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."
Best Practices for RF Mobile in 3PL and Warehousing Operations
Posted 02-10-2009 at 01:21 PM by Kevin Collins
Best Practices for RF Mobile in 3PL and Warehousing Operations
Introduction
If your role in the supply chain is to have stock immediately available to meet your customers' needs, then it is time to take a closer look at best practices for RF (radio frequency wireless).
As a distributor or 3PL, know that RF technology advances are now at the forefront of internal operational improvements in wholesale distribution. RF is a mature technology and has been implemented in thousands of facilities. There is little question, therefore, that the modern warehouse is wireless, incorporating paperless receiving, putaway, picking, shipping and inventory counting. (According to Pembroke Consulting, well over 2/3rds of industrial distributors already use wireless local area networks).
In this chapter of our Best Practices series, we're going to look at how to use RF in your operation to respond to the not uncommon scenario in which your customers demand almost 100% order accuracy (often comprised of smaller and more frequent shipments) at the same time that you're asked (by management or ownership, or your lenders if you're the owner) to increase productivity and reduce costs.
Cost reduction is key because an analysis of your labor costs will likely show that picking and packing are two of the most labor intensive and costly jobs in your operation. (This is certainly true if you're picking and packing without the aid of automation). Does the following description characterize your operation? “At each step, employees record items, quantities and locations on paper.” This type of manual picking and packing is a primary source of errors, expense, and decreased efficiency. Replacing paper and pen by integrating wireless automation into your operation should produce improvement in all three areas.
Why Wireless
While it is possible to address errors, expense, and decreased efficiency in other ways, RF automation could be the right solution for you.
Productivity improvements materialize due to substituting technology for potentially error-prone human activities such as order processing, inventory control, or picking. Data can move directly from the warehouse floor into your business system rather than via process of manual counting and recording and entering information into the system. Information from hand-held wireless scanners provides real-time stock information and can even eliminate the need for manual inventory counting.
To make data continually available to employees whenever it is needed reduces lapses in productivity and virtually eliminates wasteful trips to a stationary terminal, docking station or dispatch location to grab pick or putaway instructions. If two pickers can do the previous work of three pickers, then your picking productivity has just jumped 50%. If this means that your picking accuracy increases from 95% to over 99%, your customers will be happier.
The benefits of happier customers and avoiding the costs of correcting mistakes will appear on the bottom line. If this is what you want, the next step is to determine just what level of automation is appropriate for your needs.
The bar code is the heart of the modern warehouse or distribution center. Barcodes help identify items when they arrive, when they are later picked to fill orders and shipped out, and when they are counted during cycle or annual physical counts. The best way to capture and manage the information on these barcode labels, particularly if you want to quickly and accurately ship thousands of items, is with RF technology.
Using RF barcode scanning to capture real-time data and send it wirelessly to back-end operations, financial, and customer service systems is the standard for today's warehouse. While simplicity is one of the key reasons, RF networks also offer great efficiency by enabling warehouse employees to interact with the system directly from the point of activity.
An RF network essentially extends a wired local area network into the warehouse space where the data is collected. Networks are fairly simple, having only three primary technology components; a mobile RF scanner or terminal, an access point or base station, and a network controller connected to a server holding some kind of database application. The location and number of access points depends on a variety of factors, including the warehouse size, product composition, cabling, interference, racking design and layout. The exact number of access points is determined by a site survey (which we discuss later in the chapter). With the access points in place, users communicate with the system with scanners that link the warehouse employee and the RF system. Data is usually entered either by scanning barcode labels or by using a keyboard or touch-screen.
Benefits
RF wireless systems are increasingly common because the advantages generally far outweigh the initial costs. As companies become more experienced and adept using the technology, these increases in productivity, inventory accuracy and order visibility progressively reduce overall costs every year. Here is a laundry list of what you can gain:
Greater Efficiency and Throughput
With a streamlined paperless wireless system, you should also be able to track barcoded products from receiving, putaway, and picking, to packing, shipment confirmation, and cycle counting. These greater efficiencies should allow you to handle more orders during peak periods.
Increased Storage Capacity/Greater Flexibility in Inventory Allocation
With greater picking, packing, and putaway flexibility, you should be able to escape the clutches of fixed inventory allocation by moving to a random storage model. Putaway can become based on the specific space requirements for each product, something that will boost your space utilization and increase the percentage of your potential storage capacity.
Lower Head Counts (Permanent and Seasonal)
By employing automated data capture, you can immediately reduce the number of employees who were previously doing redundant manual data entry. You should also be able to reduce seasonal or temporary labor costs by providing novice pickers with more accurate and intelligent routing/pick lists that will greatly increase productivity.
Faster Employee Training
By relying on the system accuracy and ease-of-use of RF terminals, you should be able to train employees faster. This is especially important if you use a temporary workforce and loads of overtime to meet seasonal or demand peaks.
Greater Data Entry and Accuracy
Barcode scanners liberate users from the limitations and errors of hand recording which requires printed reports and unnecessary data re-entry. With multiple processes available within a single application, the user is able to accurately complete tasks in a timely fashion.
Faster Inventory Counts
Counting is faster because errors have previously been eliminated and safety stock levels reduced (due to the confidence of having more accurate real-time inventory data).
Faster Error Correction
Depending on your Warehouse Management System (WMS), warehouse staff can obtain real-time feedback, which enables problems to be confirmed and investigated quickly. For instance, if too much product arrives from a supplier, exceeding the purchase order, the system can alert the buyer or receiver that it is invalid. The extra cartons can be immediately set aside or refused.
Reduced Travel Time by Warehouse Personnel
Wireless can help reduce travel time for warehouse personnel by enabling companies to distribute work to individual employees by zones.
Sounds good, doesn't it? Many points in the supply chain can realize important advantages of accurate, real-time data. RF is certainly one of the warehouse improvement projects you can make with a higher than average investment/return ratio. Let's look closer now at some specific warehousing operations where RF can be applied:
Warehouse and 3PL Scenarios
Receiving
Most businesses (certainly 99% of the SmartTurn blog readership) receive products or shipments. The products or goods to be received can range from incoming raw materials and components and daily consumables (think of hospitals, restaurants and light manufacturing), to products ready for retailers' store shelves. Regardless of the type of business, there is a general receiving process common to each scenario: the receiving company must track/count delivery of the goods, update their databases and financial/accounting records, confirm with the shipper that the order arrived and then initiate some kind of payment process.
Integrating RF into this sequence provides significant advantages over the paper-based environment that has existed since even before the Dutch East India Company ruled international trade. An RF-enabled employee receiving a carton can quickly scan the barcode, sending this information (part and PO numbers, and quantity) to the database, where the item is noted as received. At virtually the same moment, the quantity received can be compared with the quantity ordered to immediately determine if there is any disparity. If a disparity exists, or the goods are damaged, immediate action can be taken. This sequence would typically take just seconds, immediately after removing the carton from the trailer. The carton is rapidly processed and forwarded to its destination, whether the warehouse, production department or shipping/staging area.
RF increases the number of putaways processed per hour. Real-time access to product information enables companies to implement flexible putaway and storage. Employees can receive dynamic instructions on pallet and bin locations, optimizing warehouse space and workers' time.
Inventory Management
Once the goods are put away, they become inventory. Anyone with more than a year in the warehousing industry is likely familiar with the drudgery that is the laborious task of physical inventory. Using sheets of paper and pencils is both inefficient and inaccurate. In contrast, the RF version of inventory management is much easier to perform, faster and nearly eliminates human error. Because product movements have been recorded in real time, RF systems provide accurate, real-time inventory information with the current inventory data available. The result is huge time savings over manual paper counting/data entry systems. Just think of the time difference when grocery shopping for the checkout clerk to either scan a product bar code or manually type it in.
The benefits of faster and more accurate inventory data pays off for both customer service and sales, as well. Service and sales reps can do quick inventory checks and notify customers (with much greater confidence) that what they are ordering is actually available for shipment. This eliminates the frustrating requirement of having to either call down to the warehouse to confirm product availability or check it personally.
RF scanners increase picking speed and accuracy as well as improve a wide range of picking principles, including individual selection, and batch selection. With efficient pick/putaway assignments in hand, employees are directed to correct storage locations in the warehouse. Once there, they can confirm the correct item has been picked, and from the correct location. A WMS with location-based features and functionality uses picking activity and order status data to generate pick lists optimized according to the pick policy including zone, aisle, location, customer and employee. This significantly reduces the distance and length of time to pick items.
Shipping problems generally increase as warehouse throughput or volume rises. They also generally increase in proportion to the number of product codes and serial numbers that employees must copy as items are removed from or loaded into trucks. RF communication enables employees to record the shipment of the item by simply scanning the item's bar code.
Your Own RF Implementation: some things to think about
Integrating RF automation into your operation by moving your operation from a completely manual system involves more than just installing an RF system. It also involves a process learning curve for the employees who will operate the equipment. Make sure that you include training in your project planning. While training should be fairly quick, there are process changes (call them improvements) that you will have to implement.
Conclusion
To have access to accurate real-time at all times means that there is no productivity break. Employees will no longer have to make “deadhead” trips to a stationary terminal, docking station or dispatch locations to receive pick or putaway. You'll be able to make critical decisions faster and take action at the point of activity. You can do more, faster, with less wasted time and without adding additional employees.
The relatively low cost of a wireless LAN has encouraged adoption by both large and small companies. If you're interested in joining, we invite you to read the next chapter in our series. We'll look at Best Practices for Setting Up an RF Network, discussing the options and steps to ensure your experience is successful.
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
If your role in the supply chain is to have stock immediately available to meet your customers' needs, then it is time to take a closer look at best practices for RF (radio frequency wireless).
As a distributor or 3PL, know that RF technology advances are now at the forefront of internal operational improvements in wholesale distribution. RF is a mature technology and has been implemented in thousands of facilities. There is little question, therefore, that the modern warehouse is wireless, incorporating paperless receiving, putaway, picking, shipping and inventory counting. (According to Pembroke Consulting, well over 2/3rds of industrial distributors already use wireless local area networks).
In this chapter of our Best Practices series, we're going to look at how to use RF in your operation to respond to the not uncommon scenario in which your customers demand almost 100% order accuracy (often comprised of smaller and more frequent shipments) at the same time that you're asked (by management or ownership, or your lenders if you're the owner) to increase productivity and reduce costs.
Cost reduction is key because an analysis of your labor costs will likely show that picking and packing are two of the most labor intensive and costly jobs in your operation. (This is certainly true if you're picking and packing without the aid of automation). Does the following description characterize your operation? “At each step, employees record items, quantities and locations on paper.” This type of manual picking and packing is a primary source of errors, expense, and decreased efficiency. Replacing paper and pen by integrating wireless automation into your operation should produce improvement in all three areas.
Why Wireless
While it is possible to address errors, expense, and decreased efficiency in other ways, RF automation could be the right solution for you.
Productivity improvements materialize due to substituting technology for potentially error-prone human activities such as order processing, inventory control, or picking. Data can move directly from the warehouse floor into your business system rather than via process of manual counting and recording and entering information into the system. Information from hand-held wireless scanners provides real-time stock information and can even eliminate the need for manual inventory counting.
To make data continually available to employees whenever it is needed reduces lapses in productivity and virtually eliminates wasteful trips to a stationary terminal, docking station or dispatch location to grab pick or putaway instructions. If two pickers can do the previous work of three pickers, then your picking productivity has just jumped 50%. If this means that your picking accuracy increases from 95% to over 99%, your customers will be happier.
The benefits of happier customers and avoiding the costs of correcting mistakes will appear on the bottom line. If this is what you want, the next step is to determine just what level of automation is appropriate for your needs.
Wireless Starts with a Barcode?TIP: Make your wireless implementation a business project, not an IT project.
The bar code is the heart of the modern warehouse or distribution center. Barcodes help identify items when they arrive, when they are later picked to fill orders and shipped out, and when they are counted during cycle or annual physical counts. The best way to capture and manage the information on these barcode labels, particularly if you want to quickly and accurately ship thousands of items, is with RF technology.
Using RF barcode scanning to capture real-time data and send it wirelessly to back-end operations, financial, and customer service systems is the standard for today's warehouse. While simplicity is one of the key reasons, RF networks also offer great efficiency by enabling warehouse employees to interact with the system directly from the point of activity.
NOTE: while we're deliberately focusing on barcode-reading RF applications, there are other RF-enabled applications such as wireless VoIP solutionsUnderlying Technology
An RF network essentially extends a wired local area network into the warehouse space where the data is collected. Networks are fairly simple, having only three primary technology components; a mobile RF scanner or terminal, an access point or base station, and a network controller connected to a server holding some kind of database application. The location and number of access points depends on a variety of factors, including the warehouse size, product composition, cabling, interference, racking design and layout. The exact number of access points is determined by a site survey (which we discuss later in the chapter). With the access points in place, users communicate with the system with scanners that link the warehouse employee and the RF system. Data is usually entered either by scanning barcode labels or by using a keyboard or touch-screen.
Benefits
RF wireless systems are increasingly common because the advantages generally far outweigh the initial costs. As companies become more experienced and adept using the technology, these increases in productivity, inventory accuracy and order visibility progressively reduce overall costs every year. Here is a laundry list of what you can gain:
Greater Efficiency and Throughput
With a streamlined paperless wireless system, you should also be able to track barcoded products from receiving, putaway, and picking, to packing, shipment confirmation, and cycle counting. These greater efficiencies should allow you to handle more orders during peak periods.
Increased Storage Capacity/Greater Flexibility in Inventory Allocation
With greater picking, packing, and putaway flexibility, you should be able to escape the clutches of fixed inventory allocation by moving to a random storage model. Putaway can become based on the specific space requirements for each product, something that will boost your space utilization and increase the percentage of your potential storage capacity.
Lower Head Counts (Permanent and Seasonal)
By employing automated data capture, you can immediately reduce the number of employees who were previously doing redundant manual data entry. You should also be able to reduce seasonal or temporary labor costs by providing novice pickers with more accurate and intelligent routing/pick lists that will greatly increase productivity.
Faster Employee Training
By relying on the system accuracy and ease-of-use of RF terminals, you should be able to train employees faster. This is especially important if you use a temporary workforce and loads of overtime to meet seasonal or demand peaks.
Greater Data Entry and Accuracy
Barcode scanners liberate users from the limitations and errors of hand recording which requires printed reports and unnecessary data re-entry. With multiple processes available within a single application, the user is able to accurately complete tasks in a timely fashion.
Faster Inventory Counts
Counting is faster because errors have previously been eliminated and safety stock levels reduced (due to the confidence of having more accurate real-time inventory data).
Faster Error Correction
Depending on your Warehouse Management System (WMS), warehouse staff can obtain real-time feedback, which enables problems to be confirmed and investigated quickly. For instance, if too much product arrives from a supplier, exceeding the purchase order, the system can alert the buyer or receiver that it is invalid. The extra cartons can be immediately set aside or refused.
Reduced Travel Time by Warehouse Personnel
Wireless can help reduce travel time for warehouse personnel by enabling companies to distribute work to individual employees by zones.
Sounds good, doesn't it? Many points in the supply chain can realize important advantages of accurate, real-time data. RF is certainly one of the warehouse improvement projects you can make with a higher than average investment/return ratio. Let's look closer now at some specific warehousing operations where RF can be applied:
Warehouse and 3PL Scenarios
Receiving
Most businesses (certainly 99% of the SmartTurn blog readership) receive products or shipments. The products or goods to be received can range from incoming raw materials and components and daily consumables (think of hospitals, restaurants and light manufacturing), to products ready for retailers' store shelves. Regardless of the type of business, there is a general receiving process common to each scenario: the receiving company must track/count delivery of the goods, update their databases and financial/accounting records, confirm with the shipper that the order arrived and then initiate some kind of payment process.
Integrating RF into this sequence provides significant advantages over the paper-based environment that has existed since even before the Dutch East India Company ruled international trade. An RF-enabled employee receiving a carton can quickly scan the barcode, sending this information (part and PO numbers, and quantity) to the database, where the item is noted as received. At virtually the same moment, the quantity received can be compared with the quantity ordered to immediately determine if there is any disparity. If a disparity exists, or the goods are damaged, immediate action can be taken. This sequence would typically take just seconds, immediately after removing the carton from the trailer. The carton is rapidly processed and forwarded to its destination, whether the warehouse, production department or shipping/staging area.
Putaway
RF increases the number of putaways processed per hour. Real-time access to product information enables companies to implement flexible putaway and storage. Employees can receive dynamic instructions on pallet and bin locations, optimizing warehouse space and workers' time.
Inventory Management
Once the goods are put away, they become inventory. Anyone with more than a year in the warehousing industry is likely familiar with the drudgery that is the laborious task of physical inventory. Using sheets of paper and pencils is both inefficient and inaccurate. In contrast, the RF version of inventory management is much easier to perform, faster and nearly eliminates human error. Because product movements have been recorded in real time, RF systems provide accurate, real-time inventory information with the current inventory data available. The result is huge time savings over manual paper counting/data entry systems. Just think of the time difference when grocery shopping for the checkout clerk to either scan a product bar code or manually type it in.
The non-wireless/classic inventory scenario requires employees to count (some cynics might say interpret) part and stock numbers and then mark them and the respective quantities on counting sheets. The much more elegant RF scenario has the employee scanning an item's bin or shelf label, and then either manually counting the quantity or scanning the each item within a bin. One key result is that you can generate inventory reports much faster and identify discrepancies.
The benefits of faster and more accurate inventory data pays off for both customer service and sales, as well. Service and sales reps can do quick inventory checks and notify customers (with much greater confidence) that what they are ordering is actually available for shipment. This eliminates the frustrating requirement of having to either call down to the warehouse to confirm product availability or check it personally.
Picking/Order Fulfillment
RF scanners increase picking speed and accuracy as well as improve a wide range of picking principles, including individual selection, and batch selection. With efficient pick/putaway assignments in hand, employees are directed to correct storage locations in the warehouse. Once there, they can confirm the correct item has been picked, and from the correct location. A WMS with location-based features and functionality uses picking activity and order status data to generate pick lists optimized according to the pick policy including zone, aisle, location, customer and employee. This significantly reduces the distance and length of time to pick items.
Shipping
Shipping problems generally increase as warehouse throughput or volume rises. They also generally increase in proportion to the number of product codes and serial numbers that employees must copy as items are removed from or loaded into trucks. RF communication enables employees to record the shipment of the item by simply scanning the item's bar code.
Your Own RF Implementation: some things to think about
Integrating RF automation into your operation by moving your operation from a completely manual system involves more than just installing an RF system. It also involves a process learning curve for the employees who will operate the equipment. Make sure that you include training in your project planning. While training should be fairly quick, there are process changes (call them improvements) that you will have to implement.
Conclusion
To have access to accurate real-time at all times means that there is no productivity break. Employees will no longer have to make “deadhead” trips to a stationary terminal, docking station or dispatch locations to receive pick or putaway. You'll be able to make critical decisions faster and take action at the point of activity. You can do more, faster, with less wasted time and without adding additional employees.
The relatively low cost of a wireless LAN has encouraged adoption by both large and small companies. If you're interested in joining, we invite you to read the next chapter in our series. We'll look at Best Practices for Setting Up an RF Network, discussing the options and steps to ensure your experience is successful.
NOTE: implementing technology and automation has to positively impact your customers. Greater efficiency for you, while negatively impacting your customers–regardless of whatever your gains–may ultimately make this a losing proposition.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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