SUPPLY CHAIN MANAGEMENT UPDATE

Meet Your New Smarter, Faster Warehouse

By Irving Chernofsky

The need for speed—driven by today's purchase-hungry consumer, among other things—has finally killed the old fulfillment model and caused the ultimate demise of the warehouse as it was previously known.

What once started with forecasting demand, developing a production plan, and producing products that were pushed into the warehouse, has now become a wait-and-see game. That is, the new fulfillment model receives orders from the customer first, and then sources and delivers the product. Driven by the requirement to reduce costs and increase customer satisfaction, the new warehouse operates with a high degree of velocity, flexibility, and customer responsiveness.

Wise Warehouse
We all know a building can't be smart, yet a warehouse must be intelligent enough to support additional capabilities such as value-added services (customer-specific labeling and packaging), warehouse configuration and optimization, labor management, task interleaving, crossdocking, yard and dock management, and automated material-handling equipment interfaces. And of course technology adoption is required to keep pace.

The use of radio frequency data communications (RFDC), for example, has become almost a given in any warehouse operation. But new technologies such as radio frequency identification (RFID) and voice-recognition systems can also increase accuracy and productivity in the warehouse. Therefore, the goals of the intelligent warehouse are maximized labor productivity, maximized space utilization, and the elimination of errors.

Labor Relations
Maximizing labor productivity is the first challenge the intelligent warehouse must conquer. Labor management software (LMS) lets you work on three levels of the labor management process.

The first level tracks how long it takes an associate to accomplish a task, and compares that performance against established standards. The LMS then reports the employee performance as a percentage of the established standard. The second level LMS is more predictive. It looks at all the outstanding work that will be performed in the warehouse for a designated period of time (a day or a shift) and uses the established labor standards for each task to determine how many associates will be required to complete the outstanding work.

At the third level, LMS performs task optimization, letting you prioritize each transaction type. For example, if putaway is given a higher priority than replenishment, the system will always select the putaway task to execute first. In addition to prioritizing the transactions, the software also considers the proximity of the associate to the location where the transaction is to be performed, as well as the associate's level of ability. If two associates are available to perform a task, the system will select the closest and most capable associate to perform the task.

Gimme Space
The intelligent warehouse will also maximize space by matching the cube of an item to be put away to the cube of available storage locations. This allows the system to place a receipt of a single pallet into a single pallet rack location, and place a receipt of 20 pallets into a storage location that can hold 20 pallets.

In addition, slotting software can enhance the cube utilization of the facility and reduce the travel time that associates require to fill orders. For example, slotting software can use the pick frequency of all the items in the warehouse to provide a pick face-slotting plan that will minimize travel time for the pickers. The software can also suggest locations that minimize the amount of stretching and bending that has to be done by the pickers.

Make No Mistake
Using bar code scanning or RFID tags, the intelligent warehouse eliminates errors through instantaneous information verification. With bar codes, when the product is initially received, a bar-coded license plate is attached. Subsequently, all future movements are tracked by scanning the license plate.

With RFID, you can read the pallets or cases automatically as they are received, without having an operator scan them. Then by using the RFID tags, the items can be tracked as they move through the warehouse, without the need for bar code scanning.

As the traditional warehouse model changes, driven by ever-more-sophisticated advances in SCM technology and business intelligence, your new warehouse will become a key member of your enterprise team, bringing value in cost and time savings, and ultimately, customer satisfaction and retention.

Irving Chernofsky is Oracle's Senior Director, Fulfillment, RFID & Supply Chain Intelligence

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