SmartTurn Inventory and Warehouse Management Best Practices Series
If your operation is one of the tens of thousands of warehouses in the United States still using paper, Microsoft Excel, or processes first developed in the late 70s/early 80s, we’re here to help. To give you tools, information, guidance, tips, proven methodologies, we offer you the forthcoming "Best Practice Series for Inventory and Warehouse Management."
If your operation is one of the tens of thousands of warehouses in the United States still using paper, Microsoft Excel, or processes first developed in the late 70s/early 80s, we’re here to help. To give you tools, information, guidance, tips, proven methodologies, we offer you the forthcoming "Best Practice Series for Inventory and Warehouse Management."
Collaboration Best Practices
Posted 02-10-2009 at 10:28 AM by Kevin Collins
Collaboration Best Practices
Introduction
According to research from the Georgia Institute of Technology, only 30% of the 600,000 warehouses in the U.S. use a Warehouse Management System (WMS). With such a huge number of warehouses unable to link to their business partners, visibility throughout the supply chain (notably inventory visibility) cannot occur. A preferable goal for these “dark” warehouses, particularly in a world in which product sourcing is increasingly global, is communication and collaboration with their partners. In this chapter, we're going to look at Best Practices for collaboration, discussing ways and options to link supply chain participants so that light is cast on those sombre warehouses and 3PLs.
Most supply chains involve more than one warehouse to consolidate, store or ship goods to market or business customers. The biggest innovation impediment is the inability to connect partners, inventory hubs, or simply internal inventory locations. Connecting business partners is even more painful should you decide to change your supply chain (move a distribution center, employ a 3PL, change your supplier or reseller channel or inventory location, for example). With improved collaboration and inventory visibility, companies have instant, multi-warehouse visibility whether it’s across the street, in another state or on another continent.
With the global retail supply chain as unpredictable as it has ever been, as well as having been extended through to the retail shelf, companies must be flexible. The supply chain technology that previously ran warehouses and distribution centers must now reach beyond the warehouse shelf to the store shelf. With better (newer, cheaper, automated and more intelligent) supply chain management tools, companies have the information they need to both adapt and respond in ways that were previously impossible. The result makes collaboration-even for small warehouse and 3PLs- possible. Real time tracking and global visibility helps companies streamline their operations and reduce costs, while providing improved services to their customers.
Depending on the sophistication, this collaboration ideal begins with activity at the retail store cash register.
A Future that is Demand Driven
Knowledge of what is selling through retail is almost as important to other participants in the supply chain as it is to the retailer. The concept of a demand-driven network rests with the sequence of events initiated by the purchase of an item in a retail store. The sale triggers a request to replace the item on the shelf. As the information flows backward from the retailer via the distributor to the manufacturer, this consumer demand data helps optimize the inventory levels in the stores as well as labor, inventory, warehouse and transportation resources in the warehouse.
In this version, the end consumer is as important to the manufacturer as the retailer. To ensure that the requisite data is passed along the chain, retailers need to break down the walls between the store, the distribution center and manufacturers. This requires the will to collaborate and the technology to do it.
My Kingdom for a WMS
Supply chain participants need to leverage the wealth of information now available at the store level and figure out a replenishment plan. The planning must consider pricing and promotion data in addition to on-hand inventory levels in the store and the distribution center (DC). It also helps to have real-time or near-real-time visibility into in-transit inventory en route from the manufacturers or already en route from the DC to the stores.
How can you create real visibility that you can share with your teams (everyone who needs to collaborate in the order to cash cycle, for example)? How can you connect with partners, inventory hubs, or simply internal inventory locations within a dynamic marketplace? For the smaller warehouse or 3PL (those companies comprising the vast majority of the 600,000 warehouses cited earlier) the increasing demands from customers for real-time inventory and shipment visibility usually produce a search for a warehouse management system (WMS).
Without real-time, relevant information, logistics innovations like “vendor management inventory”, “just-in-time”, “pull supply chains” become meaningless. Until now, these innovations came with a complexity and price tag that only very large companies with tight control over their supply chains, big budgets, IT staff, and time could handle.
Warehouse Management Systems and Collaboration
The nucleus of this relationship is a WMS that provides a platform for business partners to connect. The system can provide both internal and external user access to link field employees, business partners, customers, suppliers, owners, carriers, brokers, executives, and other partners. Once given access, any of them can login with their own unique user privileges, and access data in real time for the locations of their choice.
Collaboration Scenarios
With technology linking both data and users, this global inventory collaboration platform extracts definitive and real-world inventory location, status and flow in real-time, providing a level of visibility within and across warehouses never seen before except in the most expensive, custom and complex supply chain systems. How can this translate into your daily life? Here are some scenarios that illustrate the benefits of collaboration:
An executive of a 50-warehouse 3PL can log in from home and monitor activity through the entire operation or focus on the details within a single warehouse.
A manufacturer's broker can use a single login to access data individually for one or more companies depending on what he needed to do with it.
A company can provide personnel with Web-enabled mobile handhelds and a web portal for their clients to remotely access their own accounts.
A beverage sales rep can learn during an account visit that a certain SKU is selling more than expected and remotely access the warehouse database to confirm that additional inventory can be added to the next shipment.
3PLs and warehouses pitching a new customer can use collaboration as a selling point to generate new business. Sales reps can easily create custom demos to illustrate the benefits of real-time access to actual inventory reports.
Unlike the client-server model, the SaaS model by definition (definition meaning access anywhere you have broadband Internet access) provides the perfect platform to enable collaboration spanning geographic and corporate boundaries. Companies can easily implement and integrate additional sites to gain enterprise-wide warehouse visibility and management without adding incremental IT infrastructure and hardware costs. By simply adjusting security and permission configurations, warehouses can instantly integrate and manage information flow within their own organizations and federated trading communities. This unique ability creates an adaptive supply chain for future pull or market driven innovations like mass customization, or dynamic sourcing.
Tapping the SaaS model enables companies to collaborate near and far. Adapting Web 2.0 or social networking technologies to supply chain management extends this collaboration even further.
As the Internet became our ubiquitous communication platform in the past decade, a participatory culture arose. The Web 2.0 or social networking movement blossomed and it is now hard to imagine living without Internet connectivity, or reading and sharing information via web sites such as Google, Facebook, and Linkedin. The social networking tools and behaviors that characterize in particular modern communication between teenagers can also be applied to the supply chain.
Similarly, today’s warehouse is connected to factories, distribution centers, and web storefronts, requiring modern technologies to support the Web-based “experience economy”. A nascent concept within the supply chain, this new approach leverages secure information sharing, and Web 2.0 functionality to further extend collaboration opportunities.
So, what does this enhanced collaboration look like? First, access is available through a wide variety of technologies and interfaces. Business owners, warehouse teams, trading or logistics partners, or even customers can access data and communicate through a browser, Google Gadget, or an application such as (e.g. SAP, Oracle or QuickBooks) that they already use. Large enterprise software companies call this SOA (service oriented architecture).
Cost and complexity are minimal since users can selectively share information through a visual or web interface with customers and trading partners. Users can view or share inventory and warehouse metrics with everyone in their organization, as well as customers and trading partners. Permissions can be easily set so that inventory information is available anytime anywhere. By adding gadgets onto desktops and smartphones, collaboration is extended far beyond an office PC.
Collaboration and Security
How does security fit into a SaaS-enabled world of collaboration? Essentially, you need different layers of security to control data access. Much of it will be rules and policy-based, depending on who needs to see what. Your IT department or staff will play a huge role, notably in the role of managing user access and privileges. Who has access to what information is an on-going critical issue. Strong policies on account setup and termination must be maintained. You will provide various privilege levels to users that will vary widely. You may give permission, for example, to someone to see everything in one warehouse while restricting their access to inventory data in another warehouse. All accounts will be through encrypted user name and password protected accounts. They can also be restricted via IP address, as well.
To meet distribution requirements amid the ever-changing needs of the marketplace, real-time visibility is essential. By combining the ubiquity of Internet connectivity with a SaaS-delivered WMS, organizations can uncover the dark spots in their supply chain at a cost and efficiency value curve that allows for rapid change and adaptability to changing market pressures.
Through collaboration with downstream manufacturers and distributors, retailers can balance inventory carrying costs, order fulfillment costs and transportation costs to meet their overall strategy. Through upstream collaboration with distributors and retailers, manufacturers can also ensure that they can quickly respond to the dictates of consumer demand.
Kevin Collins,
Director, Product Management
SmartTurn, Inc.
177 Fremont St.
San Francisco, CA 94105
USA
Sales: 1-888-667-4758
Tel: 1-415-685-4200
Fax: 1-415-685-4201
About SmartTurn
SmartTurn™ Inventory and Warehouse Management System is the first true on-demand warehouse management system to provide enterprise class functionality at a fraction of the cost of traditional license and install software. Designed for quick implementation, ease-of-use, real-time inventory accuracy and warehouse performance, the SmartTurn system provides visibility on every item across single or multiple warehouses. Founded on the premise that software should be smart, simple and safe, SmartTurn’s customers span the value chain of most industries to include manufacturers, wholesalers as well as 3PLs. SmartTurn is privately held and backed by leading investors, NEA and Emergence Capital Partners. Website www.smartturn.com
About the Author
Mr. Kevin Collins joins SmartTurn having been in the warehousing and distribution business for over 15 years, where he fulfilled leadership roles for a military distribution company, a third party logistics service provider, a heating, ventilation and air conditioning company, a retail service warehouse and a general merchandise/wholesale grocery warehouse where he also partook in two acquisitions. Mr. Collins has spent his entire career learning the art of warehousing and logistics, and has been in every conceivable role within a warehouse. During his career span, Mr. Collins has also had the privilege of working directly with application developers learning about software from inventory and procurement to transportation and warehouse management systems. Mr. Collins brings to SmartTurn an invaluable background and information about processes, software and logistics, and the intricate balances between them.
Introduction
According to research from the Georgia Institute of Technology, only 30% of the 600,000 warehouses in the U.S. use a Warehouse Management System (WMS). With such a huge number of warehouses unable to link to their business partners, visibility throughout the supply chain (notably inventory visibility) cannot occur. A preferable goal for these “dark” warehouses, particularly in a world in which product sourcing is increasingly global, is communication and collaboration with their partners. In this chapter, we're going to look at Best Practices for collaboration, discussing ways and options to link supply chain participants so that light is cast on those sombre warehouses and 3PLs.
Supply chain management is uniquely difficult because its complexity extends beyond a company's walls and, frequently, its home country. While international sourcing and manufacturing provide an opportunity to source more economically, they create numerous challenges. Your supply chain now stretches across thousands of miles, creating consolidation points beyond the manufacturing center and de-consolidation points closer to your home market. Control is not surprisingly often lost. When you add an international component (such as raw material sourcing and product manufacturing) to your supply chain, you often create undesirable dark spots. This can an early experience for companies after first relocating manufacturing offshore-especially to countries with a different language. Yet, across this logistical jigsaw puzzle, you still need to track inventory.TIP:According to some industry statistics, the most efficient distribution centers use a WMS, typically operating with 99% accuracy and order fulfillment rates.
Note: Warehouse aren't the only places where inventory resides. Hospitals, hotels and construction sites have it, too.The classic teletype, telegrams and wire transfers that provided rudimentary communication ultimately gave way to faxes, email, Excel and Quickbooks. While the latter applications may have proven effective in the last century, they're far from leading edge as the end of the first decade of the 21st century rapidly approaches. None of them really enable information exchange up or down the supply chain. For the retailer with multi-warehouse requirements, or a sell-side logistics company with warehouses and stock rooms that need to maintain safety stock levels, an information chain operating in real-time is vital. When suppliers, trading partners and customers can collaborate via customized, role-based access to inventory views, business relationships improve and efficiencies are realized.
Most supply chains involve more than one warehouse to consolidate, store or ship goods to market or business customers. The biggest innovation impediment is the inability to connect partners, inventory hubs, or simply internal inventory locations. Connecting business partners is even more painful should you decide to change your supply chain (move a distribution center, employ a 3PL, change your supplier or reseller channel or inventory location, for example). With improved collaboration and inventory visibility, companies have instant, multi-warehouse visibility whether it’s across the street, in another state or on another continent.
With the global retail supply chain as unpredictable as it has ever been, as well as having been extended through to the retail shelf, companies must be flexible. The supply chain technology that previously ran warehouses and distribution centers must now reach beyond the warehouse shelf to the store shelf. With better (newer, cheaper, automated and more intelligent) supply chain management tools, companies have the information they need to both adapt and respond in ways that were previously impossible. The result makes collaboration-even for small warehouse and 3PLs- possible. Real time tracking and global visibility helps companies streamline their operations and reduce costs, while providing improved services to their customers.
Depending on the sophistication, this collaboration ideal begins with activity at the retail store cash register.
A Future that is Demand Driven
Knowledge of what is selling through retail is almost as important to other participants in the supply chain as it is to the retailer. The concept of a demand-driven network rests with the sequence of events initiated by the purchase of an item in a retail store. The sale triggers a request to replace the item on the shelf. As the information flows backward from the retailer via the distributor to the manufacturer, this consumer demand data helps optimize the inventory levels in the stores as well as labor, inventory, warehouse and transportation resources in the warehouse.
In this version, the end consumer is as important to the manufacturer as the retailer. To ensure that the requisite data is passed along the chain, retailers need to break down the walls between the store, the distribution center and manufacturers. This requires the will to collaborate and the technology to do it.
My Kingdom for a WMS
Supply chain participants need to leverage the wealth of information now available at the store level and figure out a replenishment plan. The planning must consider pricing and promotion data in addition to on-hand inventory levels in the store and the distribution center (DC). It also helps to have real-time or near-real-time visibility into in-transit inventory en route from the manufacturers or already en route from the DC to the stores.
How can you create real visibility that you can share with your teams (everyone who needs to collaborate in the order to cash cycle, for example)? How can you connect with partners, inventory hubs, or simply internal inventory locations within a dynamic marketplace? For the smaller warehouse or 3PL (those companies comprising the vast majority of the 600,000 warehouses cited earlier) the increasing demands from customers for real-time inventory and shipment visibility usually produce a search for a warehouse management system (WMS).
Creating a “pull supply chain” that can progressively react to real-time market forces while still creating the lead times necessary for high-volume batch manufacturing upstream requires real-time inventory visibility. The notion of physical inventory in a warehouse is similar to a “push supply chain”, where decisions are made retroactively, and the true stasis of the inventory levels on the sell-side is at best an exercise in guesswork. A real-time WMS that exposes inventory levels across the supply chain allows the network to collaborate. Traditional physical inventory practices, for example, can become cycle counts that keep a real-time tab on what is really there.
Without real-time, relevant information, logistics innovations like “vendor management inventory”, “just-in-time”, “pull supply chains” become meaningless. Until now, these innovations came with a complexity and price tag that only very large companies with tight control over their supply chains, big budgets, IT staff, and time could handle.
Warehouse Management Systems and Collaboration
The nucleus of this relationship is a WMS that provides a platform for business partners to connect. The system can provide both internal and external user access to link field employees, business partners, customers, suppliers, owners, carriers, brokers, executives, and other partners. Once given access, any of them can login with their own unique user privileges, and access data in real time for the locations of their choice.
Collaboration Scenarios
With technology linking both data and users, this global inventory collaboration platform extracts definitive and real-world inventory location, status and flow in real-time, providing a level of visibility within and across warehouses never seen before except in the most expensive, custom and complex supply chain systems. How can this translate into your daily life? Here are some scenarios that illustrate the benefits of collaboration:
An executive of a 50-warehouse 3PL can log in from home and monitor activity through the entire operation or focus on the details within a single warehouse.
A manufacturer's broker can use a single login to access data individually for one or more companies depending on what he needed to do with it.
A company can provide personnel with Web-enabled mobile handhelds and a web portal for their clients to remotely access their own accounts.
A beverage sales rep can learn during an account visit that a certain SKU is selling more than expected and remotely access the warehouse database to confirm that additional inventory can be added to the next shipment.
3PLs and warehouses pitching a new customer can use collaboration as a selling point to generate new business. Sales reps can easily create custom demos to illustrate the benefits of real-time access to actual inventory reports.
The Role of SaaS in Collaboration
Note: Although some of the following duplicates content from Chapter Two, it is important to revisit key features and benefits of the hosted software (software-as-a-service) delivery model because they are so critical to making global supply chain collaboration possible.Prior to the advent of the hosted software (software-as-a-service) model, the commercial viability of an installed, fully functional, ecommerce-enabled WMS exceeded the financial realties of most small- to medium-sized warehouses. Very popular with growing companies, the on-demand model has become an increasingly common delivery model for applications like sales support, transportation management, and even enterprise resource planning. In recent years, fortunately, the same subscription-based delivery has become available to companies within the manufacturing/distribution/retail supply chain. The same advantages of the on-demand model—access to sophisticated technology, low risk, predictable cost, and delivery across geographic or corporate boundaries—make it particularly appealing for companies looking to ramp up collaboration.
3PLs can learn how to retain and capture new business with next-generation web-based technologies required by many modern customers. With an on-demand system, you get it all for none of the heavy lifting and investment required just a few years ago. If you are considering a reasonably priced system, what should you look for to ensure you don’t get stuck with recurring, expensive integration costs since your warehouse isn’t an island any longer?
Unlike the client-server model, the SaaS model by definition (definition meaning access anywhere you have broadband Internet access) provides the perfect platform to enable collaboration spanning geographic and corporate boundaries. Companies can easily implement and integrate additional sites to gain enterprise-wide warehouse visibility and management without adding incremental IT infrastructure and hardware costs. By simply adjusting security and permission configurations, warehouses can instantly integrate and manage information flow within their own organizations and federated trading communities. This unique ability creates an adaptive supply chain for future pull or market driven innovations like mass customization, or dynamic sourcing.
Unless there is a need to integrate legacy systems, there is no need for physical point to point integration between warehouses. The key is to provide a modern, secure Internet architecture that ensures connectivity to other systems (e.g., ERP and CRM), as well as warehouse inventory data in both pushing/pulling scenarios. The result of native EDI and flat-file integration, for example, is a manufacturer that can now share sales and purchase order and fulfillment information with customers and suppliers.
Tapping the Social Networking to Extend Collaboration in the Warehouse or 3PL
Tapping the SaaS model enables companies to collaborate near and far. Adapting Web 2.0 or social networking technologies to supply chain management extends this collaboration even further.
As the Internet became our ubiquitous communication platform in the past decade, a participatory culture arose. The Web 2.0 or social networking movement blossomed and it is now hard to imagine living without Internet connectivity, or reading and sharing information via web sites such as Google, Facebook, and Linkedin. The social networking tools and behaviors that characterize in particular modern communication between teenagers can also be applied to the supply chain.
Similarly, today’s warehouse is connected to factories, distribution centers, and web storefronts, requiring modern technologies to support the Web-based “experience economy”. A nascent concept within the supply chain, this new approach leverages secure information sharing, and Web 2.0 functionality to further extend collaboration opportunities.
So, what does this enhanced collaboration look like? First, access is available through a wide variety of technologies and interfaces. Business owners, warehouse teams, trading or logistics partners, or even customers can access data and communicate through a browser, Google Gadget, or an application such as (e.g. SAP, Oracle or QuickBooks) that they already use. Large enterprise software companies call this SOA (service oriented architecture).
Cost and complexity are minimal since users can selectively share information through a visual or web interface with customers and trading partners. Users can view or share inventory and warehouse metrics with everyone in their organization, as well as customers and trading partners. Permissions can be easily set so that inventory information is available anytime anywhere. By adding gadgets onto desktops and smartphones, collaboration is extended far beyond an office PC.
Collaboration and Security
How does security fit into a SaaS-enabled world of collaboration? Essentially, you need different layers of security to control data access. Much of it will be rules and policy-based, depending on who needs to see what. Your IT department or staff will play a huge role, notably in the role of managing user access and privileges. Who has access to what information is an on-going critical issue. Strong policies on account setup and termination must be maintained. You will provide various privilege levels to users that will vary widely. You may give permission, for example, to someone to see everything in one warehouse while restricting their access to inventory data in another warehouse. All accounts will be through encrypted user name and password protected accounts. They can also be restricted via IP address, as well.
Conclusion
To meet distribution requirements amid the ever-changing needs of the marketplace, real-time visibility is essential. By combining the ubiquity of Internet connectivity with a SaaS-delivered WMS, organizations can uncover the dark spots in their supply chain at a cost and efficiency value curve that allows for rapid change and adaptability to changing market pressures.
Through collaboration with downstream manufacturers and distributors, retailers can balance inventory carrying costs, order fulfillment costs and transportation costs to meet their overall strategy. Through upstream collaboration with distributors and retailers, manufacturers can also ensure that they can quickly respond to the dictates of consumer demand.
Kevin Collins,
Director, Product Management
SmartTurn, Inc.
177 Fremont St.
San Francisco, CA 94105
USA
Sales: 1-888-667-4758
Tel: 1-415-685-4200
Fax: 1-415-685-4201
About SmartTurn
SmartTurn™ Inventory and Warehouse Management System is the first true on-demand warehouse management system to provide enterprise class functionality at a fraction of the cost of traditional license and install software. Designed for quick implementation, ease-of-use, real-time inventory accuracy and warehouse performance, the SmartTurn system provides visibility on every item across single or multiple warehouses. Founded on the premise that software should be smart, simple and safe, SmartTurn’s customers span the value chain of most industries to include manufacturers, wholesalers as well as 3PLs. SmartTurn is privately held and backed by leading investors, NEA and Emergence Capital Partners. Website www.smartturn.com
About the Author
Mr. Kevin Collins joins SmartTurn having been in the warehousing and distribution business for over 15 years, where he fulfilled leadership roles for a military distribution company, a third party logistics service provider, a heating, ventilation and air conditioning company, a retail service warehouse and a general merchandise/wholesale grocery warehouse where he also partook in two acquisitions. Mr. Collins has spent his entire career learning the art of warehousing and logistics, and has been in every conceivable role within a warehouse. During his career span, Mr. Collins has also had the privilege of working directly with application developers learning about software from inventory and procurement to transportation and warehouse management systems. Mr. Collins brings to SmartTurn an invaluable background and information about processes, software and logistics, and the intricate balances between them.
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