is another way to improve data entry accuracy. When you dispatch an operator to a suggested locator how do you make sure that the picks are coming from the suggested locator and not from any warehouse locator? Locator check digit is a great way of ensuring that operators perform picks and putaway at the same physical locator as the data entered in WMS.

Modern Material Handling's latest issue has an excellent article on WMS Selection (Hat Tip to Bill Reilly for forwarding the link). The seven questions covered by Bob Trebilcock in this article is a good starting point and should provide a lot of clarity to anyone in the market for WMS. From an Oracle WMS perspective the very first question is the most relevant:

Can you get WMS functionality from your ERP system? If you have Oracle Applications installed, can you prove that Oracle WMS won't meet your needs?

What this means is that if you are an Oracle Application customer, you need to have a pretty good reason why Oracle WMS should not be chosen for your warehouse needs. You need to consider the savings from an integrated WMS like Oracle vs the incremental benefits from a 3rd party WMS. How can that be done? WMS Solution Factory has all the tools!

Take a look at the Integrated WMS value calculator at the WMS solution Factory. Essentially you need to compare the savings from an integrated business like Oracle WMS vs the incremental operational benefits from a bolt-on WMS (if at all they do exist). You can use the WMS value calculator at the WMS solution factory to see if the additional benefits are justified.

Besides the 7 questions, the following points are also important:

What are you doing now? What are you doing about your current WMS needs? This is important if you want to reuse your existing IT assets and want to limit the learning curve. If your current WMS needs are causing operational issues, the time available to select a WMS is fairly limited.

Where do you want to go? You need to have a clear idea about your motivation for a new WMS. An important aspect of WMS selection is to identify the long term goals and objective behind new WMS implementation. A WMS implementation is capital intensive and once deployed not easy to switch. Questions to be asked: How is the future growth impact warehouse operations? Is the WMS vendor financially viable? Is the WMS vendor  capable to support your WMS needs for the long term?

How do you want to get there? If the number of WMS vendors seem bewildering, here is a suggestion: While a WMS is important, operational success in your warehouse and WMS deployment has less to do with the software and more to do with how its managed. A clear plan for success is important. I have blogged about it in the past at here and here. Do it and you will be fine.

GS1-128 (formally known as UCC/EAN-128) labels are the standards in today's consumer packaged goods, wholesale distribution and retail segments. It is therefore important to familiarize yourself with this label format and understand how to best use these in your WMS enabled warehouses.

As background information, the GS1-128 label is derived from Code 128, a simple symbology that translates numbers and characters into what's commonly known as "barcode". GS1-128 looks like a longer version of the typical barcode. It stores not only the serial number, but also the company and the application identifier. In essence, GS1-128 is an advanced barcode that provides the relevant business context in addition to identifying a product.
Here's an example:

Let’s take a closer look at the last set of numbers in the previous example. The label roughly breaks down into 4 sections, plus an application identifier.

It’s worthwhile to note that the Application Identifier field can refer to wide range of data contents. In the example shown, (00) implies the content is a License Plate Number(LPN). This number can also be used to identify zip code, expiration date, weight, container code and other information. Here’s the full list.

The 18-digit after Application Identifier is the LPN, also known as SSCC-18(Serialized Shipping Container Code). This number is 18 digitals long, and it is globally unique. SSCC-18 tells any operator what the product is and where it is from.

The versatility of GS1-128 is what makes it the standard labeling format in the world today. In the next post, we will be discussing how Oracle WMS can be used to generate GS1-128 label and Advanced Shipping Notices (ASN) in the customer’s inbound process.

In the last blog post we drilled deep into the GS1-128 labeling. In this post, we will go through the steps on how to setup WMS to enable GS1-128 printing.

1. LPN Setup: GS1-128 label requires an LPN to be generated as per SSCC standards. An SSCC-18 number is a unique 18-digit license plate number that is generated as per specific UCC standards. Therefore to generate GS1-128 label requires this 18 digit number to be generated.

2. Create GS1-128 label layout (see sample label) in a label designing software. In this example, the number following (00) is the SSCC-18 number. Whereas (00) is the application identifier. Please note that application identifier should appear in the human readable format as “(00)”. However in actual barcode the application identifier should be encoded as “00” (i.e. without brackets). The variable following the “00” is the 18-digit LPN number from WMS.

3. To auto-generate LPN using SSCC-18 standard, the following setup is needed in org parameters form:

4. Note: As per GS1/UCC standards, application identifier (00) is not part of the SSCC-18 data structure and need not be transmitted as a prefix for LPN in ASNs. However there are customers who require incoming ASN must have LPNs with 20-digit container reference. In this case the 20 digit number consists of 18 digit-SSCC number prefixed with SSCC application identifier “00”. Prefixing “00” to SSCC number will not change the check digit of SSCC. If a customer requires 20-digit container reference, a prefix of “00” can be added in either the label printing software or the prefix of “00” can be added to the extension digit. The setup in this case may look like:

Sometimes customers also enforce a range of container serials for certain warehouses e.g. W1 container serials start with 1, W2 with 2 etc. in such as case, the leading digit from the container serial can be removed and suffixed to LPN prefix:

This way, W1 will always generate LPNs in SSCC18 format that is distinct from W2.

5. Create a label format “UCC128” for type “Shipping Content”. Include fields such as LPN (SSCC-18), Ship to address, PO, Ship from address, etc. as shown in the figure above. You can make this the default label format for “Shipping Content” label.

6. Select a valid printer.

7. Assign “Shipping Content” label to business flow “pick drop” (you may use other business flows like packing workbench, ship confirm or pick load)

Recalls happen on a daily basis in almost every industry. A quick glance at FDA's announcements we find the following major recalls in the past week:

BABYRIDE ( 09C003000 ) (Mon, 28 Sep 2009 06:00:00 EST)
PIRELLI ( 09T012000 ) (Mon, 28 Sep 2009 06:00:00 EST)
DUCATI ( 09V365000 ) (Mon, 28 Sep 2009 06:00:00 EST)
IMI Cornelius Recalls Juice Dispensers Due to Fire Hazard (Thu, 24 Sep 2009 12:00:00 GMT)
Price Rite 25 Ct Beef Bouillon is Being Voluntarily Recalled Due to Allergy Alert(Thu, 24 Sep 2009 18:11:00 EST)

A poorly handled recall can be extremely damaging to a company. If not enough products are recalled, there is a chance that potentially risky item can still put customers at risk. If too many products are called, it can incur significant added cost to the company. Furthermore, a slow response to crisis would be damaging to company brand and could even result in lawsuits. This is where genealogy comes in handy.

Genealogy is often one of the less mentioned topics of logistics planning, but nonetheless it is an important one for the reasons given above. In short, genealogy is a tool that captures and maintains product composition history. In this post, we'll discuss the two general forms of genealogy in the Warehouse Management System (WMS) and put it in context of how genealogy can be useful.

Lot Genealogy

The most commonly genealogy in warehouse operations is in the form of "Lot Genealogy". Lot genealogy tracks the composition and where used history of a lot through split, merge and move. WMS automatically logs these transactions performed on any given lot and displays them in a tree-like structure. Lot genealogy is particularly useful in product recall situations. As an example, lot genealogy can be used when a company issues a recall for all finished goods containing a tainted lot of supplier raw material.

Serial Genealogy

Serial genealogy is the complimentary version of lot genealogy commonly used for discrete manufacturing. Serial genealogy is recorded upon job assemblies when the operator enters the generated serial numbers for each assembly. Serial genealogy works seamlessly with lot genealogy in the case of lot -> serial transactions. The ability to track individual item is useful in the case of asset maintenance and returns. As an example, it is possible to look up a returned faulty return product's serial number to compile a list of components and assemblies.

Genealogy in E-Business Suite tracks in more ways than serial and lot genealogy, and can be applicable in more scenarios than return or recall. This post merely touches two out of the many ways it can potentially benefit your organization. As traceability and accountability becomes more important in industries like consumer goods and pharmaceutical, genealogy is likely to become a focus of the next generation logistics processes.