There is no doubt that in certain circumstances a warehouse management system, (WMS) or even part of one, like a stock forecasting program, can deliver more benefits than any other investment in plant, machinery and equipment or systems. Sometimes the payback period could be as little as two weeks, as Fisons Scientific Equipment found after spending £50,000 on a stock forecasting program. Yet despite the overwhelming case for warehouse management systems (WMS) there is still a reluctance to move beyond a basic stock location program which can be picked off the shelf for as little as £1,000.
The reason for the reluctance seems to be the cost factor for some companies of a certain size. They still tend to look at WMS as a “nice to have” with a cost, rather than see it as an investment to guarantee future efficiency and control costs. In larger companies, fear of upheaval and dogmatic IT policy can also be factors preventing change.
There are good reasons why large companies fear not just upheaval but the cost consequences of getting it wrong. The fact is that cost overruns and busting of time scales are not infrequent. Only in the last few days a large clothing retailer found that its new warehouse IT investment left many of its retail outlets short of stock, with a consequential cost tag running into millions of pounds. This stresses the importance of choosing the right people to get them involved from day one. Both parties, buyer and supplier, must be properly matched in the method of working and communication.
There is, however, another potent force as work, which if neglected will undermine confidence in the fast-growing E-retailer sector, said to be worth £50 billion a year. This is lack of flexibility in dealing with small orders using a WMS geared more to moving bulk lots to shops. These established businesses which have moved into internet sales will already have a WMS but it will not be ideally suited to handling high volumes of small orders that may require different picking and stock management procedures. They may also be unprepared for handling returns efficiently and instantly updating stock records and interface with the website’s software to provide accurate, up-to-the minute stock information. Internet buying is all about consumers wanting to know if their potential purchases are in stock and will be delivered on time. Suppliers who fail to deliver accurately and on time will pay a heavy price.
Order picking accuracy is important for two reasons: it reduces the costly nightmare of handling mispicked returns and cements a trusting relationship with the customers based on reliability of supply. This is why so many businesses have abandoned paper-based order picking with its inherently higher error rates for barcode scanners using RDTs and, more lately, RFID and voice-directed solutions. Voice picking delivers double digit gains in order picking productivity and accuracy but its usefulness is much wider. Voice-directed tasks now include transfers, receiving, loading, stock counting and forklift applications.
But of all the warehouse software developments over the last 20 years or so perhaps none can compare with the impact of a good stock forecasting program. “Aligning supply closely to demand is the secret of supply chain efficiency and customer satisfaction,” says Alex Mills, sales director of Chess Logistics Technology. More than that, it can save millions of pounds tied up in inventories and money tied up in stocks can dwarf all other warehouse operating costs.
Warehouse & Logistics News