Supply Chain Question

WAREHOUSE MANAGEMENT SOFTWARE Warehouse Management Software Miami Dade College 1 WAREHOUSE MANAGEMENT SOFTWARE 2 Table of Contents Introduction………………………………………………………………………………………3 The Importance of Warehouse Management Software ……………………….…………………..3 The Key Objectives of Warehouse Management Software………………………………….……4 Practices that Support the Adoption of Warehouse Management Software at Walmart.……….…6 The Maturity Path to Warehouse Management Software……….……………………..…………8 Advantages of RFs over Traditional Computer Systems………………………………….……..11 Warehousing Functions that are Enabled by WMS Features…………………………………….12 Conclusion……………………………………………………………………………………….14 References……………………………………………….……………………………………….16 WAREHOUSE MANAGEMENT SOFTWARE 3 Warehouse Management Software The introduction of technology can significantly improve the warehouse productivity, increase utilization, reduce costs, and increase customer satisfaction. Essentially, the consumers require accurate, secure, and fast data exchange. As a result, companies are pushed to become more intense to support information technology tools in running the warehouse. The ability to communicate in real-time is crucial in the current pace of fast-moving technological world. Technology forms the backbone of warehouse management because it brings improved reliability, speed, control, and flexibility into the warehouse operations. For instance, paperbased warehouse management systems like spreadsheets can help in the management of stock if managed well. However, if the company needs its warehousing operations to be competitive, there is a need to introduce a real-time warehouse management. This paper aims to explore the issue surrounding warehousing in terms of developing and implementing warehouse management software using Walmart as the reference company. The Importance of Warehouse Management Software Before implementing a warehouse management system, it is crucial to highlight the importance of the warehouse management. At Walmart, warehouses act as the distribution centers that hold the inventories (Richards, 2014). They are crucial links in the supply chain because they allow the inventories to be available on time. This means that the warehouse should be managed effectively to ensure the efficient production of goods and delivery to customers. In this case, the use of a WMS is a proactive way that is designed to speed the turnaround time, improve accuracy of inventories, manage warehouse space, and enhance labor productivity (Hompel & Schmidt, 2006). The technology infrastructure at Walmart is one of the largest WAREHOUSE MANAGEMENT SOFTWARE 4 among private companies in the world. Every link in the supply chain is connected through technology to help the management in making forecast and predict inventory levels. Most important, embracing a WMS has helped Walmart with an innovative tool to store inventories and manage customer relationships. In more recent years, a WMS has expanded to include additional features that can handle light manufacturing, transport management and complete accounting. Moreover, WMS provides a communication system that links corporate-level production, purchasing, scheduling and logistics activities through improved supply chain visibility (Hompel & Schmidt, 2006). The Key Objectives of Warehouse Management Software include the following: • Eliminating order fulfillment errors by product identification and continuous cycle counting. • Send and receive critical customer and warehouse information with minimum lead time through electronic transmission. • Maximize labor productivity by managing and enhancing tasks priority (Richards, 2014). • Maximize space utilization by selecting a proper storage location. • Reduce inventory and handling requirements thorough a continuous flow of information (Min, 2015) In addition, because the Walmart’s warehouse acts as the distribution center, when its system is performing poorly the results may impair the processes of the entire company. It should be emphasized that there are three key effects of poor warehouse performance. These include complex management, poor customer service and high logistics costs (Hompel & Schmidt, 2006). WAREHOUSE MANAGEMENT SOFTWARE 5 Complex Management Fundamentally, many departments within the organization as well as other companies rely on the effectiveness of the distribution center to safeguard and forward inventories. As such, the warehouse management software at Walmart has played a significant role in this area. It is helping the distribution center with key responsibilities to register the inventory levels in the company’s information systems (Saxena, 2003). As a result, it has become easier to eliminate common errors. For instance, when the recorded figures do not coincide with the actual inventories in the warehouse, it becomes challenging for other departments. The managers in the affected departments will face difficulties in determining how much the company can produce, purchase or sell (Emmett, 2011). As a consequence, the levels on the inventories will rise to compensate for possible discrepancies as the company requires more substantial efforts to manage all the occurring incidents (Hompel & Schmidt, 2006). Furthermore, if the warehouse frequently ships goods late or incorrectly, other players in the supply chain may be forced to require additional safety stock to manage the uncertainties. Poor performances in the warehouse mean that there are many incidents and exceptions arising and they need to be handled. This is unpredictable behavior in a distribution center that makes it complex and more expensive to manage the activities of the supply chain (Saxena, 2003). Poor Customer Service The effects of a poorly performing warehouse have a spread-over impact on the levels of customer service. For example, errors in the deliveries may cause empty shelves in stores which could translate to possible losses (Emmett, 2011). In time-conscious situation, it may render the WAREHOUSE MANAGEMENT SOFTWARE 6 customer operations to be ineffective. Illustratively, if the customer needs some spare parts to repair a defective machine, and the parts are not available in the warehouse it means that the defect can only be fixed when the parts are available (Saxena, 2003). On the other hand, in order to maintain optimum customer services particularly during the busy periods, the warehouse must be managed effectively. When customers are dissatisfied because of issues such as late deliveries, they respond in a negative manner too (Min, 2015). They may demand for compensation or even shift their interests to a competitor. Moreover, incorrect deliveries must be returned in exchange for the correct ones thereby leading to extra shipping costs (Richards, 2014). High Logistics Costs The percentage of logistic costs varies between warehouses depending on product value and handling characteristics. However, the reality is that reducing the logistics costs can have a substantial impact on the profit margin (Saxena, 2003). In this case, some warehouses have adopted strategies such as just in time deliveries and lean thinking to reduce the inventory holding costs. At Walmart, the management has adopted technology advances to reduce the production costs (Van den Berg, 2007). The WMS in its distribution centers is helping the company to streamline their internal operations; the logistics costs are higher. Therefore, the WMS forms an integral part of the supply chain; it should be developed with objectives aiming towards integral optimization of the operations (Emmett, 2011). Practices that Support the Adoption of WMS at Walmart The Adoption of WMS at Walmart is a continuous attempt to operate and improve the processes of the distribution center. It involves the use of information technology and WAREHOUSE MANAGEMENT SOFTWARE 7 collaborations with other partners in the supply chain. Therefore, the adoption of a WMS is an ongoing process (Van den Berg, 2007). For Walmart, it is necessary to maintain a competitive performance relative to the market because the market forces can lead to different service requirements. The profiles in the supply and demand forces are not constant. A wider focus on warehouse management shows that the managers at Walmart are implementing practices that will support this process (Richards, 2014). These practices include making the operation transparent to all the key players, using flexible information systems that support both, the current and future processes, and aligning the interests of the warehouse with the departments (Emmett, 2011). Transparency is a practice that the manager uses to define processes, objectives, costs, and performance measures at Walmart. This helps the players to obtain a better understanding of the activities that are facilitated by WMS (Emmett, 2011). More importantly, transparency motivates employees of the Walmart to do their job in an efficient and precise manner. It also enhances decision making based on the facts rather than on speculation and personal opinions (Van den Berg, 2007). As a result, the activities in their warehouse are running transparently; there is a continuous analysis and improvement of the warehouse performance. Moreover, there is a flexible information system that is developed to support the desired method of working with minimal problems. It is easy to modify the software to accommodate any process or redesign to keep the warehousing processes with up-to-date market requirements (Van den Berg, 2007). The use of a standard WMS at Walmart helps in configuring different parameters into the system to support the intended activities in the future. This WMS provides better system compared to the custom-made software that has to be built from scratch making it difficult to modify (Emmett, 2011). In addition, the WMS at Walmart facilitates real-time and WAREHOUSE MANAGEMENT SOFTWARE 8 detailed information which is necessary to control the warehouse in a sophisticated manner. In a warehouse management, the flexibility of information systems helps in improving both, shortterm and long-term performances of the distribution center (Van den Berg, 2007). A third practice to support WMS at Walmart involves the alignment of the various parties involved. It is a process which implies that the actions and decisions of these parties are aimed at achieving the overall objective of the company rather than individual goals (Van den Berg, 2007). The supply chain management is the best example that is used to manage the relations with suppliers and customers. At Walmart, the WMS is objectively aimed at improving customer services at the lowest possible costs for the entire supply chain (Min, 2015). It further supports initiatives such as demand forecasting, synchronized planning, and process redesign to improve efficiency and reliability (Min, 2015). Consequently, the inventories and response times have been reduced while processes have become more reliable. The products and services are effectively tailored to the needs of individual customers of Walmart (Richards, 2014). The alignment of needs of all parties at Walmart has helped the company in achieving optimal service level and reducing the overall costs. First, the parties involved commit to the overall objectives and possess the information to substantiate their actions accordingly (Van den Berg, 2007). There is also a well-organized internal collaboration that increases mutual dependencies so that it becomes critical for the parties to perform according to the agreed standards. Thirdly, alignment helps the parties to cope with the broad scope and the related complexity of decision making (Emmett, 2011). The Maturity Path to Warehouse Management Software WAREHOUSE MANAGEMENT SOFTWARE 9 Warehouse management is a continuous process. This means that there is a systematic approach applicable to improving the performance of a WMS at the distribution center (Emmett, 2011). At Walmart, the growth path follows the four main stages; these stages are reactive, effective, responsive and collaborative warehouse management (Van den Berg, 2007). Reactive Warehouse Management Reactive Warehouse Management is the first stage that marks the maturity growth of a warehouse. It serves as the baseline where processes are not structured or defined clearly. The performance is also unreliable. In this stage, the manager is forced to deal with the same events that occur in the warehouse on a daily basis (Richards, 2014). Effective Warehouse Management Effective Warehouse Management stage marks the standardization of the distribution center. The manager focuses on forming a structured system by setting goals and identifying costs and performance levels (Richards, 2014). There are efforts to facilitate a transparent analysis of the bottlenecks that boosts the position of the warehouse as an effective link in the supply chain (Min, 2015). Responsive Warehouse Management Responsive Warehouse Management is the third stage in the growth of the warehouse. It is a stage where the manager utilizes information technology to increase the performance (Van den Berg, 2007). Information technology such as the warehouse management software becomes a powerful tool for logistical improvements. At this stage, the manager at Walmart introduced WAREHOUSE MANAGEMENT SOFTWARE 10 planning and control systems that help the company to respond in real-time activities of the warehouse (Min, 2015). Collaborative Warehouse Management This stage involves reconsidering the roles of a WMS in the supply chain. It is focused on the improvements beyond the internal operations of the warehouse. It seeks to improve the performance of previous stages and entire supply chain through better collaboration (Van den Berg, 2007). The Warehouse Management Software at Walmart There is an increasing growth of technology and its usage in shaping the business environment. In particular, the use of radio frequency (RF) communication has become prevalent in warehousing and distribution at Walmart. RF is a wireless link that integrates the power of a real-time host computer in its application in warehousing environments (Saxena, 2003). For example, RF allows inventory databases to update the instant picks that are made. It also facilitates the use of warehouse management systems that direct work and increase the accuracy of activities. These systems can also eliminate the need for physical inventories by implementing a computer-directed counting strategy (Richards, 2014). Additionally, RF communication has allowed information systems at Walmart to access real-time data and to make the accurate decisions with rapid pace of business today (Saxena, 2003). Putting it in another way, the use of RF is enabling the warehousing operations to meet the changing growth, time and customer needs of the 21st century. However, although RF has increased the efficiency of warehousing, the systems can break depending on the updates from the host or batch data processing (Min, 2015). WAREHOUSE MANAGEMENT SOFTWARE 11 Advantages of RFs over Traditional Computer Systems The RF systems at Walmart are sophisticated to allow for batch processing. When compared to traditional system like a Bin Card Locator System, the RFs are more efficient (Richards, 2014). The old systems are prone to many errors. For instance, errors can occur as the operator manually writes down the wrong identification number of a product. Secondly, bin cards and documents may be lost at the data collection stand, thus, creating problems with turnaround and response time (Hompel & Schmidt, 2006). The Bin systems are expensive and hard to modify and may create uncertainties in delivery of orders. Moreover, lack of interaction with the system at the pick and put away point make most of counting strategies impractical (Van den Berg, 2007). Usually, the results are periodic and costly physical inventories. On the other hand, the implementation of RFs at Walmart’s warehouse is helping to achieve the desired flow of information throughout the entire organization. Due to the integration of RF system with appropriate technology such as warehouse management software and bar coding, many errors are eliminated at Walmart (Richards, 2014). It should be emphasized that the capabilities of RF systems provide the company with the reliable information on processes such as receiving, storing, inventory control, and just in time processing. Furthermore, applying the RF communication systems provides tools that increase accuracy, throughput, productivity and interactive information exchange (Hompel & Schmidt, 2006). Remarkably, as warehouse management software, RFs has created paperless systems such as task management with computer-based audit trails. RF is also the intuitive link to the powerful trend of bar coding and a wide variety of operating systems at Walmart (Saxena, 2003). WAREHOUSE MANAGEMENT SOFTWARE 12 Apart from that, if the warehouse is facing one or more of the following situations, it is a signal that the warehouse needs a WMS program. The physical inventories balances have a substantial difference to the book inventory (Hompel & Schmidt, 2006). Short customer orders to under stocking, late deliveries, and lost inventories. An increase in the number of customers’ complaints and cancellation of orders should raise an alarm for the management to start investing to implement a WMS program (Richards, 2014). Functions of WMS Features at Walmart Functions WMS Features Receiving Purchase order update Advanced shipping notice Scanning Self-checking of receipt information. Inspection and Notification of inspection requirements quality control Confirmation of product inspection Storage and put Reserve storage, cross-docking, shelf-life monitoring away Operator location and operator directed put away Re-warehousing Inventory First in first out management Inventory consolidation and relocation Cycle counting. Lot and serial number tracking. WAREHOUSE MANAGEMENT SOFTWARE Order entry, Order planning and scheduling. preparation, and Order confirmation. 13 picking Shipping Carrier scheduling Load sequencing Trafficking Yard management Performance Customer service reports reporting Inventory/ order accuracy reports Item activity reports Space utilization reports Automated data Fixed inventory location collection Random inventory location Lot sequence Safety stock level. Table (Richards, 2014). Notably, WMS functionalities can encompass most of warehousing activities that Walmart has streamlined (Min, 2015). In this way, the WMS fits the unique and customized functions in the warehouse. It should be noted that it is recommendable to choose a tailor-made WMS over a standard one that can support other secondary activities like inspection and quality control (Hompel & Schmidt, 2006). The use of technology in warehouse management has helped Walmart to navigate through dynamics and uncertainties in the business environment. Competition among businesses WAREHOUSE MANAGEMENT SOFTWARE 14 is becoming more intensified and globalized with the emergence of warehouse management software (Min, 2015). At Walmart, these systems are well positioned and implemented properly to assist the company in reducing business complexities. It should be emphasized that the use of WMS technology has reduced the operating costs at Walmart by improving labor productivity in two ways. First, the WMS reduces the total time associated with performing tasks, thus, resulting in increased productivity (Hompel & Schmidt, 2006). Second, productivity is improved by eliminating the unproductive or non-value-adding steps performed by the employees. For instance, a WMS will reduce hut and search times as a result of potentially high levels of inventory (Saxena, 2003). It should be noted that WMS allows for the elimination of many non-value-added steps. These benefits have in turn supported better customer service and a quicker turn on inventory. There are also financial savings in warehousing operations (Min, 2015). A focus on smart data design and restrictive tools has led to successful implementation of a WMS at Walmart. For instance, the users are trained to understand both, the technology and the organizational business processes, making a single system satisfactory (Min, 2015). Conclusion In conclusion, based on WMS adoption at Walmart, it is evident that warehouse management software has significantly improved warehouse productivity, utilization, costs reductions, and increased customer satisfaction. Secondly, WMS provides a communication system that links and improves the activities in the supply chain. Moreover, because the warehouse acts as the distribution center, when it is managed poorly, there are adverse effects such as complex management, poor customer service, and high logistics costs. The flexibility of WAREHOUSE MANAGEMENT SOFTWARE 15 information systems helps in keeping the warehousing processes with up-to-date market requirements. However, despite the numerous benefits offered by WMS systems, their effective implementation is hindered by challenges such as lack of adequate managerial support, poor funding, and inadequate training of users. WAREHOUSE MANAGEMENT SOFTWARE 16 References Emmett, S. (2011). Excellence in warehouse management: how to minimize costs and maximize value. Hoboken, NJ: John Wiley & Sons. Hompel, M., & Schmidt, T. (2006). Warehouse management: automation and organization of warehouse and order picking systems. Berlin: Springer Science & Business Media. Min, H. (2015) The essentials of supply chain management: new business concepts and applications. Upper Saddle River, NJ: FT Press. Richards, G. (2014). Warehouse management: a complete guide to improving efficiency and minimizing costs in the modern warehouse. London: Kogan Page Publishers. Saxena, J. P. (2003). Warehouse management and inventory control. New Delhi: Vikas Publishing House PVT LTD. Van den Berg, J. P. (2007). Integral warehouse management: the next generation in transparency, collaboration and warehouse management systems. Raleigh, NC: Lulu. Com.

Supply Chain Question

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