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SUPPLY CHAIN MANAGEMENT Distribution centres – The epicentre of supply chain transformation

May 17, 2021

Ushasri Tirumala, Senior Vice President & General Manager, Manhattan Associates - The dynamicity of supply chains is constantly evolving, especially with customer shopping expectations changing. The new-age supply chains must embrace the new way of thinking about growth and profitability and change the optimisation circuit of warehouse and inventory management. In this article, Manhattan Associates – a best-in-class global solutions provider for supply chain leaders- organisations intent on creating enduring market advantages by leveraging their supply chains – explores embedding modern Warehouse Management Systems (WMS) with Warehouse Execution Systems (WES) to keep productivity and customer satisfaction at high and cost at low.

Customer-focused digital marketplaces have changed shopping expectations for consumers and, in turn, forced retailers to think differently about their business models. They have responded by starting new fulfilment methods, such as Buy Online Pick-Up in Store (BOPIS), in-store fulfilment and the likes. In this highly competitive and connected economy, the lines between online and offline shopping are blurring. Customers expect a seamless interaction with brands, regardless of the channel, whether they walk in, buy online and pick up in-store, want a curbside pickup or take advantage of any one of the store-based fulfilment experiences.

Modern warehouse management systems

Modern retailers must be able to profitably facilitate demand being fulfilled in new ways across the store network. They must embrace a new way of thinking about growth and profitability through the changing lens of warehousing and inventory optimisation.

The Warehouse Management Systems (WMS) are at the heart of supply chain innovation. They help orchestrate inventory management, execute order fulfilment and maximise the utilisation of every warehouse resource – associates, robotics and automation. The right WMS maximises warehouse resources by assigning work the moment an asset is available. Through optimisation algorithms and Machine Learning, it monitors people, equipment and inventory in real-time. Instead of using guesswork, the solution knows exactly when the work is finished and assigns new tasks immediately. Modern Warehouse Execution Systems (WES) need to be embedded within a WMS to efficiently and seamlessly orchestrate workflow across the full spectrum of resources.

Fulfilment options like next-day and same-day shipping – coupled with the continuous flow of online orders – mean warehouse priorities must constantly shift. With wave-only technology, it’s extremely difficult to change or add anything once work is released. A truly advanced WMS utilises waveless order fulfilment, i.e., order streaming, to enable a level of agility and flexibility that traditional technology can’t offer.

Order streaming includes built-in intelligence to reprioritise on the fly. The ability to rearrange tasks, shift resources and put urgent work at the front of the line is critical. Keeping productivity and customer satisfaction high and costs down requires a warehouse that is constantly dynamic.

Leveraging automation to improve warehouse and fulfilment centre operations

The increasing prevalence of e-commerce and Direct-to-Consumer (D2C) fulfilment, coupled with challenging labour markets, are putting immense pressure on companies to improve fulfilment centre operations. Companies are increasingly investing in flexible automation enabled by modern Autonomous Mobile Robotics (AMRs).

Historically, meeting peak demand workflows meant flexing capacity by throwing bodies at the problem. The more people in the warehouse and/or fulfilment centre, the more capacity increased. However, this becomes both a significant challenge and a very expensive proposition in today’s labour market. The scarcity of workers today has increased competition for the available labour and driven up temporary labour costs.

AMRs address this challenge by completing tasks humans traditionally would have handled, such as pushing carts or, in some cases, picking from shelves. This allows people to focus on other, higher-value activities. And because many of the AMR vendors are willing to provide their robots ‘as-a-Service’, customers can now deploy additional robots on demand. So, companies can scale their operation without the need to increase capacity through labour. Most AMRs are not designed to replace people. Rather, they augment the existing labour pool and drive greater performance & efficiency. In fact, it has been found that over 70% of the time, commercial service robotic technology delivered double-digit improvements to productivity, efficiency and capacity.

Optimising inventory with Radio-Frequency Identification (RFID )

As the customer demand for flexibility and convenience increases, retailers are looking for new ways to optimise their existing assets to satisfy rising consumer expectations. For instance, turning retail stores into fulfilment centres to provide BOPIS, and shipping from store options is one of the options that retailers are leveraging.

Radio Frequency Identification (RFID) makes near real-time and highly accurate inventory visibility as well improved order fulfilment possible. A study found that retailers who used RFID technology to optimise inventory management and reconcile product shipments were capable of achieving 99.9% order accuracy. RFID-enabled inventory enables DCs and retailers to confidently offer flexible fulfilment options that meet today’s customer expectations while improving profitability.

Unlock efficiency by orchestrating man & machine

In recent years, the pace of change for the supply chain has continued to accelerate, bringing forth new challenges that require new innovations and radical thinking. Rising e-commerce and omnichannel fulfilment, combined with labour volatility and cost constraints, have created more pressure on the supply chain than ever before.

While the use of technology in the warehouse is increasing, it is important to remember that more human capital is being used than ever before. With the infusion of WES capabilities within the WMS, it is now possible to orchestrate workflows across both man and machine. This ensures that supply chain leaders get the best of both worlds – the power of repeatable and predictable process and the ability to pivot & think innovatively while still retaining full control.

Coordination & collaboration across discrete and individual pieces of advanced automation in the warehouse only become more powerful when those systems are connected to and are aware of each other. More than ever, warehouse management must be approached from a perspective that considers any combination of human and automation capacity together. This approach enables and ensures the maximum utilisation of all resources, flexibility for automation growth & total visibility.

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  • Ushasri Tirumala

    Senior Vice President & General Manager

    Manhattan Associates

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