"Grocers are looking to synchronize the inbound and outbound so that the DC becomes a flow-through facility. They're finding that their old batch systems are a plug in the pipeline because they can't do this real-time inventory matching," he continues.
"These batch systems are unacceptable in the new demand-driven supply chain. The key has to be an ability to interact with the fleet, the yard, the transportation management system, etc."
Unlike older systems, the more modern WMS solutions "extend visibility upstream so customers can anticipate demand, allowing them to adapt to changing customer needs and generate a higher return on their inventory investment," says Jeff Mitchell, executive vice president of Manhattan Associates. "When you're dealing with perishable items, effective inventory management and accurate forecasting are essential."
It also has to look at the world in general, as many companies adopt a more global supply chain that includes sourcing from abroad and outsourced manufacturing, which often requires raw materials to be shipped from a supplier in one country to a plant in another, the semi-finished products to be sent somewhere else for finishing, and the finished product to be sent to warehouses and retailers all across the world.
"In food, globalization is big right now. We're also seeing a bigger presence by [third-party logistics providers], and a greater amount of [direct store delivery]. Then there's voice, which has really taken off, allowing companies to work faster and increase accuracy in order picking. You need solutions with that kind of reach," adds Eric Nilsson, senior director of solutions management at SSA Global, Chicago.
Other supply chain applications in the food industry include labor management, yard management, fleet and transportation management, demand planning, forecasting, scheduling, temperature logging and a lot more. Many older systems simply do not support those types of applications.
"They use databases that have limited capacity," says Marin of Retalix. "There are also less redundancies when you have more modern systems.
"They also do not incorporate voice, radio frequency, etc., and if they do, they have to be heavily modified. You have to look at each of those different applications and customize around them, and that adds to the cost and time to implement," he adds.
Systems also need to be able to support hundreds of users at the same time, and many of the older systems couldn't do that. "This kind of throughput was previously limited to more expensive AS400 and Unix-based systems running custom or vendor-configured code," says Ann Price, president and CEO of Motek, Beverly Hills, CA. Warehouse managers "are tired of being unable to support or upgrade complicated, customized software."
Keeping It Food-Specific
According to KOM's Wulfraat, until now, many food companies have continued to use their old, outdated WMS solutions because they did not have the money to invest in replacements or upgrades. "This is a very conservative industry with tight margins that is not spending a lot of money," he says. "Often, there's not a lot of money to invest."
Companies are also sticking to their old systems because of the amount of customization that went into them during the initial implementation. "When you've gone through the heartache of choosing and implementing a solution and getting it to work with all your other systems, you don't want to touch it," Wulfraat says. "The tendency is to put it in and leave it there for 20 years."
Then there is an underlying fear that no solution can do all that is needed. "When you talk about grocery, you have very different requirements," he explains.
"You can't take a generic distribution package and make it work in the food industry without major modifications," adds Marin.
"Food is very much a niche business with a lot of idiosyncrasies that you do not find anywhere else. You need solutions geared to the food industry because of those unique idiosyncrasies."
Among them, according to Marin, are expiration dates, weighted items with random catch weights, seasonality, temperatures, rebates and bill backs, backhauls and the need for tracking and tracing.