Warehouse simplification to support business growth and efficiency goals

 

Incompatibility and inconsistency of legacy systems

From experience, one of the most common reasons why warehouse process simplification becomes an issue is due to having inconsistent or incompatible technology systems.

 

Consider an scenario whereby a manufacturing company has grown by acquisition and ended up running a variety of WMS systems on each of its sites. Some could be running different versions of the same solution whereas others may have another product installed.

These systems might be adequate for each division's needs, but as a group, the end outcome is inconsistent data capture. As a result sites cannot easily share information and the lack of visibility means they cannot easily benefit from any economies of scale to be had, for instance group wide purchasing, centralised sales and shared inventory management. Complex reporting tools are also most likely required for management to view information across the group.

 

Even if sites do run identical systems, it will have been configured differently to suit particular business processes. Warehouse process simplification will identify the best approach for the business as a whole and creation a blueprint for each site to adopt. Once implemented, the whole organisation benefits from greater consistency, control and data visibility, plus the ability to share information.

 

For example, consider a scenario in a food manufacturing company needing to implement rules and restrictions for allergen control. In some cases the business may rely on the intelligence of the WMS system to control this, e.g. identifying products on receipt, whereas other sites might rely on the professional knowledge of the workers, which leaves them vulnerable to mistakes being made. Alternatively, they may operate different mechanisms for feeding production lines. One system might generate demand from the production schedule, whereas others will use the same calculations. Instead of this being driven through the WMS, it will be paper based because the operation prefers a more manual approach.

 

How to approach process simplification to achieve maximum buy-in

There are many ways to achieve warehouse process optimisation and they are not necessarily wrong or better, which needs to be borne in mind at all times. The role of a consultant is to understand why processes would have arisen in the first place and to look for parallels across different sites in order to understand the pros and cons of each variant. Once this is understood, the best way of working can be identified.

 

Communicating the 'why' is always critical to the success or failure of any simplification programme and will also most likely require a 'buy in' exercise. This is best conducted across all levels within the organisation and should involve operatives at a grassroots level. In situations where individual sites have previously had the autonomy to specify software and processes, management will need convincing of the merits of a new approach and be involved from the outset, with super users appointed to support the final roll out and training.

 

Importance of identifying 'path clearers'

The transition from one system or process to another requires careful management, to ensure that any business disruption is minimised. At the outset, every business risk needs to be understood, with a mitigating option identified as a first step. Indigo's approach is to then identify a path clearer at each stage, or potentially multiple path clearers, to smooth the transition process and reduce the impact.

 

For instance before implementing a new WMS and automated working, warehouse processes will need to be re-thought and introduced. Once operatives are working according to the new processes confidently, the final transition to automation supported by software will be less significant. In essence the new WMS becomes the catalyst for change and business improvement to occur.

 

Alternatively, in the case of a business migrating to a paperless working environment, implementing basic changes to the type of data to be captured, which reflects the layout of the new electronic documentation, will go a long way towards gaining acceptance of a new process. Once the final switch to electronic working is made, the main impact of the transition has been reduced.

 

A supply chain consultant's role is to swiftly evaluate the merits of the 'as is' and 'to be' processes, plus identify as many path clearers as possible, in order to reach the 'to be' end process as closely as possible beforehand.

 

Scalability and other strategic benefits of simplification

The benefits to be gained from warehouse process simplification are not clear cut, as it depends on the starting point for each manufacturer. For warehouse management, having group wide visibility of stock and inventory, which in turn feeds into purchasing, is a significant benefit. It can also benefit sales, by enabling stocks manufactured across multiple sites to be sold by a centralised commercial team. If a stock item is only available from one location and people in the commercial team cannot see what's available across a group, they cannot sell it.

 

Purchasing is another area where benefits can be seen, by supporting centralised purchasing and also, by standardising master data so that product codes and customer naming conventions are consistent for reporting purposes. This offers commercial and financial benefits and also allows sales and marketing to have access to improved information.

 

Perhaps the biggest benefit is also the most strategic. Companies are being acquired by manufacturers and then divested continuously as strategies and priorities change. Having a single way of working means that a businesses can be set up to scale more quickly and readily assimilate new acquisitions into a standard way of working. It means economies of scale can be achieved in the warehouse more quickly as new companies can be integrated more quickly into an organisation, which in turn reduces costs and improves profitability.

 

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