Faced with ever-leaner budgets, many retailers are looking for high-impact, low-cost ways to improve productivity. But one of the most effective ways to accomplish this goal may be by updating something many retailers already possess—a warehouse management system (WMS).

A WMS is complicated and labor-intensive to implement, with long timelines and few dates available for going live. Making matters worse, defect resolution and regression testing can play havoc with even the best-planned timeline.

As a result, retailers often decide to take their implementations live with only the essentials in place and a long list of “nice-to-have” functionalities deferred until later. These missing components mean that even elements of core functionality that are included at the go-live date operate at less than their full potential.

And for many retailers, later eventually becomes … never. The continued pressures to get product out the door, adapt to changes and support other major initiatives often conspire to keep these planned improvements from seeing daylight.

Deferring key elements of the WMS implementation can leave much of the promised ROI on the table, hence the need for what I call WMS implementation 2.0. This is a purposeful, comprehensive effort to identify the key elements that were left on the bench during the original implementation and rapidly design, develop, test and implement them to unlock new value from the WMS.

The elements included are different for each business, but here are my top 10 items that typically miss the cut for the first go-live but which can add tremendous value when implemented later.

1. Labor Management Systems

When purchasing a WMS suite, companies often include the vendor’s LMS module, planning to implement it at some point in time after the WMS is live. If the WMS has been up for a year or more, that time may be now.

A well-engineered labor standards program driven by an LMS can routinely achieve savings of up to 20% in DC labor throughout the facility. By including an incentive program, that number can often be improved to 30% or more. Of the items on the list, this one requires the most effort, but it also offers the greatest reward.

2. Task Interleaving

In its simplest form, task interleaving involves having each lift operator alternate between putaway and picking/pulling tasks that are physically closest to each other, greatly reducing empty “deadhead” travel and getting more productive work done with fewer people and machines. If a retailer has bandwidth for only one additional implementation, this is often the item to add, because it can improve productivity of the interleaved operation by up to 30%, cutting costs and increasing throughput. Task interleaving can also be configured to include a variety of other tasks, including cycle count, audit and empty pallet removal.

3. Slotting/Correct Assortment of Pick Location Types and Sizes

Most tier-one warehouse management systems include or make available a slotting module that integrates with RF-directed tasks to relocate product to more appropriate types of pick locations in response to changes in the cubic velocity of SKUs. Correct and frequently updated slotting plans increase pick density and efficiency while streamlining replenishment, resulting in significant increases in productivity.

But sometimes, the best slot is no slot at all. Relocating very slow movers out of the active pick area frees up space and improves pick density. The WMS can be leveraged to dynamically assign a temporary pick face for these items. Similarly, dynamic picking can be used to handle sudden spikes in demand that happen too quickly for slotting programs to accommodate.

The profile of orders that an operation fulfills will dictate the correct assortment of pick location types and sizes. Consider how many full-pallet, case-pick, flow-rack, shelf or other pick locations exist, along with the range of pick location sizes. Did analysis of order profiles drive the decision to have that assortment of pick location types and sizes? Is the current assortment well suited to the needs of the business? The range of opportunity is wide here, but fixing poor slotting can cut up to 20% of picking labor.

4. Label-Distribution Kiosks

In the rush to go paperless, retailers sometimes forget that certain business imperatives dictate label or packing list distribution to pickers. In large operations, this has often meant that all pickers line up at a central control desk to receive their labels. Not only does this require pickers to return to the desk after each assignment, it can result in the avoidable lost productivity of waiting in line, a coordination nightmare for clerks handling mountains of paperwork and, of course, the extra headcount of those clerks themselves. Leading retailers are getting around this by stationing several PC-and-printer combos throughout the pick area and letting each picker scan their ID to print the appropriate labels for their pick assignment. This eliminates the need for clericals to staff the label desk and reduces travel and congestion for order pickers.

5. Wave Balancing and Sizing

The goal of wave management is to balance replenishment and picking in such a way that neither part of the operation runs out of work or has to wait on the other to finish. Although execution can be daunting, the result—a balanced operation and a reasonable number of waves per day, which cut the downtime of pick and replenishment staffs—is well worth the effort.

6. Optimized In-Wave Replenishment Quantities and Trigger Points

Despite the crucial nature of replenishment, it rarely gets the attention it deserves. Different types of product, based on size, velocity and the type of pick location (single pallet vs. flow rack, for instance), demand tailored replenishment configurations. Pickers arriving to empty locations or stock overflowing a location are good indicators that something is amiss, and using analysis to determine optimal in-wave replenishment levels can help eliminate these problems.

7. Voice Picking

RF picking works great in many warehouse operations, but some others will show a marked improvement in productivity with voice picking. Prime candidates for voice picking include situations that require workers to use both hands—like when dealing with heavy or large products—or when workers have to wear gloves when handling products such as frozen foods.

8. Off-Peak or Lean-Time Replenishment

By electing to replenish only during the wave (in line with picking), something close to a “double pick” can occur. Not only does this have implications for productivity, it can directly affect the operation’s speed in flowing orders out the door during peak operating hours before carriers pick up at the end of the day. Sometimes it’s worth topping off your pick locations overnight to speed order-to-ship time during a warehouse’s busiest hours.

9. Visual Management

Linking wave status inquiries, task completion inquiries and other work-tracking screens to large display screens installed on the warehouse floor allows managers and associates to spend more time on the floor to quickly assess progress. Updated SOPs and job aids such as wearable shortcut guides allow users to confidently and accurately perform work in cross-functional areas outside their normal department.

10. Putaway and Pick Zone Optimization

Often, suboptimal configurations are not obvious until after go-live. The originally specified zones sometimes result in unwanted congestion or unnecessary travel. While the operation can still get shipments out the door, real productivity gains often go unrealized. In addition, those who implemented with user-directed putaway often find efficiency and throughput improvements by turning on system-directed putaway.

Conclusion

In this environment, many executives are looking for fairly short, high-impact projects with good ROI and relatively modest cost. If you have a WMS in place that has not yet fulfilled the goals of its business case, a WMS implementation 2.0 initiative may be just what is required to wring those efficiencies out of the software you already own and use each day. This list is just the start—there are dozens of additional elements that can bring significant value to the WMS system you already own.

Maximizing the Value of WMS Over Time—VF Case Study

“For VF, one of the key driving factors to get to WMS 2.0 is business change. When does the business model or some outside influence drive us to seek ‘disruptive innovation’? If we cannot get the initial functionality, we have a process for minor individual enhancements and the benefit of each enhancement is worth the cost.

For example, dynamic picking and sophisticated SKU profiling algorithms can bring huge benefits to a DC. Labor management is another key benefit to look at. LM systems can often be added to an existing WMS with limited interruption, starting with simple single-level engineering standards and time punchcards or reporting, and can grow to full-incentive pay systems. Often, a WMS needs time to stabilize after an upgrade before engineering standards can be applied, so one- and two- year-old WMS implementations are fertile ground to pursue.”

—Terry W. Brown

VF Services, Director of Common Systems

15 June 2012