Warehouse management systems (WMS for short) have become increasingly important to the smooth running of food distribution warehouses, making sure that product is received, put away, picked and shipped out to stores as efficiently as possible.
Still, there are many ways in which WMS can be improved. The good news is that at some companies those improvements are beginning to take place, enabling distributors to come closer to realizing their ultimate goal of delivering the right product to retailers in the right quantities at the right time.
Among the major changes in WMS: real-time information, intra-company collaboration, engineered labor standards, cluster selection and integrated voice selection.
One of the most prevalent trends in WMS has been the ongoing move from legacy, batch-based systems to real-time systems. Greg Vick, director of distribution and Web systems at Unified Western Grocers, a retailer-owned grocery distributor based in Commerce, Calif., said that the less automated batch-based method has reached its limit in coordinating activities. "Most companies are still on the batch-based system," he noted. "It is a huge leap from batch to real-time, and although real-time information is not state-of-the-art, companies without it are missing the boat."
In August, Unified began using, for its deli/meat warehouse, a WMS with real-time capabilities called Triceps, from OMI International, Richardson, Texas. The system allows Unified to coordinate the four major categories of warehouse activity: replenishment, putaway, selection and full-pallet picks. For example, the harmonization of replenishment and selection is important to minimize congestion or mis-picks.
Vick gave an example of how real-time inventory can allow new receiving to be recognized in time to be included in a load-out to stores. "Let's say that we are low on sour cream," he said. "Triceps compares orders to inventory at the beginning of the day and would note the sour cream discrepancy. When the order arrives, the WMS can find the product on the dock and use it directly from that location instead of putting it away, which is a very good feature."
Another trend related to real-time information is intra-company collaboration among such areas as purchasing, billing and warehousing. "There is a lot of talk about collaboration among companies, but now there is more internal collaboration," said Richard Oksanen, president of OMI.
Oksanen noted that a common circumstance is for buyers to look seven days ahead before deciding how many pallets to order. The problem becomes that the warehouse is not communicating with buyers, so inventory may be too high or too low. The Triceps system would send an alert when the warehouse damages something or records a shortage, giving the buyer a more accurate count.
Another company that has been able to achieve greater internal collaboration on warehousing processes is Associated Grocers of Maine, a wholesaler cooperative based in Gardiner, Maine, which uses the SCM/400 WMS system from AquiTec International, Chicago.
"Our facility acts as one," said Richard Houdlette, director of operations, AG of Maine. As a result, "There is now more room in the perishable cooler. Previously, the purchasing division would buy too much -- not taking into account warehouse space."
Houdlette added that in the past, the purchasing division earned the most gross profit by achieving discounts for larger orders, but that boosted labor costs. Now AG of Maine has been able to reduce labor by 15% despite higher volumes. For example, tasking is automated so labor is not waiting around for instructions.
WMS is also beginning to emphasize engineered labor standards and goal times for job functions, enabling wholesalers to track hourly wages, said Vick. He expects Unified Western's general merchandise facility, another of the five warehouses within its Portland, Ore., distribution center, to achieve significant savings from the application of labor standards to stockers and pickers for replenish and repack.
An extra benefit of labor standards is in forklift productivity across the entire distribution center, Vick said. Standards direct the operator to do the most important work first, thereby reducing stock-outs and improving customer service levels, he said. "This is a major change from batch replenishment, in which the forklift driver decides which tasks to complete first."
Another WMS trend is the increased use of cluster selection, which involves picking orders for a number of customers on one forklift run and separating them at the loading dock. "Say that the system travels one mile for each customer and there are 15 customers with small volumes," explained AG of Maine's Houdlette. "With one pick ticket for all of them in a numeric sequence, it means a consolidated trip through the warehouse. This means greater labor efficiency and should add an additional 3% to labor savings. This is currently being programmed and should be in place by next year."
Cluster selection is more common in industries such as food service, but now wholesalers are accommodating more convenience stores, said Rik Schrader, vice president, business development at AquiTec. "The industry is going through a lot of consolidation," he noted. "In order to be profitable at the tier 2 and tier 3 levels, wholesalers must serve retailers that do not have a lot of options, i.e. ones that are not served by the largest distributors."
Another trend involves RF (radio frequency) directed voice recognition, which is a step beyond traditional voice recognition software in that the employee is directed to the next task after completing the current one. Directed voice recognition is continuing to gain momentum among WMS users in the grocery industry with its promise of improving labor productivity. Said OMI's Oksanen, "Directed voice selection could reduce the order to delivery turnaround time by one to four hours. It eliminates the need for selection labels by downloading to voice terminals; thus, it eliminates the cost of printing."
Carl Marks, vice president and chief information officer at Associated Grocers of Baton Rouge, a retailer-owned cooperative in Louisiana, believes that the voice option improves accuracy in the picking function. AG Baton Rouge has entered into an agreement with Vocollect, a Pittsburgh-based company that specializes in voice solutions. "The plug-in Vocollect technology has been successfully integrated with Triceps WMS at other [OMI] client facilities," he said. "We plan to engage in a trial run this month, and provided that our success criteria are achieved, we will fully deploy in time for the holiday season."