Using Technology That Can Make Your Supply Chain More Efficient

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Technology has almost revolutionised the management and execution of supply chain functions within business today. With vast amounts of innovative hardware and software solutions (either stand alone systems or those that are built into existing modular MRP/ERP systems) available businesses are increasingly looking at how these can be applied to deliver benefit and leverage their position in the marketplace.

Successful utilization of technology can be a critical. For supply chain teams successfully applying technology can deliver:

• Simplification and Improved efficiency
• Improved management information
• Improved compliancy
• Improved forecasting
• Improved accuracy

Technology can be applied to almost every facet of the modern supply chain supporting both tactical and strategic objectives. Whilst simply throwing money at software vendors and consultants in the vain hope that some might stick and deliver benefits is never a good idea. Businesses must consider a targeted, goal orientated approach closely reviewing its operations, understanding specific weaknesses and considering what improvements would deliver strategic value.

One approach is to review the various elements of the supply chain and consider where and how technology could be applied to solve either specific problems or to deliver processes that improve competitiveness. For example:

Planning and Management: With increased visibility and controls inventory controllers can better manage company assets. With software based management reporting forecasting can be simplified and usage rates closely monitored which can deliver clearer buy signals and drive improvements in restocking practices (EOQ’s, Lot sizes etc) driving down costs whilst retaining service levels.

Integration: Delivering closer ties between trading partners facilitating efficiency and accuracy allows organizations to change their emphasis from tactical processes to strategic processes (SCM for example) that can deliver true value.

Warehouse Management: Introducing technology into the warehouse can ensure that the material handling controls are integrated, warehouse space is utilized the best effect and that the inventory overall is managed efficiently.

There is a wide range of technology available from Warehouse management systems through to vastly efficient hand held scanners through to product tags such as RFID which cal all deliver benefit when applied correctly.
Planning: Whilst many MRP systems have dedicated planning tools organizations must ensure they leverage this functionality. Robust planning ensures that resources (labor and material) come together at the same time and that the business maximises it’s own “engine room” a planning system that is not delivering means a business that doesn’t deliver either.

Finance: Whilst almost every finance system will manage the key tasks (bought ledger, sales ledger etc) to truly control costs organizations must get smart at looking under the hood of their business ascertaining key cost drivers and opportunities. For the supply chain this is centred around two areas – firstly by ensuring that the systems that manage product “bill of materials” and costs are closely integrated and secondly by having a robust supplier spend analysis system.

Asset management: Technology can help to manage assets and help mitigate risk within the supply chain. Asset management can be labour intensive and is often linked with meeting key service levels (i.e. repair turnaround times). With technological systems, asset management (including the control of rotable stock pools) can be simplified with improved management information and controls.

Purchase to Pay (P2P) Through applying workflow and flexible controls implementing a software based purchase to pay solution can deliver many benefits from integration, efficiency, control and savings. Purchase to Pay is a huge area and deployments can be small (focus on a key part of the process) or significant (focus on many or all of the purchasing process).

Technology will always be a moving feast. There will continue to be innovation in terms of functionality and its application we have only seen the start of the technological revolution and businesses must continue to be tuned into software/hardware lifecycles to avoid being caught in the “legacy application” trap. A failure to consider an appropriate supply chain technology strategy can not only impact efficiency but can also impact competiveness as other businesses use new tools to better serve the market.

Introduction to Warehouse Management Systems (WMS)

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Warehouse Management Systems (WMS) are typically software solutions whose primary purpose are to co-ordinate and administer the storage and movement of products and materials within a company’s warehouse and related processes.

What does a Warehouse Management System (WMS) do?

Whilst most WMS will have a broad range of related functionality this typically includes tools that help with:

Stock picking,
Inventory control,
Label printing,
Returns,
Cycle counting,

Some WMS systems will go beyond the physical warehouse and extend functionality to

Yard management,
Transport,
Labor (i.e. Timecards)

Key Benefits of Warehouse Management Systems

WMS can provide numerous benefits including

Faster goods movement,
Better management information,
Reducing errors
Reduced levels of data entry
Optimization of storage locations,
Improved planning

WMS can help facilitate automation and are often coupled with other solutions such as RFID and warehouse control systems that manage materials-handling.
For the businesses that utilize products incorporating shelf life (of life expiry dates) WMS can help in prioritizing dispatch of appropriate goods, eliminating errors and reducing material scrappage due to life expiry.

WMS Solution Providers

Though there is a wide variety of Warehouse Management Solutions which predominantly come from 3rd party companies that specialize in WMS, there are some packages, provided by ERP vendors, that come as a bolt on to ERP software (SAP for example). Most systems will offer some level of integration into other software including existing legacy products).

While bolt on ERP software modules are popular well known providers like RedPrairie and Infor have competed well with the large ERP vendors and have been successful in sectors such as FMCG and 3PL organizations with their products commonplace in many companies around the globe.

Many WMS systems do not rely solely on traditional use of desktop computers with systems available through PDA’s or other mobile devices. This can offer various benefits both in management information (real time tracking for example) and of course in the nature of warehouse tasks which are not typically desk bound.

WMS in SME’s

Whilst WMS are often prominent in large organizations Small businesses have been slow to implement the solutions. High volume (high number of SKU’s) and complex warehouse operations tend to benefit most from WMS where smaller organizations cannot capitalize on the benefits (due to scale) and also typically experience issues in interfacing (or funding the implementation) with other software packages such as Finance and procurement packages.

Many SME’s have looked at the cost of such systems and compared that to typically cheap labor rates coupled with relatively simple process and cannot justify the capital expenditure.

WMS costs are typically a mixture of software ,WMS hardware and implementation. As with any software deployment, ROI is realized over time. How much time will typically depend on the size of the organization and its complexity of operations prior to the WMS being deployed.

One WMS fits all

Many warehouse systems are customizable and can be tailored to suit the business sector they are deployed in and its common to find WMS in many industries from manufacturing, pharmaceuticals through to distribution and retail organizations.

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