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ap improvements to IM and WM functionality 1 Define Business Processes (cont.) “ The level of functionality that customers need in a WMS is pletely dependent upon their environment. Customers have to define their needs before they can realistically look for a WMS.” Source: Integrated Solutions Step 2 Evaluate ROI of a WMS Solution Measure productivity and accuracy before and after the WMS installation Review and analyze picking operations ? Key area of improvement Review and analyze inventory accuracy ? When supported with RF, accuracy can reach 98% 2 Evaluate ROI of a WMS Solution (cont.) “ There is no ?right? time for paying back a WMS, but typical paybacks are within six to 18 months, depending on the inefficiencies of the current operation and how much safety stock was needed to cover daily operations.” Source: Total Supply Chain Step 3 Consider RF Functionality RF supports improves warehouse bin accuracy ? Bin accuracy 98% is possible Reduces order fill process cycle time RF projects often have a 1 year or less payback period Source: Intermec Compare current receipt process to the time saved when the task is aided by automatic data collection (ADC) 3 Consider RF Functionality: Example Asis ? 1,000 pallets at five minutes / pallet = 5,000 minutes With two minutes saved per pallet ? 2 minutes * 1,000 pallets = 2,000 minutes ? 2,000 / 480 minutes worked by each receiver per day = receivers saved from the pallet receiving process Step 4 Training Resources and Schedule Resources to evaluate, guide and support a WM solution ? A fulltime, dedicated WM resource is critical ? This may or may not be the same IM resource Training schedule ? A WM solution will require a certain level of IM training ? WM training will vary based on the degree of functionality Support resources ? Consider a single resource for IM and WM if possible 5 Optimization Opportunities Picking operations and inventory accuracy ? What are your baseline requirements ? What is the volume of activity ? Evaluate picking paths and demand ? Look at your accuracy numbers over a period of time – Perhaps monthly, quarterly, annually Material handling labor costs Space utilization improvements Packing tasks ? Can you benefit from packing while picking What is the BEST Stock Management Solution? 1 Inventory Management 2 Lean Warehouse Management 3 Full Warehouse Management 4 Decentralized Warehouse Management Option 1 Inventory Management Pro?s ? Simplistic – Key receipt, issue or transfer in a single step transaction – Immediate update of inventory ? Requires less training mitment – Fewer transactions to document and present ? Traceability of all material postings into SAP R/3 – Date, user, material, quantity, storage location ? Realtime update of accounting information 1 Inventory Management (cont.) Con?s ? Does not handle plex warehouses operations well – Unable to monitor activities – Lacks tools to manage resources and tasks – Lacks functionality to optimize key processes (picking) ? Inaccurate system inventory – Inventory updated before the physical movement – Requires additional work if there are discrepancies ? Limited traceability – Only visibility is when the system posting took place – No visibility to the follow on physical activities Option 2 “Lean” Warehouse Management Use of very small portion of WM capabilities ? You do not process goods receipts or issues as a subsequent process in WM, ? No storage bins are managed in the WM application Evolved from SD pick list Putaway and pick from 1 or more fixed bins Bin is hard assigned on material master TO?s are created for picks and put away, and pick list is created from TO?s 2 “Lean” Warehouse Management (cont.) Pro?s ? Requires less configuration than full WM ? Reduced number of steps in the process – Use of transfer orders as pick lists – Confirmation is not required ? Additional processing options – Confirm putaway, picking, overdeliveries, shortages, batches – Print transfer orders – Integration to HR ? Additional picking functionality – Wave picking is possible with Lean WM 2 “Lean” Warehouse Management (cont.) Con?s ? Must ha