Benefits of an automatic storage management system

Benefits of an automatic storage management system

When companies say goodbye to their historically grown, often “crusty” warehouse structures they often uncover new potentials for optimization through these new tools. Efficient and pragmatically designed warehouse management systems not only help with finding goods in the warehouse but can also help in determining the best storage place for order picking or storing.

With the development of a company usually the required storage space also increases without existing structures being scrutinized. Especially small and medium-sized companies shy away from changing the routes the employees have become accustomed to, as to not endanger the fixed procedures and production processes. However this is the area in which there is an especially high untapped potential to reduce the necessary effort for warehouse management and shorten the distances within the warehouse. 

With the decision to use a so-called warehouse management system (WMS) all goods movements can follow one uniform and orderly process. For example the WMS solution which is offered as a module of an ERP software by a mid-sized software producer combines various articles into one joint stock order and automatically generates picking documents for production or distribution. The individually configurable proposal list of this WMS module supports the warehouse employee in selecting the storage place.

Such a proposal list enables the realization of popular strategies such as “first in –first out” for the issue of those goods first entered into storage, without having to rely on extensive inventory lists – even in the case of chaotic stock-keeping. If however, in especially urgent cases, the goods are simply to be taken from the nearest storage location, to avoid long routes, the system also offers help. For this the structure of the warehouse is recorded in a graphical interface within the WMS and the distances between the various locations are calculated. Based on this the system proposes storage locations with the shortest routes to walk to the picking employees.

Especially through the integration of the warehouse management with production planning and scheduling (PPS), purchasing or sales significant synergies can be achieved: if these functional areas interact with each other, the corresponding processes within the WMS start automatically if a certain business transaction occurs. If for example a goods delivery for an order arrives, the employees are already involved in many processes. They do not only have to handle the logistics with the supplier but additionally are busy with checking the de-livery notes and with testing the quality – an area of increasing importance. Here the use of a WMS solution which immediately activates and handles the storage process means a significant relief and time saving in the working routine.

Since many firms schedule the processing times in the production to be extremely lean it is essential that the right raw materials are available at the appropriate time at those workstations where they are required. A warehouse management system that is integrated in the production planning and scheduling is thereby able to ensure the necessary reliability in tight schedules. For example in the WMS module of the ERP solution mentioned above for this the necessary picking orders are produced automatically at the same time as the planning of a production process and scheduled for the moment of processing. Furthermore when processing customer orders automatic relocation processes can be triggered – for example the system causes the goods to be issued to be moved to a centralised shipping storage location as soon as the delivery note has been booked. The standard processes within a WMS as well as movement algorithms for individual storage locations lead to a significant simplification of internal procedures, especially in combination with other elements of an enterprise software.

Warehouse management systems also support companies in the implementation of storage strategies and help employees determine the appropriate storing location. According to specific characteristics of the goods it can be established that perishable goods are moved to cold storage and that very heavy construction components are not placed in high-bay storage. Analogous to the order picking the WM system presented as an example also produces a proposal list for the initial storage or for relocations. Storage spaces which have reached maximum capacity are not mentioned here in the first place for example. On the other hand, unused storage spaces can be especially selected, in order to optimally distribute the load within the warehouse and avoid vacancies (and with them a waste of storage capacity). Therefore often the total capacity and the productivity of a warehouse can be increased through the computer aided allocation of goods to storage spaces.

Unlike in small or medium sized businesses fixed computer workstations can most often not be used efficiently in companies with storage facilities or production floors. Nowadays printing all orders on papers is no feasible alternative either. But not only long distances to walk to the next pc terminal present an obstacle in everyday life. The time lag between the actual movement of goods and their systematic recording can distort the real situation. With this the risk arises that for example statements about the delivery capability are made based on inexact data. Some warehouse management systems therefore offer the possibility to use mobile applications for portable mobile data acquisition devices (MDA) such as barcode or RFID scanners. Inventory posting can therefore be done independent of place. If these devices are linked to the central database vial wireless inter-net or mobile phone network all posting transactions are done in real time. This way the inventory and order data are always available and up to date in the system. That having access to information early allows a company to gain a head start regarding reacting, is obvious.

As far as storage management is concerned a warehouse management system has not been a black box for quite some time. Rather the many WMS tools available in the market place are powerful aids - not just for employees in the warehouse but also for those in manufacturing, in purchasing and distribution. A decisive advantage is that there are uncomplicated possibilities to take into account company specific requirements regarding goods movements, to optimise the warehouse structure and reduce costs in a sustainable manner.

Authors: Nicolas Ziegler and Anna Seel, ERP consultant and PR manager at Industrial Application Software GmbH