Why is it that in spite of implementing warehouse management software, some companies continue to experience less than optimal operational performance and data visibility? Indigo’s Consultancy Manager, Mark Wilkinson, explains some of the common root causes and the importance of business process simplification.
Incompatibility and inconsistency of legacy systems
One of the most common reasons why warehouse process simplification becomes an issue is due to having inconsistent or incompatible technology systems. Consider an scenario whereby a manufacturing company has grown by acquisition and ended up running a variety of WMS systems on each of its sites. Some could be running different versions of the same solution whereas others may have another product installed. These systems might be adequate for each division’s needs, but as a group, the end outcome is inconsistent data capture. As a result sites cannot easily share information and the lack of visibility means they cannot easily benefit from any economies of scale.
Even if sites do run identical systems, it will have been configured differently to suit particular processes. Warehouse process simplification will identify the best approach for the business as a whole and create a blueprint for each to adopt. Once implemented, the whole organisation benefits from greater consistency, control and data visibility, plus the ability to share information.
For example, a food manufacturing company needing to implement rules and restrictions for allergen control. In some cases the business may rely on the intelligence of the WMS system to control this, e.g. identifying products on receipt, whereas other sites might rely on the professional knowledge of the workers, which leaves them vulnerable to mistakes. Alternatively, they may operate different mechanisms for feeding production lines. One system might generate demand from the production schedule, whereas others will use the same calculations. Instead of this being driven through the WMS, it will be paper based because the operation prefers a more manual approach.
How to approach process simplification to achieve maximum buy-in
There are many ways to achieve warehouse process optimisation and they are not necessarily wrong or better. The role of a consultant is to understand why processes would have arisen and to look for parallels across different sites in order to understand the pros and cons of each. Once understood, the best way of working can be identified.
Communicating the ‘why’ is always critical to the success or failure of any simplification programme and will also most likely require a ‘buy in’ exercise. This is best conducted across all levels within the organisation and should involve operatives at grassroots level. In situations where individual sites have previously had the autonomy to specify software and processes, management will need convincing of the merits of a new approach.
Importance of identifying ‘path clearers’
At the outset, every risk needs to be understood, with a mitigating option identified as a first step. Indigo’s approach is to then identify a path clearer at each stage, or potentially multiple path clearers, to smooth the transition process and reduce the impact.
For instance before implementing a new WMS, warehouse processes will need to be re-thought and introduced. Once operatives are working according to the new processes confidently, the final transition to automation supported by software will be less significant. In essence the new WMS becomes the catalyst for change and business improvement to occur.
Alternatively, in the case of a business migrating to a paperless working environment, implementing basic changes to the type of data to be captured, which reflects the layout of the new electronic documentation, will go a long way towards gaining acceptance of a new process. A supply chain consultant’s role is to swiftly evaluate the merits of the ‘as is’ and ‘to be’ processes, plus identify as many path clearers as possible, in order to reach the ‘to be’ end process as closely as possible.
Scalability and other strategic benefits of simplification
The benefits to be gained from warehouse process simplification are not clear cut, as it depends on the starting point for each manufacturer. For warehouse management, having group wide visibility of stock and inventory, which in turn feeds into purchasing, is a significant benefit. It can also benefit sales, by enabling stocks manufactured across multiple sites to be sold by a centralised commercial team. If a stock item is only available from one location and people in the commercial team cannot see what’s available across a group, they cannot sell it.
Purchasing is another area where benefits can be seen, by supporting centralised purchasing and also, by standardising master data so product codes and customer naming conventions are consistent for reporting purposes. This offers commercial and financial benefits and also allows sales and marketing to have access to improved information.
Perhaps the biggest benefit is also the most strategic. Companies are being acquired by manufacturers and then divested continuously as strategies and priorities change. Having a single way of working means businesses can be set up to scale more quickly and readily assimilate new acquisitions into a standard way of working.