Stock in trade - Warehouse Management Technology report- October 2013

Manufacturing and LogisticsIT spoke with a number of spokespeople from the warehouse management solutions community about recent – and possible future – developments in this all-important technology space.

A smooth-running warehouse or distribution centre has always been critical if all the related elements within the supply chain are to run smoothly – and this, of course, always will be the case. Nevertheless, the methodologies put in place with the aim of achieving best practice can always be further developed, as indeed can the technology backbone required to keep things flowing in and back out of the warehouse environment. So, amid this backdrop, what are some of the most important current business andoperational talking points within the world of warehouse management? 

Martin Eppert, product manager at Vanderlande Industries, considers that one of the most interesting topics concerning warehouse management system (WMS) development at the moment is how to present the right information in the right way to the system. "More and more graphical dashboards are seen in systems nowadays, even combining WMS-related information with process information from other system; for example, the lower control levels in case of automation," he said, adding that doing this in a good way enables the supervisors to make the best use of the available resources and in this way reduce costs.

Eppert also made the point that there is an increasing demand for ergonomics. "Optimally, this is achieved by a combination of fit-for-use user interfaces and optimised physical workstation setups," he said. "Good working conditions have a positive impact on the motivation and performance of workers and can reduce their sickness absence times. An ergonomic and easy user interface will also have shorter learning curves for the staff, which is especially important in dynamic workforce environments."

Additionally, Eppert maintains that the increase of e-commerce business is influencing WMS development. "Customer orders are getting smaller and the expected throughput time is getting shorter," he said. "Same-day delivery is seen at the horizon. The WMS has to support this development with suitable planning and scheduling functionalities to maintain warehouse efficiencies."

Derek Kay, business development director, Logistex, also considers that the burgeoning eCommerce industry has brought a number of topics to the fore; how best to handle smaller orders and later cut-offs, management of returns and minimising final mile delivery costs, the traditional bulk warehouses need to adapt to meet these new requirements.

He believes the latter of these is without doubt the biggest talking point at the moment and WMS integration with effective carrier management systems is critical to giving the customer flexibility in how they receive their goods. Kay adds that, historically, the supply chain, and particularly the warehouse, has been seen as a cost centre in which to minimise spend. "What we're increasingly seeing is how the introduction of appropriate automation technology leads to a rapid return on investment when combined with a WMS that can make the best use of it," he said.

Tony Hampson, managing director, BEC (Systems Integration) Ltd., believes there is now more of a requirement for real-time interfaces into these systems. "Real-time integration is now the norm and what's expected, rather than offline batching up of information and reporting after the event," he commented.

Graham Gittins, product manager Supply Chain Management at Advanced Business Solutions, reflects that few processes within the world of warehousing are new. "They largely revolve around the fairly standard practices of bringing items in, putting them away, and retrieving them again quickly and accurately at the right time," he remarked. "So it's a case of constantly striving to improve these existing processes. However, a lot of the current debate is about how to get the best out of the increasingly vast amounts of data in order to improve warehouse performance and supply chain visibility for the company."

Mikael Brorsson, product manager, Consafe Logistics, considers that flexibility to stay current with ever changing demands is key. He also cites the need for transparency and traceability in the supply chain as something that, while not new on the user's wish list, remains very much within the top five key requirements. "The key to success for integration is connected to process knowledge," he added. "To be able to understand the advantage with integration no matter the size of the company you have to understand what processes the company needs and demands. This type of deep knowledge is collected through experience from implementations in combination with deep logistics competence. We see that our customers who are in generation 4 or 5 of their WMS focusing on enhancing their existing solutions with new functionality such as Yard Management, Workforce Management, TMS etc. For customers in generation 1-3 the WMS itself is in focus and any a rolling out a working solutions to more warehouses and additional countries."

Reasons underpinning development

And what are some of the reasons behind many of the above trends and developments? In the case of e-commerce, Kay's view is that the requirements themselves have come about from fact that the UK is the biggest adopter of e-commerce retailing in the world. "The UK public has enthusiastically embraced Internet shopping both from home and 'on the go' through tablets and smartphones," he said. "The result has been a huge surge in single-line item orders which need to be efficiently processed through the warehouse for delivery. Many WMS suppliers are still struggling to catch up. The best way to keep ahead of the game is to work with customers to anticipate the next market requirement and ensure the WMS is ready before the problem has manifested itself."

Brorsson has also witnessed a surge in e-commerce activity, and observes that these types of suppliers have slightly different demands than the average wholesaler or retailer. "There is large volume of very small orders, major variations in the order flow, delivery of the product to a private consumer who is not always home to receive the goods, large quantity of troublesome returned goods," he said. "It's one thing to sell the product and collect payment via an attractive website; it is quite another matter to pick, package and transport the product to the customer, when the customer is home, without the seller being knocked out by costs. E-commerce logistics is very different from traditional logistics. It is characterised by large volumes of very small orders, and is completely different from picking and packaging a pallet or two for a store."

Gittins believes the main drivers for better utilisation of supply chain-related data are improved performance, visibility and cooperation. "The better all the people involved in the supply chain are able to cooperate though the more efficient use of data, the greater will be the business and operational benefits for the company," he said. "Improved processes can also have a large impact on cost control and profitability which is key in supply chain organisations where margins are often very tight."

Making the connection

Have ways of best integrating WMS with other systems developed to any notable degree over the past year or two? Hampson believes that the requirement for seamless, real-time solutions is on the increase as customers are forever seeking the tighter, integrated seamless solution as opposed to batched/timed uploads – thus providing data transfer dynamically and enabling clients to see updates in up to the second, real-time mode. He added that BEC is also seeing the uptake of leasing as opposed to capex requirement within this technology space, and believes this to be a positive financial step forward for both the suppliers and customers alike.

Kay reflects that system interfacing has always been the area that has required customised code, and he believes that hasn't really changed. "Better specifications and tools like XML schemas have meant that defining the interfaces is much improved, but in reality you rarely come across two identical interfaces even when dealing with two ERP implementations from the same supplier," he said. "Having comprehensive and clearly defined interface requirements for the WMS at least means that faced with the same from the ERP supplier it should just be a case of mapping the data rather than writing something new."

Hampson points out that customers have demanded that their systems become more open and accessible . "They don't want to have to go back to their ERP provider for every change and may want to do more themselves or choose who to partner with for different aspects of the solution," he remarked.

Gittins has observed that more and more people are now aware of the benefits of reliable integration between core systems, including WMS. "With such integration in place companies can more effectively take the risks out of data sharing," he said. "Dual keying was always a risky process in the past, now that process isn't really necessary. As well as avoiding much of the risk of using inaccurate or outdated information, integration can also help the staff to work more productively and more accurately. The modern ways of interfacing have resulted in major improvements to the process of data sharing within warehousing and the wider supply chain."

Gittins adds that Internet technology continues to evolve. "Web services can now make common information of all kinds available to people within a social, consumer or business environment," he said. Similarly, Gittins points out that common libraries are starting to become available. "For example, the standards organisation GS1 will soon start making supply chain-related data resources more publicly available," he commented. "In so doing, organisations will have access to better quality information rather than having to rely on something of a mixed bag that we have at the moment."

One area that can be enormously improved through greater levels of reliable integration is traceability, according to Gittins. "This continues to be a hot topic within the supply chain world. Somebody's finished goods are somebody else's raw materials. And one food product could run through 20 or 30 processes before it arrives at your dinner table. Most recently we had the horsemeat scandal. It's a shame that the subject of tracking and traceability most often seems to get attention when something goes wrong. Tracking and traceability remains one of those things that companies opt into but only at a voluntary level rather than through legislation. However, I understand that European legislation will come into force within the food industry in the near future."

In terms of the technology, Eppert sees a trend towards the reactive online type of interfaces instead of classical and less reactive batch-oriented communication. "This allows for closer process integration, e.g. being able to automatically print and add a delivery note/invoice and shipping label reflecting the latest pick results and measured parcel weights," he said.

According to Eppert, customers are becoming more and more aware of the value of their software solutions and the risks, if they don't work as expected. Therefore, he observes that upfront testing of the integration of a new system into the customers overall IT landscape has become more important. "This is achieved by setting up special test environments including remote connections, mimicking the dynamic behaviour of the connected MHE system, to test a proper integration before the software goes live on site," he said. "More and more customers are participating during this integration test phase in the test lab, which gives them an excellent opportunity for training with their new system and being well prepared for a smooth commissioning and ramp-up phase later on."

Eppert also makes the point that the heterogeneous world of logistics still requires suppliers to be flexible with integrations that connect to the existing IT landscape of the customer. "This hasn't changed so far," he added. Brorsson currently sees more demands on flexible integrations and more detailed demands for solving problems in specific areas of the supply chain.

At your service

Has the Software as a Service (SaaS) model had any notable level of impact on the WMS software solutions market so far? "Only in that people keep asking about it," said Hampson. However, he believes there are two sides to this. "Do they want the hassle of managing the system themselves or do they just want a known cost per month for managing and maintaining that system. Most companies don't want to pay for this upfront – they would rather lease it."

Gittins comments that he has observed some WMS vendors promoting a SaaS version of their offering as their core model. "I'm not sure that the SaaS model is going to change the world overnight," he reflected, "and think that the SaaS model applied to WMS is still largely in its formative years. However, the whole area of Cloud raises the question about general deployment models; for example, the potential of a SaaS-based software package to save on upfront capex and provide a level of functionality that could be of benefit to the organisation. Interestingly, the 3PL market has relied on a multi-tenanted environment for some time. So the concept of software deployment in a Cloud environment is not strictly new."

Brorsson's view is that increased demands on flexible delivery and payment models are boosting interest in SaaS WMS offerings. "For us, the Cloud concept allows more companies to invest and to start small to be able to grow with the solutions, adding the functionality that they need, when they need it," he commented.

Eppert reports that he has seen very few serious requests for a SaaS model so far, stating that in the context of automation projects the WMS is seen as an additional investment to the usually more expensive equipment. "For a 'public Cloud' approach we have seen little interest so far," he added, "but for small- to mid-size systems we see increasing interest and opportunities in 'private Cloud' solutions, having the benefit of reduced IT setup and maintenance costs. This is enabled by the general progress in communication and virtualisation technology."

Kay observes that SaaS as a payment model, available from most WMS vendors, has given customers an alternative option for purchasing the WMS. However, he believes it can be a double edged sword. "Initially it might seem great to avoid capital expenditure, especially for a fledgling business. However three years down the line when you're dependent on the WMS and you still have to pay every month just to use it, it might seem like a false economy."

Kay adds that, in his view, Cloud technology has been over hyped. "It certainly has its place, but it doesn't actually provide a better solution than an on-premise WMS system, often quite the opposite," he remarked. "Recent glitches with Cloud technology have caused downtime for Instagram, Netflix, Amazon, Intel and Google. If those companies can't guarantee a reliable connection to their services what hope does a UK SME using a Cloud WMS have?"

On the move

Are mobility solutions such as mobile computers and tablet PCs having an impact or influence on WMS systems? Brorsson believes this is undoubtedly the case. "Users want access to data/information anywhere. And our mobility applications bring this possibility to our users." Eppert also believes mobility solutions will have a big impact on WMS systems. "The progress of this technology enables new possibilities also within the warehouse," he said. "For example, if a service technician has to solve an equipment defect, he benefits from having all related information immediately available at the spot on his tablet. Furthermore if he needs remote assistance, he wants to illustrate the problem with his mobile video camera while discussing the situation with a specialist, potentially sitting thousands of miles away in his office (see, for example. the new EYE4U solution of Vanderlande Industries). We will see more of these applications in the future, as the mobile technology evolves quickly. In general there is a big common cultural trend towards being online everywhere. People's expectation is that this is possible with any kind of modern software, including WMS."

Kay makes the point that a busy warehouse can be a very harsh environment for mobile devices that haven't been designed for rugged use. "The reason most handheld devices used for picking are so bulky is because they are designed to withstand rough handling," he said. "Tablet PCs and smartphones are most useful for providing management information both within the warehouse and externally. The ability for an operations manager to check the current status of his pick operation whilst off site is obviously a useful feature. Smartphone alerts for operational alarms also mean personnel can react more quickly to problems and consequently resolve them more rapidly."

Gittins observes that mobility is certainly a very hot topic at the moment within the world of WMS. "Advanced Computer Software has just won an award in the US for developing a new mobile application for calculating an individual's expenses. And if you have people using their own mobile phones to do their expenses there's no reason why they wouldn't also be able to use their own mobile devices to do various question & answer-type tasks related to their company's WMS. For example if sales staff speaking to customers want to gain permission to release stock in order to satisfy an order more or less in real time, there's no reason why a service module couldn't be provided in a format that could be fitted onto a mobile device. By using such a device field sales personnel could receive confirmation from the warehouse that either stock is or isn't currently available. Then, they can relay that information to the customer as soon as they receive it."

Hampson's perception is that people now have an expectation that they can get their enterprise information wherever they are, so they don't have to be at their desk or in the premises. "They can get it at any time of the day, wherever they are," he said. Hampson recognises that data security is a potential issue with regard to mobile devices. However, he makes the point that when people get these devices stolen or they leave them somewhere, systems integrators such as BEC need to integrate services such as geo-fencing into their offering. In this way, devices can be quickly locked down and wiped so that any sensitive information is removed.

The big question

Is Big Data having an impact on the world of WMS solutions? Eppert believes the answer is a definite "yes". "The WMS is asked to deliver more detailed internal process data to the BI platform to facilitate deeper data analytics," he said. "Especially combining process data from various views of the warehouse can give a better insight in improvement potentials. For example, monitoring the timestamps of when delivery orders were downloaded to the WMS can help to find out why deliveries were issued later than expected in addition to just looking at their priority." Eppert added that he believes the correct interpretation of the data will stay a human task for the time being and will not become fully-automated in the near future. "In this sense Big Data should be understood as the approach to take good decisions based on good information," he said. "A challenge for the future will be to elevate media information like pictures and movies taken from the processes in a warehouse to the level of data analytics."

Gittins points out that he has spent 16 years on the software side of warehousing and has realised first-hand the amount of data available today compared with what used to be around just a few years ago. "And much of this data is tied up with dashboards and business intelligence, with people analysing it in order to better understand historical, current and future trends," he said. "The danger is that rather than resulting in companies being able to make more informed decisions they can very easily get to the point where all they've really got is 'analysis paralysis'. If they end up spending more time analysing data than using it to business advantage they've got a problem."

This, states Gittins, is where Big Data comes in. "Rather than basic data warehouses, what's needed is cubes or matrices of information that have already got the type of data companies require pre-summarised and cross referenced," he remarked. "This may be an expense but it's also a technology that I think more people are becoming familiar with. And I think as Big Data becomes increasingly recognised for the advantages it can offer, the more companies will value the expertise that can be provided by people who understand how to filter out the data chaff and focus on the information that is of direct benefit to the organisation."

Brorsson maintains that there are very few companies that have control of their data in full. "It is more common that our customers need to do a vast internal work in order to 'clean' data before implementing an WMS," he said. "When the WMS is in use, customers request solutions to support their need for analytics in retrospect analyses for their warehouse operations and for proactive operations planning."

Kay's view is that Big Data is only useful if you have good tools to turn it into it big information. "What is important is to ensure the WMS records all the important information separately from the operational database otherwise you run the risk of the reporting tools impacting the performance of the WMS operation itself," he commented. "Having historical reference data can allow you to identify trends that can in turn allow more efficient use of equipment and the workforce. What is important is not to compromise the WMS by trying to make it a Jack of all trades. Keeping the data and BI reporting separate from, but fed by, the real-time operational WMS gives you the best of both worlds."

What's the difference?

What are some of the main functionality differentiators within the WMS vendor community?

Gittins reminds us that at the larger end of the market, there are those companies who do a lot more of the hard integration, suppliers of conveyors, sorting systems, robotics, etc. "I think that as things progress this type of automation may become increasingly more commonplace," he said. "Fortunately, there are some third-party components available that can make that type of integration easier for some of the smaller WMS vendors. Then, there are the specialist technology suppliers whose systems are integrated within the suite of systems you find in many modern warehouse environments. For instance, Voice-directed picking systems, RFID technology and mobile devices of various types – truck-mounted terminals for use in the warehouse, smartphones or tablets with touch-screen technology for use by sales staff in the field. It's all about ensuring staff are given the means to work as effectively as possible."

Mikael Brorsson's view is that most WMS are similar to each other, with few differences. "We create additions to our WMS that fit our existing customers perfectly, such as Warehouse 3D, a solution for layout planning your warehouse in 3D," he said. Brorsson also cited the functionality Adaptive multi-cycle, that minimises empty driving in the warehouse, using the forklifts more efficient in adaptive task interleaving. Additionally, he points to Dynamic location allocation, for better use of space and less administration.

For Eppert, the ability to integrate in an optimal way into the specific IT context of the customer is crucial. "The existing IT setup usually reflects a significant investment, which has to be safeguarded," he said, adding: "Having a state-of-the-art and future-oriented development platform is important, as WMS setups are usually in service for many years. Additionally, Eppert considers that a good support of mechanised processes should be part of the WMS as well, as there is the steady tendency towards further automation for cost and quality reasons. Eppert also maintains that ergonomics in the software and the workplace setup is crucial, as it influences the performance of the workers and the supervising staff, as well as their learning curves.

According to Eppert, the facilities of the WMS to easily manage and supervise the warehouse processes are very important as well. "A good WMS assists the supervisor by presenting the important information in an easily accessible way," he said, adding that, besides the functional aspects, it is important to look at the organisation of the WMS supplier as well – for example at their experience in the customer's business area, their development processes and ability to deliver. "For a successful long-term relationship it is important to find the right partner," he added.

Kay believes the majority of the vendors remaining in the marketplace all have a good understanding of how to run a standard warehouse operation. "They wouldn't still be around if they hadn't," he remarked. However, Kay's view is that the differences are between what could be described as the 'Enterprise WMS' suppliers who have substantial financial backing – but consequently higher price tags and whole-life costs – and the independent WMS suppliers who can provide effective WMS solutions for manual operations. "WMS systems that can support automation 'out of the box' can give a complete solution with the ability to enhance warehouse operations with appropriate automation as and when needed," he said.

Moving ahead

What might be the next innovations/developments to look out for in the world of WMS software over the next year or two? Brorsson points to truly zero modification deployments and customers' requirement for a standard WMS with basic functionality in order to enhance implementation speed, quick integration and usage of the system. Brorsson adds that over the next few years he believes that new advanced technology will partly drive the development of WMS functionality. For example, he considers that usage of Google Glass in a warehouse would be a way of incorporating new technology. Brorsson also foresees other new ways of working in a traditional warehouse operation, and believes that usage of dashboard solutions in warehouse operations will be more frequently used.

Eppert believes one key development in the area of WMS to look out for will be the integration of new solutions such as automated shuttle systems; allowing for scalable storage solutions or automated mixed palletising solutions. These solutions, he says, ask for specific support at WMS level to get the most benefit out of the system.

Eppert added that he sees a future challenge for the WMS software world in the burgeoning conflict between the impressive innovation speed and release cycles on the consumer market on the one side and the demand for future-proof investments in the world of logistics on the other. "For example, mobile terminals in a warehouse are often in operation for many years, while the capabilities of usual Smartphones and its applications are improving monthly," said Eppert. "For me as product manager it's an interesting task to assist in introducing these new technologies into our logistics world."

Looking forward, Gittins returns to the subject of Big Data. "We will hear a lot about Big Data and its benefits. The part mobile devices play in making end-to-end track and trace and general communication more seamless will continue to develop. Overall supply chain visibility will continue to improve, with real-time monitoring and real-time events becoming the norm for a lot of warehouse professionals. Greater levels of flexibility will also continue to improve. For example, if plan A isn't considered to be the best option, plan B,C or D can be put into action in its place as part of a largely automated process. Increasingly, we will see functionality built into the system that can compensate for certain events not going to plan. So computers, through their ability to analyse information quickly, will increasingly be able to do analytical and comparative thinking in an automated way."

Generally speaking, Kay believes we are likely to see movement in two key areas; storage of key information and increased accessibility to that information, wherever you are in the world. He added: "Recording of information regarding warehouse operations, order profiles and KPI's coupled with good business intelligence tools will allow managers to more effectively manage their teams and monitor trends to ensure continuous improvement in their operations. Access to this information via mobile devices and easy to use app's is going to be critical."

As a general reflection on the WMS industry, Kay's view is that the recent recession has seen a number of WMS suppliers merge with, or be taken over by, businesses whose focus is more commercially biased. "As logistics professionals will know, trying to run a warehouse with an accounting system does not necessarily provide the best results," he remarked. "Those specialist WMS suppliers who have been strong enough to survive the past four years and continue to provide innovative and comprehensive solutions are key to supporting an industry facing the major changes brought on by the growth in e-commerce."

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