Leaning the warehouse

Thomas R. Cutler explains why a warehouse control system (WCS) is well suited to working with a lean six sigma initiative. Warehouse management systems (WMS) are a key part of the supply chain, concerned primarily with controlling the movement and storage of materials within a warehouse and processing the associated transactions, including shipping, receiving, put-away, and picking. The systems also direct and optimize stock put-away based on real-time information about the status of bin utilization. Warehouse management systems utilize auto ID data capture technology, such as barcode scanners, mobile computers, wireless LANs and potentially RFID to efficiently monitor the flow of products. Once data has been collected, there is either batch synchronization, or a real-time wireless transmission to a central database. The database can then provide useful reports about the status of goods in the warehouse.Traditionally, a WCS (warehouse control system) executes instructions provided by an upper-level host system, such as an enterprise resource planning (ERP) system or a WMS system. True tier-one WCS software provides advanced management capabilities including inventory control, resource scheduling and order management. The best-of-breed WCS systems are modular in nature, easily configurable and platform independent, with a scalable architecture to satisfy the needs of any size warehouse.Unlike a typical WMS software solution, WCS directs real-time data management and the interface responsibilities of the material handling system as well as providing common user interface screens for monitoring, control and diagnostics. WCS systems must be entirely flexible and scalable. Beyond software selection and implementation, there are mechanisms and tools for handling specific and measured process improvement. Selecting replacement, supplementary or new warehouse management software applications is a multi-step undertaking involving a wide range of skills. Finding the best fit will vary in every set of circumstances.A checklist of WCS areas of expertise must include: ÔÇó Operations audits ÔÇó Supply chain strategy development and master planningÔÇó Process analysis and optimizationÔÇó Location modeling, transportation, logistics, and distribution network analysis ÔÇó Inventory analysis and controlÔÇó Vendor/supplier collaboration ÔÇó Material handling equipment (MHE) requirements ÔÇó Analysis, specification development, and bid administrationÔÇó Warehouse management system (WMS) requirements ÔÇó Project management, systems integration, and implementation.WCS vendors must develop a strategic partnership with a manufacturing and distribution firm in which there is a clear understanding of the organizationÔÇÖs unique shipping needs, and actively assist in reaching and measuring cost reduction goals and service needs.Warehouse control systems must address numerous challenges from multiple angles and perspectives, but if these are met they can produce benefits including a greater return on assets, increased operational capacity, reduced labor costs, increased inventory turns, an increase in picking and shipping accuracy, shorter process cycle times and improved customer satisfaction.According to Jerry List, vice-president of QC Software, ÔÇ£Implementation of a WCS system requires an experienced supplier who should be able to provide streamlined project cycle, single-point of accountability and have a deep knowledge of distribution operations. This can only be achieved through the experience gained from a history of successful projects. Only then can the powerful impact of a WCS provide tight integration between hardware, software, layout, process, and personnel, as well as maximizing materials flow and use of space while providing a flexible platform for future growth and change. All this experience yields measurable resultsÔÇöfaster.ÔÇØIntegration activities must be streamlined to deliver benefits as quickly as possible. These activities include operation assessment, strategic planning, material handling design and implementation, WMS specification and selection, system integration & test, training, go live support, and post implementation audit. Successful integration will maximize materials flow, improve resource planning and decision support, increase storage capacity and throughput, and increase customer service and productivity.Companies seeking operational efficiencies in the warehouse often already have a well established lean initiative; they may even have a team dedicated to continuous improvement. Some have also added six sigma to their portfolio of tools, creating a lean six sigma initiative. Lynne Hambleton, author of the recently-published Treasure Chest of Six Sigma Growth Methods, Tools, and Best Practices, defines lean six sigma as an approach to emphasize improvement in the speed of a process by making ÔÇ£leanÔÇØ its ÔÇ£non-value-addÔÇØ steps. Developed in the manufacturing environment, the concepts of lean and six sigma have since expanded to multiple industries and applications. Its common metrics include zero wait time, zero inventory, line balancing, cutting batch sizes to improve flow, and reducing overall process time.By identifying categories of waste the WCS can operate with heightened effectiveness and efficiency. Hambleton suggests the acronym DOWNTIME to help recall the various areas of waste.D. Defects: Repairs and rework needed to get something to function properly, which slows the process flow and reduces first-pass throughput yield.O. Overproduction: Producing parts ahead of schedule (before a customer requests it or needs it) while other items in the process wait.W. Waiting: People wait unnecessarily because of shared equipment, unbalanced work activities, decisions, approvals, or inspections.N. Non-utilized people: Under-utilized resources, lack of empowerment, or too many workers in the process causing inefficient operations.T. Transportation: Moving parts or objects unnecessarily (including papers and files); excess travel distance, which also can waste time and equipment.I. Inventory: Excess space consumed by shelving, floor space, excessively wide aisles, accumulated in-process or finished goods, including parts waiting for rework or scrap storage.M. Motion: Excess, unnecessary, or non-valued people activities such as searching, walking, sitting, choosing, copying, stapling, sorting, climbing, and bending over.E. Excess processing: Unnecessary operations, steps (including inspection and approvals) and complexity (at times excessive documentation.)Since it is likely that more than 80 percent of tier one distribution warehouses will utilize a WCS by 2010, the ability to integrate lean concepts is critically important. ÔÇ£The lean philosophy is an important cornerstone of the six sigma approach and has contributed invaluable tools and techniques to create flow, eliminate waste, and strive for continuous improvement,ÔÇØ concludes Hambleton.