Warehouse Management System Information Technology Essay

A warehouse management system, or WMS, is a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, put away and picking.

The objective of a warehouse management system is to provide a set of computerized procedures to handle the receipt of stock and returns into a warehouse facility, model and manage the logical representation of the physical storage facilities (e.g. racking etc), manage the stock within the facility and enable a seamless link to order processing and logistics management in order to pick, pack and ship product out of the facility.

History:

Warehousing roots go back to the creation of granaries to store food, which was historically available for purchase during times of famine. As European explorers began to create shipping-trade routes with other nations, warehouses grew in importance for the storage of products and commodities from afar. Ports were the major location for warehouses. As railroads began to expand travel and transportation, the creation of rail depots for the storage of materials became necessary.

World War II impacted warehousing in several ways, including the need to increase the size of warehouses and the need for more mechanized methods of storing and retrieving the products and materials. As mass production grew throughout manufacturing, the needs of efficient and effective warehousing capabilities grew with it.

The warehouse industry found itself recovering from a recession at the start of the twenty-first century, partially brought on by the hype of the dot-com bubble and the excess production created after it burst. It also coped with new methods of distribution, such as just-in-time (JIT) manufacturing-where warehousing is unnecessary because products are shipped directly to customers.

Global Current Scenario:

Warehousing companies are now striving to become more than simply storage facilities. They are transforming themselves into “third-party logistics providers” or “3PLs” that provide a wide array of services and functions. In addition to packing and staging pallets, contemporary warehousing facilities offer light manufacturing, call centers, labeling, and other non-storage options.

A significant trend is the continuing growth of 3PL providers as companies try to cut costs and management issues by outsourcing their warehouse and distribution functions. An outcome of increased 3PL activity is a wave of mergers that are consolidating the industry. Customer demands for one-stop shopping and new technologies are a driving force behind this consolidation.

According to a Warehousing Management survey, competition in warehousing has become extremely tight because businesses seek warehouse firms with extremely thin margins. Warehouse management system (WMS) requirement will help managements to take their warehouse and company to the next level. An optimized WMS will play a key role in allowing a company to better manage its warehouse operations.

In the past warehouse management was very paper-intensive in its coordination of a multitude of activities. This has changed with the introduction of WMS which assist managers in tracking products throughout the entire storage and distribution process. These systems span from simple computer automation systems to high-end, feature-rich management programs that improve order picking, facilitate better dock logistics, and monitor inventory management. Warehouse management systems record all events and activities in the receipt, handling and storage of products and orders in the warehouse or distribution center, including the location of inventory

Companies are succeeding by remaining flexible and investing in technology. The main issues or trends in warehousing include radio frequency identification (RFID), transportation management systems, pick-to-light technology, and voice-activated receiving and packaging.

A paperless warehouse management system (WMS) could cut costs by increasing productivity and accuracy, which also improves customer service. But a good WMS is more complex and expensive than most people have been led to believe. To avoid installation problems, follow up-front-planning steps to select a cost-effective WMS.

The operational benefits that can be expected out of WMS installation are…

Misplaced or Lost stock

Search Times

Paperwork

Human Error

Labor and Overtime

Need for Physical

Inventory Taking

Stock outs

Shipping Errors

On Hand Inventory

Cycle Times

Space Utilization

Inventory accuracy

Throughput

Order/shipment Tracking

Stock Rotation/Inventory

Tums

Customer Service

Product Planning

Fill Rate Performance

Labor Productivity

Prospects:

The warehousing industry is a key component of the supply chain and will likely remain so as long as there are manufacturers and consumers. Past supply chain solutions were limiting due to their expense, closed architecture, lack of mobility, and inability to share with partners. WMS Software as a Service delivery model, rapid implementation and easy customization drive quick Return on Investment with minimal up-front investment. Now, any size company can reduce cost while streamlining their supply chain and improving service levels. A WMS has the potential to reduce errors, increase space utilization and decrease labor costs by offering a comprehensive suite of capabilities and work with a range of best-in-class software partners. Its state-of-the-art systems monitor and control all critical warehouse processes. They also provide support for transport and distribution operations and communicate with customs and other authorities. The implementation of the WMS led to the standardization of operations throughout distribution facilities.

Access to, and influence over, leading-edge supply chain technology

Access to best-in-class applications that are platform and database independent – facilitating standardized business processes

View real-time inventory status at each individual warehouse location or all locations

Search by Part number or Lot number and Track Orders out of each warehouse by Order Number, Ship to or Date. Print or download query results to a spreadsheet.

Review Audit History to see chronological record of incoming and outgoing products.

Rapid start-up and reduced risk in global deployment – including project delivery, service management, supplier management, – integration and hosting

Scalability and repeatability worldwide

Unrivalled expertise in interfacing with your stock control, resource planning and business information systems

Proven, pre-integration with other supply chain partner systems – including visibility and control

Regulations in Warehousing Management Services:

The Warehousing (Development and Regulation) Bill, 2005 was enacted in Parliament to make provisions for development and regulations of warehouses in India. This act covers warehouses in the whole of India except Jammu and Kashmir. Its scope includes negotiation of warehouse receipts, establishment of a warehousing development and regulatory authority and for matters connected to it. According to this Bill,

A registration certificate in respect of the concerned warehouse is necessary for any person starting this business. The authority will issue a negotiable certificate.

A warehouseman is liable for loss or damage to goods for which he couldn’t take necessary precaution. If the damage is not due to the negligence of the warehouseman then he is payable to tune of the value of goods at the time bringing it to the warehouse. If the damage is caused due to the negligence of the warehouseman then he is payable to the tune of original value of goods plus the loss of profits caused to the holder of the receipt.

Duties of the warehouseman are to keep the records and accounts of warehouse business. Also the warehouseman is responsible for keeping the goods in safe condition.

Warehouseman has the special powers of dealing with perishable and hazardous goods. He can take necessary action to remove the potentially hazardous goods.

A warehouse receipt shall be a document of title to goods in writing if it contains receipt number, warehouse registration number, name and address of warehouse, date of issue of receipt, rates of storage and handling charges, market value of goods, description of goods, name of the insurance company securing against fire, flood, theft, burglary, riots, strikes or terrorism, whether the warehouse receipt is negotiable or non-negotiable etc.

Any warehouseman who knowingly issues a receipt without taking the actual physical entry of goods in his warehouse is entitled for an imprisonment for a term which may extend to up to three years. Also if warehouseman issues a duplicate receipt then he is entitled to the same punishment.

Whenever any offence is committed by a company under this Act, every person who was present at the time when the offence was committed shall be liable for the punishment accordingly.

Building Warehousing Competitiveness:

Central warehousing Corporation (CWC) tries to implement the best practices in the field of logistics and warehousing in India. Warehousing accounts for 20% of domestic logistics industry. Thus even a 1% reduction in warehousing cost could have a significant positive impact on the national economy.

In designing a warehouse, due attention should be given on how to pick best orders, how to plan the pickup time, how to use sales data to plan the product line, etc. Lay outing is therefore an important aspect of a warehouse design. Automation and modern equipment will make warehouses more efficient. E.g. Sun City and Sri City.

Warehouse services providing companies:

We are mentioning a few domestic and international players who are providing warehouse management services.

Domestic Players:

1. AB Sea Container Private Ltd: They are providing goods warehousing services, industrial goods warehousing, commercial goods warehousing and automotive warehousing services. They are located in New Delhi.

2. Falcon Freightlink Pvt. Ltd: They provide 3PL services to the customers. They also offer cargo warehousing services, customized logistical solutions, expedite cargo transportation services. They are located in New Delhi

3. Threestar Solutions And Services Private Ltd: They provide international warehouse services, commercial warehousing, warehouse management services. They are located in Mumbai.

4. Mars Shipping Agency: They provide general warehouse management services, inventory management system, goods storage service, safe goods storage services, dock stuffing services. They are located in Mumbai.

5. Pace Carrier Private Ltd: They provide warehousing services, warehouse consultation services, goods storage services, bulk storage services, industrial goods storage services and electronic goods storage services. They are located in Ghaziabad.

6. Trinitys Clearing and Shipping Agencies: Apart from the regular warehousing services, their specialties include expedite cargo transportation services, packing services, moving facilities to exporters and importers in India. They are located in Chennai.

International Players:

1. Admiral Logistics (INDIA) Pvt. Ltd: They provide warehouse management services, freight forwarding services, air freight services, freight shipping services, Cargo services, custom clearance services. They are an Indonesian company and operates in Hyderabad in India.

2. Anjie International transportation Co Ltd: They provide warehouse management services, Air freight services, and customs clearance services. They are a Chinese company.

3. Mamufa Global Ltd: They provide warehousing management services, shifting services, air and sea freight forwarding services, international freight services. They are a Nigerian company.

4. PWC Logistics: They provide warehousing and logistics services. They are a Kuwaitian company.

5. Network Logistics: They provide warehousing and transportation services. They are an American company.

Companies using Warehouse Management Services:

Procter & Gamble:

P&G is one of the top players in manufacturing, distribution and marketing of nearly 300 brands related to baby, feminine and home care products. Procter & Gamble is concerned more about storing the manufactured products undamaged. It realised that accurate case picking and pallet making will keep the shipments free from damage. So P&G implemented AutoPallet3 system to enhance its case pick operation. It takes order data and converts it into instructions to pick a high-cube damage-free pallet. Since then, P&G was able to cut down case picking time in its warehouses dramatically and has created opportunity to ship damage-free truck loads.

Also in China, P&G invested and improved its warehouse management system by using mobile computing technology. It enabled the sales orders to enter in to an Integrated Distribution System and transfer the information to warehouse workers. So implementation of this technology enhanced productivity for a more efficient warehouse management system which led to further cost savings in supply chain.

Pfizer Pharmaceuticals:

Pfizer is a global pharmaceutical company which is consistently ranked in top 3 in the world. It is based in New York city. Pfizer started its warehousing services in Chicago in 1882. It built a new state-of-the-art automated warehouse and distribution centre at Kent in UK in 2001. This new warehouse provided storage for raw materials for both bulk and the dosage form drugs from manufacturing plants along with providing storage and order fulfilment services for bulk exports and for finished pack sales of pharmaceutical and animal health products. All these warehouse functions are accomplished by using a number of automated systems and managed by a computerized warehouse management system. This facilitated services like direct to hospital and direct to clinic deliveries of medicines.

Wal-Mart:

Wal-Mart, famous multinational retailer achieved and is maintaining its differentiation, cost leadership position mainly due to its innovative warehousing system. It has a flexible regional warehousing system. In a retail business like Wal-Mart warehouses are necessary to restock the stores frequently. Also, the warehouses should be as close to the stores as possible. Wal-Mart’s warehousing system solved the problem of contrast of few warehouses coupled with short distances and reduced overheads which significantly reduced production costs. This made the goods available for customers at lower prices.

Maruti Suzuki:

Maruti Suzuki, with its headquarters in Delhi is the first Indian company to produce and sell million cars. Its entire logistics and supply chain system especially it’s warehouse management system played a vital role in its success. It has a single main warehouse at Gurgaon where the components of its finished cars are stored. Its warehouses are fully automated with latest equipment and technology required for material identification, periodic stock taking and inventory carrying cost analysis. This system was devised to ensure quality and was highly successful because dealers order spare parts along with the cars. Now, Maruti is decentralizing its warehouse management system with warehouses in every region of the country due to increased competition.

Future Prospects in Warehouse Services:

Outsourcing: Many companies are already opting to outsource their warehousing functions to Third party logistics providers (3PL). This move not only cut down the costs of warehousing for the company but also provides the ability to leverage on the expertise of 3rd party service providers.

Labour Management Systems: These can be used to track the performance of the employees working in a warehouse. Accordingly incentives can be provided along with enhancing the efficiency of working.

Decision Support Tools: These tools provide the ability to design key performance indicators that can be tailored to achieve specific goals. These are usually web-based and deliver their metrics through graphical dashboards.

Reverse Logistics: Reverse logistics help the companies to increase the efficiency of operations of returns from first customer interaction to final product disposition. It also increases the service levels of a company.

Slotting: Slotting of packages is done to allow operations to optimize product location with respective warehouses for increased picking efficiency.

RFID(Radio Frequency Identification): Famous retailers like Wal-Mart is already using this technology due to its potential to help supply chains lower operating costs, improve inventory accuracy, increase throughput, reduce inventory levels and increase visibility in warehouses. But the usage is limited because of high cost of implementation. It is expected to be one of the dominating technologies in the coming years.

Future needs of Warehousing Industry:

Current shift to goods and services tax (GST) will have a positive impact on the warehousing industry. It will help the industry to work more efficiently. Also free trade warehouse zones (FTWZs) should come up.

In the longer run, the growth will come from space optimization, use of new technologies, efficient tax policies, IT adoption, value added services, use of appropriate storage types, adoption of right architecture, installation of surveillance and security systems and skills training. Warehouses should not just stock goods. It should also equip itself to receive goods, break shipments, and prepare for shipments.

Warehousing industry is hampered by lack of capital and sufficient funding options are not available. Hence government should consider introducing tax holidays that might attract private equity players to the industry. The industry players will also do well to get listed on the secondary markets. Also the government should consider granting industry status to warehousing, which will improve the funding prospects.

The bigger challenge for the industry would be to bridge the skill gap. This is because the major part of the industry is unorganized and there is deficit of industrial skills development centers in the country.