How can a warehouse be transformed from a necessary cost factor to a proactive or even value-adding part of the supply chain? By using warehouse management platforms based on networking and IoT to capture complexity and create transparency. But this requires a new mindset.
The warehouse in the field of tension between dynamic processes and needs
A warehouse always moves in a field of tension between a dynamic process with many process variants and many needs to provide the goods at the right time. Delays have an effect on the subsequent process, and the more closely a supply chain is to be interlocked, the more important it is that the required components for the individual steps in the warehouse are available as planned. So on the one hand, the processes must remain robust. On the other hand, the IT solution used for this purpose must be easy to use for employees.
A warehouse management platform must therefore map highly complex, end-to-end processes. In addition, the support processes should also be integrated in order to control the assortment according to demand via purchasing and supply. This also includes inventory and replenishment control. Optimally, these processes have no influence on the operational business: Inventory is taken in the plant and replenishments are calculated in such a way that throughput is ensured.
In the warehouse, time is money
Structured putaway is also important in order to achieve the optimum in order picking. For example, if fast-moving goods are stored incorrectly, it takes significantly more time for each pick. In order to achieve the most efficient picking process possible, classic static criteria, comparative values from the past, but also increasingly intelligent algorithms based on machine learning help to determine where which material is stored.
Particularly important are the integration of material flow systems and complex high-bay warehouse systems into end-to-end processes. Direct integration enables successful networking right down to the drive and process level. This makes it possible to react much more flexibly to changes in order situations, exceptions and new strategies – for example, by optimizing warehousing during periods when operations are slow. In addition, direct integration makes it possible to streamline the system landscape by eliminating intermediate systems.
IoT and RFID set new transparency standards
If the warehouse is to contribute more value, cost reduction through optimization of space and throughput times is the imperative. To achieve this, the integration of live and inbound data is crucial: Where is the truck that is supposed to bring or pick up goods currently located? Where are the boxes that need to be loaded without the truck having to wait? Any movement that works too slowly costs money. IoT technology today enables real-time visibility. Better warehouse planning can yield savings in the range of 30 to 50 percent in execution, depending on the scenario.
Networking is fundamentally an important aspect for warehouse optimization: RFID technology is particularly suitable for this, as transponders have now become significantly cheaper. If the technology is used consistently and cleanly, then workflow management can be made considerably more flexible. Orders are then automatically distributed to a wide variety of handheld devices, so that employees can get started right away instead of waiting for paper documents. RFID makes manual intervention obsolete, ensures greater efficiency and, thanks to seamless tracking, fewer goods are lost. At the same time, the system can use the real-time data to react very quickly to certain conditions in an automated manner – faster than a human being: For example, it can recognize that there is a very high workload in one part of the warehouse, so that personnel can be brought over from another area.
Sustainability and new value-added services in the warehouse
The better the warehouse is organized, the more likely it is that companies will be able to combine orders and shipments in a cost-saving manner, thus saving on loading slots, loading capacity and transportation costs. By combining orders in a way that cleverly fills up the truck (tendering), savings of 30 to 40 percent on freight costs can be achieved. Above all, however, a step can be taken here toward significantly greater sustainability – a topic that will continue to gain relevance in the coming years.
Digitization also makes it possible to turn warehouse management into an enabler for subsequent processes and to offer added value. Typical value-added services are, for example, finishing and assembly activities on the factory premises or directly in the warehouse. Some companies use cobots to perform simple assembly tasks in the logistics environment. The exact documentation of packing instructions or traceability, the importance of which has increased massively in recent years, also help companies to increase their service level to their customers – a classic win-win situation.
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Matthias Kraus
Consulting Director SAP EWM
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