Archives for Radio Beacon Warehouse Management System

The Importance of Warehouse Inventory Accuracy

As supply chains continue to get more automated to streamline inventory, through the use of technology and utilizing best practices in operations, accuracy naturally beings to improve.  However, not every warehouse is automated and for various reason, If the physical inventory “on the books” and the physical inventory in a warehouse do not match, the situation is often chaotic.  For example, when a picker goes to retrieve a part and it is not there (or not enough is there), a series of manual checks and back tracking must be completed to fix the problem and get the order out the door.   The importance of warehouse inventory accuracy cannot be underestimated when you consider that your inventory could be the largest asset to a company.  Inaccurate inventory record accuracy results in having wide impact on other system  and areas in warehousing including:

  • Poor buying practices and excess safety stock associated to buyers lack of confidence in record accuracy.
  • Delays in order fulfillment associated to lost or misplaced product.
  • Lost sales due to stock outs and over commitments.
  • Costs associated to placing and managing back orders.
  • Lower labor productivity associated to searching for lost product.
  • Potentially higher freight costs resulting from expediting shipments to customers.

These issues could result in excess inventory, which ties up capital and negatively impacts capacity. The results are higher costs, low productivity and bad customer service. The self-checking nature of  advanced warehousing technology such as Warehouse Management Systems or WMS, in addition to a good cycle counting program, ensures inventory accuracy of 99+%. This high level of inventory accuracy is the foundation for a majority of the other benefits realized in using a WMS.

Learn more about Benefits of Warehouse Management Systems

 

Benefits Gained from Warehouse Management Systems-WMS

End-to-End Supply Chain Management Technology is becoming more common to have a unified method to fully optimize the follow of inventory in an organization.  A big contributor for optimization can be achieved through utilizing Warehouse Management Systems as part of this total supply chain solution.  Warehouse Management Systems, WMS, can seamless integrate with popular ERP technology to achieve this result.

HighJump Warehouse Edge (formerly AccellosOne) delivers a powerful, scalable and flexible real-time Warehouse Management System (WMS) for distributors.  HighJump WMS has the power to help your supply chain management objectives from the following benefits.

  1. Increase supply chain visibility:  HighJump Warehouse Systems integrates seamlessly with many popular accounting/order-entry packages and shipping systems to provide the warehouse link in a total supply chain solution. By integrating with leading accounting packages, warehouse automation equipment and shipping systems, you connect your warehouse to the rest of your supply chain. The seamless transfer of information between your systems means more efficient invoicing, order tracking and purchasing for your distribution operation.
  2. Streamline your warehouse processes:  By using the latest in Radio Frequency (RF), RFID and barcode technology to automate your warehouse processes, you can find, pick and pack inventory in the most efficient manner possible. This means that you will be shipping the right items, in the right cartons, to the right customers, on time, every time from your warehouse. Inventory accuracy is key.
  3. Improve your customer service:  By giving your customer service staff, sales team and even your customers a window into the warehouse using web-based warehouse management system technology, you allow them to track and trace the status of inventory and orders resulting in fewer customer calls and better managed sales expectations.
  4. Decrease Labor Cost:  Through Warehouse Automation , including a standard way of warehouse operations, you be sure that you are utilizing both technology and labor in the most efficient manner possible with the potential of enormous savings from a “paper driven” warehouse with little or no guidance for efficiency.
  5. Ensure Inventory Accuracy:  By selecting and upgrading  to an electronic Warehouse Management System from a “Paper-Driven” Warehouse, you can obtain an extremely high level of accuracy across along all warehouse processes and run your warehouse operations in the best manner possible.

Learn more about HighJump Warehouse Management Systems

Managing Warehouse Space Better with Warehousing Technology

Warehouse Management Systems (WMS) are designed with savings in mind to manage your inventory in the most efficient manner possible.  However, additional benefits can be recognized in other areas, such as cost saving associated with reduced labor and administrative costs, plus also an increase in customer service levels.  Another area as well includes both efficiency gains and reduced cost is in the area of better space management for your warehouse.

Consider the following. Can you eliminate or minimize the need for outside storage?  If so, you have the direct savings of reducing lease cost (normally on a $ per sq ft basis), insurance, and possibly transportation costs. Depending on the size, complexity and activity of the off-site storage, you may even be able to save labor costs associated with managing and transporting the inventory back and forth. Improvements in space utilization generally range from 5-15%.

A Warehouse Management System (WMS) tracks every location and knows where each product and quantity received should be stored. Put-away can be directed to maximize space utilization, minimize put-away travel, minimize pick travel, or some combination. The WMS knows the size and weight of each item, case and pallet, and the physical constraints of each location.

Material is placed in an appropriate location based on these criteria and other pre-configured put-a-way rules pertaining to forward pick location replenishment, product velocity, storage requirements, etc. Space utilization improvements are generally step functions. In a typical situation where the distribution infrastructure is owned, the creation of empty space in the warehouse produces no real benefit. The amount of space made available must be enough to provide for other activities.

For instance, if 500 ft2 are freed up, this will provide very little benefit. If, however, 5,000 ft2 becomes available, several alternatives can be presented for the new space. For internal space savings, if enough space is made available to avoid new construction expansion or a green field site, this can be directly qualified as a cost avoidance.

For example, if enough new space is available to be used for light manufacturing, value added services, offices, etc., this can be classified as a savings. If the new space can be subleased, this can also be classified as an incremental cash inflow. However, you must also consider the potential cost of refurbishing the facility as required by the potential tenant. Additionally, location utilization is improved by using a WMS. A non-automated operation is generally considered at capacity when 80% of the locations are being used at any given time.

With a WMS, operating capacity can be increased to 95+%. This improvement is due primarily to the WMS’s ability to continually manage inventory consolidations, re-warehousing activities, and mixed item locations.

Learn more about the Benefits of Warehouse Management System

How WMS Software Can Save Money for your Company

Warehouse Technology Systems, commonly called Warehouse Management Systems (WMS), are designed to make the movement of inventory in and out of the warehouse as efficient as possible. Through advanced functionality such as different inventory picking options, lot and serial management, cycle counting, bin placement,  space management, ERP to WMS integration and others; warehouse management improvements can be realized that can offer significant savings from having increase accuracy, fewer errors and reduce labor cost.

Increased Accuracy-If the physical inventory “on the books” and the physical inventory in a warehouse do not match, the situation is often chaotic. When a warehouse picker goes to retrieve a part and it is not there (or not enough is there), a series of manual checks and back tracking must be completed to fix the problem and get the order out the door. Inaccurate inventory results can have broad consequences including:Savings

  • Poor buying practices and excess safety stock associated to buyers lack of confidence in record accuracy
  • Delays in order fulfillment associated to lost or misplaced product
  • Lost sales due to stock outs and over commitments
  • Costs associated to placing and managing back orders
  • Lower labor productivity associated to searching for lost product
  • Potentially higher freight costs resulting from expediting shipments to customers

Example: These issues could result in excess inventory, which ties up capital and negatively impacts capacity. The results are higher costs, low productivity and bad customer service. The self-checking nature of a WMS, in addition to a good cycle counting program, ensures inventory accuracy of 99.9%. This high level of inventory accuracy is the foundation for a majority of the other benefits realized in using a WMS. Inventory may be the highest asset in your company.  What is the financial impact of 95% inventory accuracy compared to 99.9% over the course of a month or year?

Fewer Errors-A real-time Radio Frequency (RF), ie. Hand Held Bar Code Scanning driven WMS is self-checking. As transactions occur, the system verifies the activity and may even prompt the user with a question if the system detects a potential problem. In a paper-based environment, errors are common across all functional areas. The impact of an error in one function is amplified throughout the overall operation. An error in receiving (wrong product number, wrong quantity, etc.) will create potential delays across many operations.

Example: Let’s assume 20 cases of part A are received as 200 cases, a put-a-way operator may spend considerable time searching for the extra 180 cases. In a non-automated environment, it is common to have operators putting away whatever product is in a staging queue without checking product numbers or quantities. In this instance, the
quantity error in receiving will get pushed even further downstream as operators are sent to pick 40 cases from the
load with only 20 cases physically on hand. Also, if an automatic payment correction is generated, you may end up requesting approval for payment of an additional 180 ghost cases.

In a paper based manual data entry environment, there is also an increased chance of data entry error. Humans make mistakes; WMS doesn’t. Studies have shown, on average, one out of every 300 keystrokes is an error. The cost of even one such error can be significant.

Example: What would be the effect of a missed product of some value, such as the cost of miss shipping a piano to Albany, Oregon, instead of Albany, New York, could easily run in the thousands of dollars. And, this does not take into account the added cost in damaged customer relations. The automated data collection nature of an advanced WMS results in process efficiency and data integrity. The benefits of data integrity are numerous.

Reduced Labor Cost-By eliminating manual data entry, associated fixed labor costs are immediately reduced. These reductions alone can justify an investment in automated data collection which is a key component of WMS. But other labor costs are reduced as well.

Example: Administrative labor is reduced as less time is spent correcting errors. Fewer errors and timelier, accurate information also mean fewer, more productive meetings for managers and executives. In general, automated data collection lowers labor costs by reducing overall setups, idle time, cost of expediting, and time spent correcting errors.

Example: It is reasonable to expect up to a 20% improvement in direct labor productivity. Direct labor is better utilized due primarily to a WMS’s ability to provide specific task assignments based from a concise picture of inventory availability, inventory positions, and the overall movement activities to be accomplished. System directed activities minimize operators time spent identifying what actions need to be accomplished and planning the activities once they have been identified.

Download the complete Business Case for Warehouse Management Systems 

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Managing Your Labor Costs Pays Off

This is part 3 of my 5 part series on the four simple ways to pay for a warehouse management system. In the first part I listed the four ways and outlined each one.  In part two I covered how better control and accuracy of the inventory can save money and help pay for a WMS.  In part three I will discuss what is arguably your most important asset, your employees.

Here are a few points for you to consider; effectively managing labor costs in most businesses is difficult.  Labor costs account for a huge portion of your cost of doing business.  Arguably your staff in the warehouse can/will make or break your business.

Reducing or reallocating labor is the primary driver for finding the money to pay for a warehouse management solution.   A properly implemented WMS like Accellos One Warehouse can reduce your labor needs, help you reallocate staff and or keep you from needing to bring on more staff to meet growing sales or seasonal fluctuations.  More people mean more problems most of the time.  There is a long list of labor areas  that are strongly impacted by the implementation and use of best practices while deploying a WMS.

From the moment product hits your receiving dock until the invoice is sent for the shipped out items people are involved.  By using a WMS you increase the efficiency and accuracy of the work they do while eliminating the mistakes they will make.  A best of breed WMS should provide useful labor reports that can help you determine who your best people are and who needs help.  When the WMS is integrated tightly to your ERP/accounting/business management software  you can eliminate the costly clerical work.  This allows the people doing this manual data entry to be re-positioned  into areas that will help the company make money not just spend it.  Another plus here is the accuracy factor a WMS provides.  You can also speed up the invoices process which gets you paid in a more timely manner.

Here is an overview of areas of improvement;Workers In Warehouse Preparing Goods For Dispatch

  • Lines picked per shift are improved
  • Fill rates increase
  • Inventory accuracy is dramatically improved
  • Reduced staff and increased work volume
  • Higher pick/pack rates
  • Reduced shipping department needs
  • Shift elimination and or hour reductions
  • Transportation cost are optimized

It is not unusual for a WMS to reduce labor costs by 20 to 30 percent.   Lets look at a simple example.  If your annual labor cost for a staff of 15 warehouse employees including clerical support is $561,000.00 (18.00 per hour loaded, X 2080 per year, X 15 employees) and you save 20% with the implementation of a WMS you would save $112,000.00.  That is huge!  Of course every business is different but I have seen this kind of savings by many of our customers.  Maybe its time you took a good look at what you could save.

My next post will how cover how a WMS saves money by improving shipping accuracy.

Learn more about iCepts Technology Group and the many ways we work daily to help our customers improve their businesses.

4 Simple Ways to Pay for a WMS

Implementing a warehouse management system is one of the biggest “bang for the buck” things a business engaged in the distribution of products can do for their business.  The profits that can be re-captured when a business becomes more efficient and productive can be staggering.  Like wise when a business is not operating at top efficiency, is making to many shipping mistakes and is having problems with inventory accuracy and control it is most likely leaking profits.  Sadly this can happen without knowing it.  If you think all is well because products manage to get out the door in the warehouse it may be time to take a hard look at the warehouse operations.

Many times when talk with a business, they seem to understand the value in a WMS but can’t seem to see how to make the investment needed to pull the trigger and implement a solution.  Here are four areas where a WMS makes a serious impact and can quickly create the return that will pay for a WMS

1. Reduced Stock (Inventory)

2. Reduced or reallocated labor

3. Improved shipping accuracy

4. Reduced space requirements

In the next series of posts we will dig into each of these areas and explore where the money can be found to pay for a WMS solution. For information on our WMS solutions click here.  For more information on iCepts Technology Group and our other technology offerings click here.  

 

Top 10 “Must Have” Warehouse Management Systems (WMS) Features-Receiving

Receiving is another key “must have” in any warehouse management system.  Receiving is another functionality designed to migrate the paper receiving process to a wireless device.  Once a purchase order has been entered into an ERP system, it is seamlessly transferred to the WMS (warehouse management software) where receivers await shipment. They are armed with wireless mobile computers that have integrated bar code scanners.

After an inbound shipment arrives at the warehouse, the receiving team will typically unload the truck and grab the paperwork to identify which purchase orders are being received.

Scanner-001Box3

The first job of the WMS Software is to receive items accurately into the warehouse and then reconcile the shipment against the original purchase orders entered into your ERP system. Rather than using pen and paper to reconcile physical receipts, the receiver will bring up the purchase orders on a handheld computer. Once this is done, the receiver only needs to start identifying the product that is being unloaded (in no particular sequence).

With “best-in-breed” WMS Software, the receiver counts down against items being received right off of the container. It validates items against multiple purchase orders in the background, and then seamlessly updates your ERP system. No more paperwork!

Because a receipt is recorded as soon as items are entered into the handheld, stock may be immediately put away to a bin location. Bin location assignment following receipt may be automatic; stock can be transferred to a temporary receiving location if receipts are to be staged prior to put-away.

Most of the time, stock will be put-away following goods receipt.  If there are backorders waiting for product (standard or non-stock) or there is a “low stock alert,” stock may be put away directly to pick locations. Otherwise, stock handlers will move pallets into bulk locations (typically up in the pallet racks or on floor stacks).

Some of the highlighted benefits for accurate, efficient warehouse receiving include:

  • Receive multiple orders simultaneously in no sequence, without paperwork
  • Scan product bar code or use quick lookup functions to identify products as they are being received
  • Print carton or pallet-ID labels as product is being received
  • Receive multiple pack-sizes on the fly.
  • Cross-dock non-stock items to forward pick locations
  • Immediately put product away without staging

Request the complete document by completing the information below!  We will email you this information immediately!

Click here to request “The Top 10 “Must Have” Warehouse Management Systems (WMS) Features”

 

Not All Are Created Equal

Not all warehouse management solutions are created equal, the right WMS saves you time and money and ultimately increases your customers’ satisfaction.  The key to choosing the right WMS is, will it help in maximizing customer service and satisfaction. A Best in Breed WMS will provide a spike in customer service, leading to greater customer satisfaction and increased profitability. Not having a WMS or one that is not meeting your changing needs means constant struggles to keep a stable customer base.

So, what should a best in breed WMS offer and what should you look for?  Here is a list of things to look for.

  1. Maximum Functionality; will the WMS streamline operations and provide improved productivity Read more
  2. Ease of Use; if the WMS is easy for the warehouse staff to learn and use they will not look for ways to not use it or find work-arounds.
  3. Transaction Management; You want the WMS to track everything from the moment product hits your receiving dock until it is shipped out the door.  And you want to be able to get easy instant reports on everything that moves and who is moving it in the warehouse.
  4. Flexibility; a good WMS will be able to grow with you and be able to meet new and changing requirements.  Be sure to review what the plan is for future upgrades.  Make sure the WMS can interface with today’s well known ERP solutions.  One day you may want or need to move to a new ERP and not want start over with your warehouse management system.  This is important.
  5. Useful Reports; data is important.  Review the way the WMS provides that data to you.  Are their easy to access reports?  Does it provide a way to easily create your own ad-hoc reports?  Does it have a business intelligence capability?
  6. ROI; this seems to be a horse that gets ridden too much.  But, ROI for a WMS can easily be established and should be investigated and analyzed.  Good WMS solutions can provide solid, real results from existing customers. Read more about ROI.
  7. Proven Track Record; a good WMS provider should be able to provide you with a viable list of references that are in the same or similar industry as you.  If possible go for a tour of a business using the WMS and if possible one that in seamlessly integrated to the same ERP solution.  Make a list of questions and get answers on the points I have listed.

The right WMS will save you time and money and ultimately increases your customers’ satisfaction and profits. The difference between purchasing the right WMS and the wrong WMS is simply a matter of knowing which questions to ask.

Read more on how a warehouse operates using a best in breed WMS

Top 10 “Must Have” Warehouse Management Systems (WMS) Features-Counting

Another “Key” feature for better inventory control is counting.  Counting should be a core module in any Warehouse Management System to accurately track all inventory.  Any sort of Counting Functionality should ideally support both Cycle Counting (forced and manual) and physical inventory counting.

Many distributors conduct an annual physical inventory. That is, they count the products in their facilities once a year.  Unfortunately we’ve found that most physical inventories are a total waste of time and money. Why?

Usually anyone with a pulse is drafted to count inventory during the physical.Even people who are not familiar with your products (like the receptionist and her brother-in-law) will be sent out to the warehouse so that all of the products can be counted in the time allotted.

Workers do not enjoy the physical count process.They probably have better things to do with their weekend than spend it in a hot or cold warehouse counting products. In all probability their actual objective is not to perform an accurate count, but to put down on the count sheet whatever management will accept so they can go home.

There is a tremendous time pressure to finish the count.Shutting down operations for a physical count is a very expensive process. Usually at the end of the time allotted, management will decide to accept the existing count as being as “accurate as possible” so that the company can return to the task of servicing customers. Many discrepancies between the computer’s perpetual inventory and the quantity counted may remain unresolved.

Even if an annual physical count is 100 percent accurate, how long does it stay accurate? A week? A month? Many distributors respond that on-hand quantities only remain accurate until they start shipping material again.  For most distributors, cycle counting provides a much better tool for maintaining accurate stock levels than an annual physical inventory. Cycle counting is the process of counting a few products every business day throughout the year.

There are three common methods to determine what products to count on a specific day:

1. Random selection—Products to be counted are chosen at random. While this method keeps potentially dishonest

employees on their toes, it does not ensure that all items in a warehouse will be counted on a regular basis.

2. Geographic selection—Products are counted in sequence. Starting at one end of the warehouse a certain number of products are counted each day until the counters reach the other end of the building. All products are counted the same number of times, even though some products are more susceptible to discrepancies than others.

3. Rank-based selection—Products that are sold most often (regardless of quantity) or have the highest cost of goods sold are counted most frequently. Slow-moving products and dead stock items are only counted once a year.

Of the three methods, we’ve found rank-based cycle counting to be the most effective at maintaining accurate stock levels. The more frequently an item is sold, the more chance for inventory inaccuracy. After all, every time someone fills an order or puts away a stock receipt is another opportunity for an error to occur. And the products that are requested most often are probably extremely important to your customers. In order to provide good service, it is critical that you have accurate counts for these items.

It is interesting that, for most distributors, relatively few products are responsible for the majority of product requests (also known as “hits”). You may have heard of the 80–20 rule or “Pareto’s Principle.” This theory states that 80 percent of your sales are derived from 20 percent of your inventory items. We’ve found this not to be true. Usually only 10–13 percent of a distributor’s inventory items are responsible for 80 percent of activity and 50 percent of items are responsible for 95 percent of sales.

We want to count the few items responsible for 80 percent of sales very frequently, perhaps four to eight times a year. Items with fewer hits can be counted less often. Let’s look at a typical rank-based cycle counting program.Items are sorted in descending sequence by hits. The items that are responsible for 80 percent of total activity are assigned to the “A” rank, products responsible for the next 15 percent of activity are assigned to the “B” rank, “C” rank products include the products that are responsible for the next 4 percent of activity, and “D” rank products are responsible for the last 1 percent of activity. Products with a rank of “X” have no activity (they’re dead stock).

• Count the “A” rank products six times a year

• Count the “B” rank products three times a year

• Count “C,” “D,” and “X” rank products once or twice a year

Rank-based cycle counting ensures that your counting activity is productive. Spending just an hour or so a day counting can make the difference in maintaining an accurate perpetual inventory system. It takes a lot of discipline to implement and follow a program in which you count a certain number of products every business day. Many distributors have tried cycle counting and abandoned the program. They’ve been frustrated as other tasks have interfered with the process or they have not been able to complete counting all of the products scheduled on a certain day. The following ideas have helped many of our customers develop successful cycle counting programs. These companies are working “smarter” rather than “harder.”

Additional WMS Software Counting Functionality could include:

  • Cycle Count by Bin
  • Inventory Count / Recount
  • Cycle Counting serialized items
  • Configurable workflow prompt for bin
  • Option to allow adjustments to inventory during Cycle Count based on discrepancies between expected qty and counted qty
  • Option to hold adjustments created through Cycle Counting in a pending state, for supervisor review
  • Ability to define bins to exclude from cycle counting
  • Physical Inventory Wizard supports Multiple Warehouses
  • Cycle Counting single-item license plates

Visit the Warehouse Management Systems Features Page

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Contacts us with any questions about Warehouse Management Systems for Distribution or Manufacturing 

 

 

Top 10 “Must Have” Warehouse Management Systems (WMS) Features

Receiving is another key “must have” in any warehouse management system.  Receiving is another functionality designed to migrate the paper receiving process to a wireless device.  Once a purchase order has been entered into an ERP system, it is seamlessly transferred to the WMS (warehouse management software) where receivers await shipment. They are armed with wireless mobile computers that have integrated bar code scanners.

After an inbound shipment arrives at the warehouse, the receiving team will typically unload the truck and grab the paperwork to identify which purchase orders are being received.

Man in warehouse scanning

The first job of the WMS Software is to receive items accurately into the warehouse and then reconcile the shipment against the original purchase orders entered into your ERP system. Rather than using pen and paper to reconcile physical receipts, the receiver will bring up the purchase orders on a handheld computer. Once this is done, the receiver only needs to start identifying the product that is being unloaded (in no particular sequence).

With “best-in-breed” WMS Software, the receiver counts down against items being received right off of the container. It validates items against multiple purchase orders in the background, and then seamlessly updates your ERP system. No more paperwork!

Because a receipt is recorded as soon as items are entered into the handheld, stock may be immediately put away to a bin location. Bin location assignment following receipt may be automatic; stock can be transferred to a temporary receiving location if receipts are to be staged prior to put-away.

Most of the time, stock will be put-away following goods receipt.  If there are backorders waiting for product (standard or non-stock) or there is a “low stock alert,” stock may be put away directly to pick locations. Otherwise, stock handlers will move pallets into bulk locations (typically up in the pallet racks or on floor stacks).

Some of the highlighted benefits for accurate, efficient warehouse receiving include:

  • Receive multiple orders simultaneously in no sequence, without paperwork
  • Scan product bar code or use quick lookup functions to identify products as they are being received
  • Print carton or pallet-ID labels as product is being received
  • Receive multiple pack-sizes on the fly.
  • Cross-dock non-stock items to forward pick locations
  • Immediately put product away without staging

Request the complete document by completing the information below!  We will email you this information immediately!

Click here to request “The Top 10 “Must Have” Warehouse Management Systems (WMS) Features”