NEC Electronics (Santa Clara, CA), a semiconductor and electronics component division of multi-billion-dollar NEC Corp., is making a company-wide effort to increase efficiency and technical capabilities. The company decided to move to a client/server model, which would include new solutions for accounting, human resource and WMS.
For WMS, NEC chose a solution from AllPoints Systems, Inc., a Dedham, MA-based software and service product company. Joe Francis, AllPoints VP of operations, says one reason NEC chose his company was because of its in-production client/server-based WMS system. "We had already installed our NT client/server-based system in six other facilities prior to 1996, when NEC started its search," says Francis. "The company had very specific technology needs at that time. Unless it wanted to be a beta site, we were a logical solution."
Moving To A New System
Previously, NEC was using an internally developed mainframe solution. "There are two concerns that were really pushing the move from mainframe to NT solutions," explains Francis. "First is the Year 2000 problem. Companies must be Y2K-compliant to survive. The second concern is the need to have a more flexible, configurable system."
Another problem with mainframes, says Francis, is trying to find people who know how to work with older mainframe programs. "With companies I have worked with," he explains, "most of the people who have worked on these systems have either retired or gone into midrange or client/server technology. These people are not thrilled with the idea of going back to the mainframe arena unless a company is willing to spend a lot of money."
Working Toward A WMS Solution
NEC began working with AllPoints Systems in 1996 to implement a WMS solution. At that time, according to Francis, warehouse employees had to manually enter data into the mainframe. This data included the manufacturing date, lot numbers, quantity, purchase orders, and product numbers that could be as long as 30 characters.
"This system led to data entry errors," he explains, "because warehouse employees would write this information on a piece of paper, walk to a computer and type the information in. NEC had 10 pickers that took orders off of a piece of paper. They had to look at every single box and verify that this 30-character product code was correct. Of course, this was difficult because these 30-character codes might differ by only one number or letter.
"The system would then tell them where to go in the warehouse to get the package," he continues, "but there could be as many as 50 different boxes on that same shelf. Pickers would go through every single box on that shelf to make sure they were getting the right one."
Using The New WMS Solution
The AllPoints application integrates AIDC technology on the warehouse floor using handheld scanners, including the Symbol PDT3140, for tracking packages and entering data. Warehouse employees now scan bar codes on the boxes or products instead of manually entering the data.
"What took the pickers 30 minutes to do with the previous system now takes about two minutes," says Francis. Warehouse employees don't have to run back and forth to the computer to complete their orders. The scanners contain a graphic LCD display, which can be used to provide a list of value-added services, like adding specific part labels to OEM orders. It can also tell the employee where the package is supposed to be sent next.
"The system verifies that the picker has scanned the correct box," Francis explains. "Next, the picker places the box on the conveyor or other material-handling device, and it is routed to its next destination. That destination could be shipping or a clean room where another value may be add to fulfill the order."
When the order is put in the system, AllPoints software creates a task for each one of the value-added items NEC is providing. Each of these tasks is verified through the handheld terminals. Products will not be sent until all of the value-adds have been completed.
Meeting Order Requirements
"The WMS system gives all the information online for a customer," says Francis. "When the employees go to the workstation, they can look at the work order and instructions, along with any notes from the customer. It says where the item is in its task list."
The AllPoints system also accesses a standard route-rating application from Aristo Computer. "It's a seamless implementation," says Francis. "Our software seamlessly interfaces with Aristo rating and manifesting software. The WMS tells the employee if they have to do anything special with the package. It selects the carrier and puts the package on the manifest after all value-added tasks are completed. The system also prints the shipping label and whether the package is the last in the shipment, and prints the packing list."
The first phase of the installation was completed last August. "Right now," Francis explains, "we are developing a standard interface with NEC's new ERP system from PeopleSoft. It is scheduled to go live in April."
Efficiency Has Increased
According to Dick Steinkamp, NEC Electronics director of logistics, inventory accuracy has increased from 98.4% to 99.97%. "We have about 25,000 orders in the logistics center," Steinkamp explains. "At 98.4% efficiency, this means that 383 cartons were misplaced. At 99.7% accuracy, only eight cartons are misplaced on an average," he continues. "Our shipment-error rate has gone from 1.4 to .3 errors per 1,000 orders. We have also saved 13% in labor costs in the warehouse because the AllPoints system simply requires fewer people to operate the system."