Inventory Management And Warehouse Operations

Published Date: 02 Nov 2017

Early warehouse management systems (WMS) stuck to the basics—tracking what was coming in, what was going out, with workers manually keying in data along the way. Since then, the technology has matured to expand beyond the core functions of receiving, picking, and shipping to include an extensive menu of modules to execute and support every conceivable task occurring under the roof of a warehouse or distribution center (DC).

Many come with sophisticated rules and logic, real-time seamless integration to aligned business applications, and effortless interfaces to automated equipment and mobile technology. Yet, despite having many of these technological advancements within their reach, users are still not using their WMS to their fullest potential. "Industry and market folklore suggests that users are availing themselves of no more than 60 percent to 65 percent of the functionality of contemporary WMS," says John Hill, director for supply chain and logistics consulting firm, St. Onge Company. Dwight Klappich, vice president for research and consulting company at Gartner Inc., goes as far as saying that a name change may even be in order. "We shouldn’t call it a warehouse ‘management’ system; we should actually call it a warehouse ‘execution’ system, because that is basically what companies are using it for—the execution of specific warehousing tasks."

By "Jeff Berman", August 09, 2012

The Warehouse Management System (WMS) market saw significant growth in 2011, increasing by ten percent, according to data from Dedham, Mass.-based ARC Advisory Services. Reasons for the growth in the WMS market were widespread, according to ARC officials. In its report, entitled "Warehouse Management Systems Worldwide Outlook," ARC noted that WMS revenues for add-on functionality like labor management systems and warehouse analytics have been growing at impressive rates. They explained that many WMS suppliers are offering a wide-range of available WMS add-ons and other suppliers are developing add-on functionality to extend their current WMS offerings. What’s more, with more suppliers offering add-on services will provide new opportunities for cross-selling into their respective installed base and also offer customers the option to purchase add-ons from their incumbent WMS suppliers. The firm said it is forecasting "above average growth rates" for the add-ons as more suppliers extend product lines to include additional add-on options.

The estimate for 2011 WMS market was nearly $1.3 billion," said ARC Enterprise Software Analyst and principal author of the report Clint Reiser in an interview. "Suppliers noted high levels of growth in both the Latin America and Asia markets. For sales of add-on functionality, analytics, labor management, and optimization functionality remains robust. For end user industries, discrete manufacturing experienced strong growth last year, but I believe this is in large part due to a delayed rebound from the recent global recession."

ARC said emerging markets are growing faster than developed ones and is reflected in WMS sales. And ARC said they will continue to experience higher growth rates due to current low market penetration and high economic growth in those regions.

Going forward, Reiser said ARC expects strong growth in food and beverage due to traceability requirements and retail due to adaptation to ecommerce fulfillment requirement.

Berman doesn’t expect the growth to remain as strong as experienced last year, because mr.Berman believes that growth was enhanced by the post-recession rebound.

The report added that e-commerce expansion and multichannel retail are increasing demand for WMS services and technology, which support piece pick, pack, labeling, and other process changes driven by the high labor requirements of e-commerce fulfillment.

And these e-commerce increases, said ARC, offer additional opportunities for WMS suppliers to assist retailers and direct-to-consumer manufacturers with distribution efficiencies.

By "Dave Piasecki"-inventory management and warehouse operations

The evolution of warehouse management systems (WMS) is very similar to that of many other software solutions. Initially a system to control movement and storage of materials within a warehouse, the role of WMS is expanding to including light manufacturing, transportation management, order management, and complete accounting systems. To use the grandfather of operations-related software, MRP, as a comparison, material requirements planning (MRP) started as a system for planning raw material requirements in a manufacturing environment. Soon MRP evolved into manufacturing resource planning (MRPII), which took the basic MRP system and added scheduling and capacity planning logic. Eventually MRPII evolved into enterprise resource planning (ERP), incorporating all the MRPII functionality with full financials and customer and vendor management functionality. Now, whether WMS evolving into a warehouse-focused ERP system is a good thing or not is up to debate. What is clear is that the expansion of the overlap in functionality between Warehouse Management Systems, Enterprise Resource Planning, Distribution Requirements Planning, Transportation Management Systems, Supply Chain Planning, Advanced Planning and Scheduling, and Manufacturing Execution Systems will only increase the level of confusion among companies looking for software solutions for their operations.

Even though WMS continues to gain added functionality, the initial core functionality of a WMS has not really changed. The primary purpose of a WMS is to control the movement and storage of materials within an operation and process the associated transactions. Directed picking, directed replenishment, and directed putaway are the key to WMS. The detailed setup and processing within a WMS can vary significantly from one software vendor to another, however the basic logic will use a combination of item, location, quantity, unit of measure, and order information to determine where to stock, where to pick, and in what sequence to perform these operations.

Knowledge management -November 28, 2009

A warehouse management system is an important component of an effective global supply chain management system solution. Warehouse Management System was a system of movement and storage control of materials within a warehouse. Today also includes tasks such as the manufacture of lighting, transportation management order management, and the entire accounting department. Implementation of Warehouse Management System (WMS) will increase in the accuracy, reducing labor costs is saved when the thesis is concerned to maintain the system is less than the work at the warehouse and a greater capacity to customers by reducing cycle time service. WMS does not serve with inventory reduction and greater storage capacity. An increase in the accuracy and efficiency receiving process might lead to the reduction required level of safety has. But the consequence of this reduction is hardly visible for the entire inventory. WMS perhaps not the only factors (oriented batch sizing, lead times and demand variability) the control of inventories. WMS is, however, contributes to more efficient and organized, that leads to increased storage capacity. Recently in the field of inventory management, Infer the largest provider of enterprise software is to develop solutions for the manufacturing and distribution industries. Information management technology for enterprise resource planning is meant (ERP) system. Information technology is used for single and multiple warehouses. It allows manufacturers and distributors carry out and monitor the location of certain items within the facility. The Technology is also very beneficial move for the determination of the size and weight of incoming shipments to establish the perfect way, and to warehouse in the. The professional experts from Infer plan to integrate it into Microsoft.Net based Infor ERP system for manufacturers.

3. RESEARCH DESIGN

3.1 Statement of the problem

Warehouse management was considered to be very simple to handle in earlier days when everything was performed manually. The biggest problems then were the bar codes and space utilization in the warehouse. There has been drastic change in today’s Internet world, after the outbreak of this internet technology everything was looking even simpler than the earlier days with more efficiency and consumption of less time and gaining a competitive advantage with potential economical savings. The evolving technology changed the warehousing methods a lot with logistics being carried out a quicker pace and with very little scope for error. Although there are many technologies evolving every day, many problems are also arising making Warehousing more complex. This in turn is affecting the whole supply chain management. (Hompel Ten., Michael., Schmidt, Thorsten., 2007)

The following are some of the problems faced by today’s warehouses:

Increasing labor turnover in warehousing industries

Warehousing method followed by many companies are expensive

Less WMS capabilities

Automate all the mechanized or manual operations

Satisfy the requirements of the customer without much customization

Integration of the warehouse data with supply chain applications

Compatible to the cost- effective global supply chain

3.2 Need and importance of the study

Faster payback and Inventory returns: WMS reduces the lead time by confining the movement of inventory and improve the inventory records accuracy, this leads to a system which supports the JIT environment.

Efficient-Warehouse floor space utilization: Warehouse management system can efficiently locate the items in relation to receiving, assembling, packing, and shipping point thus contributing to efficient use of warehouse space.

Reduction in paperwork for inventory transactions: WMS minimise the paper work which is associated with warehouse operations such as receiving, picking and packing maintaining the data electronically, and also ensures the timely and accurate flow of information.

Improvement in Cycle Counting: WMS captures relevant data in order to schedule the personnel for cycle counts. These cycle counts can enhance the accuracy of inventory records for planning purposes, and also minimizes the need costly physical inventories.

Reduced Dependency on Warehouse Personnel: The operations such as picking methods, inventory movements and inventory locations can be standardized by implementing WMS. The above standardization results in lower training costs, lower error rate and minimizes reliance on informal practices.

Enhanced customer service: The process can be streamlined from order to delivery with the WMS implementation, and thus companies can accurately find product availability and the realistic dates for delivery. WMS identifies and releases back-order inventory and thus minimizes returns due to the fact that shipment accuracy is improved.

Improved labor Productivity: Cross docking is another important aspect of warehouse management system where incoming shipments are routed to the location near to the outbound shipping dock, thereby reducing warehouse handling. Thus material flow is optimized by WMS using cross docking function.

3.3 Objectives of the study

This research project is aimed at studying profitable warehousing models to be adopted in Bangalore logistics industry as a whole, through which it can enhance its warehousing activities. By investigating the current scale of implementation, perceived barriers for adoption, through general evaluation of WMS, extent of use of WMS capabilities as well as desired R&D needs, this study aspires to provide conclusions and recommendations on warehousing sector in Bangalore.

Hypothesis:

H1: Improper selection of warehousing model can lead to a loss

3.4 Conceptual and Operational definition of variables

3.41 Dependent variable

profitability of the warehouse

Efficient functioning of the warehouse activities

3.42 Independent variable

Adopting & Implementing warehouse management system(wms)

Labour management

3.5 Scope of the study

The scope and tasks of the research project include finding out the scale of implementation of WMS and perceived barriers for adoption, evaluating the strengths and weaknesses of WMS currently adopted by the industry as a whole, examining usefulness versus deployment status of current WMS capabilities and interpreting future R&D needs on desired WMS capabilities. A survey (see Annex) was conducted targeting logistics companies which were engaged in warehouse operations, both operating and not operating

WMS in Bangalore.

4 RESEARCH METHODOLOGY

4.1 Type of Research:

The type of research that is to be performed is partly Exploratory and partly

Diagnostic Research.

4.2 Data collection:

The research contains both primary and secondary data. The data is predominantly from secondary sources i.e. text books, articles, journals, internet and other materials on warehouse management system. Primary data will be collected through interviews and questionnaires.

4.3 Sampling techniques:

The data will be predominantly from secondary sources from published information. Only the primary data collection will require the identification of the specialists with knowledge of the subject matter. Therefore, for primary data collection, the sampling technique used will be Judgmental sampling and also Snowball sampling.

4.4 Data analysis:

Since the data is gathered only from the experts the data will be analysed using Spearmann Rank correlation.

4.5 Limitations of the study:

The dissertation work analyses the purpose through the perspective of the individual firm and this research work solely looks into the internal functions within a company excluding the external environment as much as possible.

The warehouse managers were very helpful in the interviews conducted in all aspects but some questions were left unanswered in the better interest of the companies due to some constraints of the businesses and company policies.

The study is limited to only companies which are located in and around Bangalore.

The research work is mainly constrained to qualitative study and very less work based on quantitative approach is performed.

6 CONCLUSIONS

6.1 Summary and findings

According to survey results, 54% of the warehouses in Bangalore logistics industry have adopted WMS. Though it was described as an under-estimated figure by industrial professionals, it is considered a large scale of implementation for the logistics industries in Bangalore. Graphical comparison was done between small and medium-large warehouses in terms of level of warehouse sophistication and number of employees, among which number of employees was found to be an influential factor for WMS adoption. Thus, it is concluded that the notably large representation of small players (in terms of number of employees) hinders the full implementation WMS in the warehousing sector.

Among the reasons for non-adopters in not operating WMS, high start-up cost was ranked the top one. During interviews, several professionals expressed consensus with this survey finding.

6.2 Implications

The R&D needs for visibility, event management and performance management are all classified as high-importance and high-urgency, although performance management is perceived to be relatively more important than urgent as compared to the other two R&D needs. Especially, the importance and urgency for visibility and performance management R&D needs are slightly higher than event management. As pointed out by several working professionals during interviews, warehousing is a customer-driven service. It is a trend that nowadays customers are becoming more demanding. Thus, R&D needs for WMS are targeted to enhance customer service and increase customer satisfaction.

6.3 Final conclusion and suggestion

Suggestion:

Since Bangalore is not located in the coastal regions it has considerably few large warehouses as compared to other coastal cities. So, the adoption of WMS does not make big business sense for some small players due to low operational volume, as according to a few survey respondent and several interviewees. Therefore, aggregation of warehouse space by merging small players might be seen in the decade to come, which could lead to larger operational scale and the requirement for WMS. Smaller warehouses shall merge and become big players in the market. At the enterprise level, the advantage of centralization of warehouse space is that warehouses can leverage on large scale of operation to enjoy economies of scale and have more resources to offer to the customers. Especially, Bangalore being a geographically small place does not impose significant impacts on the inbound and outbound transportation cost for warehouse centralization. Rather, there would be cost saving on facility set-ups. At the national level, warehouse centralization could further enhance Bangalore’s competitiveness in the logistics industries. Big players with greater extent of WMS usage can largely increase warehouse operational efficiency and productivity.

Conclusion:

In conclusion, warehouses should be encouraged to make full use of WMS capabilities, especially extended capabilities which can increase the profits and warehouse operation efficiency to a higher level in Bangalore.