“At the warehouse level, every one of those product derivations has to get stocked and that is when you run into the challenge of successfully turning your inventory,” says Granos.
These companies are also active merger and acquisition participants. All of these activities challenge warehousing space, forcing managers to become innovative in optimizing available space so they don’t have to think about investing in additional warehouse construction.
“To deal with these situations, we see increased usage of cross-docking,” says Granos. There is also an increased use of wave picking or RFID to move products through the warehouse more efficiently in order to achieve full truckloads on the outbound.
Companies are monitoring more closely what is happening at the store level and they are tracking their inventory a lot better.
“You want to be able to move your hotter products that keep flying off the shelves onto a pallet and get them loaded onto a truck with as few steps as possible. The way to do this is through cross-docking,” says Granos. “If you had to put those products away and then pick them, you add time and costs and you end up with fewer full truckloads on the outbound, which will increase your operational costs.”
The most important thing, continues Granos, is to have the right inventory on full trucks.
Asset management is also an important consideration, adds Granos. “Preventative maintenance assures your forklifts and conveyors are ready to use when you have a truck waiting at your dock door.”
SEEKING COMMODITY PRODUCTS
Lot management and control has long been of interest to the industry, but focus in robust track-and-trace capabilities is expanding into commodity products, particularly to vegetables, reports Richard Kirker, director of SCM solutions management for SAP Labs LLC.
“The recent salmonella outbreaks in lettuce and spinach have urged companies to be able to trace back to the original farm where the contamination may have occurred,” explains Kirker. “We saw the same kind of thing when the meat industry had to deal with avian flu. Now this industry has to be able to track back to certain ranches or farms.
“We see this activity happening more with vegetables now. So having solutions in place—or at least starting to think about increased track-and-trace requirements—is probably a good idea.”
Kirker says SAP’s robust functionality in the pharmaceutical industry is giving the company traction in disparate industries—including the food industry.
“From an operational standpoint, this requires a lot of discipline in the ability to capture data,” he says. “This also requires a significant organizational change and there has to be change management in controlling your products to this degree. This is a pain point for some companies.”
The major changes include controlling inventory at a more granular level. “When you switch to lot control, you have to make sure each product is labeled and you can’t commingle products if you want to track them effectively,” explains Kirker.
“You also have to be able to share all the data across the enterprise and locate a lot quickly for a recall or a trace. You have to control discrete batches with a system that will reduce the impact of a recall. Then from a regulatory standpoint, the demands are increasing to have this data and to produce it quicker. So there is an organizational impact and you have to have the proper tools in place to do this.”
If this infrastructure is not in place, companies can face going out of business, as was the case for a meat company facing a major recall. It did not have a good system for tracking and tracing. “They had to recall a year’s worth of production because they couldn’t accurately determine which lots the problem occurred in,” Kirker says. The company went out of business and subsequently was acquired by a competitor.
VOICE, LABOR MANAGEMENT TRENDS
The trends in WMS technology are driven by two main engines: efficiency and quality. Voice and labor management are two solutions designed to achieve these goals, whether they are used independently or combined with one another, says Keith Menking, vice president and general manager for WMS at AFS Technologies in Dallas.