WAREHOUSE MANAGEMENT SYSTEM

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.