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Traditional linear supply chains with sequential processes are evolving into complex global ecosystems that are highly responsive to customer requirements. These demand-driven environments - which work in conjunction with traditional push strategies - are known as adaptive supply chain networks.
An adaptive supply chain network allows all the stakeholders in the supply chain – both internal and external to the enterprise – to share knowledge, make collaborative decisions and immediately respond to changing conditions. Trading partners can avoid costly supply chain problems. Moreover, firms can enhance their financial position and improve their supply chain economics.
Without an adaptive supply chain network, the potential for growth is limited to improving linear processes and merely optimizing points throughout the network. These single optimizations rarely, if ever, affect the ecosystem as a whole.
Today, most companies work in a “plan then execute” paradigm. This has natural limitations because there is a fundamental mismatch between planning an ideal scenario and executing those plans in a real-life situation. An adaptive supply chain network can monitor changes in the real world so firms can profitably respond with timely and intelligent solutions to problems.
A warehouse management system (WMS) is one of the key technologies required to create a successful adaptive supply chain network. This system enables the extended warehouse to sense and respond to a variety of business requirements and meet complex and changing customer needs. To this end, warehouse management - and the technology that supports it - has moved to the forefront of the CEO’s agenda.
A TIME FOR CHANGE
Many firms already have a basic WMS in place, but a Forrester Research, Inc. survey of about 200 supply chain executives indicates that yesterday’s solutions are not meeting today’s demands. Approximately half the respondents said that their WMS application was at least three years old and many of these respondents stated that they operated on five-year-old solutions. Follow-up interviews revealed that many companies customized the application to the point where an upgrade was actually a reimplementation. This phenomenon - combined with increasing inventory levels at facilities, tight margins, and
the desire for more business flexibility - is driving widespread reevaluation of WMS solutions.
To compete in today’s market, warehouses need to operate in a real-time environment where functions such as forecasting, order management and transportation are tightly integrated. Also, there is also pressure to meet the demand for value-added services, such as light manufacturing within the warehouse. In fact, warehouses are beginning to resemble manufacturing sites because postponement strategies and complex value-added services are pushing manufacturing requirements toward WMS fulfillment.
As systems become more tightly integrated, companies benefit from having visibility into internal operations and the supply chain as a whole. For example, trailers can be expedited to dock doors - instead of going through a yard-management process for handling – and distribution requirements can be incorporated into planning. Processes for order management allow suppliers to see demand-based movement downstream. As a result, customers have improved visibility of their orders.
At the same time, companies stand to improve their margins through labor-performance management. Demand forecasts can be used to plan labor workloads in advance by calculating how much time will be needed for specific tasks (such as picking and receiving) and determining individual schedules based on those figures. Companies can go one step further by linking customer relationship management (CRM) and order-management systems to the WMS, which helps prioritize work within the warehouse.
WMS DEPLOYMENT OPTIONS
Once the business case has been proven for a new WMS, operators and IT managers must agree on the best way to leverage the solution to meet business requirements and lay the foundation for growth. Some of the issues that must be considered are the placement of the server, the facilities that should be involved, and the optimal deployment option. Generally, there are three deployment options for a WMS:
Traditional enterprise resource planning (ERP) system integrated on a central server - Many firms choose the centralized deployment option because of the flexible configuration, risk-free integration, scalability, functionality of ERP software. A centralized deployment solution helps firms manage small warehouses with simple processes and large distribution centers with complex processes.
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