With warehouses having to be more agile and responsive than ever before to the demands of the marketplace, food and beverage companies are looking to their warehouse management solutions (WMS) solutions to squeeze more productivity, efficiency and quality from their supply chains. This means enabling visibility from supplier to food manufacturer to distributors and retailers. Yes, visibility has been there for quite some time, but today’s version is getting ever more granular.
Companies want the best technology offering the best total cost of ownership to apply to their business operations. “We see that being leveraged not necessarily with different best-of-breed components, but by taking a holistic view from an integrated perspective that accommodates logistics, distribution, and customer service,” notes Rik Schrader, senior vice president, global sales and marketing, supply chain, for Retalix U.S., Inc. in Plano, TX.
The current versions of WMS offer easy new modular integrations. “The client server systems of the ’90s came as one big executable so they were harder to swap up components individually,” says Rory Granos, global director of process industry solutions for Infor in Alpharetta, GA. “There is less a need to rip and replace with today’s versions and you can improve your system incrementally, so total integration is quicker and costs a lot less than that one big executable.”
So companies are now looking for that additional quarter of a point to one point to the bottom line, while considering the acceptable and comfortable return on investment the new systems offer. Here are four top trends in the marketplace.
THE GOLDILOCKS FACTOR
Too much inventory: not a good thing. Out-of-stocks: also not a good thing. Schrader at Retalix reports that it costs the industry about $30 billion annually for having too much inventory in the pipeline. On the other hand, the industry loses between $7 billion and $12 billion annually due to out-of-stocks, he says. So how do companies achieve the balance so they can brand themselves as top-level service providers?
Companies are focusing on a pull environment by monitoring store-level forecasting, says Schrader. Creating a highly collaborative environment with suppliers and retailers can reduce friction in the supply chain.
“It’s about having a single version of the truth shared in a real-time environment,” continues Schrader. “It comes down to deploying intelligence at the store level that not only analyzes data going through the point of sale, but also considers promotional activities while taking into account differing shrink components. Then I can know how much product needs to pass through the supply chain to assure products are on the shelf when the consumer wants them.”
A customer-centric environment requires an agile and flexible technology piece to respond to the changing needs of the marketplace, Schrader says. “It also has to be adaptable because processes change over time.”
Today’s WMS solutions have the capability to allow operators to change on the fly. “They want users to be able to take control of business rules immediately so they can make slight changes to processes to allow them to be more agile,” explains Schrader.
Whether this means moving from RF to voice technology or changing the work flow of a current procedure—these changes need to be easy to deploy.
“WMS solutions are reacting to these kinds of situations quickly, and they are deploying them to the operations staff to get that extra layer of efficiency hitting the bottom line,” says Schrader.
Schrader reports that removing the friction from the supply chain can save 15 percent to 30 percent in direct labor costs and another 10 percent to 20 percent in inventory reduction.
CROSS-DOCKING = EFFICIENT DCS
Product proliferation, especially in the beverage industry, is bursting the seams of warehouses. Because the beverage industry’s constant quest for that next great flavor or the newest size, the number of SKUs is expanding exponentially to provide these unique products and their corresponding labels, says Granos at Infor.