Definition
It 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 systems also direct and optimize stock put away based on
real-time information about the status of bin utilization.
Benefits
It is found that there are overlaps in
the functionality of the warehouse management and the enterprise resource
planning, distribution requirements planning, transportation management
systems, supply chain planning and scheduling. If all these are to have
separate software the company that is using the software will get confused with
the software solution provided separately. Hence there is a need for an
integrated system that will have warehouse management and other related
operations of the company.
The Reality
The implementation of a WMS along with
automated data collection will likely give you increases in accuracy, reduction
in labor costs (provided the labor required to maintain the system is less than
the labor saved on the warehouse floor), and a greater ability to service the customer
by reducing cycle times. Expectations of
inventory reduction and increased storage capacity are less likely. While increased accuracy and efficiencies in
the receiving process may reduce the level of safety stock required, the
impact of this reduction will likely be negligible in comparison to overall
inventory levels. The predominant factors that control inventory levels are lot sizing,
lead times, and demand variability. It
is unlikely that a WMS will have a significant impact on any of these factors.
And while a WMS certainly provides the tools for more organized storage which
may result in increased storage capacity, this improvement will be relative to
just how sloppy your pre-WMS processes were.
Automatic picking machines
Fully automated picking machines (such as
A-frames) are still pretty rare and are used only where very high volumes of
similar products are picked such as music CDs, or, where high volume in
combination with high accuracy requirements exist such as pharmaceutical
fulfillment.
Bar-Code Scanners
Though very useful in increasing
accuracy levels, bar-code scanners in a fast-paced piece-pick operation tend to
become cumbersome and can significantly reduce your pick rates. With proper training, tracking, and
accountability, you can get very high accuracy rates in order picking without
scanners. I find they are better suited
to case pick, pallet load, put away, and order checking operations.
Voice-directed picking
Voice technology has come of
age in recent years and is now a very viable solution for piece pick, case
pick, or pallet pick operations.
Automated Conveyor and Sortation
Systems
Automated conveyor systems and sortation systems will be integral to any
large-scale piece pick operation. The
variety of equipment and system designs is enormous.
Radio
Frequency/Bar-coding
SAP provides direct radio frequency
(RF), allowing the use of mobile RF terminals and handhelds with scanning
devices. This enables immediate and error-free data transfer -- setting a high
standard of quality for warehouse transactions. The character-based or
graphical terminals and handhelds receive data directly from the SAP system
without using a middleware product and transfer results immediately to wherever
they are needed. The configurable barcode setup allows you to use barcode standards
(for example, EAN128 or SSCC) as well as any defined barcode systems you define
yourself.
Handling
Unit Management
You can use handling unit management
(HUM) to reflect packing-based logistics structures in SAP ERP. In SAP
Warehouse Management, you can use handling units to process warehouse
movements, such as putaway, picking, or stock transfers. Furthermore, handling
units can be created in the warehouse, labeled, and picked for existing
deliveries. HUM allows you to uniquely identify packages, for example, pallets,
in the warehouse and throughout the supply chain. This includes EAN128 and
SSCC18 labeling. The handling units can be nested and packed with different
materials or batches.
Storage and Stock Management
Serial Numbers: Handling unit management makes serial numbers
known in the warehouse.
Batch
Management: Batch
management is integrated into all SAP WM processes. This includes the handling
of batches and batch determination for delivery picking, for production supply,
or in internal warehouse processes. Also, active ingredient processing is
integrated into the batch determination process in SAP WM.
Hazardous Materials: Although many materials
that are classified as dangerous can be placed into storage along with other
goods, some require special handling and placement into specially designed
storage facilities. Some examples of these materials include explosives,
petroleum fuels and oil, poisons, corrosive liquids, and radioactive materials.
SAP WM is designed to manage the handling and storage of hazardous materials.
Planning
Phase of Physical Inventory
The physical inventory process
can plan which material has to be counted at which storage location on
which date. Stocks can be blocked for goods movements before the beginning of
counting, measuring, and weighing.
Counting
Phase of Physical Inventory
RF transactions support stock
counting. After the results have been entered, you can monitor the differences
and trigger a recount if necessary. If you post quantity differences for your
locations, an update of the material valuation and financial accounting is
triggered automatically.
Monitoring
of the Physical Inventory Activities
Detailed functions for monitoring the
completeness of the physical inventory, the status of open and completed
physical inventory activities, and the results of historical physical inventory
activities are available. You can monitor the activities on material or
location level.
Achieve
cost-efficient operations:
Inventories can facility cost-efficient operations in several ways. Inventories
can provide a buffer between operations so that each phase of the
transformation process can continue to operate even when output rates differ.
Inventories also allow a company to maintain a level workforce throughout the year
even when there is seasonal demand for the company’s output. By building large
production lots of items, companies are able to spread some fixed costs over a
larger number of units, thereby decreasing the unit cost of each item. Finally,
large purchases of inventory might qualify for quantity discounts, which will
also reduce the unit cost of each item.
