Magazine Article | January 1, 1998

A Snapshot Of A Successful Warehouse Management System

Source: Field Technologies Magazine

Kodak increases warehouse efficiency by 25% and cuts equipment use by 16% with radio frequency, bar code devices and warehouse management software.

Integrated Solutions, January-February 1998
Windsor, CO boasts one of only two Kodak manufacturing facilities in the United States. The manufacturing/warehousing complex encompasses over one million square feet. The warehouse operates 24-hours-a-day, seven-days-a-week. The facility receives and stores sensitized film rolls, sensitized paper rolls and other materials such as boxes, bags, and labels. When materials are requested to meet production schedules, warehouse personnel pick it from storage and deliver it to the appropriate sites within the complex.

Identifying The Need
Ed Hurtubis, senior engineer - facilities for Eastman Kodak, was appointed to redesign the warehouse's operations. He had to determine how it should be operated in future. To do that, he needed to understand thoroughly how the warehouse had operated in the past. Accordingly, as the project leader, he queried the users - the people responsible for managing and performing the warehouse operations. Specifically, he asked them what they needed to make warehouse operations more efficient. Hurtubis identified several key system requirements. These included the need for a warehouse management system that was turnkey, user friendly and paperless. There had to be a single point of contact for problems within the system and the ability to outsource system maintenance. There had to be capabilities that allowed users to change system operations without Kodak's information services (IS) support.

Two problem areas identified included inventory and task assignments. Prior to implementation of the program, inventory was received and accounted for manually, by penciling in information on paper forms. Because this system could not accurately reflect stock levels, it was necessary to keep an extra day's stock on hand. Another key challenge was the loss in productive time spent by warehouse workers between tasks. "Workers had to go back to a central job assignment location in the warehouse to get their next task assignments," said Hurtubis. "This resulted in a lot of unproductive downtime."

Determining An Implementation Plan
During the definition phase of the project, a team was formed to develop an implementation plan. The team consisted of three members: A representative of the user community, one from information systems, and one from facilities. As a first step, the team documented how the warehouse had been functioning. Working with the purchasing department, the team identified potential warehouse management software suppliers. Based upon their responses, the team visited the vendors and inspected their operational installations at other companies. The purpose was to evaluate various systems. It was also designed to learn from the experiences gained and mistakes made at those sites.

Kodak chose Uniteq - a Redwood City, CA-based warehouse management software supplier - as its implementation partner. Uniteq employs 40 people and has annual revenues of more than $5 million. In addition to supplying software, Uniteq served as the single point of contact with all the hardware vendors. Another key in choosing Uniteq was its flexibility. Some vendors would have required Kodak to redo the nomenclature it used. Uniteq enabled Kodak to retain the terminology it was already comfortable with. (For example, warehouse personnel referred to storage locations by building, floor, room, aisle, etc.)

Part of Kodak-Uniteq's plan was the establishment of a radio frequency (RF) system. This was required to eliminate the need for fork lift operators to traverse the large warehouse area to pick up work orders. A facility analysis by the RF equipment vendor, LXE, was performed. This enabled the vendor to survey the site and to recommend the number and placement of antennas needed to guarantee complete coverage. "The end result was that there were no dead spots in the entire million-plus square-foot facility," said Hurtubis.

Assessing The Technology
The most crucial part of any warehouse management system is the software which acts as the glue to the entire system, according to Hurtubis. For Kodak's Colorado Division, the system can seamlessly access the corporate mainframe in Rochester, NY, via a wide-area network. It can upload or download near-real-time data from Kodak's mainframe manufacturing control system.

Support for radio frequency devices was a system requirement. Job orders are automatically dispatched to radio frequency mobile computers mounted on fork lifts or other material-handling equipment. Guided by a set of programmable rules, the warehouse management system automatically dispatches the right equipment and personnel. It also determines the most efficient sequence for the equipment to complete the assigned tasks.

Bar coded labels are affixed on all storage locations and incoming shipments. In this way, the system can efficiently read the identifier, minimizing the possibility of human error. Kodak chose a bar coded license plate-method to identify pallets.

Installing The System
A time-consuming activity was loading data and storage information into the new system. The company also submitted requests to its raw material suppliers that both human- and machine-readable documents accompany each order. Otherwise, their shipments could not be processed quickly.

Kodak determined the integration of the warehouse management system with the mainframe-based manufacturing control system in Rochester was critical. The project team member responsible for information systems oversaw the download of order information and the upload of receipts, move and pick data.

Kodak decided a phased implementation approach would help users become familiar with the system. Selected product groups began using the warehouse system immediately, while other products were phased in over time. Training continued both during and after system installation.

One key component of the system is the user's ability to modify the program's rules without having to rely on the IS department. Hurtubis says, "A warehouse team can decide to turn on or turn off rules within the system without having to go through Kodak's management information system. And at the end of it, they can get together and evaluate their actions, giving users the ability to make adjustments quickly."

Evaluating The Benefits
According to Hurtubis, payback benefits from the system included increased equipment use and personnel productivity. It also improved inventory turns, or reduced amount of inventory needed to support production, and improved overall morale.

The warehouse management system installed at Kodak allowed personnel reductions of 25%. Inventory-on-hand was reduced by one day. The number of leased material-handling vehicles was cut by 16%.

"Although our division has experienced 5% to 10% growth each year since we implemented the system, we haven't had to add any additional resources to maintain a high quality of production," Hurtubis commented. "We're happy with the system and its reliability. We have not had a single unplanned downtime event since implementation."