Archives for Radio Frequency Identification (RFID) technology

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

 

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 

Contact us about Questions on Warehouse Management Technology

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”

 

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”

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

1. Picking:  The Picking functionality in warehouse management systems is a core functionality designed to move the paper picking process to a wireless device.  Warehouses come in different shapes and sizes. Some are “wide open” in a square shaped space. Others are contained in buildings on multiple floors, utilizing elevators to transport materials. Warehouses will have varying ceiling heights. Some might have yard space.Materials handling will differ by product shape and size.

As a result, the warehouse racking infrastructure will vary by product size. Many warehouses keep large products in bulk stacks or pallet racks. While with small products, picking efficiency may be increased by storing smaller products in flow racking or static shelving.

Warehouse

Product velocity and order types also affect warehouse layout and consequently the picking strategies.  Companies that ship single-sku pallets of product to customers will have significantly different warehouse operations than ones that ship trailer loads of mixed-sku pallets (grocery is a good example of this).

Even subtle differences in customer requirements for consumer products wholesalers will have substantial effects on the materials handling and picking. Operations that ship to retail distribution centers will have different fulfillment requirements than those that ship directly to stores.

Accellos One Warehouse, an example of a “best-in-breed” Warehouse Management System, has an abundance of picking styles that will accommodate a warehouse manager’s fulfillment strategy independent of warehouse layout, product size,velocity and order characteristics.

Some of the many picking styles are listed below:

  • Wave Picking
  • Batch Picking
  • Product Picking
  • One Scan Picking
  • Scanner Picking

In addition to picking styles, there are numerous benefits for having warehouse picking systems including:

  • Multiple pickers can pick in a single sales order
  • Single picker can pick on multiple sales orders
  • Password protection for skipping and shorting picks
  • Configurable worklow prompts for bin, packsize, and carton
  • Ability to generate a packing slip after last pick
  • Ability to assign orders to s specific user
  • Ability to reapack item
  • End of Line (EOL) workflow controls what additional processes happen to sales orders after they are fully picked
  • And more, including additional advanced picking functionality

Request the full white paper: Request the Top 10 “Must Have” Warehouse Management Systems Features

Visit our Warehouse Management Systems information page here

Posted by iCepts Technology GroupA Pennsylvania Partner for Accellos One Warehouse Management Systems