INTRODUCTION

Steve booked an item from a renowned e-commerce site and

immediately gets a mobile alert that his item has been dispatched from
the West Town sorting facility. This doesn’t awe us anymore, does it?
The West Town facility, housing the item, is a 1.2 million square feet
(equivalent of 28 football fields) area of land. Steve’s item is one among
the 15 million items that needs to be picked, packed and loaded within
few minutes on a truck that is waiting at one of many dock doors. In a
intense competitive environment, companies cannot afford to lose time
in day-day operations. A facility, like West Town, needs to be on its toes
to churn out every item requested in the shortest time possible. The
technology that lies behind the scene, silently absorbing the growing
load is a Warehouse Management System that continuously evolves
and innovates to keep up with the quickening pace of service and
competition.

The Next Generation Warehouse Management System, adopts leading

technologies of Warehouse Automation, Lean and Analytics for bringing
quick turnarounds and reducing waste in the system.
 “Amazon has built an e-commerce
juggernaut thanks in large part to Amazon
Prime. All the goodies you can buy with the
two-day shipping perks are thanks to the
$99-a-year service. It is an undeniable fact
that this disruption is fueled using a
revolutionary warehouse management.
Amazon greatly relied on automation and
technology to achieve this feat.”
thestreet.com

World is moving towards instantaneous
services. Time is of essence and services are
being measured in seconds. Uber has made it
possible to book cabs in seconds, memories
are being shared with our social circles and
food is being ordered in seconds, even a bank
loan is available at our fingertips in seconds.
In today’s Connected and Digital era, this
“Instant Phenomena” is no more a
bandwagon, but is slowly becoming a great
necessity.
To serve the time conscious customers,
businesses are striving towards leaner and
more agile delivery structures. Large retailers
have already shrunk their lead times to less
than 3 days. High competition coupled with
impatient customers are forcing supply
chains worldwide to reinvent itself for
achieving faster lead time and lower costs.
In the entire supply chain, Warehousing plays
a significant role in reducing logistics lead
time and supply chain costs. Warehousing
alone contributes 10% other total logistics
cost. An improvement in warehouse
operations results in considerable impact on
the order to ship time and total landed cost
of the product. Technologies are powering
factories to produce customized products in a
fraction of a day. This revolution is trickling
down further in the supply chain and
transforming warehouse operations to a
great extent.
There are several trends reshaping the
warehouse management space. Exisiting
warehouse management systems (WMS)
need to adapt to as well as adopt the new
trends to keep up to serve its purpose
effectively. This New Generation WMS would
serve as the key to leaner, short and faster
cycles.
Next-Gen Warehouse Management Systems
(NG-WMS) are insta-warehouse systems that
respond to customer demands
instantaneously and reduce the warehousing
costs intelligently. These WMS leverage the
principles of Internet of Things (IOT), Lean
AUTOMATION in rise
A warehouse operation is either an Inbound
Operation or an Outbound Operation.
Inbound operations cover the cycle of
receiving a product against a purchase order,
inspecting the quality of items entering the
warehouse and placing them at their
appropriate locations inside the warehouse
(Put-Away). These operations consisting of
numerous sub-processes are fraught with sub
optimal processes and manual intervention,
affecting the time for completion.
methodology and Advanced Analytics to
simplify and automate the operations of a
warehouse. A Next Gen WMS would play a
critical role in enabling faster roll-outs of
product and shorter time for taking the
products to the market.
Challenges in Inbound operations: The
Inbound operation cycle involves the manual
reading of pallets and manual entry of
information into ERP systems. This leads to
high cycle time (GRN time). Consequently,
high GRN time results in an increased
inventory levels. The process of manual
placement of incoming materials lead to
ineffective space utilization and lower
accuracy of inventory location that impacts
the retrieval time negatively.
 Mobility and Robotics will enhance automation in a Next Gen WMS
reducing operation cycle time by 20%, increasing space utilization upto 90%

A warehouse operator needs to have access his activities without the need for any
to stock related details quickly and manual intervention.
immediately. Mobility solutions comprising
Robots constitute Automated Storage and
Hands-free devices allow operators the
Retrieval (AS/RS), an advanced system for
freedom to access information while on the
storing items. AS/RS technology is used in
move on the floor. A range of devices like
high volume distribution centers for
simple barcode scanners and RFID enable the
accessing extremely high racks found. While
operators to scan incoming pallet and
capital intensive, use of Robots lead to
retrieve all related details in one-go. Returns
maximizing storage space, increase in put-
and storable items are separated quickly,
away productivity, reduction in warehouse
labeled with unique identifiers and routed
labor and higher Put-Away accuracy.
into their respective locations. Use of
Wearable devices like Smart Watch is
enhancing worker productivity by supporting Next Gen WMS will improve
uploading of information directly into the inventory location accuracy to
WMS with just few taps. Smart Glass with its >99.9 % by leveraging advanced Put
Augmented Reality solution is giving visual Away rules
confirmation to the operator assisting him in
Directed Put Away rules recommends storage
locations based on configurable parameters
of velocity, volume and/or weight, and
material classification to dynamically slot
material. This reduces the low inventory
location accuracy caused due to incorrect
Put-Away rules. Additionally, the rules
enable minimizing storage fragmentation,
enforcing compliance with hazardous
material, reducing obsolescence and
implementing different storage restrictions.
Outbound operations cover the cycle of
picking a product against a sales order,
packing and loading onto outbound trucks.
Challenges in Outbound Operations: A
predominant challenge in this process is the
time taken for picking an item. Picking
methodologies can be broadly classified into
“Goods To Picker” (GTP) and “Picker To
Goods” (PTG). In a GTP environment, pickers
remain at their workstations while a
software-driven System AS/RS retrieves,
conveys and delivers required SKUs to the
picker directly. In contrast, a PTG system
directs picking associates to static pick facings
located throughout the warehouse.
Voice/light systems assist the pickers in
navigating to locations accurately as well as in
confirming the pick-up. A quick comparison of
features favours GTP over PTG. A PTG system
spend 35% more time travelling. GTP also has
more scalability, achieved by just having to
configure the WMS for any additional aisles.
Additionally, GTP can pick up 50% more lines
Than PTG. However, in case of a system
failure, a GTP System may halt the entire
warehouse operation unlike a PTG system.
GTP systems also attract a higher amount of
capital investment than PTG systems.
Voice and Light based sensors in
a Next-Gen WMS will power
both PTG and GTP methodologies
achieving more than 99.9 % pick
accuracy.
A voice picking system, via speech
recognition capabilities, allows warehouse
operators to communicate with the WMS
like a human-human interaction. This is
advantageous for slow moving stock items.
In addition, Pick to Light Systems employ LED
displays to quickly and easily locate the
correct location of a stock item. Light picking
is beneficial for fast moving SKU’s.
LEAN warehousing
Doing more with less is the motto of any lean
operation. Lean warehousing aims to reduce
inventory carrying cost and working capital by
carrying fewer inventories. However,
inventory availability is extremely crucial to
order fulfillment. Managing lower inventory
levels without affecting fulfillment is achieved
by adopting Cross-Docking and Drop-Shipping
methodologies.
Cross-Docking is a supply chain strategy that
supports Lean Warehousing by redirecting
incoming material to outbound docks of the
warehouse directly, with limited
intermediate material handling. Cross
docking reduces the material handling as well
as the need for storage in the warehouse. This
reduces the routing/re-routing to/from
storage racks. Thus, It enables a lean
warehouse with exceptional inventory saving
by cutting down the inventory holding and
handling costs.
A well-executed cross docking strategy
can improve service levels by 40% and
reduce transportation costs by 30%.
At the warehouse where cross docking is
performed, a Next-Gen WMS is responsible
for daily planning and execution of incoming
and outgoing orders. This involves visibility
into future orders and knowledge of the
destination of an item before it is received via
visibility into all dock and yard storage
locations Advanced Shipment Notification
(ASN) and Yard management systems (YMS)
for providing. Integrating point-of-sale (POS)
software along with order management
systems (OMS) would power visibility of
future orders for better planning.
Costco Wholesale, second largest retailer in
the world, follows a high-volume-low-margin
strategy. It aims to sell merchandise in large
volumes to customers at competitive rates,
similar to Walmart. An extremely crucial
aspect to enabling this strategy is tight cost
controls. Both the retailers have implemented
cross-docking, that has reduced their
inventory carrying cost and labor costs, to
keep a check on their prices as a part of their
strategy.
Pull replenishment systems use demand
data to drive both replenishment and
production. Only immediate customer
requirements are drawn from the protective
inventories upstream. This is powered by the
actual consumption data at the store
(store/SKU/daily demand) along with
forecasts. This allows for a much more
granular approach than push systems. A next
Gen WMS with pull replenishment can affect
service level performance with upto
30% reduction in inventory, 20%
increase in perfect orders and 10%
increase in revenue.
Drop-shipping allows orders to be shipped
straight from the supplier to the customer.
This enables faster delivery of items,
reduction in the storage needed impacting
the warehouse size.
All big retailers in the world - Alibaba, Amazon,
eBay, sell online with zero inventory, owning
no stores, warehouses, or stock. They focus
and invest in branding, merchandising, and
customer support while relying on drop ship
distributors to fulfill products at wholesale
prices.
However, Drop shipping is sought with risks.
With drop shipping, a WMS needs to keep a
check on the suppliers, quality of goods,
tracking and returns. Advanced integration
between WMS and the supplier’s order
management system is beneficial in
supporting drop shipping.

VISIBILITY in operations
Radio Frequency Identification (RFID) has
created a mini disruption in warehouse
management. Its ability of being read through
packaging without a direct line of sight,
resistance to damage on exposure to dirt,
moisture and heat has made it a strong tool
for enabling visibility in harsher and newer
environments. RFIDs are gradually vanishing
blind spots common in supply chain
operations. RFID also stores information
about any inventory movement from
receiving to put-away, picking, and shipping.
This can provide valuable insights into route
optimization
A Next-Gen WMS needs to keep track of
every item in the warehouse. With RFID tags
it is much easier to locate a pallet without a
line of sight. An active ultra
wideband RFID system has the capability to
locate where a tagged object is located to
within a few inches. However, these are fairly
more expensive. Accurate inventory and
vehicle location data is communicated in real-
time to Next-Gen WMS to create optimized
tasks, enable interleaving opportunities, and
also decrease cycle counting resources. A
recent study by AMR Research indicated that
RFID adopters in the consumer goods
industry have reduced supply chain
costs between 3 and 5 % because of
enhanced supply chain visibility.
A Next-Gen WMS keeps track of all the tasks
that are assigned to an employee/Equipment.
All the pending tasks can be released in one
go. The incomplete tasks are acknowledged
with a message or alert that enables
instantaneous resolution of the problem.
Inventory Record Accuracy (IRA) is a measure
of how closely official inventory records
match the physical inventory. Many
managers equate IRA with cycle counting. In
Cycle Counting a small number of items are
physically counted, daily, on a random or
semi-random basis. The physical count is
compared to the inventory record. When
necessary, the records are corrected. Cycle
counting can achieve very high accuracies,
level the workload, reduce inventory,
continuously measure inventory accuracy,
function without interruption of operations,
facilitate process improvement and eliminate
the annual inventory audit. With RFID cycle
counting becomes much easier in a Next-Gen
WMS.
Warehouse operations are faced with large
amounts of information. Interlinked Data is
stored in silos in order processing systems,
warehouse management systems, labor
management systems and the like.
Warehouse Analytics are designed to pull
this information to one place and give
valuable insights into warehouse operations.
conclusion Warehouse management systems have experienced a
metamorphosis from being custom built to highly
specialized applications, to standardized systems that
offer a high degree of warehouse operations functional
support. All of us benefit daily from the efficiencies
delivered by warehouse management systems every
time we receive an item delivered at home.

In the past decade, these systems have grown too vast.

They are facilitating selling 200 items per second,
stocking more than 10 million items, maximizing
utilization space of 1.2 million square feet, managing
around 2000 employees, controlling conveyor belts
moving at 20 mph and managing thousands of suppliers.
These applications are the unsung heroes behind
clockwork operations of a warehouse. Beating the
evolving customers’ demands using a legacy WMS will
have a serious negative impact on the sales. It is time for
organizations to take notice of the huge leaps of
advancements in Warehouse Technologies so as to
remain relevant in the hyper competitive business
environment.

A Next-Gen WMS will provide the necessary

directive to harness various advanced devices and
technologies for maximum warehouse operations
and business impact
References
1. http://www.ssi-schaefer.us
2. http://www.rfidjounal.com/
3. http://www.mhi.org/
4. http://gartner.com
5. http://oracle.com
6. http://www.supplychain247.com/
7. http://www.cisco.com/c/dam/en/us/solutions/collateral/industry-solutions/iot-warehouse.pdf
8. https://www.sparkpay.com/the-numbers-behind-drop-shipping

About the Author

Sandeep Koyya is a Supply Chain Consultant within Birlasoft’s ERP
Consulting Practice. Sandeep has an M.B.A. from NITIE, Mumbai
and a certified Green belt in Six Sigma. His primary areas of
expertise include supply chain management and manufacturing.
His experience includes advising companies with supply chain
planning and execution issues across manufacturing industries.
He can be reached at sandeep.koyya@birlasoft.com