Norman Saenz, Jr., assistant vice president of TranSystems, urges companies to adopt the big picture, when deciding how to implement and operate various supply-chain execution applications.
Process change comes before the adoption of advanced technology in the warehouse, says Saenz. "If you put a technology on a bad process, you're just going to enhance that bad process," he says. A close look at way in which a warehouse operates can yield fresh ideas for boosting productivity, even before new systems are installed.
One of the first tasks that a warehouse should examine is product slotting. By getting the right items in the right place, a facility can boost productivity by 20 percent or more, "before technology is even laid on top of that process," says Saenz. "It's really low-hanging fruit for many people." Most Tier 1 warehouse-management systems include a slotting module. There are also a number of stand-alone packages that fulfill the same purpose. Either way, companies need to move past "seat-of-the-pants" judgments to a more scientific examination of slotting procedures. The technique can help them to manage in complex environments that deal with seasonal peaks and valleys, frequent promotions and many new products.
A classic "ABC" analysis of warehouse activity will help to identify fast and slow-moving items. For most warehouses, 20 percent of the products account for 80 percent of total activity. Managers should also know exactly how much of a given product is being picked. "If you're not keeping up with fast and slow movers," Saenz says, "that can really kill your productivity."
Another big trend in warehouse systems today is the use of labor-management systems. "People make up most of the costs in a warehouse," says Saenz. "This lets you manage people and get productivity and feedback [from workers]."
WMS packages must integrate smoothly with transportation-management system software. Otherwise, an operation is liable to sub-optimize one process while optimizing another. Making the best use of cubic space within a trailer, for example, can slow down order processing within the warehouse. Saenz says the various disciplines within a logistics organization need to work closely together to prevent that from happening.
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