January 1996 € Volume 6 € No. 1
WAREHOUSING & DISTRIBUTION
Implementing A Warehouse Management System
By Dan Trew
Your company has just purchased a warehouse management system. You are responsible
for the implementation. You have spent three to six months listening to
warehouse systems salespeople tell you about all the wonderful things that
the system is going to do when it is installed in your warehouse.
The new warehouse system, based upon all the sales presentations, will:
- Improve inventory accuracy
- Improve employee productivity and performance
- Improve space utilization
- Increase inventory turns
- Improve customer service levels
- Reduce operating costs
You have heard all the benefits before and, for the most part, the warehouse
automation software supplier is right. But will your company realize all
the benefits, and will you be around to see that it happens? The industry
is full of horror stories about the implementations that went bad. Most
of the implementations that were disasters could have been avoided. Make
sure that you take the steps necessary to maximize the potential for success.
Step 1: Obtain senior management commitment
The warehouse automation vendor has given you estimates of what their effort
level is. Do you understand the investment in manpower, training costs,
re-warehousing and start-up that your company has to make? Warehouse automation
systems typically require a significant manpower investment from the purchasing
company in order to be successful. Make sure you properly plan for that
manpower commitment and have senior management approval. The tasks that
should be planned with regard to manpower include:
- Training of all warehouse operations staff
- Labeling re-racking and potentially re-warehousing prior to implementation
- Hardware site preparation including cabling, site readiness, equipment
procurement and placement, RF site surveys and training of warehouse system
administrative staff
- Start-up costs, i.e., new warehouse procedures development
Step 2: Training, training and more training
The warehouse automation vendor has probably given you estimates of what
warehouse operations training should take. Make sure you understand all
the assumptions that were made when the estimate was developed. Is the vendor's
approach "train the trainer" or does it include training for all
warehouse operations personnel? What assumptions were made with regard to
the skill level of the warehouse staff? Perform your own evaluation of your
warehouse staff. Do they have the basic computer literacy and skills necessary
to run the warehouse system? Or do they need basic core competency training
before the warehouse training even begins?
Step 3: Plan for the disaster that never occurs
The first few days of the implementation are the most critical. Your newly
trained employees are running a brand new system in a production environment
for the first time. Although benefits with regard to increased employee
productivity can and should be realized, don't anticipate that increased
performance on day one. As a matter of fact, during the first few days of
implementation, it may require more people to work longer hours than had
been the case with your manual system. Although sometimes unavoidable, never
implement during your peak season and be certain that you have contingency
plans in place. Assume the new system won't work. Plan for it, and you will
probably never have to use those plans.
Step 4: Garbage in, garbage out
One of the cost benefits of a new warehouse system should be increased inventory
accuracy. When you start up the new system, your inventory records need
to be as accurate as you can possibly make them. You should plan on performing
a physical inventory prior to start-up. The system should help you maintain
a significantly higher inventory accuracy level than your manual system.
But don't expect the new system to correct problems that preceded the implementation.
Bad inventory records also make problem identification next to impossible.
Is there a problem with the new system's inventory control? Or was the inventory
messed up prior to implementation?
If you follow these steps, you will maximize the potential for success and
increase the likelihood that you will have a major success story on your
hands.
If you don't follow these steps, I would recommend that you, at the very
least, keep your resume updated.
Dan Trew is director of logistics for Catalyst International, a supplier
of warehouse management software. Trew has over 15 years of experience in
the implementation of warehouse automation systems.
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