There is no question that information technology is critical to warehouse performance, but its effectiveness depends to a great extent on the degree to which companies can weld disparate components into an efficient overall system.
Technologies such as electronic data interchange (EDI) – for exchanging business documents – real time response, voice recognition and radio frequency identification (RFID) have all upped the complexity of warehouse IT. And it’s not going to get any easier.
‘It is now rare to find a warehouse management system (WMS) working in isolation although there are still a few paper-driven systems out there. Instead most systems interface with combinations of hardware and software aimed at improving performance at local or enterprise level,’ says Alex Mills, marketing director of Chess Logistics Technology.
Early supply chain systems operated in batch mode. They collected data over a period of time before passing it on for further processing which often took place over night. However, the arrival of on-line systems and cheaper radio frequency (RF) communications has made it possible to track and trace items almost instantly.
Running a warehouse used to be a matter of making best use of space, but efforts to make the supply chain more responsive mean that stock turn is now the key measure of how well a warehouse is performing.
WMS have had to keep pace by ensuring operators can hold inventory for shorter periods, handle it better, improve data accuracy and make sure goods reach their destination in a timely manner. They must support a throughput that keeps capital tied up in the warehouse to a minimum.
Manufacturers of data capture devices have not been slow to respond either: technology for capturing data is already into its second generation. Automation that began with battery powered handheld units gathering information from keyboards or laser scanners for batch processing has now progressed to devices capable of dealing with multiple media in real time over local or wide area wireless networks.
Real time systems have greatly improved the speed and accuracy of supply chain monitoring. A pallet can be scanned with a hand-held bar code reader and data about it transmitted to back office systems almost immediately for distribution to users at head office or in customer premises.
For these real time supply chain applications to work effectively they must be able to gather data from different manufacturers’ systems: in the jargon, they must be interoperable. Despite commercial rivalries, suppliers have made progress in improving interoperability. Terminals from leading companies will now work together, increasing the flexibility of data capture systems.
One of the key elements in the improvement of data capture technology has been the way techniques developed for one application have been combined with those designed for other purposes. For example, laser bar code scanning has now been superseded by image scanning based on charge couple devices (CCD) that were originally developed for use in cameras. The adoption of digital imaging in bar code scanning allows companies not only to scan bar codes but to capture images of signatures, addresses and even parcels or packages.
Protecting your reputation
The ability to integrate data capture devices into enterprise systems was critical in a recent project carried out by vehicle manufacturer DaimlerChrysler. Accidentally mislabelling parts or shipping them to a wrong location not only costs the company a huge amount of money, but also damages DaimlerChrysler’s image. The company recently installed SAP Automotive at its Kassel, Germany plant and wanted data capture devices that could be used with the SAP system. DaimlerChrysler opted for Symbol MC9060-G handheld computers.
‘It was important for us that the technology we would implement be future-proof,’ says Karsten Götze, project leader for WLAN Infrastructure at the SAP Automotive project at Kassel. ‘One requirement was that the devices would be able to support new applications without a problem, since DaimlerChrysler plans on using them for several years. This was the reason that we decided in favour of a Windows-based device. However, the device also has to work seamlessly with the rest of the IT architecture.’
‘The most common interfaces are with radio frequency equipment such as hand-held and truckmounted barcode scanners,’ says Mills. ‘These have been around for years and are considered entry level by many users. Barcodes and other machine-readable codes are still ideal for the stock management and traceability requirements that are central to most warehouse operations.’
When the Peacock Retail Group, which operates 240 stores selling clothing and home furnishings in the UK, consolidated six warehouses in the Cardiff area of Wales into a single distribution centre, it installed a bar codebased wireless system. The company installed 28 wearable and six truck mounted terminals and a wireless local area network from Symbol Technologies.
‘With the system we are able to track the movement of every single item of stock wherever it is in the building, in real-time. Whether an item is moved by hand or by truck, we know precisely where and when,’ says operations manager for Peacock Retail Group, Laurie Hynds.
‘If at any point in the process someone is at the wrong location, handling the wrong product or trying to send it to the wrong place the system simply sends out an alert and prevents the action. This gives us a level of immediate control that is simply not possible with paper or batch systems.’
One of the big advances in data capture has been the emergence of wireless networks – either locally in warehouses or over wide areas to connect data capture devices in vehicles with enterprise systems in real time.
With some 80 per cent of warehouses now equipped with wireless local area networks, the flexibility of handheld devices has been greatly improved – compared with the older batch style of working. Outside the warehouse, mobile telephone networks and the more recent higher bandwidth general packet radio systems (GPRS) are increasingly providing communications on the move.
UK handbag and leather accessory manufacturer Radley is one company that recently installed a wireless or radio frequency (RF) network. Radley had not even had a WMS before when it swapped paper and pencil for an Empirica system from Chess Logistics Technology. Growth at the company meant it had outgrown its warehouse in London. Radley decided to relocate its distribution operations to a brand new warehouse outside the city at Milton Keynes. The new facility covers 4200 sq m and contains 5000 pallet and 9000 shelf storage locations.
One area where the WMS system has proved especially useful is managing single item orders, says Radley. Unlike many warehouse operations, the company often breaks palletised loads and cartons down to individual items. Some of the WMS the company assessed did not have facilities to cope with this type of stock management. ‘The other systems we looked at could not cope with breaking loads to a sub-carton level,’ says Justin Murphy, operations manager, Radley. ‘But our new system is able to track single items whenever we want.’
Increasingly, wireless is being used within warehouses to implement voice directed picking. In a typical application, voice devices receive instructions from an order management or warehouse management system. The WMS first synthesises the data into speech, enabling workers equipped with a headset to receive oral instructions from a computer system directing their work.
In turn, workers use a microphone to respond to the computer and note that their task has been completed, often using coded responses. In warehouses, such systems have been used for parts inspection, put away and order selection. The key advantage to this technology is that the warehouse worker’s hands are free to lift items or operate equipment as he or she communicates with a computer.
Voice directed picking
Voice directed picking introduces new possibilities by enabling dialogue between WMS and picker. Staff wear unobtrusive headsets and follow audible instructions issued directly by the WMS. The WMS issues instructions in sequence and only authorises a new pick when the preceding action has been confirmed. The best systems offer simultaneous multilingual capabilityso that people from different countries can work alongside each other using their native language.
It is not uncommon to find voice picking systems that have reduced picking errors by 50 per cent, according to Mills, which even in modest operations can mean hundreds of mistakes are eliminated every week.
More orders are fulfilled on schedule and less product ends up in the wrong place at the wrong time. This improves customer service and saves costs because there is reduced need to manage returns or issue replacements. Picking accuracy – often already well over 99 per cent with conventional WMS using barcodes – can now approach 100 per cent.
The latest development has been the emergence of RF equipment which supports voice and data in the same device. This offers greater flexibility because users can choose whether to use data, voice or some combination of both to fulfil their requirement by using the advantages of each where they are most appropriate.
Flexibility is a key consideration for logistics managers, many of whom have invested considerable money and human resources in warehouse management systems that predated the arrival of voice technology. WMS suppliers are starting to address this by developing tools that simplify the integration of legacy applications and voice-based systems with minimal re-engineering.
WMS packages are also geared up to deal with a wider range of warehouse management tasks thanpreviously such as organising transport in the yard and improving warehouse labour productivity. Several technology companies have introduced productivity improvement packages that help control labour costs in distribution centres. Systems are becoming increasingly flexible with software that is now capable of handling both bulk and single picking, so that store and individual customer orders can be fulfilled.
Orders received via mail-order or via the web, can begift-wrapped, packed, labelled and shipped, while the data collected during the fulfilment process that is held in the WMS system can be forwarded to enterprise systems running merchandising, finance, marketing and transport management applications.
Sophisticated warehouse equipment such as sortation systems to manage high throughputs with exceptional accuracy are also being linked to WMS. For example, interfaces with conveyors and mobile and fixed-position scanners allow the WMS to oversee picking and then track items through the warehouse, onto the loading bay and then aboard the delivery vehicle. The objective is to remove human intervention to reduce costs and increase overall productivity.
Warehouse managers are also beginning to use available information to develop greater understanding of their operations. An emerging trend is the provision of key performance indicator information by the WMS which helps logistics service providers to measure, confirm and improve their performance. These facilities are increasingly in demand from third party logistics providers who need to demonstrate performance as part of their service level agreements.
However, the wireless technology that has generated more interest than any other in recent years is radio frequency identification (RFID), which involves tagging goods and containers with chips fitted with radioantennae and memory. Leading WMS already sport basic RFID modules that enable those using the technology to gather the Electronic Product Codes that are being used to identify items in the supply chain.
Although the cost of tags and associated readers remains a stumbling block, proponents are confident that volume production can bring prices down. Chip companies talk about tags costing under a cent to buy. The challenge for warehouse managers is to ensure that the new technology like its predecessors is set up correctly and is effectively integrated with existing warehouse management systems.
Many users are still at a pilot stage: testing the technology internally and ironing out snafus such as the interference caused by liquids, metals and the presence of nearby readers. RFID also poses important questions about how the potentially much larger amount of data gathered from tags is handled in IT systems to provide a good enough return on investment.
Once again integration is the key to making a technical advance a paying proposition. Only when back office systems are set up to make the most of RFID will the technology have really arrived.