Customers today are finicky. They expect to receive their orders as quickly and accurately as possible, while receiving the highest level of service. Consequently, order fulfillment has become more than simply receiving an order and shipping it out to the customer.
Now, it is about processing that order and delivering it to the satisfaction of the customer. After all, when customers are happy with a company’s performance, they will continue to do business with that organization.
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Moreover, IBISWorld predicts that consumer spending will grow at an annual rate of 2.6 percent over the next five years, reaching $12.9 trillion by 2020. This growth means that retailers will require more industry services to deliver goods to consumers in a timely, precise manner.
As order fulfillment becomes more complex, the burden falls on manufacturers and distributors to meet customer demand in a shorter amount of time. In addition to facing pressure from the customer, these companies struggle with a number of other challenges that create inefficiencies throughout the fulfillment process:
Limited Space: Warehouses may have limited space for storing and staging orders. Similarly, customer sites’ may have smaller “back rooms,” and therefore, require more just-in-time (JIT) order placements.
Unreliable Transportation: The transportation industry has become increasingly unreliable due to the shortage of drivers. If a truck is late or misses its appointment, orders are not only delayed, but also end up sitting in the warehouse, taking up valuable space. Without a streamlined inventory management process, this is an even larger problem.
Lack of Communication: There is often a lack of communication between sales, manufacturing, warehousing, distribution and even the customer. This leads to additional changes to customer orders late in the process.
Other challenges stem from under- or over-selling the product, insufficient inventory, limited production capacity and inefficient use of labor. With these complexities in mind, companies are now looking for a solution to help overcome the order fulfillment burden. While there are many tools available (ranging from manual, to automated, to a mix of both), warehouse execution systems (WES) are emerging as the solution of choice for many leading manufacturing and distribution companies.
The term “warehouse execution system” is fairly new, with various, slightly different definitions. But, at its core, a WES is a software system that provides warehouse management system (WMS) and warehouse control system (WCS) functionality in a single solution. Eliminating the need for multiple applications, warehouse execution systems offer the inventory management, storage optimization and traceability features of a WMS, as well as the automation control components of a WCS, which provide a real-time view of material handling equipment, labor status and other key performance indicators (KPIs) crucial to efficient warehouse operations.
When compared to traditional, separate WMS and WCS solutions, a warehouse execution system has numerous advantages. First, it allows users to maximize the benefits of automated systems while increasing inventory accuracy and reducing labor costs. Second, the solution is also scalable and customizable – users can turn on and off the functionality needed to meet their requirements and set up specific business rules. It can even interface with other applications, such as corporate enterprise resource planning (ERP) systems and programmable logic controllers (PLCs). Third, a single system creates consistency across an organization’s facilities and typically requires a shorter learning curve for operators and IT personnel.
So, how does a WES address order fulfillment challenges? In addition to the aforementioned benefits, a WES provides the following capabilities:
Built-in Order Planning: A WES has built-in order planning processes. This allows shipment planners and dock coordinators to determine inventory and transportation availability and compare that to order demand.
Receiving & Tracking: A WES provides the functionality to receive and track product, while optimally marrying inventory to customer orders through its order fulfillment processing capabilities.
Labor Breakdown: As users generate orders for fulfillment, the WES breaks the orders into logical units of work and distributes the tasks appropriately. It then uses its WCS functionality to direct automated material handling equipment and/or manual labor to execute the work.
Using these capabilities, a WES offers the flexibility to enable accurate, JIT order fulfillment processes. Users can easily accommodate for last-minute order changes and transportation delays, while keeping the warehouse moving smoothly. With quicker load turn-around times, distribution centers can reduce the probability of truck detention fees and strengthen carrier relationships.
A WES also increases labor efficiency and productivity, cutting down on the number of wasted steps in the materials handling process. This leads to greater throughput and, therefore, greater profitability. As a result, companies can readily meet even the most fickle customers’ needs and fulfill their orders on time, every time, to their utmost satisfaction.
Dave Williams is Director of Software & Solution Delivery at Westfalia Technologies.