While every part of the supply chain is important, let’s take a moment to consider the tough challenges facing warehouses today. Warehouses sit at the heart of the supply chain, fulfilling customer promises and playing a critical role in driving satisfaction and repeat sales. Warehouses also represent a huge, and growing, cost center. And let’s not forget that they have a significant impact on sustainability results.
Logistics teams have a hard time optimizing warehouses for cost, service, sustainability, and other metrics even in the most stable business environment. And today’s landscape is anything but stable. Operating costs are skyrocketing. Labor shortages are only worsening. Disruptions have become the norm. And, amid this chaos, customers’ service expectations are steadily growing.
The world’s leading manufacturers, retailers and logistics services providers (LSPs) have already realized the value of advanced warehouse management system (WMS) solutions to achieve visibility and control, streamline processes and improve efficiency across the distribution network. But increasingly they’re adding a new capability — a warehouse execution system (WES) — to optimize performance in today’s complex, disrupted environment.
What exactly is a WES? And why do companies need one? These questions were the focus of a recent LinkedIn Live event called “Warehouse Execution System: A New Competitive Imperative.” Joining me for the event was Joe Kozenski, Product Director for WES at Blue Yonder.
WES: The Brain of the Warehouse
“A WMS provides a set of rules, algorithms and processes that define the core of your warehousing business,” explains Joe. “This is a critical tool of the warehousing toolbox but a WES adds an extra layer of intelligence and cognition. Think of it as the ‘brain’ of the warehouse. It applies advanced artificial intelligence (AI) and machine learning (ML) to create dynamic plans and resolve problems like disruptions — based on real-time signals it’s gathering from across the warehouse.”
According to Joe, a WES is purpose-built to seamlessly orchestrate work across all warehouse resources — both humans and machines — in a dynamic manner as conditions change. It uses advanced technology to continuously improve speed, accuracy and profitability across the warehouse, with minimal human intervention. In an age when disruptions have become commonplace, a WES autonomously finds an optimal resolution that maximizes cost, service, sustainability and other outcomes — while taking real-world constraints into account.
“Let’s say a carrier is making a pickup at 5 p.m., and the entire warehouse is already enacting a plan for getting hundreds of orders out that day. That plan has been carefully defined, based on specific task assignments, the facility’s physical layout, the human and machine resources available, travel times and established task completion times,” says Joe. “That’s an incredible feat of orchestration already that was done by the warehouse supervisors, managers and experts.”
“But now a disruption occurs,” he continues. “An employee comes in late or leaves early. A picking robot breaks down or runs out of a charge. A scheduled incoming delivery never shows up. A rush order comes in from a top-tier customer. The carefully defined plan is thrown into chaos. These are too many variables to manage in real time, which is where the WES comes in for assistance.”
“What’s the best resolution, across the warehouse? Literally thousands of calculations might be required now. While that problem exceeds human cognition, it’s easy for the WES,” Joe notes. “The WES applies analytics and starts reassigning tasks — based on cost, service, sustainability, and other outcomes. It automatically and immediately matches labor, robotics, equipment, and other resources with a newly defined set of priorities, in real time.”
The Value of Decision Automation
Joe points out that “warehouse automation” is a term that usually refers to using robots to accomplish physical work. But a WES delivers decision automation, which is equally important in today’s complex and volatile warehouse environment.
“More than ever, the warehouse needs to constantly change course, seamlessly and in concert, as conditions change,” Joe stresses. “That ongoing course correction can’t be driven by time-consuming, error-prone manual analysis. Instead, the WES automatically senses a disruption and accurately chooses the right corrective action to keep end-to-end operations on track. It even pulls the execution lever. And ML makes the WES smarter all the time. This shifts the dynamic to for your workforce to manage the whole process to managing the exceptions or decisions that aren’t automated responses.”
According to Joe, the WES doesn’t just solve real-time problems, but it also tackles longer-range planning challenges. If a warehouse needs to process 40% more orders to meet short-term seasonal demand, the WES can figure out how to enable that volume increase. It creates and tests a variety of scenarios, from adding new employees to onboarding new robotics. The logistics team can then choose the optimal course of action moving forward.
Applying Advanced Technology in a Practical Way
“Customers are always approaching us with an interest in increasing their investments in AI, ML, data science, and robotics,” states Joe. “But they don’t want to use advanced technology just for the sake of using advanced technology. They want to see practical value from those investments. Frequently, they’re looking for the smaller investment opportunity to test or validate some of these principles out before investing in a full warehouse implementation and multi-million dollar cost.”
“Customers are asking really pointed questions like, ‘How do we get the most out of our existing workforce since we can’t hire more people? How can we maximize the return on our robotics, which were expensive? How should we be using all the data we’re getting from the WMS and the OMS?’” he says. “And those are really great questions.”
“Blue Yonder’s WES has been designed specifically to meet all those practical customer challenges,” Joe emphasizes. “It’s built to ensure work is completed efficiently and accurately. It’s built to deliver customer orders quickly and profitably. But it’s also built to maximize the utilization and financial return of every warehouse resource, from human employees and equipment to robotics systems.”
“Customers who are implementing WES in their warehouses tell us they can’t imagine going back to their old ways of managing the warehouse,” Joe concludes. “The results — including significant improvements in cost, service and throughput — speak for themselves.”
Next: Tips for Choosing the Right WES
In my next blog, I’ll highlight Joe’s advice for choosing the right WES solution. We’ll look at the key capabilities that should be provided by a best-in-class WES. Until then, watch our LinkedIn Live event or read my recent Logistics Viewpoints article on this topic.
