Hughes: Warehouse management systems drive supply chain efficiency

If this is not your first time reading this series, you will notice I like to talk about efficiency. The entirety of the AI landscape in business—and in personal lives—remains driven by the quest for efficiency. The reality tells us there is no finish line for efficiency. It is an arbitrary destination that when you take steps toward improvement, like lowering a golf handicap, you improve in different areas and realize smaller achievements that drive the overall output to one result: a stronger top line and an improved bottom line. While many factors contribute to improving efficiency and raising performance, one of the biggest factors is the selection, integration, and utilization of the best warehouse management system for the distribution of products.

The changing role of the warehouse

Evolution has been a common theme throughout the history of our industry, and one of the most critical elements of that evolution has been the warehouse. Warehouses at all levels have moved from simply a "store and ship" facility to a point where many different tasks must be accomplished every day in perfect harmony for the business to operate. An efficient warehouse must be organized in a way to effectively navigate receiving products and putting them on the shelves for inventory, then once a sale happens, those parts must be picked, packed, and brought to the shipping dock for pickup and delivery—often within 24 hours. This does not even include things like the processing of warranty or stock returns, forklift and other equipment operation, as well as adhering to many different levels of quality and inventory control.

New technology, new opportunities

Technology has opened the door to many opportunities for improved efficiency within the warehouse. Many advancements have already changed the game considerably, but I would argue that none are more significant than the level of integration throughout the entire supply chain. The chain of events set in motion when an order is placed reverberates across many levels and systems.

A service professional working on a car diagnoses a malfunction, and this begins a series of transactions that occur behind the scenes that people rarely realize. The parts to execute the repair get ordered, delivered, and installed; however, this only scratches the surface of the activity involved in that repair. Thanks to more advanced inventory modeling, the parts stores and warehouses already knew to expect the repair based on historical data and reliable vehicle operation figures. Beyond that, once the sale is made and the delivery to the service facility takes place, the distributor, which is already connected to the supplier, has sent a notification of the sale and the need to replenish. This notification is received by the supplier and then goes to work on replenishment, and all without a human interaction.

This is only one aspect of integration and other advances technology delivers; many more complex interactions continue to pave the way to improved operational efficiency at every level of the supply chain.

Implementation challenges remain

Transitions do not come without challenges, however. Moving from a legacy system like the IBM AS400, which IBM has not supported for many years, to a more functional and integrated system like SAP requires the navigation of many landmines. The more advanced the technology and the less intense the human input may require more training for the employees tasked with navigating the WMS daily. Simply departing from a legacy system is not the elixir; machines and automation only do what they are programmed to do, even with the inclusion of AI technology. Overcoming a legacy team that has operated a specific way in the warehouse can produce even more challenges than simply implementing a new platform. Steps that may seem out of order, the interface into the platform, as well as the functionality of many of the critical steps, all contribute to barriers to achieving optimal efficiency.

Finding the right system

I am not here to promote or endorse any particular warehouse management system or platform. There is no right or wrong answer, like launching or implementing a CRM system; it comes down to the organizational leadership finding the right mix of human input and built-in expertise of the WMS platform to gain optimal efficiency. Individual nuances native to different WMS platforms can be the difference between long-term success and challenges of varying degrees of difficulty and length of time. Regardless if the warehouse is a supplier warehouse holding products for delivery to distributors around the world, or if the warehouse is one of the hundreds of independent distributors, or even a retail distribution center; the foundation of success for any warehouse starts with the research, exploration, selection, and implementation of the right warehouse management system—followed by a thorough review and continuous improvement processes put in place.