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Warehouse management systems - Essay Example

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Warehouse management systems (WMS) are a combination of software, firmware, and hardware that facilitate efficient distribution across the supply chain and are becoming increasingly necessary for operational processes. This is primarily due to the fact that in a highly-competitive business environment, supply chain efficiency can make the difference between profitability and loss…
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Download file to see previous pages The modern warehouse can ill-afford to ignore this important resource.
The key focus of SCM is to get the right part to the right place at the right time. WMS facilitates this process by dramatically increasing the accuracy of inventory management, control, and distribution. For example, when parts are received at a warehouse facility, a good WMS can "check the bill of lading against the items actually received, [and] any discrepancies can be noted through the audit trail" thereby allowing management to track items that have been lost in transit (Gladston 40). It goes without saying that it is impossible to ship the right part from the warehouse facility if the item never actually made it to the warehouse. When the system generates an audit trail document, facility employees can quickly and easily identify the problem and resolve it. Thus, system accuracy is greatly enhanced through WMS. If, as in the case study, a facility that is holding more than 85,000 stock keeping units can obtain 99.9% accuracy, the impact of such a system is significant.
Another reason why WMS is critical to operations is its ability to allocate storage locations of parts and supplies within the facility itself. Businesses that move a high volume of parts through their supply chain must focus on improving "the efficiency of warehouse management (especially space)" to avoid the logistical difficulties that would be present in a poorly-designed facility (Cortada 292). In the case of Toyota, the ability to allocate warehouse space according to the part's size and frequency of demand was a major contributor to the system's success. For a company like Wal-Mart, which uses centralized distribution centers to serve its many outlets, a WMS that streamlined facility space allocations by creating inventory zones would create a scale of supply chain efficiency that could save the company millions of dollars a year. In the same way that it is impossible to move the right part from the warehouse if it hasn't arrived, it is equally difficult to do so if management knows that it has the part in the warehouse but isn't sure where it is. The organization of storage and product flow throughout a warehouse facility is so important that if a WMS did only that, it would be worth the investment. The advantages of a WMS, however, go beyond the ability to track and store inventory. As the systems become more sophisticated, they are able to increase supply chain efficiency in many other ways.
As noted in the case study on Toyota, the WMS not only tracks position within the system, but also produces a tag label giving part details and locations. A dealer direct order capability, when combined with overall supply chain efficiency, leverages warehouse management to a much higher level. As one author notes, "WMS functionality will continue to broaden... with an increasing focus on dynamic optimization" to a point that will "enable the system to ship product without ever actually receiving it" (Hoctor and Thierauf 238). The ability to optimize a company's operations to the point that supply-chain subsystems are integrated across the entire platform is what makes a good WMS more than just a ...Download file to see next pagesRead More
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