Cutting Edge: Warehouse Management
Ferguson, based in Newport News, Va., utilizes ViaWare software from Provia for the warehouse management system installed within its distribution centers.
“A warehouse management system that helps us manage all of our transactions and inventory is critical to our success,” says Chris Everett, manager of distribution center operations.
Burlington, Mass.-based F.W. Webb has an in-house warehouse management program that uses a radio-frequency bar code system. “It's what we call a push system - whatever we sell that day, we make an order for that night,” says Charles Slattery, vice president of purchasing. Each of the 62 branches' sales are transmitted to the distribution center, where a requisition is made to reorder.
“We have the option to increase it, decrease it, and the capability to work some of the controls that will either increase or decrease the order by a number of different factors,” he says.
F.W. Webb has spent more than 30 years adjusting, tweaking and fine-tuning its system until it eventually adopted a multi-faceted formula of minimums/maximums. “We're still working on it today,” Slattery says.
“Most users of software will face times when they may be forced to modify existing software or upgrade to the software provider's current version in order to meet the growing needs of the customer,” Ferguson's Everett says. “This can be a question that can go well beyond the cost and impact daily operations. It is a question that must be weighed carefully,” he notes.
At Todd Pipe & Supply, based in Hawthorne, Calif., when the question of modifying or upgrading warehouse management software arises, the wholesaler first determines the requirements Todd Pipe must meet as a company to be successful, then analyzes how the warehouse management system will meet those requirements, according to Mark Grantham, director of IT. Two years ago, Todd Pipe changed warehouse management software vendors. It now uses a warehouse management system by Intuit Eclipse. “We felt our old system wasn't providing us with the information we needed to be successful in the future.”
Ferguson's ApproachFerguson rolled out its current warehouse management system about seven years ago at its Elkin, N.C., distribution center. Since that time, Ferguson has used the software in all of its distribution centers to better meet the needs of the Ferguson branches to which they supply product and provide many valuable services.
Beyond warehouse management software, what becomes more critical is how the wholesaler operates, Everett notes.
“When you get into an automated environment through radio-frequency technology and a warehouse management system, if you don't have sound procedures and quality associates, you will fail,” Everett says. “Another critical need with a warehouse management sytem is for stockkeeping unit information: length, width, height. Does the product have an inner pack? You also need pallet length, width and height. This information is critical to your warehouse management system operating in the most efficient manner.”
F.W. Webb's ApproachF.W. Webb has a system it built in-house that automatically creates a stock requisition at each branch location based on the sales made that day. This is downloaded to bar code readers, selected on a second shift operation and shipped the following morning.
Also, every month the computer automatically recalculates minimum and maximum quantities and then looks at the past year's sales history to recalculate.
“We also look at seasonality and current business trends, and we exclude exceptional sales,” Slattery says. “A one-time sale can spike the numbers.” They adjust these exceptional sales down to the next highest level to eliminate these spikes.
“Our current process is being refined to adjust for erratic usage items that sell once every few months,” Slattery says. “On these items there is not enough consistent usage to calculate an accurate min/max.”
F.W. Webb is building in a probability factor to forecast the probability of the next likely hit of these unpredictable sales. A professor of mathematics in the IT department writes these formulas, and has come up with a 12-step process.
“Our standard forecast would most likely suggest a zero stock level on these irregular usage items and we would fail to meet the customers' needs,” Slattery says. “We strive for 100% fill rates and we're actually tracking at slightly over 98%.”
Todd Pipe & Supply's ApproachThe latest warehouse management initiative at Todd Pipe & Supply involved the installation of a wireless radio frequency bar coding system - one branch at a time - that automatically keeps track of inventory. All locations now have bar codes. In addition, the wholesaler's Web site has been upgraded to allow customers to check stock, place orders, review invoices and statements, and download spec sheets.
“We've invested a lot of money in the backend of our warehouse management system,” Grantham says, “including a more powerful IBM/UNIX server.”
Some of the best features of Todd Pipe's current warehouse management system are inventory tracking and real-time information, he says.
“It all comes down to accurate, real-time information: you don't have to wait until the end of the day or month to know where you are,” Grantham says. “Any time you look in the system, all your numbers are current.”
Asked about the best features of Todd Pipe's current warehouse management system, Aaron Olsen, corporate operations manager at Todd Pipe's Garden Grove branch says, “The fact that you can't misplace materials anymore. In the past, if one guy checked it in, it might sit on a shelf for three weeks. Then, when the material was required, it might be difficult to locate. Now, there's no time spent looking for random material. Also, the new system helps with the fill rates. If a customer orders 10, and we go to the shelf and find only eight, it instantly messages the purchasing agent that there's an error and he needs to fix it.”
To complement the warehouse management system, Todd Pipe has installed television monitors that show all the orders and transfers being pulled for the day, Olsen says. Will-call customers can watch their orders being filled. The monitor refreshes every 10 seconds.
“Will-call customers can be antsy,” Olsen says. “They're ready to get their order and get out to their job. Before, they would just sit and wonder how long the order would take. Now they can watch the monitor.”
Training is key to the successful implementation of a warehouse management system, Grantham says. “We provide management training and individual training in order to provide the best customer service possible. The greatest warehouse management system in the world is useless if you don't know how to use it. And if you don't understand customer service, it doesn't matter if you know how to use it or not.”
The warehouse employees had to learn how to perform their functions differently, Olsen says. “They used to go into the warehouse and search for a product. Now they have to look for a location.” The system specifies the aisle and row where the product is located.
“Now a new employee can come in and learn the warehouse in about a day,” Olsen says. “If they know their ABCs, they can find the product. If it gives them a green light, they've got the right product, and if they've got the wrong one, it gives them a red.” It used to take new employees a week or two of walking through the entire warehouse to learn product locations, he adds.
“I like the fact that if everybody does his or her job correctly, errors are minimized and customer service is maximized,” Olsen says. “We still have errors because of human error or trying to sidestep the process. We weren't looking at this as a labor-saver, but more for accuracy. It's a faster and easier process to learn than the old process.”