Impact of Digital Transformation on the Warehouse



Introduction

Digital transformation is the one of the key trend in modern warehousing. To meet rapidly changing buyer expectations every manufacturers, distributors and retailers need to channel the data throughout the supply chain

Today everyone expect to able to locate products be it customers, B2B buyers or retail customers. They want to access real time inventory levels, and track their orders from the warehouse to their doorstep. Customer expects their orders are delivered in timely manner and not to find out later item is out of stock or delivery is delayed due to an error at warehouse end.

The majority of this places huge interest on the IT and warehouse operations. Clearly, no organization can explore the unpredictable waters of digital transformation without first converting all of its supply chain information into digital data. The present warehouse can't stand to have paper in any of its work processes. Tomorrow's warehouse will require continuous computerized inventory network information associated with the Industrial Internet of Things (IIoT), so as to serve clients, accomplices and providers.

Supply Chains Today and Tomorrow

Generally focused on decreasing costs, supply chain management (SCM) and the related innovation are currently used to drive development and alleviate dangers. This move in center requires a digital transformation of SCM. However, this is confounded by divergent endeavour programming framework scenes, worldwide tasks, huge information volumes, and the vulnerability in regards to information quality and respectability.

Today Tomorrow
Manual data gathering across systems / roles Real time Connections
Manual Collaboration Digitize Collaboration & Scenarios
Manual "What - If" Scenario Creation Automatic Simulation
Cadence - based planning and decision – making Continuous event - driven planning and decision – making
The State of Modern Warehouse Management
  • 40+% of IT and Operations decision makers say that meeting the need for shorter delivery times will require warehouse investment.

  • 6% year over year (YOY) increase in starting pay went to warehouse workers in 2017 – more than double the increase received by other types of hourly earners, as competition for skilled warehouse employees tightens

  • 82% of operation managers expect an increase in inbound items that will be bar-coded by 2020

  • 75% of IT and operations decision makers plan to move to a warehouse management system by 2020 to help manage more locations and an increasing number of items shipped.

  • 76% of executives expect to invest in real – time location systems (RTLS) that track inventory and assets throughout the warehouse by 2020

Symptoms of warehouse in need of optimization

There are many signs that warehouse inefficiency or inaccuracy is having a negative impact on business. If warehouse is suffering from one or more of these problems, it’s time to think about new technology to automate slow processes and improve accuracy.

  • Paper – based processes that require keying inventory transactions into the ERP system

  • High rate of order errors and customer returns

  • Costly shipment errors that result in missed customer expectations.

  • Inefficient utilization of warehouse employees.

  • Low morale among the warehouse workers and managers.

  • Overstocking or stocking out of inventory items.

  • Messy warehouse resulting in lost inventory and/ or worker injuries.

  • Misplacing or losing inventory after it’s been received.

  • Too many inventory counts.

Four steps for transforming the warehouse into the digital Supply Chain
  • Get rid of paper – based processes by wireless barcode scanning devices.

  • Optimize the movement of goods in your warehouse and routes taken by your workers with a warehouse management system.

  • Shorten learning curves and dramatically improve productivity by instituting paperless picking in warehouse.

  • Embrace industry 4.0 by creating an IIoT strategy and incorporating new connected technologies into your supply chain, such as sensors, robotics, 3D printing, last – mile solutions, and augmented reality.

Eliminate paper – based processes with bar-coding

Nothing slows down your warehouse like paperwork. Whether it’s walking around with paper pick list or checking off items in receiving on paper purchase orders, the potential for human error is high. Paperwork can be misplaced. Handwriting can be hard to read. Assuming you have an ERP system, the information will all have data to be re-entered later, introducing more possibility for data entry error.

An automated data collection can utilize barcode labels or RFID tags in combination with Hand Held Terminal devices to update real time metrics and validate data integrity. With bar-coding, there’s no more walking the warehouse with a clipboard and making notes on paper to type into the computer later. Now, everything will update in real time.

Speed and accuracy are two primary advantages of bar-coding over paper note taking or even entering information on a keyboard. Barcode scanning is fast—five to seven times faster than keying data into a computer and much faster than writing by hand. While keying data generates one error for about every 300 keystrokes, barcode scanning has an average error rate of one in three million. That’s an accuracy increase of 10,000% with barcodes

Warehouse managers and IT personnel acknowledge the need to increase automated data collection usage in the warehouse. A recent survey of IT and operations decision makers found that 68% plan to make investments in barcode scanning.

Motorola conducted a survey that revealed increasing automation in inbound and outbound handling is one of the top five opportunities to improve warehouse alignment. Their report states the need for increased efficiency requires “more bar-coding” and supplier “support for more automated processes” and went on to predict that the number of bar-coded items received at a warehouse or distribution center would reach 84% by this year.

Benefits of Automated Data Collection with Bar-coding

Implementing barcodes in your warehouse and using an automated data collection system will:

Improve Accuracy. When you eliminate the confusion of handwritten communication and the typographical errors from manual data entry, accuracy increases.

Increase productivity. Scanning barcodes is much faster than making notes on paper. An automated data collection system will send the information collected from the barcodes straight to your ERP, so you also eliminate the time previously spent rekeying data.

Reduce labor costs. Since each warehouse worker can accomplish more with automated data collection, your business can grow for a while without having to add people.

Help leverage your ERP system better. Bar-coding with automated data collection improves the quality and timeliness of the data in your ERP, so people throughout your organization can have a real-time status of inventory and orders.

Help ensure compliance with government regulations. Certain industries such as finance, aerospace and defence operate under strict government rules with costly penalties for compliance failures. Barcode scanning improves the timeliness and accuracy of data collection in your warehouse and provides a trail of who, what and where in your ERP.

Increase the tracking and traceability of products. In the event of a recall, the challenge is to quickly identify affected products and find where they are physically located. Automated data collection solutions keep track of lot numbers, batch numbers and serial numbers, so you can trace exactly where recalled products have been shipped.

Implement a Warehouse Management System

After you’ve gotten the paper out of your warehouse, the next level of efficiency comes from implementing a Warehouse Management System (WMS). A WMS provides opportunities to increase the productivity of the warehouse without adding staff

A WMS helps you plan your warehouse for better utilization, locating higher-volume items in easier to reach places. A WMS can direct picking and put away operations to increase the efficiency of how your workers move through the warehouse. It can enforce warehouse rules for quality, such as first-in, first-out (FIFO) rules that keep items from expiring or becoming obsolete.

Benefits of a WMS

A WMS shares many of the same benefits as an automated data collection solution, including even faster speed and better accuracy. However, a WMS delivers additional warehouse productivity in some strategic ways. The right WMS system will help you:

Enhance tracking and reporting on key warehouse metrics. This can help you see how many times per year each item is moved or picked.

Optimize routes employees take through the warehouse. Minimizing the crisscross of your warehouse will save time and increase the productivity of each worker.

Utilize space more effectively in the warehouse. A WMS will optimize inbound receiving for new items, so that fast-moving items are put away in preferred locations, for example at the end of aisles or nearest the shipping dock. A WMS will also send items to special locations—for example sending frozen items to a freezer or intact pallets to box storage.

Lower cycle times. Fill sales orders or work orders faster. A WMS can analyze a pick and split a large order between employees or send parts of orders to multiple locations if inventory on hand at one location is insufficient.

Increase the visibility of your inventory. What are you using or selling the most? Are there some key items that your warehouse stocks out of too often? A WMS increases your visibility into inventory, so you can run leaner and increase your inventory turns.

Speed up picking and fulfillment. Directed picking lets employees know exactly where they need to go. They don’t have to search shelves or bins for the items they need.

Meet the special demands of customers. A WMS can support special labelling needs such as license plating and facilitate EDI to match the trading requirements of customers.