These constraints impact both the manufacturing and distribution functions. An Enterprise Resource Planning (ERP) system offers basic warehouse management capabilities that all manufacturers have implemented to one degree or another.
As the manufacturer grows and expands its reach in terms of products and customers, the resource constraints it faces become greater and more intense. As customers and products are added, the manufacturer’s Supply Chain Management challenges increase, leading to the need for a more sophisticated Warehouse Management System (WMS) solution.
Computerised support is needed for advanced WMS capabilities, such as directed putaway, stock rotation based on “best before” dates, and optimised picking, while supporting the ultimate goal of 100% Sales Order fulfillment.
An Advanced WMS (AWMS) is a “must-have” technology for the Food and Beverage manufacturer.
Often, manufacturers take the first step and procure a “stand alone” WMS for the distribution side of the business; but this only solves part of the problem. Only by integrating the WMS to the existing ERP can the true benefits of improved visibility, traceability, and productivity be achieved.
What Do I Have?
Inventory is the backbone of any Food and Beverage manufacturer’s supply chain. An AWMS provides accurate, real-time visibility of inventory, helping reduce the loss of product due to expiration.
This is done by balancing the needs of customers who require same day shipments (captured in the ERP system) with the efficient rotation and shipment of short shelf life products (managed within the WMS).
The AWMS provides the central repository for the critical information needed by supply chain managers. This gives them full visibility not only into future demands but pending deliveries, reducing the likeliness of overstocking product.
The AWMS also allows the organisation to optimise the use of storage areas and bin locations within the distribution side of the manufacturing warehouse.
A more efficient and better utilised finished goods warehouse can eliminate the need for costly third-party external warehouses. This shortens the cycle times for sales order fulfillment as orders are shipped within the manufacturing company.
The AWMS also manages product storage by using rules-based putaway and picking that is tailored specifically for the facility.
A better organised warehouse not only yields space savings, but proper storage reduces the inadvertent exposure to potential allergens.
Finally, the AWMS provides employee level warehouse productivity feedback that leads to faster putaway and outbound trailer loads.
Where Did It Go?
Industry regulations make product traceability faster and more accurate and recall capabilities as a condition of doing business.
Most ERP systems installed in Food and Beverage companies can support the voluntary recall of products when required. However, the ERP system may not have full visibility throughout the supply chain.
With an AWMS, product recall capabilities extend both upstream to the supplier - who may be planning to deliver more of the suspect lot (visible on the inbound Advanced Ship Note) - and to the company owned distribution centre that is holding the balance of the finished good lot.
The AWMS maintains the detailed history of every movement, from raw material arrival through to finished good shipment. This central system becomes invaluable during product recalls when a company must quickly know what products, according to their dates and location, need to be returned. Electronic reporting within the AWMS dramatically reduces the risk of noncompliance.
How Well Do I Operate?
Implementing an AWMS can improve labor efficiencies by measuring and reporting on individual tasks such as putaway, location moves, and sales order picks within the warehouse.
The AWMS provides advanced forms of task management, including selecting the next best activity for an employee to perform based on user-defined factors. It coordinates warehouse activity by matching personnel capabilities, for example; the type of forklift the employee can operate, with the priority of the work - high pick versus low pick - to be done.
The AWMS also holds location intelligence allowing physical proximity to be factored in when assigning tasks in a specific order and to a specific worker.
The larger the facility, and the more tasks in the queue, the greater the potential of productivity improvements driven by the AWMS.
Those who implement an AWMS normally see annual warehouse labor cost reductions of up to 30% as quicker processing times lead to increased productivity.
In many cases, long-term productivity is further enhanced through post-implementation changes to the layout and flow of the warehouse based on data analytics from the AWMS.
Process changes in putaway, location moves, and sales order picking lead to a more efficient use of equipment through better routing of forklifts through to the facility.
Once the AWMS is in place, advanced technologies such as Voice Directed Task Management may be implemented, further decreasing the amount of manual and paper-based processes which are more prone to errors.
What About the Customer?
The best gauge of the benefits of implementing an AWMS is how well the business operates in terms of customer satisfaction.
With narrow delivery windows, even minor missteps and miscalculations can have major service level consequences. The AWMS reduces human errors, ensuring the products a customer orders are not only in stock but also have sufficient remaining shelf life.
The AWMS organises sales orders within the ERP system while tracking shipments made within the WMS. The AWMS keeps the customer in the loop by sending automated notices of the status of their order which include the tracking number of the shipment, so that proper delivery expectations are set and met.
These connections lead to improved customer satisfaction, as well as lower customer service costs, as the automated notices reduce the number of inbound calls from customers looking for sales order status.
Why Aim for Full Integration?
All Food and Beverage manufacturers have gone through the process of implementing an ERP system to handle their needs, from sales order capture through to cash payment processing.
The basic warehouse management capabilities within their ERP system usually satisfy 75%-80% of their distribution requirements.
The gap is often filled through manual processes or, in some cases, through the implementation of a standalone WMS.
However, in a high volume/low margin industry such as Food and Beverage, satisfactory capability is no longer sufficient for firms looking to be market leaders.
Standalone solutions are not the answer. What is needed is to fully integrate the ERP system to the WMS, thereby providing the aspiring manufacturer with an Advanced Warehouse Management System (AWMS).’
Jack Payne, is vice president, Product Management and Solution Consulting, Aptean.