More Efficient Operational Processes

More efficient warehouse operations.  If only.  Is it possible?  If it were, there would likely be less labor costs relative to increased production.  Less costs and less production is clearly a down cycle in the business as is more costs and less production.  Ideally you want less costs and more production. 

Automation is the key.  But, automate what, how?

For most manufacturers and wholesale distributors the key often revolves around inventory levels, processing and handling.  Inventory tends to have the greatest Return On Investment (ROI).  Inventory management is somewhat like upgrading your kitchen in your house remodel.  The kitchen remodel generally returns the most on investment.  Other upgrades make living more comfortable, but Kitchens have one of the better paybacks.

Increased accuracy in order and pick/pack/ship processing due to warehouse layout optimization, receiving efficiencies including barcoding and scanning, automated put-aways and cycle counting are just a few examples that can contribute to more efficient operations.

Most businesses that have survived the economic fluctuations are running fairly well and have probably automated at least some and likely much of their facilities.  Warehouse Management Systems (WMS) are the key to the automation.  Unfortunately these systems are not always fully implemented.  Sometimes the implementation plan was a phased approach, but never completed.  Sometimes the organization had a loss of faith in the promised return.  The causes are many, a bad match between sales and purchasing, lack of education, or lack of funds to fully implement the solution. 

WMS systems are great, but they do have to match the business model.  Typically the greatest efficiency in WMS comes from a fully integrated solution that is part of the native Enterprise Resource Planning (ERP) solution.  However, if the ERP solution is not a good match, the WMS module will tend to exacerbate the problems.

A thorough review of business operations makes sense before purchasing or upgrading your WMS solution. 

Are there plans and budget available to outfit workers with wireless equipment, barcode scanners, printers, and other tools?  The benefits of WMS will be limited without the corresponding equipment.  Automating labor collection and reporting is another benefit of WMS systems.  A phased-in approach is a valid model as long as the implementation is completed.

How much paper is involved with the current processing of orders, receiving and counting?  How will a WMS system reduce this overhead?  Will your people be convinced?  What is the baseline and what metrics are needed to gauge the project success?  Without an electronic system how can workloads be optimized?  How much time and effort is needed to check orders? 

How much does the administrative overhead affect your profitability?

Achievable goals include year over year decreases in labor costs relative to production, order, pick and shipment rates of 99% accuracy.  To enable these accuracy levels organizations will typically need to implement bin management in their WMS system, real-time paperless receiving and put-aways, automated picking and cycle counting.  Manual systems require a significant amount of administrative overhead and paperwork which contributes to inaccuracies. These inaccuracies increase if batch, lot or serial number processing is involved. 

High accuracy rates are not the end goal, efficiency is.  High accuracy rates are what enables business to concentrate on real operational efficiency improvements. 

To get started, businesses need to conduct a business process review including evaluation of the incumbent and competitive ERP software including WMS systems, including any upgrades to their current systems.  This is only a start, but it is an important an unavoidable step in the right direction.

Buy-in at all levels in the organization is an important component to not be forgotten. 

Owners and/or management cannot just decide one day to push out a whole new way of doing business without proper training and education.  From the shop floor, warehouse, to the back office, management and top level personnel, everyone needs to understand that the change will help them to do what they do more efficiently and productively.  Set the expectations and gain consensus on the outcome. 

This is a real test for the leadership in the organization.  

How is your organization dealing with change, leadership and inventory challenges? 

Dolvin Consulting works with your team to identify and remediate the causes of inefficiency in your organization.  Contact us today to see how we can help. 

Keys for a Good WMS Implementation

What are some key factors are for a good Warehouse Management System (WMS) implementation?  This is a great topic and there are many answers to such an open ended question.  Below is a list of some common issues.  What can you add to this list?

Suggestions with some additional thoughts:

1.       Preparation.  Involve everyone, do your planning, and create lots of test cases. 

2.       Needs.  Do you need this or did your boss read a recent press release and now wants what the competition has?

3.       Expectations.  Is what you want to accomplish reasonable?  Is a WMS solution the answer to what is keeping you awake at night?

4.       Focus.  Focus on business processes and requirements first.  This is what you are trying to streamline.  This is not a Technology decision.

5.       People.  Who is or will be involved in the design, planning, testing, implementation, and utilization of this solution?

6.       Testing.  Determine what needs to be tested and actually perform those tests.  Do not just give the system what it is expecting.

7.       Finance.  Make sure there is reasonable Return on Investment (ROI).  Why else would you invest what could be a significant amount?  The solution should address the inventory, labor and equipment utilization.

8.       Project.  Strong project management and resource commitment.  If you do not have a technology road map, how do you know where you are starting from and where you are headed?  How will you know when you get there?

9.       Support.  Commitment from executive team.  Commitment from software and hardware vendors and realistic goals, buy in and managed expectations.  A good job will take time and this is a project that should not be rushed.

10.   Planning.  Take the time to plan up front and include time for problems and pitfalls.

11.   Training.  If you want the change to be successful, you are going to have to invest in training.  The solution may make sense to you, but if the people actually using the system do not understand, then you will have trouble, delays and cost overruns.

12.   Future.  Consider long range goals and plan accordingly for growth.  This does not have to be the final system you use, but if you are not planning at least three to five years down the line, you may be shortsighted and bound for a costly mistake.

13.   ERP.  Tie the WMS solution to your Enterprise Resource Planning (ERP) system.  These systems can run stand alone, but if efficiency and streamlined operations are included in your goals, then you need and should want a fully integrated solution.

14.   Changes.  Make sure if changes are needed they get done promptly.  Changes can be a twin edge sword and open your system to instability, but also promise a tailored solution.  Just make sure that the people making the changes understand the system and the implications of your change requests.

15.   Complications.  Do not overcomplicate a simple solution.  Implement in stages if that is an option.  Get the basics working first, then turn on the fancy bells and whistles.

16.   Implementation.  Use your project plan, allow for unforeseen and stick to the plan.  Do not get pressured to start if you are not ready.

17.   Workarounds.  What have you planned to do when the system is implemented and it is not working?

18.   Instincts.  Trust your gut instincts.  If it does not feel right, then find out why.  Did you just eat something that disagreed with your insides or is there a problem that will cost you your job?

19.   Ownership.  Who owns the project?  Who will be or is the leader from within?

Contact Dolvin Consulting today.  Dolvin works with manufacturers, distributors and specialty retailers to help them streamline their computer operations with ERP and WMS solutions to reduce their costs and increase profits. 

Radio Frequency Identification (RFID) Technology Increases Efficiency

As inventory control technologies continue to evolve, opportunities for distribution and manufacturing companies to streamline warehouse and shipping operations increase.
 

The evolution of Radio Frequency Identification (RFID) technology comprises a prime example.  RFID is a method used to identify, store and remotely retrieve data using RFID tagging devices.  These RFID tags, which can be attached to materials or merchandise and then scanned, transmit information via radio waves to a database.  The RFID tag may contain information such as product type, quantity or suggested retail price.

Mike Moser, Director of IT for Haier, summarized the problem, “To implement the technology successfully, yet remain cost effective, we needed a software solution that we could integrate seamlessly and securely with our existing enterprise resource planning (ERP) package.”

 

Click here to read the full story.

“The knowledge that VAI could design a secure and seamless RFID solution to work as a part of our ERP package—and not function as a mere add-on—was perceived as a tremendous benefit.  The fact that VAI’s ultimate solution had broad applicability, beyond Wal-Mart’s requirements, put us way ahead of the curve in anticipating future demands for RFID tags.”

 

Since its implementation in January 2007, the completely integrated system has provided increased coordination and a higher level of efficiency between Haier’s distribution operations and Wal-Mart’s warehousing facilities.  Haier is now equipped to handle Wal-Mart’s mandated RFID system as well as the anticipated future requirements of other big-box retailers.  Aside from minor visual changes to Haier’s shipping labels, VAI’s solution has made this changeover a seamless, simple process.

The title of this posting should be “Partnership Makes the Solution Work”. 

 

There are many RFID solutions available today, more so than back in 2007.  Five years is a long time in technology circles, but the core notes here transcend current buzz words.

 

·         One- Haier has a partner and that cares about their success and not just in profits.

·         Two- The partner, VAI, took the time to listen and find the right-size fit solution. 

·         Three- Haier did not just implement a slap-on solution.  Their solution lays the foundation to future growth.

·         Four- Increased efficiency. 

Because of their size Walmart is able to trend industry objectives to greater efficiency.  For some organizations the changes can be painful.  The changes never seem to be timed right or easy to implement.  But that is just the point.  Whether you like Walmart or not, they are streamlining an entire industry.  What lessons can be learned by their initiatives? 

 

A lot of operations would be inefficient when done one at a time. 

 

How costly would a piece of plywood be if you only made one?  When you scale up to make thousands, the costs are distributed over a greater number of products and what was not feasible becomes possible.

 

VAI has helped Haier take a step forward in compliance and hence has made their own operations more efficient.

 

More efficiency generally reduces costs and leads to increased profits.  Dolvin Consulting helps Manufacturers, Distributors and Specialty Retailers streamline their operations so they remain competitive.  Contact us today to see how we can help you achieve your goals.

I Would Like to Understand How You Track Inventory

I really am beginning to really like LinkedIn.  I am finding new uses for it almost every day.  Today’s forum discussion is from Mr. A and he wants to understand how we track inventory and to know if there is a way to visually manage and monitor inventory.

This is a really good point, although I am not sure Mr. A is asking for the same reason I am answering.  That is another story, but one of the fundamental differences between a forum or written communication and verbal, in-person contact. 

So what are the contributors suggesting?

·         People are so helpful.   The first person is really proud that he “invented” graphic techniques “years-ago”.  Wow, imagine that we are getting to know someone who invented graphic techniques.  Hey we can even visit his web site.

·         The next person informs us that he has done stock analysis in different stores and recalculated reorder points based on consumption and Economic Order Quantity (EOQ) methods.  Well, there are many types of calculations based on any number of formulas.  Different locations in an operation may need different calculation methods and certainly no one way is perfect.  He is available if you want to contact him for the details.  Might be a good idea, but.

·         Next is the suggestion of a Kanban system.  Old, but reliable.  My guess is if Mr. A is asking the question the way he is, then Kanban is too much to consider implementing at this point in time.

·         Next we are told that there are a lot of software applications and different methodologies, but of course you have to be able to calculate the Return on Investment (ROI).  There are also cycle counting solutions and, on and on and on and on.  He sure seems smart.

·         Next we find out that (insert big company name (BCN)) has a great inventory management system.  Okay, I believe that, but Mr. A did not mention he had BCN and if he does not, it is not going to help him today or possibly in the future.  Oh, and a Kaizen approach is efficient.  BCN has great solutions for some organizations, but making that decision is more involved than a LinkedIn discussion will address.

·         Our next respondent notes that it is what you do with the information that is equally important.  True, why else would you bother?  He even shows how smart he is by explaining that you can identify fast moving stock and you may even need to rearrange your warehouse to optimally place those fast moving items.  Rearrange my warehouse?  Did Mr. A say anything about this?  Poor guy just wants to get a handle on his inventory.  If he is asking, then he is not the person that should be making those decisions.

·         The next guy indicates there are several ways to track inventory.  Sure, there are.

·         Finally, we here from someone who indicates these are all good points and he agrees with all of them.  He notes that the product type may influence the process to use and of course there is money tied up in inventory.   Personally, I think there is little he does not agree with.

I feel so much better now and I am sure Mr A. does too.

Do we know why Mr. A is asking about tracking inventory?  Every company that handles inventory needs to find efficient ways to count and manage it. 

What benefit would visually managing and monitoring inventory have?  Visually presenting the information has value.  Look at the popularity of YouTube and Facebook.  Pictures tell a story.

An important component in any inventory system is accuracy and tracking, both being interrelated.  From an accurate inventory comes forecasting and effective management.

Here is a point nearly every on-line forum does not deal with.  It is my point.  Did anyone of the respondents directly ask why?  Did anyone ask Mr. A what he was hoping to achieve?  What system he was using now, if any?  Was this for his benefit or senior management?

 

There a whole host of questions that should be addressed first.  Perhaps this is a disadvantage of on-line forums.  Everyone wants to be helpful, get heard first, have the best answer (to an unasked question), and be looked upon as intelligent.  We are all stroke deprived and need someone else to think we are smarter than we actually are.  We get beat up every day.

 

Dolvin Consulting works directly with your team and starts with questions, not benefits and solutions.  We first start with a phone conversation to determine if we are capable of addressing your challenges.  If we both feel that it is worth an investment of our time, we meet face-to-face.  Interpersonal communication is 70% non verbal.  We potentially lose a lot of information, if we do not do this.  This does not mean we do business together, it just means it is worth our time to sit down and find out if the solutions we have to offer match your challenges. 

No match means we do our best to refer you another resource that may be able to help.

 

There is no harm in contacting us today.  We are not here to sell you anything.  We are a solution provider that connects challenges and resources.  Please contact us for your consultation.

Problem: Picked/Shipped Wrong Product. Result: Charge-Backs.

Wholesalers move toward intelligent warehouses.  Automation increases inefficiencies.  No matter how modern a warehouse, if it includes overhead costs, paper processing or manual processes, there is room for improvements.  Evidence would be workers sent to the wrong bin slots, picking the wrong products, or shipping the wrong products.

Click here for the Video.

Click here for a PDF file.

More accurate shipping means less returns and more customer satisfaction.

Intelligent, instrumented and interconnected warehouses enable the ability to respond to supply and demand from market fluctuations.  Purchasing can be done at a more accurate level, which results in not holding on to inventory for extended periods of time.  Something food processors are keenly aware of. 

Monitoring customer needs, having inventory on hand and available, knowing what is happening in real-time.  These are key concerns for any distribution operation.  Automation through bar codes and Radio Frequency Identification (RFID) tags enable automated tracking and inventory processing much faster and accurately than manual paper processing.

Other automations include portable printing systems, such as belt printers, which save time and increase accuracy.  Voice response units enable hands-free picking increasing safety, saving time and energy, and increases accuracy of orders.

How much nicer would it be if your orders were accurately picked and shipped?  Easier on the workers in your operations, easier for customer service, happier customers who receive what they ordered on time. 

The alternative is not attractive:

·         First you get the call from an unhappy customer, resulting in time taken away from production.  Hopefully your customer service people are in a good mood that day and can reassure your customers this is not typical of your business. 

·         Then add the time and effort of the computer entry of the return and replacement orders and resulting paperwork. 

·         Do not forget to add in any time for investigation of what went wrong and supervisor or manager approval of the credit.  Your finance team probably has lots of free time anyway. 

·         Then you end up paying for the return and expedited replacement shipment.  Was this one box or a pallet or entire truckload?

·         Add in the time someone takes to pick the replacement order.

·         Add in the time for someone to receive the original incorrect order, inspection, and restocking efforts. 

Your team has spare time, right?  Your business has grown in this economy and you have extra time and personnel to deal with these issues.  You did not have any overtime situations, because of the extra overhead of incorrect shipments, did you? 

Are you saying that this is just a part of doing business?  This does not happen often enough to worry about.  Nothing can be done about it. 

Would adding automation really help?

Warehouse Management Systems (WMS) that are fully integrated with an Enterprise Resource Planning (ERP) system solve these issues.  Especially if it is the right solution.

Too soon to tell, but is it not worth an investment of some time to know you are doing the best you can?   Maybe you do not solve all your issues today, but you put a plan in place to tackle your challenges so that over time you become more efficient. 

Maybe today is the day you pick up the phone and call Dolvin Consulting to confirm you are already doing everything possible in the area of warehouse automation.  Contacting us is the first step.  It is only a phone call.  Hang up if you like.  Stay on the line to move forward.  No promises, just conversation.  We are not out to sell you anything.  We are here to see if there is a match between your challenges and our solutions.