| Many retailers are still struggling with inflexible legacy WMS that were not designed for today’s dynamic and fast-moving retail environment. As Rob Smith, director of marketing at Kewill, puts it: “Complexity in the supply chain has increased exponentially with globalisation. There are so many more participants in the supply chain now.”
According to a recent study on supply chain efficiency by The Aberdeen Group, some of the most effective savings can be made in the warehouse, i.e. by avoiding inaccuracies at the picking stage. Covering over 150 businesses worldwide, the survey found that 67 per cent of businesses were looking to improve their warehouse processes within the next 12 months, with 32 per cent planning to upgrade or enhance their warehouse management solution. Meanwhile, 78 per cent of ‘best in class’ companies deployed a centralised direction of processes at the warehousing stage, in the form of voice-activated picking software in use by all the warehouse operatives. By 2009, over 50 per cent of the leading companies surveyed worldwide will be using additional warehouse technology, including voice-recognition applications, labour management software, mobile computers and automated storage and retrieval equipment.
This supports the opinion of Gary Glessner, managing director at Vocollect Europe who works with the likes of Sainsbury’s, Next, WH Smith, 3663, Palmer & Harvey and Brakes to help them improve the efficiency of getting products from the warehouse to the store or restaurant. “With fuel and commodity prices on the rise and severe cuts in consumer spending happening, the supply chain supporting the UK retail sector must review its operational costs,” he says.
When the going gets tough
Glessner’s view is backed up by Sarah Taylor, retail industry director at Oracle Retail. “When times get a little tougher, costs get put under the microscope,” she says. “The warehouse and supply chain area of a retail business is one where cost savings can be made, and technology can help to achieve that.”
By using the latest forecasting tools, retailers can ensure stock reaches stores faster than ever before. “They need to know what product, at what price, they’re going to put into which store or channel,” says Taylor. “The planning aspect of distribution has to be tightened up considerably, becoming predictive and proactive rather than reactive.”
Integrated planning and forecasting with real-time replenishment can streamline a retailer’s operations and enable them to respond quickly to customer demands, but complex supply chains can often limit its scope. “If the business doesn’t know where the products are in the warehouse, if they don’t have visibility because their systems aren’t integrated, it costs them not only cash, but also customer satisfaction,” says Kewill’s Smith. “You might have an effective WMS, but if it doesn’t talk to your planning or financial system, you lose efficiency.”
By incorporating service orientated architecture (SOA) elements into their WMS systems, which allows disparate applications to exchange data with one another as they participate in businesses processes, retailers can create a more adaptable and efficient IT infrastructure. “Retailers need technology that moulds to the business model as opposed to the business model moulding to the technology,” says Smith. “A really important part of SOA is building open and flexible technology that wraps around
an existing business process, or set of business processes.”
Voice picking solutions can integrate seamlessly with retailers WMS to improve efficiency in the warehouse. WH Smith has recently increased the number of Vocollect Talkman voice-directed wearable computers in its Holford distribution centre by 50 per cent. This centre underpins the WH Smith Travel Group which supplies more than 300 travel shops. The decision followed two years of voice directed picking at the site. During this period daily pick-rates per picker increased by an average of 25 per cent and pick errors fell by 80 per cent per week.
According to the retailer, the system’s ease-of-use enables new staff to reach the same levels of productivity as long-term colleagues within a week. “The business case was based on productivity rates, and it has proved hands down that we can save a lot of time and effort with voice-directed picking,” says Jim McCafferty, site manager at WH Smith. “But there were other net benefits as well. Accuracy increased substantially: we can identify and investigate and delivery issues much more quickly and efficiently than before, and subsequently our shrink levels in-store have reduced.”
The solution helps to provide WH Smith with a detailed view of the entire distribution process. “It gives us complete information with regards to receipt of goods,” says McCafferty. “We’ve got access to so much detail now: if we need to, we can see who has done what right down to the second. We know exactly when the product has gone into a pick-face or bulk location. We know what container it’s in, when the container’s been received at dispatch, and when the container’s been loaded onto the vehicle.”
This increased visibility has reduced the time taken to perform basic functions within the distribution centre. “Replenishing pick faces for example – it just quickens that whole process up, which creates a domino effect.”
Instead of being viewed merely as a place to store as much stock as possible, the warehouse is now seen as an integral part of a streamlined supply chain. By implementing the latest WMS and logistics solutions, retailers can ensure they remain efficient and flexible enough to weather the current economic climate.
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