Archives for 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

 

Improve Shipping Accuracy! (Part 4 of Four Simple Ways to Pay For a WMS)

Shipping accuracy to some companies is an oxymoron and to others a solid part of their business.  So what causes some to struggle and others to excel?  The accuracy of their pick and verification process.  Lets look a little closer.

I was talking with a prospect recently who shared with me that they shipped an average of 600 orders per day and 800 boxes.  He was very proud to tell me that they were 98.6% accurate on their shipping.  Now 98.6% sounds pretty good (especially in a busy disorganized paper driven warehouse) when you think of the fact that they ship 600 orders per day right.  I pointed out to him that means that about 8 orders go out wrong every day.  Industry statistics show it costs $200.00  to fix each mis-shipped order.  So if you do the math that’s $1600.00 per day for this prospect to cover the cost of their mistakes.  If you look at that over the course of one year the total is $83,200.  That’s a Problem.

 

A WMS will virtually eliminate the potential for making these mistakes.  By providing an accurate way to pick orders by scanning the barcodes and verifying the product  being picked is correct you gain tremendous accuracy.  By using a WMS to consolidate orders you can send fewer boxes and save shipping costs. By creating efficient pick paths and picking processes accuracy is increased dramatically.  Many companies find they can eliminate costly, time stealing check processes once a WMS has been implementing without increasing mistakes.  If the shipping process is integrated into the WMS shipping accuracy is improved and much more efficient.

Eliminating mistakes that go out the door to your customers will offset a large portion of the initial investment in a warehouse Management system like Accellos One Warehouse.  To learn more about how A1W can help a business be more profitable check out our dedicated website http://www.warehouse-management-systems-us.com/wp-admin/post-new.php.

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.  

 

Will Your Business Thrive or Wither?

With costs and competition rising faster than ever, only businesses that find new ways to improve and increase value to both their customers and shareholders will survive let only thrive in today’s market.  Only certain activities within a business represent opportunities for adding value to the product or service the business provides.  In general, these activities are profit-generators that can be distinguished from the overhead and support functions of commercial/wholesale distributors web-based retailers and company warehouses.

Value added functions often relate the specifics of a particular business. The following are some value-adding functions that are common to most business and should be familiar to anyone who depends on their warehouse as a critical part of their operation:

  • Kitting Services
  • Marketing and sales
  • Production/operations
  • Inbound logistics
  • Outbound processes

Warehouses are generally seen as  cost-centers to a business and rarely are considered as an area for profit creation.  Yet some businesses have discovered ways to turn their warehouse into a significant competitive advantage.  Of the value-adding functions listed above, inbound/outbound processes relate directly to wholesale distributors or distribution centers.  In addition the quality of these processes along with storing, delivering and moving inventoried products can impact sales, production and services in a positive or negative manner.  In my next post I will discuss warehousing practices in the value chain and how a warehouse management system plays a significant role in creating revenue inside the warehouse.

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”

 

Which 30% Is your Company In?

Less than 30 percent of warehouses are efficient, according to “Benchmarking Warehouse Performance,” a study by Georgia Institute of Technology in Atlanta GA Efficiency translates directly into money. You may have been wondering if a WMS system could make your warehouse more efficient. Interestingly, about 30 percent of the warehouses in the United States have a WMS system installed. What are the numbers telling us? Only 30 percent of warehouses are efficient, and less than 30 percent of warehouses have a WMS system installed. Which 30% does your company fall into?  If you are in the under 30% group that does use a WMS good for you.  Most likely you are many times over more efficient than those not using a WMS to manage their warehouse operations.

Those numbers are telling me we can fix the inefficiencies or “lost revenues” taking place in over 70 percent of warehouses. These leaks involve serious money being lost and customers being poorly serviced. My point is this: There’s a lot of information out there on how to make your warehouse more efficient, but what you needs to realized is, “It’s not what you know that counts, it’s what you do with what you know.” Many companies already know their warehouse is inefficient, but are reluctant to make the move to improve due to what they perceive as a high cost to purchase and install a WMS.  I would suggest they should take a very close look at the ROI that a good WMS can achieve.  It might surprise many to find out that the initial investment can be recouped in a very short amount of time.  If you own or manage a business that operates a warehouse which 30% do you want to be in??

 

Learn more about electronic warehouse management solutions by visiting http://www.warehouse-management-systems-us.com

Learn more by reading this white paper on How Goods move through an Accellos One managed warehouse

It’s Time to Retire the Pencils and Paper

I am astonished on a weekly basis by the number of businesses I encounter that are still managing their warehouse operation with paper and pencil.  In most of these companies I see well thought out processes to handle the many functions and activities in the warehouse.  And while these processes do work and the products manage to get out the door,  they are holding back the business from making higher profits.  Why?  Because they are extremely inefficient and inefficiency robs the company of hard earned revenue.

For  companies that are in warehousing, distribution or manufacturing it is time to retire the pencil and paper and move into the 21st century.  Today, with profit margins being razor thin and customers looking for the very best prices and added services you need to be as efficient and productive as possible.  Your warehouse has to be profitable.  No longer can you subscribe to the notion that if the products get shipped out then all is well.  It is time to automate as many  processes as possible.

Its starts with  barcoding and with automating the receiving, put-away, replenishment picking and shipping functions by moving to an electronic warehouse management system.  WMS solutions are no longer just for the big guns in the 3PL, wholesale distribution or manufacturing business segments.  It is time for small and mid sized companies to adopt this technology.  Frankly your customers demand it.  It is my opinion (backed up by a plethora of industry statistics from the Aberdeen Group, Gartner and Supply Chain Management to name a few) that those that do not step up their game will be left behind.  They will wonder where their customers have gone and why they are losing money.

I said earlier it starts with the barcode because the essence of a WMS is tracking very item in the warehouse and every task performed by scanning the barcode that is on nearly every product produced today.  And should you actually have products without a barcode you can create one.  In your warehouse you add barcodes to every storage location where product could be stored.  The combination of scanning the product and the location of that product begins to create an efficiency and accuracy not possible in a paper and pencil, manually operated warehouse.

So take those well thought out processes mentioned earlier that you have been operating with and  automate them through the use of a warehouse management system that best fits your companies needs and watch your profits rise.  Small percentage gains in efficiency, accuracy and productive will add up to a significant return on investment.

To read more on optimizing ROI in the warehouse click here.

To Read a recent case study on how one company has improved their operation through the use of a WMS solution click here

 

 

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

Request a  Free Warehouse Management Demo 

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”

4 Simple Ways

Implementing a warehouse management system is one of the biggest “bang for your buck” things a warehousing or distribution company can do for the business. Although I only list four in the post there are many other ways a WMS can pay for itself.  These four are simple ideas, however many operations choose to continue running their warehouses with pen and paper even though their most successful competitors have made the investment done the work and are now reaping the rewards.

1. REDUCE STOCK.  This may seem pretty obvious but many companies carry to much inventory in order to meet customer demand.  This is caused by not knowing how much really is in the warehouse or where it is.  Nor do they have an accurate idea of how fast they are turning over their products.  With real-time data collection inventory accuracy will improve dramatically.  This leads to improved item location, quantity etc. etc.

2.  REDUCE OR RELOCATE LABOR. Overhead is costly.  A WMS will help you see what work is being done, how fast and accurately it is happening and who are your stars.  So much more will get done when you throw away the paper and pencil and use real time information to receive put-away replenish pick and ship your products.

3.  IMPROVE SHIPPING ACCURACY.  It is not uncommon to see a company using paper and pencil technology to have a high error rates on the orders they ship out.  Even a company that boats 98% accuracy is paying a lot for that 2% error rate.  Not just in the hard dollars it costs to fix the problem but also and potentially more hurtful in customer dissatisfaction.  A warehouse management system is design to eliminate costly shipping errors and help you improve customer satisfaction and even obtain new customers..

4.  SPACE UTILIZATION.  A WMS will allow you to use the warehouse space you have more efficiently by helping you store your product better.  Because you can see where all your product is and you can better decide how to use your racks and floor space.  Wasted space and empty racks are used properly keeping you from having to add-on which saves thousands of dollars.

The time for achieving a return on investment (ROI) in a warehouse management system should be relatively short.  Many companies find that the system can pay for itself in 6 to 9 months however 12 to 18 is a good rule of thumb.

So consider putting done the paper and pencil for a minute and find a company that will work with you to analyze your particular situation and see if it makes sense for your company to consider a warehouse management solution.

Download our complete whitepaper on <a href=”http://www.warehouse-management-systems-us.com/wp-content/uploads/2013/06/4SimpleWaysToPayForWMS-1.pdf” title=”4 Simple ways white paper”>4 Simple Ways to Pay For A Warehouse Management System </a>

Visit our website for more information on WMS solutions http://www.warehouse-management-systems-us.com/