The History Of Warehouse Management System

Published Date: 02 Nov 2017

1. WAREHOUSE MANAGEMENT SYSTEM (WMS)

Warehouse management system is a pivotal part of the supply chain which mainly controls the storage and movement of materials within a warehouse and processes the transactions, including receiving, shipping, picking and putaway. WMS also enables in directing and optimizing stock putaway according to the real-time information of bin utilization status.

Warehouse management system works on Auto ID Data Capture technology, such as mobile computers, barcode scanners, wireless, RFID and LAN’s to efficiently monitor the flow of products. In this process, data is collected and there is either batch synchronization, or wireless transmission to a central database in real time basis. Then the database provides the status of goods in the warehouse accurately. The main objective of WMS is to provide an automated (computerized) procedure to handle the records of incoming and outgoing goods. WMS provides a helpful link to logistics management and also for order processing in order to pick-up, packing and shipping the product out of the facility. (Wikipedia)

WMS benefits:

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 by 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 labour 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, there by reducing the warehouse handling. Thus material flow is optimized by WMS using cross docking function.

The above mentioned benefits which are achieved by WMS involve high cost for the organization to spend. WMS takes into account or uses all the advanced techniques in order to improve the warehousing activities and also contributes to the efficiency of the supply chain management against a very high cost. So it is very important to follow few steps while implementing WMS by the companies in order to control the cost involved in implementing it.

2. JUST-IN-TIME (JIT) WAREHOUSING

JIT can be best described as an inventory strategy to enhance the return on investment by decreasing in-process inventory and its related carrying cost .JIT concept is based on delivering the product directly from the supplier to the retail outlet and shelf the products in the retail store eliminating the concept of warehousing which is now becoming more prominent in the businesses because there is a drastic reduction in the costs of the businesses by eliminating the warehouse thus eliminating the inventory holding costs. As the distance between the supplier and the retailer increases, it builds up the need for a warehouse in between the geographical regions to reduce the transportation costs and to add some value adding activities to the products. There are also some other advantages such as consolidation and pooling if a warehouse is located between the supplier and the manufacturer.

3. RETAIL WAREHOUSING

Retail warehouse is the concept of selling the goods in the warehouse itself. In this kind of warehousing the goods are on display in the warehouse for the immediate purchase by the consumer. It is a dynamic industry and the amount of floor space, type and location occupied by retailing is determined by the number of influences forced by the consumer, the developer, land use planner and the retainer. In the last 10-15 years there is a drastic change in the market needs, the dramatic decrease in the rate of growth of the population has given pace to population decentralization. The growth of new companies and with the corporate rationalization after post war period retail warehousing has become more common business concept. (Wikipedia)

4. CONCEPT OF PAPERLESS WAREHOUSE SYSTEM

The computer has eliminated tremendous amount of paper work transactions which take place on a daily basis in a warehouse. In between receiving and shipping there are many operations which require lot of paper work. As the material is picked for an order, the operators must write down the quantity which is picked and all the other parameters which are necessary for giving the right information. The employee schedules and working hours also require lot of paper work which make it very hard to control and maintain all these records on mere paper sheets. This can be eliminated by integrating mechanical and electronic equipment by data scanning equipment which communicate directly with the computer, which in turn reduce the burden of paper work in the warehouse.

Control of computer in warehouse

The mechanical and electrical equipment must be integrated in order to use them efficiently and effectively and this can be done perfectly by computer. This will in turn reduce the burden on the personnel and this can help in reduction of labour in warehouses.

The computer can be used for maintaining the identification and location of the goods in the warehouse. The computers can also be used to attain an optimized solution for using the floor space of the warehouse efficiently using some software which is installed in the computer.

The major advantages of computerization of the warehouses are:

Improve productivity

Control of physical operations

Optimize the space utilization

Maximize the flow of goods and increase the fill rate

Minimize the costs

Motivate the employees

The main fields in which computer are extensively used in a warehouse:

Order entry

Inventory management and control

Receipts and inbound quality control

Stock location and space utilization

Work scheduling

Quality control and assurance

Integrating the computer with warehouse equipment

Shipping schedules and transportation

Employee satisfaction and motivation

Warehouse performance reports (Raymond A. Nelson, 1985)

Integrating the computer with warehouse equipment

Nowadays, all the mechanical and electrical equipment is more or less integrated with the computer systems in the warehouse. The equipment which is integrated to the computer system is:

Moving materials

Conveyors

Forklift tricks

Tractor trailer trains

Storage material in the warehouse:

Racks

Shelving

Automatic storage and retrieval systems

Picking customer orders:

Pallet picking

Case, inner pack, piece packing

Sorting and accumulation of material

Sorting systems

Conveyors

Palletizers and De-palletizers

Controlling and recording activities in a warehouse

Optical printing

CRT devices

Weigh scales

Labeling systems

Metering systems (Raymond A. Nelson, 1985)

1.6 Industries with different warehousing models

TNT

VOLVO

1.7 Challenges involved in warehousing for logistics companies

The traditional warehousing technique is becoming obsolete since the last decade of the 20th century with introduction of some of the sophisticated techniques such as JIT, deployment of WMS, development of automation and control systems, deployment of goods identification techniques like RFID, voice picking etc. These new developments specially designed to enhance the return on investment of the businesses by optimizing the inventory levels and help in reducing the overall warehousing costs.

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 everyday, many problems are also arising making Warehousing more complex. This in turn is affecting the whole supply chain management.

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

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.

2. LITERATURE REVIEW

"Mahesh Kumar Rajuldevi 2008-THEORY AND PRACTICE IN WAREHOSING": The problem in the warehouses is that the old and conventional methods which are obsolete are combined with very crowded conditions. Hence there is always a quest for newer and better methods. However, merely installing the newer methods does not mean that the system is effective and efficient, there is also necessity of a strong supervisory organization of the system to make the methods more effective and this also requires lot of training and managing the operations. Comparing the present situation to the theoretical framework in order to get an idea of the strategies deployed by the businesses. the warehouses today are deploying a mixture of both latest strategies and technologies and the traditional methods in order to have a good efficiency in the warehouses.

"Tomkins 1990-Warehouse management systems’’:

The majority of warehousing problems occur because of a lack of control of inventory,

Operations, and/or management. To become dynamic, successful and consistent, an organization must control its warehouse operations. A principal requirement for controlling the warehouse is harnessing the power of technology to maximize a facility’s potential.

Furthermore, the road to overall organizational excellence goes right through the warehouse

door. A control system is a means by which operations are managed. It can be manual or

computerized. Its basic objectives are:

To identify and coordinate the work

To help maximize performance and customer satisfaction and minimize mistakes.

To report the past, present, and future work status via activity-based costing.

A manual control system uses physical, paper-based technology to attempt to streamline

warehousing operations. Due to the rate of change; demands for accurate real-time

information; expectations of next-day service and marketplace competition, the use of

manual systems in the 21st century is unrealistic. Today, the need to computerize is critical;

tomorrow it will be too late.

A computerized warehouse management system (WMS) is the integration of bar coding

technology, radio frequency (RF) communications equipment, hardware, and software. The

sophistication of WMSs can vary from simple stock location control to systems that can nearly maximize customer satisfaction, space, labor, and equipment in the warehouse.

It is important to note that one should not confuse WMS technology with business systems

applications that impact the warehouse. A mainframe inventory control application or module is not a WMS. A manufacturing resource planning (MRP II) system is not a WMS. AWMS is an operating tool that is based upon the needs of the warehouse operation and provides tools and information for the management of the warehouse.

"Hompel,Ten.,Michael ., Schmidt, Thorsten" 2007-Due to the changing trends in the businesses, warehousing and distribution operations should adopt to the emerging changes and growing needs of the customers. The term ‘Globalization’ brought rigorous changes in the field of logistics. The distribution operations now pay more emphasis on fewer inventories, smaller order sizes, larger SKU catalogues, quicker order turnaround, increased customized packaging and value adding services. Once the businesses concentrated only on local distribution centers and now all the companies give more importance on having more globalized distribution centers, and instead of having single network channel, they are having multiple distribution channels. In order to cope to these changing trends every second, most of the companies have deployed new technologies such as Warehouse management systems (WMS) and Transportation management systems (TMS) and some have decided to redesign the processes and facilities to meet the emerging requirements as well as to reduce costs and improve service levels to the customers at the same time. Some large scale businesses have gone one step ahead and decided to deploy automation of the whole warehousing operations. Some have already opted to outsource all their warehousing operations to third party logistics provider (3PL).

"J.A. Tompkins" New York 1996-warehouse management system technologies

The majority of warehousing problems occur because of a lack of control of inventory,

operations, and/or management. To become dynamic, successful and consistent, an organization

must control its warehouse operations. A principal requirement for controlling the

warehouse is harnessing the power of technology to maximize a facility’s potential.

Furthermore, the road to overall organizational excellence goes right through the warehouse

door. A control system is a means by which operations are managed. It can be manual or

computerized.

Its basic objectives are:

To identify and coordinate the work

To help maximize performance and customer satisfaction and minimize mistakes.

To report the past, present, and future work status via activity-based costing.

A manual control system uses physical, paper-based technology to attempt to streamline

warehousing operations. Due to the rate of change; demands for accurate real-time

information; expectations of next-day service and marketplace competition, the use of

manual systems in the 21st century is unrealistic. Today, the need to computerize is critical;

tomorrow it will be too late. A computerized warehouse management system (WMS) is the integration of bar coding technology, radio frequency (RF) communications equipment, hardware, and software. The sophistication of WMSs can vary from simple stock location control to systems that can nearly maximize customer satisfaction, space, labor, and equipment in the warehouse. It is important to note that one should not confuse WMS technology with business systems applications that impact the warehouse. A mainframe inventory control application or module is not a WMS. A manufacturing resource planning (MRP II) system is not a WMS. AWMS is an operating tool that is based upon the needs of the warehouse operation and provides tools and information for the management of the warehouse.

" Bridget McCrea" October 01, 2012-logistics management

The "warehouse" concept is simple in theory. After all, how difficult can it really be to manage a cavernous space filled with racks, boxes, pallets, and forklifts?

In reality, the task is huge and requires the right mix of people, systems, and solutions to run smoothly. For many logistics professionals, the latter need is filled by a WMS, which is tasked with controlling the movement and storage of materials within an operation and then processing the associated transactions.

As WMS evolved over the years, the number of functionalities that these systems can handle has increased exponentially. Wave and batch picking, task interleaving (mixing dissimilar tasks like put away and picking), automated data collection (ADC), advanced shipment notifications (ASN), cross docking, and slotting are just a few of the vital warehouse functions that today’s WMS can tackle. 

According to Reiser’s research at ARC, the WMS add-on market was one of the sector’s key drivers in 2011. Add-on functionalities like analytics, labor management, and optimization are in high demand as shippers strive to work smarter, better, and faster in today’s competitive business environment.

Joe Vernon, manager of North America supply chain technologies for Capgemini, certainly agrees with Reiser’s assessment. "We’ve seen increased breadth and height within the base of standard WMS products," says Vernon. "There are so many features that come standard and many more that shippers can pick out and use as they need them. That’s helped more end customers make ‘buy’ decisions."

Availability of turnkey, ready-to-use systems is also driving demand, says Vernon, who points to RedPrairie’s WMS as a good example of a solution that allows shippers to "purchase a license and go live with a minimal amount of work," he explains. "Just three or four years ago that would not have been possible due to the need for changes and modifications."

"Clint Reiser" 2011-logistics management

The warehouse management systems (WMS) market is on a tear. In 2011 it grew by 10 percent over 2010 to nearly $1.3 billion, according to ARC Advisory Group, a leading supply chain management software analyst firm.

That double-digit growth aligns with Logistics Management’s 2012 Software Survey, which identified WMS as the top software choice for 35 percent—the highest percentage across all supply chain software sectors—of the logistics professionals that were in the market for supply chain solutions over the past year.

Clint Reiser, ARC research analyst, credits several forces with driving the impressive WMS market growth. "A demand bottleneck created by the economic recession—and then let loose in 2011 when companies slowly began spending again—was one of the key drivers," says Reiser. Also buoying the sector’s impressive increase, according to Reiser, were growth spikes in emerging markets like Latin America and Asia, the introduction of add-on functionalities, as well as the strong growth within the discrete manufacturing sector.