Automating Your Warehouse

So, here we are nearing the end of 2002, and you're considering automating your warehouse. It finally makes sense to replace pen and paper with more efficient and accurate tools, such as a bar code scanner and a centralized database. Maybe you're even thinking about going a step further and installing a wireless LAN (WLAN) so you can update your inventory database in real time. But, is it that easy? Can you expect to install a WMS (warehouse management system), flip a switch, and instantly convert your warehouse to a fully automated operation? Well, the answer is a vehement no if you don't understand your warehouse operations, if you don't have employee buy-in, and if you over-customize your software.

Who Knows Your Needs?
Before leaping headfirst into a warehouse automation project, consider operations from your warehouse setup to business rules for picking and putting away products.

Enterprises that neglect the big picture are going to realize a fraction of what warehouse automation has to offer. In reality, WMS is one part of the total solution. An initial part of the system is the equipment used to store and retrieve products. For instance, by automatically moving product from top shelves to more accessible, lower shelves, AS/RS (automated storage retrieval systems) can reduce wait, walk, and search time by up to 52%. Additionally, equipment such as power conveyors, computerized carts with multiple picking bins, and horizontal or vertical carousels can complement any WMS. "Some companies don't recognize the fact that if they were to analyze their operational procedures they would probably find ways to run more efficiently," says Art Fleischer, marketing manager for Ann Arbor Computer (Ann Arbor, MI), a material handling system solutions provider. "For example, they may have picking practices that are inefficient, they don't have the right racks for their products, or perhaps they have aged inventory that is not turning over properly for one reason or another." So, you can automate these inefficient processes or you can fix them and reap huge benefits. "Those who choose to address their inefficient practices often find they can reduce their 'safety stock' by as much as 20%," says Fleischer. "Furthermore, this increase in efficiency allows them to expand their transaction volumes and product offerings without adding additional employees or warehouse space."

Getting the big picture of your organization may not be something you can accomplish alone, however. According to David Kogan, VP of finance at ASAP Automation (Louisville, KY), an industrial automation solutions provider, "Most midsized companies don't have in-house supply chain experts who can assess the company's needs from a global perspective. By using the resources of a supply chain consultant, companies can put together a strategy that best synchronizes its infrastructure, data management, and goals." By having a big-picture strategy, companies can roll out their WMS in a phased manner and get the most return on their investment.

Employees Need To Buy Into WMS
After streamlining or upgrading their equipment needs and fixing their inventory logistics and picking practices, companies have one more obstacle they need to address: employee involvement and training. What seems like an obvious timesaving and money-saving solution to top management looks like a threat to job security for many warehouse workers. It's your job to show them they are a valuable part of the company's growth and higher levels of warehousing efficiency are necessary to make customers happy and to attract more customers. "Proper training, combined with incentive programs, is the best way to get employee buy-in," says Fleischer. "By sharing some of the realized profits achieved by the WMS and automated equipment, a company sends the message that everyone wins when things run more efficiently."

Another way to ensure employee buy-in is to get employees involved with the project from the get-go. Ease employees into using automated machines, handheld scanners, and printers rather than announcing, "Starting Monday everyone will be using the new system." Another benefit to having employees involved in the process, especially project managers, is that it will be easier for them to get the big-picture perspective.

Conform To WMS Or Tweak WMS?
One of the most important issues that will arise as you prepare to roll out a WMS and integrate it with automation equipment is the decision to tweak or not to tweak your WMS. Some vendors will tell you that you should avoid modifying a WMS system at almost any cost. Claus Henkel, CEO of Knapp Logistics & Automation (Atlanta), a material handling vendor, advises, "Many enterprises feel their products or business models are unique and a WMS will require a lot of customization to fit their practices. The truth of the matter is, however, that WMS vendors design their software with best practices principles in mind." Henkel believes companies should ask vendors, "How do your other customers handle this issue?", instead of making the assumption that the software will need to be customized. Besides, there are a few problems that arise when too much tweaking occurs. "Companies can spend two to five times as much money on a solution that is modified versus an off-the-shelf solution," says Henkel. "First, you have the cost of the additional custom coding that must be written. Then, you have the ongoing extra charges for software service and upgrades because the vendor has to spend extra time fixing or upgrading your solution." According to Henkel, if a customer asks for more than 10% to 15% customization done to its WMS solution, his company says no because it believes the customer will become dissatisfied with the extra coding and ongoing support costs.

For companies that find the "minimal tweaking" approach too rigid, there are some vendors that have a different view of customization. Maybe your product or manufacturing and distribution processes really are unique and there isn't a software program that adequately meets your business requirements. Daniel Labell, president of Westfalia Technologies (York, PA), a warehouse automation enabler, says, "Sometimes you need to change a WMS to be able to get the most efficiency out of the system. After all, it's the way you do business that gives you a competitive edge, not the way a software package dictates. Choose a WMS vendor that uses modern programming languages and platforms such as C# [pronounced 'C sharp'] running on .Net. Newer programming languages and platforms enable easier customization and better overall performance."

Choose A WMS That's Ready For Automated Equipment
One final piece of advice before you purchase a WMS is to consider only systems that are built with automated equipment in mind. "Only 30% of all WMS solutions on the market today are compatible with automated picking equipment in their native form without a lot of extra programming," says Henkel. "Most WMS solutions are designed to work in batch mode, and most automated equipment is designed with real-time functionality in mind. I've seen companies that operate at only 75% efficiency because their WMS is not allowing their automated equipment to perform at its full potential." Enterprises that don't consider this integration issue end up adding expensive middleware to make the WMS compatible with the automated equipment. And, by rolling out a solution that integrates data automation with equipment automation, enterprises will maximize the combined efficiencies of their solutions.