Volume 46, Issue 3 - April 2007

Case Study:
A Powerful Tool: A CEO Gives a Personal View of a Warehouse Management System

Millwork business expenditures are rising. Costs for physical storage, handling and transporting of millwork products are going up. And, of course, employee compensations continue to rise.

So how does a millwork executive keep his business profitable in a demanding climate? Economical handling and storage methods, state-of-the-art materials handling and delivery equipment and more qualified employees help. But thereís one other tool thatís becoming increasingly invaluable for millwork executives: a warehouse management system (WMS).

We used WMS to reduce employee count and storage space in our import reload facilities by more than 20 percent while increasing the volume, reducing shipping errors and shortening the order-to-delivery cycle. Many companies already have them in place, and eventually most successful millwork companies will be likely to rely on WMS for assistance in managing at least some warehouse functions. Setting one up, isnít easy. But the effort can be worth it. 

The Basics
The WMS tool can help manage relatively elementary warehouse functions like keeping track of product locations, or it can be a part of a sophisticated logic system that drives virtually every movement in a facility. A WMS can even be integrated with production and delivery systems. 

Two dynamics play a big part in an effective deployment of a WMS application. One is the task of product and warehouse labeling, which is more difficult than it first looks to be. Until radio frequency identification, or RFID, technology becomes suitable for mainstream use, bar-code labels and hand-held scanners will be a necessary part of the WMS labeling deployment required for product and order location tracking. 

The second dynamic is more cultural: A successful WMS deployment requires a big dose of operations process management, which is the consistent and repetitive physical methods for effecting every movement and transaction. 

If a company is currently operating without a WMS system, it probably has inadequate formal processes in place to take full advantage of the program. Conceiving, documenting and training employees how to perform these physical tasks consistently are big factors in getting maximum return from WMS. 

One Experience
ECMD developed and used various WMS tools for more than a decade, constantly refining the software and its operating processes. Our latest WMS is a two-year, ground-up development project that puts to work the lessons we learned over the years of using our previous less-sophisticated systems. 

ECMDís warehouse management system, known internally as UCS, is tailored specifically to our own operating methods. We use UCS in our bulk import reload centers as well as in the distribution centers operated by EastCoast Moulding Co., Crown Heritage Stair Co., Arndt & Herman Building Products Co. and ECMD Distribution Co. We hope to eventually use many of its functions in our manufacturing facilities, too. 

The early months of UCS development focused on thinking through and documenting in detail just exactly how we wanted to apply lean principles to our physical warehouse operations. Then our developers began working on the software and hardware technologies that would be required to make UCS function in the real world. 

Imported Items
Our UCS system reaches beyond the activities in our own warehouses, and probably includes functions most WMS applications wonít need. From the time imported raw materials and finished products leave a foreign port, we utilize UCS to track incoming shipments, recording unit numbers and container and vessel IDs. This helps us smooth the flow of containers arriving from the port to our import reload facilities. This step also facilitates the actual receiving process and helps make incoming product available for sale quicker. UCS also operates in ďreal timeĒ mode, meaning warehouse movements are directed, tracked and made visible throughout the systemís user community on a live basis. To develop this feature, we placed dozens of wireless devices in our distribution centers (DC) across the country. They connect with our centralized management, purchasing, customer service and back-office operations in North Carolina. 

UCS is fully integrated with our transaction systems, meaning that from the instant an order entry is made by a customer on-line or via EDI, or by our customer-service rep as a result of a phone or fax order, it directs the operations of the appropriate DC.

While UCS enables users to monitor and direct DC activities, it is designed to use internal logic to manage many of those functions behind the scenes in automated fashion. Instead of requiring managers to constantly coordinate warehouse activities, UCS utilizes real-time automatic exception monitoring to alert both the DC supervisors and those who interact with the customer of a potential service failure. This means service failures are addressed before they become an issue. 

Integration of WMS and Operations
No put-away, picking, staging or loading is performed in our warehouse without real-time wireless communications being involved. Every forklift, every powered picking tug and every vertical stock picker is outfitted with radio frequency communication and scanning devices. In the increasingly rare instance of an employee on foot picking an order, he or she also carries a hand-held PC/scanner with RF communication. Employees involved with picking orders get one-item-at-a-time instructions from the UCS system. Aisle work flow is UCS-driven to eliminate two-way traffic. It never directs a picker to back up or retrace his or her steps, safely facilitating high-volume and high-velocity activities that use less warehouse space. 

UCS also uses order statistics and logic to establish pick sequences to nest similar items in a pallet so that bundling and palletizing labor and product damage are reduced. On orders picked for ECMD Distribution Co.ís retail clients, UCS uses Unitconfig functionality to capture the location of every item within the pallet and prints an easy-to-audit receiving document. 

Take Your Pick
The Picking Manager function directs every step of each warehouse worker who picks orders. Orders are prioritized for picking using several parameters, the most important of which is the service promise we have made to the customer. UCS helps DC managers make good decisions in assigning orders to the appropriate warehouse personnel for picking, but it does not automatically perform that function at the order level for the manager. 

To introduce the necessary human element to the picking process, DC managersí offices are on the warehouse floor in view of most employees. The supervisorís work pod becomes control central and includes all the tools for managing every receiving, put-away, picking and staging function along with the various devices used to produce labels needed for product and order location tracking. UCS provides DC managers with performance metrics such as the number of pounds, items and orders being picked by each employee. It also helps the manager constantly evaluate the work shiftís remaining workload on an up-to-the-minute basis. UCS captures every order and every itemís physical movement history with a time and user stamp on each scan and uses various codes that indicate order and item status along the way, providing a rich database for analytical reporting.

While our custom WMS was designed to manage an entire supply chain segment, its goal of efficiently managing just warehousing functions should relate well to most WMS offerings. Thatís especially helpful in the millwork industry, which seems destined for continued consolidation. In that scenario, unlocking scale efficiencies will be more and more important for all supply chain participants. While basic WMS and the process culture it requires is applicable in some fashion to almost every millwork operation, it is an especially powerful tool in larger facilities serving consolidated marketplaces. 

© Copyright 2007 Key Communications Inc. All rights reserved. No reproduction of any type without expressed written permission.