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Taking Fear out of WMS Technology

Warehouse Management Systems are not the future of distribution. They are the present

by Jason Bader

A few weeks ago, I sent out a survey to some readers. I was curious about their experience with warehouse management software (WMS) and where they saw the benefit. I wanted to understand the challenges associated with implementing these systems. I also asked what advice they would give distributors who are considering the investment in this technology.

Here is a quick overview of WMS and distribution applications. Essentially, these packages use bar code scanning technology to perform warehouse functions. We scan material coming in to the warehouse. Warehouse employees are directed by the scanner (something resembling a phaser on Star Trek) to put the items into a bin. We use the scanner to pick orders, ship orders and count inventory. The idea is that we are enabling a higher degree of accuracy and inventory movement transparency in our warehouse.

My personal adventures in WMS began in the mid ’90s. I was exposed to a third-party add-on system recommended by my distribution software package. Being a sucker for technology and having a foolish desire to be on the bleeding edge of distribution, I convinced the company that we should invest. Perhaps we should have done a little more homework first.

One of the first challenges was to get this standalone system to communicate with our distribution software package. Not only did they run on separate databases, but they ran on different types of database. The WMS database was built in Windows SQL and the distribution package was in a Unix-type Progress database. For the non-technical, it was like translating English to Chinese but with far fewer rules. Unfortunately, inventory was often lost in translation.

On a positive note, shipping accuracy was phenomenal. We rarely shipped the wrong product. Occasionally we shipped the wrong quantity, but that was because the system required people to count. When we inject the human element, there is always a risk of breakdown.

The real winner for us was the order picking process. Not only were we very accurate, we were able to pick more lines with fewer bodies. Those who followed directions were ultimately the most successful. The “thinkers” had a little more difficult time embracing the change. Our fastest picker was a developmentally disabled man who spoke English as a second language. He just looked at the gun and followed the directions.

Ultimately, we were not very successful with the transition to WMS. After sinking the equivalent of several luxury automobiles into the project, we pulled the plug. Some would say that the technology was faulty. Sure, it had several unacceptable bugs. This is what you get when you ride the bleeding edge. Our failure resulted primarily from a change in culture. Our discipline was to blame. We wanted technology to fix our bad habits, but it only made them come to the surface faster.

Although I can provide a plethora of advice from my personal experience with warehouse technology, I find it more interesting to hear from current practitioners. Here’s a synopsis of what your fellow distributors had to say about using this technology.

Does your WMS package use the same items database as your distribution software package, or does the WMS package hold its own database and synchronize with your main distribution software?

Synchronization can be done anywhere from every minute to every 24 hours. Companies have different philosophies on this. One challenge I found was in regard to hierarchy. Which system was the master? Do we always use the WMS database as gospel?

More than 75% of the participants in the survey have eliminated this issue. Their packages work from the same database in real time. Many of their WMS solutions are actual modules owned by the distribution software company. This tends to provide less confusion and also eliminates finger pointing when there is a breakdown.

The fact that your software provider does not offer an integrated solution should not preclude you from exploring this technology. There are many WMS packages that integrate very well with your legacy distribution software. Synchronization tends to be most effective when both databases use the same language.

What has been the most beneficial aspect of implementing a WMS system in your company?

The overwhelming response was accuracy. When the order taker is looking at a screen and the system says we have 100 on the shelf, there is a very good chance that there are 100 on the shelf. Order takers are more confident in the counts and are less likely to put someone on hold to go check. This is not always the case in many companies. I believe that distributors often employ one additional inside salesperson because they don’t trust inventory accuracy.

Distributors also benefited from the ease and speed of locating items. With scanning gun in hand, users no longer have to search for inventory. Picking time will improve and there will be fewer mistakes in shipping. It should also be noted that this will represent a change in culture. If your salespeople are used to running around the warehouse looking for items, you will have a difficult time. The system requires the discipline of only removing items with a scanning gun. You have to tell the system that an item has left the bin. Do yourself a favor and get the salespeople out of the warehouse.

Cycle counting is far more effective with a WMS system. You no longer have to count before or after hours. Since the system knows when an item is added to or subtracted from a shelf, you can count during the normal course of business. Many companies struggle with the labor side of cycle counting. This makes it easier for your warehouse manager to make it part of the natural work day.

What has been the most challenging aspect of implementing a WMS system in your company?

Fear of technology was one of the challenges identified by the participants. Several users were afraid they would screw up the company if they pushed the wrong button on the scanner. Others felt that the new method was too technical for their current employee base. Consequently, some employees left voluntarily.

The scanners can be intimidating at first. There are many buttons and a lot of information packed into a small screen. Don’t gloss over the need for hand holding. For some, this is their first adventure into computing technology. The laser generated from the scanner can cause fear as well. Be patient and explain thoroughly. Don’t let your IT people do the training unless they are very adept at coaching. Most are not.

The discipline and culture is the biggest hurdle to overcome. Technology does not fix problems. We apply technology to good practices in order to make them faster. If we have bad habits, we will make mistakes faster. Inventory movement dictated by a scanner will be frustrating to some employees. The discipline of scanning communicates that movement to our system and ultimately allows additional action to occur. When someone circumvents the process (by just grabbing it off the shelf to take care of a customer), the system has no way of recording that movement. Ultimately, our count will be off and customer service will suffer.

Another challenge came from material without bar codes. Several distributors buy from suppliers that have not invested in coding technology. This will cause your receiving process to bog down. Receivers will have to generate a bar code tag for this material before it goes to the shelf. Some distributors simply have master bar codes on the bins and do not label individual items. Work with suppliers and see if they can help this process.

If you were to give advice to someone considering the purchase of this type of system, what would you tell them to do?

Some of the best advice from the survey was to visit someone using the technology. It doesn’t necessarily have to be from your industry, but that can help you visualize how it will function in your environment. Ask the company what they like and don’t like about the package. Do several visits before you start shopping so that you can narrow your field quickly.

Get all of the players involved in the decision process. If you spring the “solution” on them, the team will be much more apt to find fault in your decision making. The ability to embrace change will be compromised.

Get your warehouse in shape before implementation. Not only do you need to get the physical house in order, but your procedures need to be cleaned up as well. Scrutinize the way you are performing basic functions: receiving, put away, picking, shipping and counting. What procedures need to be streamlined? Are you still sending packing slips to the office for receipt into the system? With regards to the physical plant, make sure that you quarantine dead and obsolete inventory. Clean up the place and make sure that you have a good bin layout.

The participants were split on how to implement the different pieces of a WMS package. I always believed that a phased in approach was easier to swallow. Start with either cycle counting or receiving and work your way through the modules. Several participants recommended that new users go live with all aspects from day one. Seeing the power of a fully integrated system will fuel the team to maintain discipline and help justify the investment.

Getting involved with WMS technology is a fairly big decision for many distributors. Some of the packages can be very expensive, but that is changing. The costs have come down to where the majority of distributors (under $20 million in annual revenue) can justify the expense. When buying a new distribution software package, make sure that the provider has a solid WMS solution. If you don’t have a plan to implement this type of technology, get one. This is not a fad or philosophy. You may not execute the plan this year or even next. When the time is right, you will be far more prepared to make the best decision possible. As always, I am here to help you through the process. Good luck.

Jason Bader is the managing partner of The Distribution Team. He spent the first 20 years of his career working in distributor operations. His firm specializes in helping distributors become more profitable through operating efficiencies. He is regular speaker at industry events and spends much of his time working with individual distribution companies. He can be reached at (503) 282-2333 or Jason@Distributionteam.com.

This article originally appeared in the Nov./Dec. 2009 edition of Industrial Supply magazine. Copyright 2009, Direct Business Media, LLC.

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