Cover Story Boosting warehouse operating efficiencies Written for export & import SA by David Levin, Director, RedPrairie Africa In southern Africa, many warehousing operations are still running on paper-based environments, which are manually driven and controlled. Most growing operations reach a point where opportunities for refinement of manual warehouse processes have been exhausted, and the next level of efficiency cannot be achieved without the support of technology. A common question asked by companies, when investing in technology of any kind, is what is the appropriate level of sophistication required? A company can either be over-sold on the benefits, and invest in something which is unable to deliver returns, or be tempted into installing a cheaper system that cannot meet the longer-term functional requirements of the business. Another key consideration is the speed of return on investment. Over the past ten or so years there have been some interesting changes in the local WMS software market. The nominal cost of skilled and semi-skilled warehouse labour has approximately doubled since 2000, while the rand cost of WMS software has in fact reduced over that same period (due to a combination of increased market competition and rand strength). As a result, returns on investment in such technology have substantially improved, and with that the justification for making such investments. An investment in WMS technology can be the trigger to boost warehouse efficiencies and take supply chain productivity to the next level. The typical reasons for installing a WMS include: � Increased growth and complexity: Often this means either moving to a larger location and employing more staff, or otherwise investing in a WMS that allows for improved productivity and flow while keep the same fixed infrastructure and people costs. � Clear business case based on manual inefficiencies: A manually run warehouse will not be run as efficiently and investment in technology can often yield a reasonably quick return (sometimes inside of 12 months). � Quality and business risk issues: Issues such as inventory control and losses, batch or serial number traceability and recall, or risks around staff retention (manual systems require product recognition and therefore greater reliance on experience). The business benefits or justification for making an investment in a WMS is to use the technology to assist the operations to build the capacity and capability to manage more with the same or less resources. This is best achieved by having the necessary technology, a WMS, to best assign 4 and manage these new activities within its available pool of resources. For example, to illustrate this concept, in a typical warehousing operation with low levels of technology, MHE resources are usually assigned to focus on either inbound activities like receiving and put-away tasks or outbound activities like let-downs and picking tasks. This is not necessarily the most efficient use of these resources. In a WMS scenario, the system considers all these MHE resources as available to perform any task within the warehouse while considering each resources physical handling constraints. The WMS then dynamically assigns tasks in real time to these resources, based on optimisation criteria such as reducing travel time and distance, eliminating “empty-leg” travelling of MHE and staff and reducing double-handling of goods. The further benefit of implementing a WMS is the accumulation of accurate activity records. This information can to be used to review and understand the best mix of resources (staff and MHE) required to increase throughput to meet both internal cost and customer service level objectives as well as understand cost drivers for improvement and budgeting. Through our various productivity solutions, RedPrairie have been assisting customers globally and in South Africa for many years by improving warehousing efficiencies, levels of productivity and service levels to the end customer. About RedPrairie, in existence for 35 years, delivers productivity solutions helping companies around the world in three categories – inventory, transportation and workforce. RedPrairie provides solutions to manufacturers, distributors and retailers looking to reduce cost, increase sales and create competitive advantage. Over 20 global offices, including South Africa, provide services to over 34 000 sites in 40 countries; companies trust RedPrairie inventory, workforce and transportation solutions to deliver an immediate increase in productivity – with the flexibility to adapt as business needs change. RedPrairie has supply chain execution applications for productivity, warehouse, transportation management, visibility and performance measurement delivered in line with RedPrairie’s core value of delivering customer value. ◆ For further information, please visit www.RedPrairie.com EXPORT & IMPORT SA // APRIL <strong>2011</strong>
17626 Export 09/2010