This is Part 1 of a five-part series for midmarket distributors who are looking to bring their warehouses into the 21st century and beyond.
WAREHOUSE TECHNOLOGIES AND CONSIDERATIONS
Managing inventory and warehouse operations is easy when you are small. Warehouse management becomes more difficult as distributors grow, adding more locations, large facilities, and larger product lines.
Growing distributors and those using entry-level accounting or legacy distribution ERP systems must modernize warehouse operations to remain competitive. This often warrants a replacement of the business system or the acquisition of expensive warehouse management software.
This series of articles provides wholesale distributors with an overview of warehouse management features and technologies. It includes a self-assessment to determine what steps to take next. It also provides WMS strategies and a process for executing WMS implementations to modernize warehouse and distribution center operations.
Let’s start at the beginning, and take a look at some of the features available to midmarket distributors who are looking to maximize efficiency and reduce costly errors.
INTRODUCTION TO WMS FEATURES
Distributors need to consider six feature categories when modernizing their warehouse operations and business systems. These are general features, inventory management, order management, inventory transactions, automation, and compliance and reporting. These feature sets are crucial to every warehouse modernization project. They provide distributors with the tools they need to eliminate manual data entry, streamline business processes, and improve visibility into all warehouse and inventory transactions.
Creating a modern warehouse relies on modern technologies. The application platform is crucial. It should be developed in modern programming languages and database applications.
You should have the option to deploy in the cloud or on-premises with easy connectivity to external systems. The data and access to the system should include multiple levels of security.
Other features to consider include customizable workflows, real-time inventory updates, and flexible packaging definitions. Unit of measure conversions for sales, purchasing, and inventory are also important. Do not underestimate the value of ERP publishers, vendors, and consulting partners. All of them are essential to the success of your warehouse modernization project.
Modern warehouse management depends on robust inventory management. Systems should support flexible warehouse configurations including locations, bins, containers, and slotting requirements.
Simple, yet sophisticated inventory cycle counting is a must-have to ensure inventory accuracy. Systems with ABC rank codes, movement classes, and calendardependent cycle counting help determine warehouse layouts for high-volume and low-volume inventory.
Distributors of perishable goods need systems to manage expiration dates, lots, and stock rotation. Item creation tools including imports and matrix items are crucial for distributors across industry segments. Replenishment should support min/max, safety stock, reorder points, demand forecasts, vendor lead times, and more.
Some WMS systems provide order management while others integrate with the sales order module in your ERP application. Either way, sales order management is a major factor in every warehouse modernization project.
Systems should support back orders, item substitutions, inventory allocation to orders, and drop-shipments from vendors to customers. Product pricing, promotions, and discounting must be flexible to support your needs. Integration with EDI, commerce, and retail systems may also be required to account for other sales order sources.
Modern warehouses automate processes. Systems should support automated inventory movement using bar code scanners and RFID. Other automation technologies may include labeling, pallet or container license plating, automated replenishment, carousel and robotics integration, EDI, and scale integration.
COMPLIANCE & REPORTING
Do not neglect compliance and reporting. Look carefully at industry and customer labeling requirements, quality assurance, lot and serial tracking, inventory valuation, financial reporting, and government or industry compliance regulations.
Transactions are the heartbeat of every warehouse. Inventory receipts should support directed put-away to the preferred item stocking location. Inventory movement should provide at least single-step or two-step transfers. More sophisticated distributors may consider three-step transfers to track in-transit shipments between facilities.
Kitting and kit disassembly are important in most distribution businesses. Look for systems that support multiple kitting scenarios with disassembly functionality.
Issue inventory according to your needs, including FIFO, LIFO, expiration date, sequential, or user entered. Pick using batch, wave, or zone picking methods. Manage perishable inventory with first-expired-first-out (FEFO) picking. Manage carts and containers for transactions.
Look for systems that support flexible packing options including various packaging definitions and carton management.
The shipping process should be completely integrated with sales order and inventory management. Consider systems that natively support small parcel, less than truckload (LTL), or truckload (TL) carriers. You may also require route and delivery management if you own your own fleet and manage direct shipments to customers.
Next week, we’ll look at specific technologies you should be leveraging to keep your warehouse up to date in the 21st century.
WHAT ACUMATICA CAN DO FOR YOU
Acumatica Cloud ERP provides the best business management solution for digitally resilient companies. Built for mobile and telework scenarios and easily integrated with the collaboration tools of your choice, Acumatica delivers flexibility, efficiency, and continuity of operations to growing small and midmarket organizations.
MODERN WAREHOUSE MANAGEMENT WITH ACUMATICA DISTRIBUTION EDITION
A modern warehouse is crucial for wholesale distributors to thrive in today’s digital economy. Entry-level business applications and legacy ERP software pose barriers to modernization projects forcing many distributors to invest in costly customizations or complex and expensive warehouse management systems.
Distributors need to understand inventory and warehouse technologies so they can improve and automate business processes. They must understand how to utilize ERP and WMS features effectively for inventory management, order processing, inventory transactions, warehouse automation, and compliance and reporting.
A disciplined strategy is critical to the success of warehouse modernization projects. The strategy establishes a solid foundation, provides research, and defines priorities for the modernization plan. A four-phased execution approach ensures that distributors are prepared for implementations with continuous review and process improvement.
Acumatica Distribution Edition provides a modern platform for wholesalers to modernize warehouse operations with tools to manage projects, support cases, and installations or upgrades. Through leading-edge cloud technology, Acumatica Distribution Edition delivers unparalleled value to small and midmarket distributors. Integrated workflows span the full suite of business management applications with native warehouse management and barcoding features.