Applying Warehouse Management Technology within a Manufacturing Environment

Warehouse management systems: they are not just for distribution anymore

Today’s modern supply chain typically focuses the application of Warehouse Management Systems (WMS) technology on the automation of the outbound finished goods process. Industry leaders, however, have realized significant returns by applying that same WMS technology to more efficiently and accurately manage the inbound flow of raw materials through the manufacturing process, a.k.a. Production Logistics.

The supply chain is, after all, often defined as the flow of resources into and out of the enterprise’s collective operations. Logistics is the part of the supply chain process that plans, implements, and controls the flow and storage of goods, services, and related information from a point of origin to a point of consumption in order to meet customer demand. Production Logistics manages the progressive stages of track and trace, beginning with the inbound transportation of raw materials from suppliers to a processing facility through to the delivery and consumption of that material as it is transformed into finished goods.

Correct application of information technology

ogistics Information Technology (IT) applications can be broken down fundamentally by their operational orientation and the role they play in the supply chain process. A functional gap exists in the typical execution software space between the production planning and control system levels. This gap results from the limited functional capabilities of ERP, MRP, and MES applications to control the resources required to move raw material from storage to consumption. The question is can WMS move over and operate in a manufacturing environment? The answer is Yes!

When considering whether WMS is the appropriate production logistics technology, it is important to consider what primary business problem an application was originally designed to solve. Planning solutions such as ERP were originally designed as financial or other administrative systems, operate in a batch transaction mode and are not well suited for the real-time world of logistics. Execution solutions, such as WMS, are task oriented and execute based upon real-time conditions, constraints and priorities of the business.

Companies have taken different approaches to gain better control and visibility of the flow of raw materials driven mainly by the various levels of complexity found within their manufacturing operations. No matter what solution is utilized, as the operating environment becomes more complex, the flaws of an application become more apparent through the introduction of process inefficiencies. These inefficiencies are the direct result of the application operating in an environment it was not designed for.

Processing Window

  • Planning Horizon: Macro: months/weeks
  • Response Time: Batch: hours

Data Model

  • Architecture: accounting/transaction
  • Scope: enterprise/supply chain
  • Decision Support: aggregate/summary

Functional

  • Optimization Focus: enterprise financial
  • Inventory: purchasing
  • Constraints: theoretical/batch
  • Task Management: workflow
  • Access: workstation
  • Quality Control: available

Processing Window

  • Planning Horizon: Current: days/hours
  • Response Time: Real Time: Seconds

Data Model

  • Architecture: recipe/work orders
  • Scope: plant/cell
  • Decision Support: finite level

Functional

  • Optimization Focus: equipment utilization
  • Inventory: work in progress
  • Constraints: assumed
  • Task Management: workflow
  • Access: workstation
  • Quality Control: SPC/SQC

Processing Window

  • Planning Horizon: Current: days/hours
  • Response Time: Real Time: Seconds

Data Model

  • Architecture: orders/tasks
  • Scope: site/multi-site
  • Decision Support: finite level

Functional

  • Optimization Focus: material flow
  • Inventory: material conversation/tracking
  • Constraints: actual/real-time
  • Task Management: systems directed
  • Access: wireless
  • Quality Control: confirmation & release

Technologies such as ERP and MES can and have been used to meet the needs of manufacturers’ material flow requirements, but they are not architecturally designed to effectively execute complex material flow processes. Supply chain execution solutions such as WMS are well suited to handle the complex material flow job.

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