Magazine Article | May 24, 2009

Improve Inventory Accuracy With A Warehouse Management System

Source: Field Technologies Magazine

Bally Technologies reduced warehouse labor hours by 15% by implementing handheld scanners and portable printers.

Integrated Solutions, May/June 2009
One of the most labor-intensive and time-consuming tasks organizations face is conducting their annual physical inventory count. For a typical small to midsize company, this process consists of six weeks of preparation and then three to four days to conduct the count. After the count is completed, there is an entire reconciliation process that must be conducted. The resources, time, and lost production associated with physical inventory can be marked. By implementing a comprehensive warehouse management system (WMS), Bally Technologies no longer needs to conduct a physical inventory — instead, it simply relies on its cycle counts.

Bally is a diversified, worldwide gaming company that designs, manufactures, operates, and distributes slot and video machines. The company also designs, integrates, and sells computerized monitoring systems that provide casinos with networked accounting and security services for gaming machines. Bally has more than 300,000 game monitoring units installed at more than 225 locations worldwide.

In 2007, Bally was encountering many of the typical problems involved with warehouse operations: receiving errors, problems with picking parts, and a lack of visibility to real-time inventory usage. "At the time, our inventory accuracy was only 24%," recounts Tony Evans, director of internal logistics for Bally. "So, when an employee went to pick parts for an order, the parts would only be there 24% of the time."

The company decided it needed to find a solution that would improve its inventory accuracy levels and provide information in real time. Instead of looking at various vendors, Bally chose to leverage the knowledge it already had about WMS. On the hardware side of the solution, Bally had been using Intermec equipment for more than 10 years and had a good relationship with the vendor. On the software side, the company employed some former Manhattan Associates personnel, giving the company instant in-house expertise with the software. After evaluating its existing strengths and comparing those to other vendor offerings, Bally decided on the Intermec and Manhattan Associates WMS solution. The initial implementation included 50 CK31 mobile computers and 50 PB50 mobile printers — both from Intermec — that integrated with Manhattan Associates WMS.

The entire installation, including configuration, testing, and training, took approximately eight months. By choosing a solution that leveraged the company's existing hardware, Bally minimized the compatibility issues encountered during the installation. The biggest challenge was integrating the new WMS with the legacy resource planning system. The team worked to develop a configuration that enabled inventory data to be uploaded from the legacy system to the WMS.

Based on the new WMS, Bally has realized several benefits. First, the company has increased its warehouse employees' efficiency. "Our previous system was very paper-intensive with the pick-and-pack lists," explains Evans. "Now, we can load the day's tasks onto the CK31s, and our warehouse employees take the handhelds with them to the locations." This feature allows employees to complete tasks more quickly without having to run back and forth or wait for the warehouse manager. Bally has reduced its labor hours by 15% based on this increased efficiency.

The handheld's integration with the WMS gives the buyers and planners real-time information on the company's inventory levels. Previously, the inventory system was updated once at the end of the day, making it difficult to accurately determine how much to buy and how to ship. Now, employees have real-time data on a part's total usage, and they can determine if the part should be shipped directly to one of Bally's global locations or if it should be distributed through the Las Vegas warehouse. Plus, the inventory accuracy has improved from 24% to 99.5%.

Another reason Bally upgraded to the CK31 handhelds was the increased scanning functionality. The CK31s use Intermec's EX imaging technology that enables near-far area imaging. This means a warehouse employee can scan virtually any kind of bar code, in any orientation, at a range of distances.

Most substantially, Bally has been able to eliminate its annual physical inventory process. Before the new WMS, Bally employees spent six weeks planning and preparing for its physical inventory count. Then 75 to 100 people would take three to four days to conduct the count. With the improved inventory accuracy, the company now relies solely on its routine cycle counts. "We realized a $600,000 return on the WMS in just the first year," touts Evans.