NEWS & SOLUTIONS 1997-05-19

ADAM BLAIR

NEW YORK -- Computerized warehouse management systems have already helped distribution executives conquer the realm of space by maximizing cubic footage within warehouse facilities.

But newer, more advanced systems are targeting time as the next frontier to be explored. More precise timing of virtually all warehouse operations, including receiving, put-away, picking and shipping, will allow distribution centers to proceed with initiatives ranging from establishing interfaces with their transportation systems, to implementing cross-docking and flow-through programs.

Distribution center executives say that warehouse management systems' ability to give them the real-time status of all freight within the facility is the key to achieving improved timing within the warehouse.

Such systems allow warehouse managers to prioritize pallet moves, communicating instructions to forklift drivers and other warehouse workers via radio-frequency technology.

Because advanced warehouse systems require associates to key in specified job codes in order to receive instructions, they provide the infrastructure for establishing engineered labor standards. By giving a more accurate picture of stock within the warehouse, they also hold the potential to simplify or reduce cyclical methods of taking inventory.

Distributors interviewed by SN report that implementation of advanced warehouse management systems has given them measurable increases in productivity at their facilities, as well as greater accuracy in shipping freight to stores.

Price Chopper Supermarkets, Schenectady, N.Y., has employed a warehouse management system since 1981, according to Tom Bird, director of warehousing. But the retailer is now in the process of implementing a new, more advanced system at its four distribution centers.

"One of the things we tried to do was reduce the empty fork time for forklift operators," said Bird. The new system addresses this issue by allowing interleaving, "which allows an operator to do put-away and letdown simultaneously, reducing empty fork time and increasing the operator's daily productivity," Bird explained.

Such efficiencies have helped Price Chopper increase average pallet moves from approximately 22 per hour to 26 per hour in its dry grocery distribution center.

"Even the 22 per hour was a decent number, when you consider that 15 years ago, prior to using any computerized warehouse management system, we averaged nine pallet moves per hour," said Bird.

Bird also credited use of the warehouse management system in Price Chopper's perishables facility, installed earlier this year, with lowering the "scratch rate" of out-of-stocks caused by inaccurate inventory counts. "Our scratch rate in perishables had been running at about 0.3%; we've now gotten it down to 0.1%," said Bird.

While basic warehouse management systems offer users more efficient use of available space, advanced systems can make that jump even more dramatic by providing real-time information on pallet location.

"Prior to using a computerized warehouse management system, we always had to put the same pallet in a designated pick slot. We were forced to do that because we didn't have any other systems to find the pallet when we needed it," said Michel Remillard, supervisor of logistics at Hudon et Deaudelin, Montreal. The grocery distributor operates four distribution centers in the province of Quebec, serving more than 300 supermarkets.

Use of the new warehouse management system "gives us the ability to have stock everywhere in the warehouse," said Remillard. "This has allowed us to increase our cube utilization of the warehouse dramatically, by approximately 20%."

Systems that allow warehouses to implement automated replenishment and retrieval of pallets offer the greatest opportunity for efficiency gains, according to Tim Conner, director of distribution center operations at Associated Food Stores, Salt Lake City.

"When a store orders product, our people pull items for that particular store from the slot where it's kept," Conner explained. "But we don't stock every bit of inventory in that pick location. The product that doesn't fit there has to be stored -- hopefully in proximity to that location. "Our new warehouse management system will have our people place incoming product in close proximity to that 'home' slot," said Conner.

Associated, which operates three separate facilities with a combined 750,000 square feet of space, converted its meat and deli warehouse to an advanced warehouse management system in January, followed by its frozens facility in April. The retailer plans to expand the system to its produce facility in September, followed by its grocery facility in February 1998.

These newer warehouse management systems also allow distributors to establish their own parameters for put-away, replenishment and selection of product. "With this system, there's a bar-coded label attached to each pallet, so each one is identified and known to the system," said John Limbrunner, project manager for Alex Lee Inc., Hickory, N.C., which has been using an advanced system for two years.

"When the forklift driver scans that bar code, the system says 'I know what that is, it's supposed to be located here.' Then it identifies the closest location to put the product in, finds an open slot and tells the forklift operator to take it there," he said.

The use of real-time information also allows the system to rationalize the replenishment process, according to Limbrunner.

Prior to implementing the system, forklift drivers replenished "strictly by guess and by golly," he said.

Time and effort were often wasted as drivers looked for the appropriate pallet, according to Limbrunner. Previously, if a picker went to a pick slot and didn't find enough of a given item he needed, "he'd go to a paging system and page a forklift operator to lower a pallet to him," said Limbrunner.

Now, selectors notify the computer system that they're going to pick a pallet. If the system notes that the pick slot doesn't have enough of the desired product, it sends a message, via RF technology, to the forklift driver responsible for this area, Limbrunner explained. "The message says 'By the way, let down this particular pallet in this particular location, because a picker's coming really soon and he needs this product,"' said Limbrunner.

Joe Sealey, vice president of distribution at Minyard Food Stores, Coppell, Texas, noted that RF use within the warehouse has the potential to increase efficiency. "It's the first measuring stick that you have had for forklift drivers," he said. Minyard operates a 770,000-square-foot facility supplying 83 stores.

It is virtually impossible to make real-time measurements of pallet moves without a warehouse management system equipped with RF technology, Sealey said. "If your forklift drivers do an average of 18 to 22 moves per hour, you might give a driver 20 moves to do and tell him to come back when he's finished," said Sealey. While the driver may have been moving around the warehouse, there was previously no way to determine if he was delivering the appropriate pallet to the appropriate location, said Sealey. "With radio frequency, drivers sign on to each and every job, and as they finish it they get another one that's in close proximity to where they are. And it tells them to do the most critical job first," he said.

Alex Lee's Limbrunner is planning to leverage warehouse management systems' ability to accurately measure warehouse work to implement engineered labor standards in its new 1-million-square-foot warehouse facility, opening in mid-May.

Limbrunner also hopes that the system will allow Alex Lee to eliminate the need for annual physical inventories and the costs associated with them, beginning in 1998.

Gerry Greenleaf, director of distribution at Hannaford Bros., Scarborough, Maine, said the company has used a warehouse management system for over a decade, periodically upgrading as new components became available.

Hannaford operates four distribution centers serving over 150 stores. Its most recent advance is an interface between the warehouse management system and Hannaford's transportation resource planning system.

Linking the two systems "allows us to do a better job of routing trucks and dispatching loads," said Greenleaf. Hannaford's transportation system receives store orders at the same time as its warehouse management system, and makes routing decisions for the company's trucks.

"Currently on paper, but in the near future electronically, the transportation system will send those routing changes to the warehouse management system," said Greenleaf. "This way the warehouse system can process the order in the most efficient manner, instead of reacting at the dock."

Price Chopper's Bird anticipates greater efficiency through cross-docking and flow-through initiatives. He reported that the company is already cross docking both consumer product and store supplies with seven of its major vendors, and that he anticipates using a flow-through module of the warehouse management system in the future.

"The biggest advantage we have is the ability to read and understand bar codes using scanning and RF technology," Bird added. This will allow Price Chopper to "continue to build cross docking, so that we don't touch the cases. That's really where the savings are."