WMS Systems Heat Up the Cold Chain
By Tom Kozenski and Jeff Behn
Food companies today have to deal with several factors that affect the way they can manage the "cold chain" for their refrigerated and frozen foods.
With rising energy prices, it is imperative that food companies effectively manage costs on everything from the warehouse to freight and transportation. Throw in the untimely recall and it becomes apparent how quickly a cold chain can cast a chill on a food company's profits.
That's why many food companies are turning to Warehouse Management Systems (WMS). A decade ago, WMS was primarily used to eliminate paper-based processing, perform real-time location management and automate existing warehousing practices.
Fast forward to today. WMS now includes task optimization, proactive alert notification, freshness tracking and advanced lot, code, and date management. These advances have enabled food companies to find much more efficient, safe and cost-effective ways to store and transport goods.
Food companies have several things to consider as they decide how best to manage their cold chains with WMS. For instance, they should be able to track raw material inventory from plant storage through manufacturing, all the way to the finished product. Failure to do this makes it almost impossible to trace items in a recall.
WMS solutions today provide these kinds of sophisticated inventory controls. They can also include RFID-enablement and superior product rotation, freshness, lot control, catch weight, date control and even variable aging capabilities.
Many people in the food industry today still think Enterprise Resource Planning (ERP) systems, many of which come with their own WMS modules, are the answer to their emerging cold chain challenges. Sure, a single integrated ERP approach sounds attractive and at face value may even seem cost-effective, especially to the CFO.
However, WMS operations-and specifically cold chain requirements-are often too complex for ERP systems to handle, especially when companies consider the sophisticated inventory controls that are required. And that can become critically important in the case of a recall.
Another concern food companies have today is how the WMS will integrate with its existing Electronic Data Interchange (EDI) and third-party billing. Not only do billing statements have to be accurate, but they also have to be supported by detailed warehouse data, which today's WMS solutions can provide. WMS also supports third-party billing end-to-end within the facility for all services, quality checks, picking, loading and storage, providing billing visibility throughout the cold chain.
Still, WMS systems should not exist in a vacuum. WMS solutions must be integrated with the other supply chain solutions the company uses. In the past, some food companies used manual procedures or siloed systems to manage everything, including distribution, workforce, slotting, yard management, transportation management and fleet operations.
That almost always leads to disconnections that are inherently inefficient and lead to customer service complaints. These can be answered by integrating all supply chain solutions and process workflows with "glass pipeline" visibility, which makes distribution and transportation one seamless loop.
One final concern that has come to the forefront in the past few years has been the environmental impact of the cold chain. Historically, compliance with Food and Drug Administration (FDA) and other government regulations-including environmental controls-have been improved through WMS solutions.
However, going green is no longer just a trend. It is a regulatory, economic and consumer requirement. That's why food companies today are using WMS to increasingly track and measure their carbon footprint. Not only is it good for the environment, it's good for business.
While energy prices are expected to continue their rise and recalls-especially with refrigerated and frozen foods-will not be going away anytime soon, forward-thinking food companies will leverage WMS to effectively manage their costs throughout the cold chain, from the warehouse to freight and transportation.
The innovations they realize will eventually enable the industry to realize total visibility of goods-from manufacturing through distribution centers and warehouses, all the way into the stores and restaurants. And that visibility will heat up the cold chain's impact on food companies' bottom lines.
Kozenski is a vice president of product strategy at RedPrairie Corp., Milwaukee, and can be reached at Tom.Kozenski@RedPrairie.com. Behn is a sales leader with a specific focus on companies in the cold chain. He can be reached at Jeff.Behn@RedPrairie.com.