A Hybrid Solution

 A HYBRID SOLUTION 01Warehouse control systems are evolving to include execution.

By Jerry List

Today’s distributors are challenged to streamline processes, accelerate productivity, increase efficiency and reduce costs. Warehouse control systems (WCS) bridge material handling equipment with ERP or warehouse management systems (WMS). Today, many WCS remain limited to this area and do not address operational or process challenges. Consequently, warehouse execution systems (WES) were introduced. A WES synchronizes the resources necessary to complete such tasks as order fulfillment and shipping in the most efficient manner. Furthermore, a WES orchestrates the overall flow of work by selecting the next best order to release from the available pool of orders and current workload in the various work cells.

So what’s the answer: do you need a WCS and a WES? Fortunately, the answer is “no.” Today’s sophisticated warehouse control systems have evolved into a WCS/WES hybrid.

Two companies recently put this hybrid solution to work. Sheetz, a leading East Coast chain of convenience stores; and home furnishings specialty retailer Crate and Barrel are examples of businesses with distinctively different markets, demands, schedules, tools, processes and supply chain strategies. However, both are examples of companies leveraging today’s new WCS/WES functionality.

Made to Order

Sheetz delivers three times a week to each of the company’s 535 convenience stores spread across six states. Until recently, all distribution was handled by a single Pennsylvania-based facility. Sheetz wanted to move away from a customized distribution environment and leverage off-the-shelf control components coupled with product based software solutions and implement a modern and easily configurable warehousing system. The key to this was a modern WCS that would synchronize material handling, order fulfillment and drive efficiency. The solution provided a single replacement for three separate systems. The initial phase consisted of three subsystems: tote conveyor routing, carousel picking and cigarette pick/pack control.

The results of the new system included a significant reduction in downtime that prevented the flow of containers to shipping. In addition, daily delays and workarounds were greatly reduced, saving at least six hours a week, not to mention operational inefficiencies from downtime. The new system also gives Sheetz the ability to begin a batch before reconciling the previous batch. This keeps production moving eliminating five minutes of downtime 15 times a day.

Increased Productivity

On-line orders for Crate and Barrel are processed through its Naperville, Ill., distribution center. Here order fulfillment can approach 15,000 orders a day with the number nearly doubling during peak season. An increased demand coupled with an inefficient paper-based process created serious bottlenecks. These issues, along with challenges associated with inventory control, picking accuracy, replenishment, and packing operations put a strain on both warehouse operations and the company’s bottom line.

Specific improvement goals included better inventory tracking, faster and more accurate order fulfillment, along with the ability to leverage new picking tools. To complicate matters, management was charged with making these and other improvements while reducing operating costs across the board. The WCS solution improved a number of areas associated with their break-pack operations including picking, packing and replenishment.

“Our system gives us real-time data and reports, and we are able to take this information and manage our business more effectively,” Direct Fulfillment Manager Howard Filip says. “Not only with labor, but we can re-allocate labor resources to fulfill orders. Our system provides real-time data along with real-time bar coding and scanning.” This newfound flexibility allowed Crate and Barrel to streamline operations by adopting new processes such as cartonization, zone skipping and dynamic slotting.

Dynamic slotting in particular proved to be a tremendous asset. Because of the wide range of SKUs and the seasonality, business was constantly challenged with rotating stock to optimize picking. The system automatically slots products based on velocity and forecast. “Basically, in the old system we had to do it all manually. In the new world, once that SKU is put in, everything is automated. This saves time, labor, and helps to fill orders at a much faster rate,” Filip adds.

In 2013, when the automated solution was introduced, the results were significant:

•     Operational bottlenecks were reduced;

•     Hourly picking improved from 50 to 200 pieces;

•     Measurable inventory control was achieved; and 

•     40 to 60 percent labor savings was realized.

In addition, the system provided the ability to consolidate three separate business channels into a single streamlined operation. The solution enabled Crate and Barrel to quantifiably measure performance and track progress via extensive reporting tools. At the same time the dynamic slotting capability allowed the company to be even more responsive to seasonal change-over that is such a big part of the retail business.

As distribution / warehouse software continues to evolve, the area between a WCS and WES is becoming increasingly blurred.  The best advice is not to get caught up in the hype and acronyms. Rather concentrate on what functionality is needed to operate the warehouse or distribution center in the most efficient manner. 

As vice president of QC Software, Jerry List is responsible for evaluating new technology and industry trends and incorporating them into the company’s offering. He helps warehouses and distributors improve productivity and profitability by leveraging WCS/WES solutions to effectively orchestrate material handling automation in harmony with business process improvements. He can be reached at 513-469-1424 or jerrylist@qcsoftware.com.

 

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