Warehouse Management Systems are powerful tools designed to enable warehouse managers to optimize the daily use of warehouse resources, including labor, storage, material handling equipment, and the building. Usually optimizing warehouse resources leads to the improved productivity that can justify the purchase and implementation of a WMS.
In recent years many managers have begun expressing their dissatisfaction with their WMS investment. They want to understand how these results have occurred and how to increase the value they get from their system as daily workload changes. This article presents what we have learned about how the implementation of Warehouse Management Systems provides for improvement in labor productivity. We will focus on labor productivity to illustrate our conclusions.
Warehouse management systems are unique in that they are designed to support management of the picking process through three dimensions:
Planning and organizing resources
Directing and controlling operations tasks
The first dimension in improving productivity is a core element of a WMS: supporting management in the daily planning and organizing of the workload and staffing for the next period or shift, by matching the staffing to the variation in workload every day. The planning process starts with managers knowing, with an increasing level of accuracy, the amount of work that needs to be accomplished each day. This knowledge, when combined with labor productivity data, reduces the need for excess labor to handle unknown requirements. The result is that overstaffing and the need for overtime are significantly reduced, and the work is completed every day.
Achieving improved productivity through planning and organizing requires two elements in a WMS project. These elements include capturing, analyzing, and developing new information about warehouse operations, and building and sustaining collaborative relationships among the managing staff within the warehouse.
Obtaining the information to support planning and organizing starts with an understanding of the past in order to plan for the future. Often a WMS project represents the first time management has implemented a planning process. The project will have collected and used information describing:
Orders, including on-hand orders to accurately predict the immediate work load, and historical patterns:
Trends in total and by customer type;
Regular seasonal, cyclical patterns;
Detail characteristics for E-commerce, wholesale, and retail etc., including lines per order, pieces and cases per line, pieces shipped, etc.;
Same day shipping;
Labor productivity (engineered standards or reasonable expectancies) to estimate staffing hours required by picking task, to handle the daily requirement;
Carrier departure times and vehicle loading (route delivery or axle weight distribution) that drive the picking sequence; and
New data, including weight and dimensions to plan for repack carton sizing (pick-pack) for e-commerce, or delivery routing to optimize order assembly and loading.
Each day, the order data changes and provides the opportunity for new insight into what needs to be done the following day. The capability to capture, interpret, and use this data typically requires a new skill in the general management staff, and it requires an individual to lead the planning and organizing process every day.
Making the daily planning and organizing function of the WMS work effectively requires managers and supervisors who can work together to understand how and why the process works well — and also to understand why, when it does not. Each day, the planner has the responsibility to look at the data describing the portion of the orders to process that have been received, compare that with historical data, and create a plan for the following day or shift. The plan will set a performance goal that can be converted to an estimated number of people required to complete that work during the course of the shift.
Each plan provides the floor supervisors with the opportunity to collaborate with one another to execute the plan, and to work with the planner at the end of the day to understand the results and refine the planning process for the following day. As order trends, characteristics, or productivity rates change, the planning process must respond. Perhaps the size of daily improvement will diminish over time, but the ability to adapt to changes in the workload will improve. Refining the daily process builds a team of responsible supervisors that will yield improved productivity and performance.
It requires more than individual training to build the ability to capture and use the information, and to build and sustain relationships that can achieve these objectives. This capability requires experience in observing others doing this work, practice at doing it, and a culture that expects and supports ongoing collaborative learning and continuous improvement.
The second dimension in improving picking productivity is also a core element of a WMS — to direct and control the picking process. Key to this ability to improve labor productivity is documenting a complete understanding of the picking process, including the handling of exceptions. This documentation provides the direction to drive the WMS configuration, and the creation and installation of associated elements. In our experience, this foundation can only be created through a complete re-engineering of the picking process.
Re-engineering the picking process, including the processes to handle exceptions, will ensure that the WMS process of directing and controlling the performance of picking tasks will minimize performance variation, in both normal and exceptional circumstances. When re-engineering is not accomplished or complete, the WMS
May not direct all steps in the picking process, causing operators not to verify picking, or letting them make independent decisions or wander in search of merchandise without following a consistent, defined pick path.
May not direct the picker through explicit processes to handle exceptions, leaving the picker to make decisions about what to do when inventory is not available in a pick position, creating non-standard responses to the same situation.
May not direct inventory movement effectively, yielding poor timing for forward pick-position replenishment, missed picks, etc.
May not effectively predict the completion of work in each work area (each and case, etc.) for the planning and coordinating of order assembly and loading, and requiring larger staging capacity between work areas and on the dock.
Because the third dimension is not a core element of most warehouse management systems, it needs additional effort from operations management to provide the foundation for ongoing productivity improvement. Specifically, this dimension is a simple measurement system.
A simple measurement system provides the feedback needed to understand whether the actions we have taken yield our intended results. An effective measurement system does not require a significant investment to capture, analyze, and report. A simple process can be sufficient. For example, daily reporting the:
Total hours worked in the day (controllable input); and
Total major output (cases received plus cases shipped); and
… and regularly updating the results on a line graph posted near the time-clock, consistently provides the feedback needed for employees, supervisors, planners, and managers to know whether productivity is improving or not. This form of feedback is often sufficient to support the continuing effort to use a WMS to improve productivity.
The ability to achieve improved picking productivity and performance, initially and into the future, is directly dependent upon the effective implementation of these two dimensions of the WMS, the design and implementation project, and a simple measurement and reporting system.
However, as Warehouse Management Systems have become commodities, price has become a very strong element in the negotiation process. The result has shifted the focus of the vendor’s work from building the information, relationships, and capabilities in the use of the WMS, to minimizing the total cost of the system. The consequences include reduced time spent on one or more of these dimensions with no effort to provide timely feedback on the results of the staff effort to build their skills using their WMS.
A WMS is an expensive and powerful tool. And like all tools, the value and results of using the tool are directly related to the ability of the system to effectively support the user’s warehouse, and the capabilities of the user(s) to use it effectively. And in the process of negotiating the price for the system, we need to be concerned about both short- and long-term objectives.
The good news is that all is not lost if these dimensions were not addressed effectively in your WMS implementation, or if user skill development is not a priority as warehouse managers and supervisors move in and out of positions. The process of daily planning and organizing can be learned, the supervisory team can be built, and picking processes can be re-engineered after implementation, and again years later. A simple measurement system can be implemented at any time. All it takes is a decision, and you can begin again to improve productivity every day with your WMS.
Don Benson, also known as The Warehouse Coach, is a systems thinker who has been bringing ideas, people, and organizations together to achieve their desired outcomes with Warehouse Management Systems for over 35 years. You can reach him at www.wmssupport.com.