While different
organisations provide blueprints for key processes using barcoding and radio
frequency controls, these standardised methods only apply to reading and
recording data. The actual handling of physical materials and the specific
procedures followed in each warehouse are distinct and tailored to the
individual business. This is driven by factors including:
- The magnitude of the warehouse
operation.
- Storage capacity.
- Temperature.
- Order profiles.
- Legislative requirements.
- Organisational culture.
- Volume of goods moving through the
facility.
Warehouse Operations
The different processes that
occur within a Warehouse Management System are fundamentally the same across
many Warehouse Operations and typically consist of:
Receiving: Handling products in a
warehouse and through a mechanical handling system. Receipts may be for single
or multiple products. Items such as pallets or small split pins may be
significant. The best way to receive products is a supplier's Advance Shipping
Notice (ASN). With this information in a system, staff can scan barcoded
consignment notes to bring up the ASN on the Warehouse Management System (WMS).
If the delivery matches the
ASN, the goods can be system-received. However, at this point, they are still
at staging, albeit ready for put-away, although some systems allow goods to be
received into inventory. In contrast, others require products to be delivered
to a specific stock storage location before inventory is updated.
Put-Away: A WMS system will prompt
warehouse receipt staff with a put-away note indicating that stock is in the
staging area waiting to be transferred to a stock storage location. The process
commences when staff accept the put-away task from the WMS, which scans the
relevant barcode of goods to be put away.
If there is no barcode, a
manual entry can be made to confirm that the goods have been identified. At
this point, the system will direct the put-away staff to deliver the goods to
the relevant storage location.
Once at the location, staff
may scan the relevant stock storage location barcode or confirm manually that
the correct storage location has been found, then place the goods in the
storage location before confirming that the put-away process is complete.
Picking: There are two main ways of
picking:
- Primary: This is the leading way of
picking goods. The goods are delivered directly to a staging area or
packing bench for consigning and dispatching. Thus, the first pick becomes
the last pick.
- Secondary: This is a second-picking
process. Some primary picks are subject to a secondary picking process,
mainly where picked goods must be allocated to numerous or discrete orders
via a sortation process. With increased online sales across many industries,
more organisations are conducting secondary picking processes than ever.
Once orders are received,
they are commonly released 'in real time' or in waves. Real-time orders are
processed as they are received from customers in a natural environment. Orders
can be accumulated in waves for specific picking times and transport routes.
Packing: There are numerous ways
that goods are packed, but organisations typically follow the five rules
identified below to maintain successful Order packing processes:
- Picked goods must be traceable to
the location from which they were picked, with relevant ‘use-by’ dates or
‘batch’ dates and codes.
- Accuracy and quality assurance
checks must be included in the process.
- Goods picked from different zones
within the warehouse must be easily 'combined', and the system must be
managed to ensure Order completeness.
- Products must be packed according
to size, quantity, volume, temperature, toxicity, value, fragility,
hygiene and legislative requirements.
- Consignments must always be
system-traceable to documents or invoice numbers for future traceability
and to ensure the customer is correctly billed for the goods supplied.
Dispatching: Successful dispatch lies
in an organisation's ability to have Orders ready for departure just as the
Distribution vehicle arrives to collect the day's dispatches for balance and
forecast packing and dispatching according to carrier pick-up times.
Orders that are ready too
early will clutter the staging areas. At the same time, late dispatches will
delay loading and potentially cause late deliveries. Many organisations use
their systems to release orders for picking in waves aligned to specific
delivery routes or carrier types.
Returns: Returns are an intricate
part of most organisations. The volume of product returns is growing for many
organisations, mainly due to the e-commerce revolution. The complexity around
handling returns mandates the following rules:
- When customers return goods, they
should seek and be given Return Management Authorisation, which outlines
what is being returned and why.
- All returns must be traced to their
order document and invoice.
- Organisations must have a
pre-determined returns process that delineates what to do with the goods
once they are returned to the warehouse, such as returning them to stock,
repairing them, destroying them, discarding them, recycling them, or
returning them to the manufacturer.
- Credits for returned goods must be
system-recorded to show why the goods were returned.
- Inventory must be updated where
goods are returned to stock or held for further action.
Value-adding: This is the part of
the organisation where products are produced, kitted, assembled, relabelled,
modified, or subject to some other value-adding process. It is about performing
work on the product to make it ‘ready for sale’. This value-adding process can
be complex, particularly when combining many items to form a new product.
The complexity around
handling value-adding processes and the changing nature of component products
in and out-of-shelf locations can be daunting. Over the years, systems have
evolved to assist. Yet, many organisations find that recording value-adding components
may be incompatible with how their logistics system or WMS is set up.
Warehouse Management Systems
A warehouse management
system (WMS) encompasses a series of procedures and protocols designed to
streamline the operations of a warehouse or distribution centre, ensuring
optimal functionality and goal achievement.
Previously, the term
'warehouse management information system' was used to differentiate software
fulfilling this role from theoretical systems. Some smaller facilities resort
to manual methods like spreadsheets or pen and paper for documentation, which also
falls under the WMS umbrella.
The term predominantly
refers to computerised systems that track inventory arrivals and departures.
Additional features are incorporated, such as pinpointing stock locations
within the warehouse, maximising space utilisation, and coordinating tasks for
enhanced efficiency.
Establishing or updating an
organisation's WMS is justified by five key factors. It can yield numerous
advantages that contribute to business expansion and customer loyalty. The
foremost benefit is real-time inventory management, which aids logistics service
providers and clients effectively plan resources and inventory.
Implementing a new WMS can
help organisations experience substantial growth and foster customer trust
through improved operational processes and enhanced service delivery. Effective
product management and inventory control are crucial for any organisation, and
implementing a WMS system can significantly improve these aspects.
By screening and scanning
products at every stage of movement within the facility, the organisation gains
clear visibility into the location of products and can ensure proper inventory
control. This significantly reduces the chances of mishandling inventories,
improving operations' efficiency and accuracy.
Another critical advantage
of advanced WMS systems is the ability to achieve faster product delivery,
which holds immense value in today's fast-paced and highly competitive business
environment. By tracking, tracing, and monitoring products throughout the
supply chain, organisations can streamline their processes and expedite the
delivery of goods to customers. This enhances customer satisfaction and gives
the organisation a competitive edge in the market.
The benefits of implementing
a WMS system extend beyond outbound logistics. When managing returns, a
well-implemented WMS system can significantly simplify and make the process
more effective. By monitoring and tracking returned inventory, organisations can
efficiently handle customer returns, ensuring timely resolution and minimising
any potential disruptions in the supply chain.
Enterprise Resource Planning
Enterprise resource planning
(ERP) is a crucial process that organisations utilise to manage and integrate
essential components of their operations. ERP software applications play a
critical role in resource planning by consolidating all necessary processes
into one system. This integrated system encompasses planning, purchasing,
inventory management, sales, and marketing, streamlining organisational
operations.
An ERP system is a cohesive
force that combines the various computer systems within a large organisation.
Without an ERP application, each team within the organisation would have its IT
system tailored to its specific tasks. However, with ERP software implementation,
each team retains its system while gaining access to all systems through a
single application and interface. This integration facilitates a comprehensive
planning and operating system.
ERP applications are crucial
in enhancing communication and information sharing among different teams within
an organisation. By collecting data on the organisation's activities and the
status of various teams, the ERP system makes this information readily
available to other teams, enabling them to utilise it effectively.
Implementing ERP
applications can significantly contribute to an organisation's self-awareness
by connecting information related to production, finance, distribution, and
human resources. This integration bridges the technological gaps between
different parts of the organisation, eliminating duplication and incompatible
technologies. It often integrates systems such as accounts payable, stock
control, order monitoring, and customer databases into a unified system.
Over the years, ERP
offerings have evolved from traditional software models reliant on physical
client servers to cloud-based software that offers remote web-based access.
While an ERP system does not entirely eradicate inefficiencies, it prompts the
organisation to reconsider its structure and operations to maximise the
benefits of ERP technology.
Despite the potential
advantages, ERP systems often fail to achieve their intended objectives due to
organisations' reluctance to abandon outdated processes incompatible with the
software. Additionally, some organisations are hesitant to let go of old software
that has proven effective in the past. To ensure the success of ERP projects,
it is crucial to keep them distinct from numerous smaller projects, which can
lead to product and service cost overruns.
E-Commerce
Electronic commerce, or
E-commerce, refers to any commercial activity or financial transaction that
involves exchanging information over the Internet. It encompasses the buying
and selling products and services between individuals or organisations.
The activities focus on conducting internal and external business
processes as a continuous stream of product and data flows upstream and
downstream of the supply chain, utilising cloud-based internet-based
technologies across many different IT networks and platforms.
E-commerce encompasses the
capability to exchange products or services by leveraging computer networks
like the internet or mobile technology, such as "Apps" on mobile
phones. The realm of electronic commerce relies on various technologies to
facilitate its operations. Electronic commerce draws on technologies such as:
- Mobile commerce.
- Electronic funds transfer.
- Supply Chain Management.
- Internet marketing.
- Online transaction processing.
- Electronic data interchange (EDI).
- Inventory management systems.
- Automated data collection.
Organisations have faced
challenges due to the disparity between the advantages of supply chain
technology and the means to actualise those advantages. Nevertheless, the
growing adoption of e-commerce technologies has offered a streamlined and
productive method of realising the benefits of modern supply chain
technologies. This can unify all internal and external organisational
operations encompassing the tangible, monetary, and informational movements of
products, services, and data across the supply chain.
Furthermore, the influence
of e-commerce on supply chains is considerably more advanced. By utilising
electronic solutions, organisations can now pinpoint discrepancies between
various levels of supply chains, thereby eliminating the performance gap. The
advent of e-commerce has also facilitated the implementation of ERP and WMS
systems, enabling organisations to enhance the efficiency and effectiveness of
their supply operations with customers and suppliers.
These new capabilities still
need to be fully exploited as technology organisations invest in new e-commerce
software solutions and expect greater investment returns. E-commerce helps
solve many issues that organisations may need help coping with, such as
political barriers or cross-country changes, and it provides organisations with
a more efficient and effective way to collaborate within the supply chain.
The emergence of e-commerce
has created job opportunities in information-related services, software apps,
and digital products. However, e-commerce has also resulted in job losses,
especially within the retail, postal, and travel sectors, which are expected to
experience the most significant job losses due to the increasing reliance on
e-commerce and customers' self-sufficiency in using online services provided by
organisations.
One of the main advantages
of e-commerce is its convenience to customers. They can now shop from home and
easily browse through an organisation's online shopping portal. This is
especially beneficial when purchasing products or services that are not available
locally. By shopping online, customers can access a broader range of products,
saving them time, money, and effort. Additionally, online shopping gives
customers purchasing power as people can research products and compare prices
among multiple retailers.
E-commerce technologies have
also helped reduce transaction costs by eliminating the need for
intermediaries. Organisations and end users can now directly engage in online
product or service searches, which has contributed to the success of e-commerce
at both urban and regional levels. However, the success of e-commerce relies on
how effectively local organisations utilise it and how well local end users
adapt to its use.
Despite e-commerce's
advantages, human interaction is still needed, especially for customers who
prefer face-to-face contact. Many customers are concerned about online
transactions' security and integrity, and remain loyal to well-known retailers.
To address these concerns, some clothing retailers, like Tommy Hilfiger, have
introduced "Virtual Fit" platforms on their e-commerce sites to
minimise the risk of customers purchasing ill-fitting clothes. However, the
effectiveness of these platforms varies significantly.
While e-commerce has created
new job opportunities and increased customer convenience, it has also led to
job losses in specific sectors. The success of e-commerce depends on the proper
use of local organisations and the adaptation of local end users. Additionally,
human interaction is still needed to address customer concerns regarding online
transactions.
The rise of e-commerce has
been identified as a principal and significant factor contributing to the
decline of brick-and-mortar retailers, a phenomenon often dubbed the
"Retail apocalypse". The proliferation of online shopping platforms
like Amazon has posed challenges for traditional retailers in retaining and
attracting customers, prompting them to revamp their sales tactics.
As a result, many businesses
have resorted to implementing sales promotions and intensifying their digital
presence to entice consumers, leading to the closure of physical store
locations. This shift in consumer behaviour has compelled some traditional retailers
to prioritise their online operations over their traditional storefronts,
ultimately reshaping the retail industry's landscape.
Additional articles can be
found at Supply Chain Management Made Easy. This site looks at supply
chain management issues to assist organisations and people in increasing the
quality, efficiency, and effectiveness of their product and service supply to
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