Warehouse of the Future: The Importance of an Integrated and Autonomous Supply Chain System – Part 3 of 3
In part 1 of this blog series, we took a look at how innovation is changing the supply chain and the evolution of different warehouse types and processes. Part 2 of the series took a deeper dive into the adoption of technology within the distribution center (DC), how technological innovation processes in DCs are poised to change over the next few years and the path and obstacles to automated DCs. Part 3, the final part of the series, will go into further detail around integrated solutions and the importance of an autonomous supply chain.
Integrating planning supply chain software, coupled with execution solutions, such as warehouse management systems (WMS), can help optimize supply chains. An organization with integrated supply chain planning and execution solutions can be “constraint aware.” This type of awareness can help organizations determine critical information across their supply chains and optimize for a total systems solution covering several different software platforms. Organizations can combine planning software, such as demand planning, forecasting, distributive order management with execution software such as transportation, warehousing and labor management and be “intelligent fulfillment constraint aware” from a warehousing perspective. An organization that’s “intelligent fulfillment constraint aware” can analyze input parameters based on operational best practices and then define how to optimize that within the warehouse.
In order to deal with future and continuous changing customers demands, having integrated supply chain solutions across planning, inventory management, transportation management and warehouse management will be a requirement. Software solutions will need to be constraint aware to provide a real end-to-end solution. Many customers today can’t take advantage of integrated constraint aware solutions because they have not yet invested in software that will work together very well, or they have enterprise resource planning (ERP) solutions that are both expensive and difficult to adjust.
WMS solutions are also increasingly moving to the cloud. It’s predicted that by 2020, 90 percent of spending on new WMS will be in the form of cloud-based systems. System deployment time and complexity has been greatly reduced, and reliability has improved. Moving to the cloud has resulted in greater organizational flexibility because necessary infrastructure to roll out a WMS or other supply chain system does not have to be continuously rebuilt for each application of the system.
WMS, WCS and WES Solutions
To extend the execution capabilities of WMS solutions, organizations have sought to implement warehouse control systems (WCS) and warehouse execution systems (WES) solutions inside their distribution centers.
WCS are smaller, more specialized solutions that typically sit below WMS solutions. Their objective is to manage material handling technologies such as conveyors, automated storage and retrieval systems (AS/RS), carousels, scales and sorters, etc. These are automation equipment subsystems that need instructions that is typically managed on the equipment levels but a level of control that is not available in the WMS. A WCS contains logic so that WMS don’t have to manage all the intricacies of the automation equipment subsystems.
Some WCS solutions have increased functionality and have taken on small portions of WMS functionality. These enhanced WCS solutions have become the foundation of more comprehensive WES solutions. WES solutions include material handling management and control capabilities. They also might include intelligence so that the picking and put away functions can be optimized within, for example, a pick-to-light or put-to-light system, or another material handling system. A WES augments the WMS when it comes to items such as waveless order picking. Waveless order picking can be critical if the firm is moving to an e-commerce environment and picking individual units instead of pallets.
The move to omni-channel retailing means that warehouses are less able to batch orders into large waves. WCS providers are becoming more aware of the operations beyond the material handling technology and so WES solutions are being developed to blend functionalities between WMS and traditional WCS. WES are smarter, more aware of what is happening in the facility.
For larger, complex operations that include a high degree of automation, both a WES and WMS are going to be needed. WES is not usually going to be a replacement for WMS. And, in the future, it is foreseen that WMS will include enough intelligence so that WCS/WES can be rolled into the WMS solution. This integration could relieve some of the pressure off implementation and will reduce the costs of running multiple “warehouse management oriented” systems in one facility. If a firm has heavily automated solution needs to be integrated with their management systems, approximately 20 percent of their effort on the project will be applied to simply enable integration.
In the future, there may be standard messaging systems developed that will allow for simpler integration of warehouse or manufacturing automation and their management systems. The warehouse execution of the future will likely include artificial intelligence capabilities such as cognitive computing and machine learning, and may also contain automation control knowledge in larger amounts than they do currently.
Analytics and Warehouse Automation
Optimization and analytical systems are being built into WMS systems and their connected software. So, if it is more cost effective to ship from a supplier to a store than supplier to a customer the optimization and analytical systems should be able to sense the resources and constraints and execute to best outcome. Through WMS and other related solutions, there may be a way to receive items and not specifically identify the destination or channel. Based on a layer of analytics, the system will pull the product based on a demand signal in a cost-effective manner. Automation will facilitate based on predictive analytics.
It’s likely that analytics are going to help coordinate movements and storage locations within the warehouse, but also have an impact beyond the four walls of these facilities. In the future, analytics will help manage inventory across the supply chain system and not just inside each facility. Ideally, they will contribute to define routes to customers and identify locations where items should be placed. For instance, if a firm has a retail store presence, the warehousing capabilities of the future will require having strong analytics to not only optimize order fulfillment but also sort, assort, and place inventory in the right locations. If a firm has slow moving items that are fast moving in one supply chain location and those items are not placed at stores or vendor warehouses at the right time, they will draw excess costs.
The Evolvement of WMS
WMS is evolving from software that is used to manage receive, put away, locate, pick and ship products to sophisticated systems that allow for “what if” analysis, provide active, constraint aware, warehouse activity planning and tight integration with the rest of the supply chain software platforms and its supply chain. WMS solutions are increasingly under pressure to operate in environments where labor supply is tight and more difficult to manage. Companies are more and more viewing their WMS as strategic investments to enable them to compete.
Learn more by downloading The Warehouse of the Future report.