1. Supply Chain Execution Systems Warehouse Management Systems Lecture Resource Adapted with permission from presentations by John Hill, © 2002, 2003 John M. Hill, ESYNC

2. Supply Chain Execution Systems (SCES) Manage inventory, space, material handling equipment, labor, and transportation resources in real time to assure timely, error-free fulfillment, delivery, and visibility of order status throughout the supply chain Matching material and information flow

3. SCES Impact Areas Fulfillment Delivery Visibility Responsiveness

4. Fulfillment and Delivery Material handling and controls Right condition AutoID and data collection Right material Supply chain execution systems Right time People Necessary for all of the above

5. Responsiveness The best decision making is executed on the basis of events as or before, not after, they occur Responsive logistics systems provide discipline and control that is based not only upon plans and performance goals, but also upon the dynamics of actual operations

6. SCES Components Warehouse and Labor Management Transportation Management Yard Management International Trade Logistics Supply Chain Visibility and Event Management

7. THE SYSTEM HIERARCHY ENTERPRISE SYSTEM PLANNING Demand Mgmt APS Customers Suppliers Carriers Customers Suppliers Carriers E n t e r p r i s e N e t w o r k ADMIN/FINANCE Purchasing Order Management EDI / WEB Material Handling Device Control Data Entry Devices L o c a l A r e a N e t w o r k Task Mgmt Order Process Inventory Mgmt Shipping Receiving Storage Staging Loading Picking Replen MANUFACTURING MRP MES WMS LABOR MANAGEMENT YARDMANAGEMENT TMS

8. Warehouse Management Systems Manages warehouse inventory, space, equipment, and labor resources to direct the flow of materials and information from receiving and putaway to light assembly, order picking, value-added processing and shipment

9. WMS History 1975: First WMS installed at J. C. Penney. 1986: First WMS installation in C on a UNIX platform. 1990s: Hundreds of new stock locator & WMS systems; Windows NT platform emerges. 1995: MHIA WMS product section formed. 1999: First WMS company reaches annual revenues of $100 million. 2000: Expanded suites with TMS & SCV. Today: User-configurability & scalability remain key differentiators.

10. WMS Functions Receiving Blind ASN/EDI Conventional or Automatic Putaway Dedicated, Random or Hybrid Location Selection: System or Operator Put Confirmation Picking and Shipping Pick by Order, Batch, Wave Pick Confirmation Shipping Check Lists Manifests, Bills of Lading

11. WMS Differentiators Order Planning & Scheduling Unit of Measure Conversion Location Management / Slotting Inventory Allocation Shelf Life Monitoring Lot & Serial Number Tracking Cartonization Cycle Counting Replenishment & Consolidation Task Assignment & Monitoring Reverse Logistics Scalability & Configurability Upgrade Support

12. WMS Setup Product Files Descriptions Dimensions Units of Measure Bills of Material Substitutions Location Files Numbering / Sequencing Dimensions / Capacity Equipment Files Employee Files

13. Employee Task Prioritization

14. Workload Management Equipment Profiles Material Profiles Location Profiles Operator / Equipment Matrices Operator / Task Priorities Labor Standards

15. Task Manager 2137 New Tasks 9873 4532 5471 3679 1234 Task RFDC Link source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. source | dest | time- req | load type | etc. Tasks in Memory Work Queue TASK ALLOCATION Priority Priority Operator Authorizations Operator Authorizations Equipment Type Equipment Type Current Location Current Location TASK ALLOCATION Priority Priority Operator Authorizations Operator Authorizations Equipment Type Equipment Type Current Location Current Location Job Completions Work Requests RFDC Workload Management

16. Material Handling Interfaces Conveyor Sortation Palletizer AGVs Pick (Pack)-To-Light Carousel AS/RS

17. Systems Interfaces Purchasing Order Management MRP / MES Labor Standards / LMS Load Planning Freight Rating / TMS Slotting

18. Receiving ASNs / Purchase Order Receiving Carrier Appointment Scheduling Pre-Tagged Receipts Blind (Unanticipated) Receipts Load Tagging/Labeling Quality Assurance Returns

19. CARRIER SCHEDULING

20. Stage Stage Crossdock Crossdock QC Move QC Move Putaway Putaway (Print & Apply LP) (Print & Apply LP) Stage Stage Crossdock Crossdock QC Move QC Move Putaway Putaway RFDC Key-Enter Order Number, Key-Enter Order Number, Product ID, Quantity & Product ID, Quantity & Condition Condition (Pre-Printed License Plate) (Pre-Printed License Plate) RFDC Operator Assigned to Receiving Operator Assigned to Receiving Bar Coded Pallet ID (Scan or Key-Enter) Bar Coded Pallet ID (Scan or Key-Enter) (Verify Product, Quantity & Condition) (Verify Product, Quantity & Condition) WMS Match LP to ASN or Retrieve PO Match LP to ASN or Retrieve PO Validate Receipt Validate Receipt Resolve Exceptions Resolve Exceptions Check Demand Check Demand Issue Task Issue Task Update Inventory Records Update Inventory Records Receiving

21. HOLIDAYS 2000 Warehouse Wasteland or Competitive Edge? Source: BizRate.com eSales: $6 Billion eSales: $6 Billion Returns: $900 Million Returns: $900 Million Reverse Logistics

22. Storage and Putaway Location Selection Override Location Confirmation Crossdocking Relocation Consolidation

23. Check Demand for Product Check Demand for Product Issue Move Task Issue Move Task Destination Destination Storage Storage Crossdock Crossdock Quality Quality Returns Returns Other Other Confirm Drop Confirm Drop Await Next Task Await Next Task RFDC Move to Designated Location Move to Designated Location Scan Location Bar Code Scan Location Bar Code Operator Assigned to Putaway / Move Operator Assigned to Putaway / Move Scan License Plate Scan License Plate RFDC Validate Location Validate Location Resolve Exceptions Resolve Exceptions Issue Drop Instruction Issue Drop Instruction - - - - - - - - - - - - - - - - - - - - - - - - Update Inventory Update Inventory Issue Next Task Issue Next Task WMS Putaway and Move

24. Inventory Management Lot, Date Code, and Serial Number Tracking Shelf-Life Monitoring and Rotation Catch Weighing Routine and Exception Cycle Counting Full Physicals

25. Replenishment Forward Pick Locations Floating Forward Pick Replenishment Trigger Controls Demand Replenishment Batch Replenishment Reslotting

26. Pick Planning Host Download Format and Frequency Wave and Batch Planning Material Allocation Order / Shipment Release Changes and Cancellations

27. Display Pick Location Display Pick Location Scan Item Bar Code/LP Scan Item Bar Code/LP Pick / Confirm Quantity Pick / Confirm Quantity - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Await Next Pick Await Next Pick RFDC Move to Location Move to Location Scan Location Bar Code Scan Location Bar Code Operator Assigned to Picking Operator Assigned to Picking Ready for Next Pick Task Ready for Next Pick Task RFDC Validate Location Validate Location Issue Pick Issue Pick - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Validate Item / Quantity Validate Item / Quantity Resolve Exceptions Resolve Exceptions Update Inventory Update Inventory - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Issue Next Pick Issue Next Pick WMS Picking

28. Staging and Shipping Trailer Scheduling / Processing Staging Location Management Staged Load Confirmation Door / Truck Verification Shipping Labels Manifests / Bills of Lading Shipment Confirmation

29. WMS Cost Breakdown COMPONENT% TOTAL COST Computer6 RFDC24 Bar Code Label Applicators9 Hardware Subtotal39 WMS License8 WMS Enhancements10 Host Interface6 Other Software Licenses4 Software Subtotal28 Location Labels6 WMS Installation Services21 Project Team Costs6 Implementation Subtotal33

30. WMS Benefits Potential Improvements in: Inventory accuracy and turns Space utilization, stock rotation Order, lot and serial number tracking Backorder handling Crossdocking Resource planning and scheduling Labor and equipment productivity Performance measurement Customer service Potential Reductions of: Damage/Shrinkage Lost stock Safety stock Search times and deadheading Paperwork Human error Physical inventory taking Labor, equipment and utility costs Courier/Delivery costs Outside warehousing

31. WMS Justification Direct Labor Pre-receiving Receiving Returns Putaway Replenishment Pallet picking Case/Piece picking Value-added processing Shipping Overtime Indirect Labor Floor supervision Expeditors Inventory control Training Overtime Other Administration Shipment planning Inventory management Traffic Overtime Other

32. WMS Justification Other Tangible Savings Space utilization Transportation Expedited delivery Reduced paperwork Reduced operating costs Damage Shrinkage Perishable loss reduction Storage/picking/shipping errors Physical inventory costs Intangible Savings Order cycle times Customer service Inventory turns Reduced obsolescence Lost orders ABC facilitation Performance measurement

33. WMS Benchmarking Order Fulfillment Inventory Management Warehouse Productivity Transportation Performance

34. Order Fulfillment Measures On-time Delivery Order Fill Rate Order Accuracy Line Accuracy Order Cycle Time Perfect Order Completion Percentage

35. Inventory Management Measures Inventory Accuracy Damaged Inventory Days On Hand Storage Utilization Dock to Stock Time Inventory Visibility

36. Warehouse Productivity Measures Orders per Hour Lines per Hour Items per Hour Cost per Order Cost as % of Sales

37. Transportation Performance Measures On-time Deliveries Damage Demurrage Cost Percentage Assessorials Cost Percentage Missed Appointments Percentage Freight Bill Accuracy Cost per Order Cost as % of Sales

38. Creating a Responsive WMS Use contemporary ADC technology and systems to assure Accurate execution of receiving, storage, and move tasks Error-free picking, replenishment, and shipping Traceability Provide seamless interfaces to other corporate systems to assure Real-time visibility of inventory availability by SKU, quantity, lot number, serial number and shelf life by location Real-time order confirmation and status for customers Event-driven exception handling Facilitate a quick match of available resources to current and expected inbound, replenishment, and outbound workload Select the best operators and equipment for tasks based upon proximity, skill sets and priority Task operators to immediately store or cross-dock receipts

39. Creating a Responsive WMS Support returns processing and reverse logistics Use task interleaving to minimize deadheading Improve order consolidation, wave planning, inventory allocation, and pick sequencing Identify consolidation opportunities to free space and reduce outside storage requirements Support bill of material, work order, and value-added processing Update inventory records as events occur Provide accuracy that allows replacement of full physicals with scheduled cycle counts Time stamp each transaction and identify the operator who performed it Provide feedback to the workforce and support performance measurement Measure supplier and carrier performance

40. WMS Trends Further industry consolidation as well as alliances with enterprise systems providers Activity based costing and management Embedded profiling tools for space use analysis to facilitate relayout and inventory slotting Object-oriented tool kits for requirements modeling and WMS development