Warehouse Management System (WMS)

Introduction
The majority of the problems that occur in the warehouse occur because of a lack of
control: a lack of inventory control, operational control and/or management control.
To become a dynamic, consistent organization, all the operations must be under
“control”. In order to achieve this control, all the tools and technology available has to
be used to get control and manage the warehouse operations. A control system is a
means, mechanism or procedure by which we manage these operations. There are
three basic objectives of a control system, either manual or computerized:

1. To identify and coordinate the work that has to be performed.

2. To direct the achievement of the work to maximize performance (productivity
of warehouse resources and customer satisfaction) and minimize or eliminate
human errors.

3. To report the status of the work that needs to be, or was, done.

A manual control system uses physical, paper-based technology to attempt to

optimize warehousing operations. Due to the rate of change, demands for accurate,
real-time in-formation, next-day-service mentality and marketplace competition, the
use of manual systems in the next millennium will be unrealistic. A computerized
warehouse management system (WMS) is the integration of bar coding technology,
Radio Frequency (RF) communications equipment, hardware and software.
Warehouse management software has the capability to optimize the warehouse and
warehouse-related operations. Whereas the sophistication of manual control systems
is low, the sophistication of WMS’s can vary from simple stock location control to
systems that truly optimize customer service, space, labor and equipment in the
warehouse. It is important to note that one should not confuse WMS technology with
business systems applications that impact the warehouse. A WMS is an operating tool
that is based upon the needs of the warehouse operation and provides tools and
information for the management of the warehouse.

Warehouse Functions
To have a better understanding of the requirements of a warehouse and thus, the
benefits of the warehouse management systems we first introduce the basic functions
of the warehouse and then we can get into the benefits of having a WMS
implemented in the daily operations.
Traditionally a warehouse performs four basic functions: (1) receive product, (2) store
product, (3) pick product and (4) ship product.

2.1. Receiving.
The basic functions in the receiving area are: the packaging of raw materials from
suppliers, finished goods from manufacturers and other sources, and customer
returns. Generally, receiving operations have two major needs:

 The need to have accurate receipt information with advanced notice, this
facilitates the receiving operations by providing accurate and quick information
from the sender’s host system directly to a WMS. This system translates receipt
information into usable information for dock activity planning, order release
and inventory allocation.

 The need to reduce the time the product spends in staging. A WMS minimizes
the time the product sits in staging due to operator-directed put-away and
system-directed put-away and system-directed put-away locations.

2.1. Storage.
The basic functions in the storage area are: quality inspection, put-away, product
location and lot control and crossdock operations. The typical needs with respect to
product storage are:

 The need to have adequate identification and tracking of product that are
ready for put-away.

 The need to have an automatic selection of storage locations for pallets loads,
designed to maximize space utilization, picking efficiency and minimize retrieval
or put-away labor.

 The need for a stock location system that tracks identity and quantity of each
SKU by unique storage location (in order to ensure product trace ability to
customer).

 The real-time update of inventory, locations of lot and stock records to provide
timely information. The more real-time update, the greater the reduction in the
information lead time.

 The ability to cycle count inventory by storage location, as opposed to a

physical on-hand inventory count. A WMS, uses cycle counting techniques.
  Crossdocking.

A major deficiency in many warehousing operations is the absence of a stock location

system. Knowing where and how much of a product is in the warehouse, is a basic
fundamental to success of the operation. The absence of a stock location system
requires that the inventory accuracy be reliable. Usually this implies counting the
entire on-hand inventory for a single SKU. This process is not only labor intensive, but
also can be affected by human error. A WMS provides the feature of cycle count by
location, record accuracy can be verified by location. The result is a drastic decrease
in labor requirements and time and a dramatic increase in inventory accuracy.

2.2. Picking
The basic functions in the picking area are: raw material picking, work in progress
picking and finished goods picking. The shipping needs of a warehouse typically
include:

 The need to select specific storage locations for picking based parameters such
as lot number, stock rotation, order quantity and pick location.

 The need to minimize pick travel distance and multiple handling by pre-route
and pre-post customer orders in storage location sequence.

 The need to perform case picking and broken case picking.

Again the need for a stock location system is essential, since it provides a the
foundation for efficient order picking. The picking functionality provided by a WMS is
designed to exploit the existence of the stock location system to further maximize the
picking efficiency. The ability of the computerized control system allows to minimize
the picker travel time between picks and maximize actual time spend picking during
discrete picking.

2.3. Shipping
The typical shipping needs include:

 The routing of picked goods to predetermined staging lanes for order control
and consolidation from multiple pick zones.

 Automatic bill-of-landing generation.

 Automatic updating of customer files.

  Automatic shipping notification to customer (via EDI ).

The shipping functions are designed to maximize the control of orders moving
through packing, checking and loading. In addition, bill-of-landing, packing list, and
customer file updating are used to minimize manual clerical tasks to reduce labor and
improve accuracy and customer service.

2.4. Other Warehouse Function Capabilities.

There are other functional capabilities required by every warehouse. Some of these
need include:

 The ability to maintain product data files.

 The ability to generate activity reports in order to manage warehouse

performance.

 The ability to monitor employee performance through transaction activity

accumulation.

 The creation of an audit trail to facilitate error corrections in warehouse

activities.

 The ability to track and access order status from order entry through shipping.

 The ability to provide access as needed, maintaining data security.

 The ability to facilitate efficient material replenishment.