A certain level of productivity must be achieved for a warehouse to be considered efficient and profitable. Therefore, there can be no talk of noticing inefficiencies while inventory is being received, put away and stored: replenishments must be anticipated and calculated as accurately as possible.
So how can those warehouse operations be optimized? We learn that more and more managers are using algorithms. The question is how do these algorithms contribute to warehouse operations and which workflows can they automate? Our Generix Group experts answer your questions with careful observations.
Inefficient Supply Chain Network Set-Up Configuration, the Number One Concern
A recent mission of the DataLab Generix Group at one of its customers’ premises showed that the inefficiencies of the supply chain network set-up configuration were a major factor in the decrease of productivity. It is therefore essential that the picker never finds himself in front of an empty or insufficiently filled space for the order to be completed.
If this happened to be the case, the picker would have to make an urgent replenishment request and wait for a pallet to be delivered from the inventory put aside for emergencies. While the picker can always move on to another order, the process is not optimal.
To avoid this type of situation, we can set replenishment thresholds and anticipate the demand based on calculations made in advance (the day before, for example).
Replenishment thresholds
Replenishment thresholds prevent inventory shortages. A software setting will trigger the replenishment process once a picking location reaches the “replenishment threshold” for a certain product.
Storage location must be taken into account because while it is impossible to place two pallets in a slot sized for one pallet, it may be possible to place one pallet and one layer of cartons in such a slot. Since the dimensions of the locations, pallets and cartons are known and tracked by the system, the calculation is done automatically using simple algorithms that add up the dimensions of the objects with a certain tolerance.
Demand Forecasting
For consumption or demand forecasting, we use a simulation tool, which is also algorithm-based. The tool deduces the total quantity required using historical data, checks the product quantity remaining in the picking location and automatically triggers the replenishment process. The orders that need to be executed the quickest are targeted.
For this simulation we can use order data entered in the WMS or the forecast data transmitted to the WMS through the ERP. For example, warehouse consumption for the last week of a reference period deemed relevant can be used to take into account the seasonal nature of the business or the fluctuation on its cycles.
Just-in-Time Supply
In just-in-time supply optimal use of resources must be guaranteed and critical needs must be addressed in real time. Replenishment must highly targeted effectively addressing most critical needs.
Our tool automates the management of replenishments by letting the system trigger them at the most appropriate time, as and when needed. The system is, of course, based on theoretical data specific to each warehouse and adapts to the inventory management approach used. This functionality takes into account different parameters:
- Modification of the priority by the warehouse worker in charge of receiving and storing inventory
- Comparison of the inventory and minimum picking
- Current priorities
Based on these criteria, the system will recalculate and define a precise timing for the initiation of a replenishment process. To illustrate the depth of this calculation, we can mention variables such as picking time, product changeover time, aisle changeover time, demand forecasting time and even break times!
Compliance with Dated Contracts
You may decide to combine the expiry dates of certain products with their dated contracts. In this case, a configurable safety margin is added to the expiry date thus honoring customer commitment. This is a technique widely used in the retail sector to guarantee a certain shelf life, which is particularly critical for perishable goods.
Order Processing Sequence
We will select orders, or certain elements of an order, and determine the strategy to follow in order to optimize the planning of the work to be done as well as managing the order processing efficiently.
Some of the planning issues that may arise include:
- Target loading time (maximum)
- Carrier
- Delivery round
- Orders consisting of less than n pieces or more than x pieces
- The approval allowing missing parts
- Full pallets and complete packages
The algorithms integrated into a WMS will optimize the use of resources by automatically triggering replenishment, by ensuring compliance with “date contracts” or by managing picking locations.
Generix Group North America provides a series of solutions within our Supply Chain Hub product suite to create efficiencies across an entire supply chain. From Warehouse Management Systems (WMS) and Transportation Management Systems (TMS) to Manufacturing Execution Systems (MES) and more, software platforms can deliver a wide range of benefits that ultimately flow to the warehouse operator’s bottom line. Our solutions are in use around the world and our experience is second-to-none. We invite you to contact us to learn more.
