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Three Ways to Achieve a Greater ROI with a WMS vs. an ERP Warehouse Module

Every company must have within its objectives the growth, which is demonstrated in the fulfillment of goals and in the management indicators that the success of the strategies established in the different procedures. One of these indicators is the ROI or Return on investment, which is the representation of the economic gain generated by the implementation of different strategies. Now, if the company’s priority when implementing a technological solution is to achieve a higher ROI, which system should be chosen, a WMS or an ERP?

ERP vs WMS: how do they work?

While enterprise resource planning (ERP) software, automates activities in all departments of an organization, including accounting, customer relationship management and inventory management, for its part warehouse management systems o The Warehouse Management System (WMS) manages the resources involved in the TOTAL operation of a distribution center (CEDI) in real time, a detailed record of each product movement that occurs in the warehouse and optimizing operations of entry and exit of products.

Three ways to achieve a higher ROI with a WMS

  1. Increase productivity and reduce cycle time

In each of the processes present in the CeDis, advanced WMS improves productivity in comparison to the warehouse modules that an ERP has because it a) plans the needs thanks to the historical collection of times, users and movements, information that It is essential when making decisions; b) optimize the space automatically and recommend modifications according to the rotation of the product; and c) improves the flow of choice taking into account the route, location, characteristic of pollution, picking by wave, among others to optimize productivity.

2. Achieve mayor precision taking more detailed control

A WMS offers greater visibility and control over more details than an ERP warehouse module, as a result the management team can improve the accuracy and efficiency of orders, for example, by knowing the expiration dates; integrate teams that facilitate data capture and picking processes; reduce product identification errors, facilitate process changes such as cross-docking; recorder automatically the variable weight of units or pallets; bill services offered in case of being a 3PL; among others.

3. Improve visibility

Most of the ERP warehouse modules focus on quantitative control and inventory availability within the four walls of a CeDi, on the contrary the WMS provide a holistic view of the supply chain, this is done by example through proactive alerts, simultaneous consultation of the inventory status by managers, consultation of the status of an order by customers, viewing and downloading reports from different mobile devices, among others.

This vision on the advantages of a WMS over an ERP, as well as the idea of ​​the benefit that a company can have when acquiring a specialized and robust solution that manages all the processes and resources of the distribution center, facilitates decision making at the moment of starting a project

Although each company according to its nature identifies identifications are its needs and therefore the indicators on which its ROI will measure, it should be remembered that part of the success is in identifying the actual starting values ​​before having a WMS.

 

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Corporate Social Responsibility: Fundación Segundos de Vida

Cerca Technology joins the work of the Fundación Segundos de Vida, supporting the families of children with cancer in Colombia.

In Cerca Technology we recognize that integrality is one of the keys to success, that is why from Talent Management it was launched the Corporate Social Responsibility policy to demonstrate the commitment as a company in positively impacting social, environmental and economic improvement.

Within the framework of this policy, projects such as Eco-laborador are being carried out that seek to promote habits of care for natural resources inside and outside the company, as well as the relationship with Fundación Segundos de Vida, a non-profit organization that carries out a continuous accompaniment, legal and psychological support, and a family basket for hundreds of children suffering from cancer and their families, who are going through difficult situations due to this disease.

With the support of Cerca collaborators who have added positively to this great initiative, we have established different activities in order to support the foundation. Monthly we make an economic donation, 50% contributions from employees and an additional 50% paid by the company.

Likewise, Cerca has supported with other social initiatives this year: Blood donation; donation of toiletries; volunteers for hospital parties and plastic caps collection points which are delivered to the foundation for later sale. With the money collected, food vouchers are bought for the mothers of children who receive treatments in hospitals.

We know that this is the beginning of many activities that we will support as a company, and we thank the collaborators and managers for making this possible. We invite our business partners to join these initiatives that certainly generate value and also positively impact our lives.

 

Julieth Giraldo

Human Talent Coordinator

Cerca Technology

 

What is the Difference between Artificial Intelligence and Machine Learning?

To clarify this topic, and understand the difference between Machine Learning (ML) and Artificial Intelligence (AI), it is useful to begin by mentioning some simple definitions.

The AI ​​refers essentially to the ability of a high-tech or computerized device to simulate the human mind. AI software routines and systems provide what appears to be logic, memory and decision making in these devices. As its name implies, artificial intelligence can be interpreted in a general way as the incorporation of human intelligence into machines.

For example, these machines can be used to move and manipulate objects, language recognition and problem solving. Today, the routine of AI is in an increasingly wide range of consumer electronic products, from Bluetooth speakers and smartphones to portable devices of all kinds.

Machine Learning, as the name implies, can be interpreted in a general way as empowering computer systems with the ability to “learn”.

The purpose of ML is to allow machines to learn by themselves using the data provided and make accurate predictions. Then, instead of software routines coded with specific instructions to perform a particular task, Machine Learning is a way to “train” an algorithm so you can learn how to do it. “Training” involves providing enormous amounts of data to the algorithm and allowing the algorithm to adjust and improve.

As an example of ML we can see how the vision of computers has been improved, to recognize an object or image.

At this point, then we can say that ML is a subset of AI, in fact, it is simply a technique within it.

In the industrial aspect, the AI ​​can be applied to predict when the machines will need maintenance or to analyze the manufacturing processes to obtain great efficiency gains, saving millions of dollars.

On the consumer side, instead of having to adapt to technology, technology can adapt to us. Instead of clicking, writing and searching, we can simply ask a machine what we need. We could ask for information such as weather or an action such as preparing the house for bedtime (turning off the thermostat, closing the doors, turning off the lights, etc.).

Finally, it is also true that ML represents currently the most promising path towards artificial intelligence.

What is Change Management?

The Change Management concept refers to a series of activities that are developed during the transformation processes to help concretize the adoption of the change.

In the context of technological transformation projects, it involves considering a series of impacts on processes and people, which must be addressed to support the success of the project and obtain the expected benefits.

From the strategic perspective, it is necessary to validate the relevance of the project within the framework of the organizational objectives.

From the perspective of the processes, what should be changed? What improvement? And above all, how do we measure it?

From the perspective of people it is necessary to consider that the adoption of change is a process with stages and that throughout the project people should be provided with space for each of these stages.

 

The management of the change and its two components should be understood as a parallel project that supports the implementation project of the tool.

What are the change management activities for a software implementation project?

Change management needs vary from project to project, so a diagnosis must be made that includes an understanding of the organizational culture, the identification of those involved and impacted, the measurement of willingness to change and a deep understanding of AS. and the TO BE of the processes.

Once the change drivers and the map of the involved and impacted have been identified, a plan is drawn up that usually includes awareness-raising activities, a complete communication plan (hearings, messages, channels and media), and training activities. in technical skills how soft skills.

Why is change management important in projects?

Because when it is not considered, there is a risk of impacting duration, quality and cost of the project.

This aspect is often left aside and the importance of allocating the budget of the project is reduced, also, sometimes it is reduced to few and unstructured communication actions that lack context and intention.

However, many post-implementation studies point to the management of change as a fundamental factor in the success of the project.

It is then essential to plan and timely execute a change management project that considers the specific needs of the project, that ensures a team with the required skills and an organization aware of the need and the benefits that the change represents.

Autor: Aimara Fagúndez, Professional Services SOLA Manager at Cerca Technology

 

What are the Critical Points to Consider When Designing the Replenishment Strategy in my Distribution Center?

Replenishment is basically defined as the process in which the preparation or picking1 locations are periodically supplied to complete their capacity with reserve stock, generally from pallet type locations. If preparation locations are used in the warehouse, they must be stocked regularly. The quantities supplied are based on the total capacity of the preparation location and the quantity of the article prepared for that location.

There are several types of replenishment that you can consider implementing. Some of the most common are:

  • Normal Replenishment: This type of replenishment is the most common and generally works by bringing a full pallet of merchandise from higher rack levels to a first level preparation location. These locations are usually a little larger (usually the difference is in their height) so that the so-called “security mattress” exists and prevent the location from being left empty before the replenishment is completed.
  • Cascade Replenishment: These replenishments occur when a second replenishment can be made from one preparation location to another. For example, the first replenishment is made from a reserve location to a box picking location and a second replenishment is generated from the box picking location to a unit picking location.
  • Replenishment of cherry pick: This replenishment called cherry pick by some software manufacturers WMS (Warehouse Management System), is very useful when you have pick locations in mezzanines that are small lightweight bookshelves or “bines” among others. In this model, a partial pick up of merchandise is made in different reserve locations to consolidate a “mixed pallet” of products and then take it to the pick area to deconsolidate it and fill the picking locations in a logical sequence and route. This method helps reduce both routes and equipment utilization as well as product availability times.

Because of what has been described above, replenishments are definitely a useful tool to complement your daily operations; however, keep in mind the following recommendations so that they do not become a double-edged sword:

  1. For replenishments to work correctly, you must know in detail the information of your ABC products by logistic rotation. The number of visits to the location and the units or boxes dispatched in a certain period of time are key so that the replenishments are generated in an adequate manner. High rotation vs. Very small locations or few locations can exponentially increase the number of refills that you probably will not have the ability to handle.
  2. Assignment of the safety mattress and resupply capacity. It is important to find the right numbers for the so-called safety cushion or reorder point and the amount that will replenish at the location. If the security mattress or the replenishment quantity is very low, it is possible that your location will be left empty before completing the next replenishment, generating delays in the selection of orders.
  3. Take into account the availability of the adequate equipment to complete the refills. The most common equipment used to execute re-stockings are the forklifts, the trilateral and the order picker (for cherry pick), in some cases complemented with pallets for cascade or cherry pick type. If you do not have the necessary equipment to perform all your refills, these can become a stone in the shoe since storage and selection operations will be delayed. If you do not have enough equipment, you can think of different strategies such as generating workgroups to execute all the pending refills before starting the next work shift or the next wave launch (order groups).
  4. Over-allocation or so-called “overallocation”: Some WMS systems provide functions such as over-allocation in which product is basically assigned from a picking location even if the material is not yet there (the replenishment has not been completed). It is important to make sure that even when the order planner has made the launch of the wave, the replenishment has been executed before the selection operator arrives to execute its task. Otherwise, it will have to wait for the replenishment to run or skip that task, which will force it to return later, affecting the flow of the logical sequence of picking and the time of selection of the orders.
  5. If you have implemented a WMS, the implementation of a Slotting module is recommended to optimize the layout of your picking locations, the time of selection and preparation of orders and the replenishments generated.

In a world-class distribution center after picking, replenishment is one of the most labor-intensive tasks, accounting for around 30% of the demand for resources. Replenishments are a very useful tool when optimizing your process flow, but at the same time they must be programmed and executed with due care to avoid inconveniences and negative impacts on the operation.

A selection or picking location is a location assigned to a SKU (usually one location is associated per item, but it is not the norm) to facilitate picking. This location is generally replenished from height or reserve locations.

Voice Technology, Performance beyond Operation in Picking Tasks

At present, the reduction of operating costs, the adequate management of the workforce and the level of customer satisfaction are some of the most important indicators with which the efficiency of business management is being measured. From the logistics area, the reengineering of the processes and the productivity provided by the systems applied to the distribution centers are, without a doubt, the greatest contribution that the logistics area makes to achieving these objectives.

The voice is par excellence the most effective form of communication, which is why the implementation of technological tools based on Voice technology, which allow to perform the daily tasks in the distribution center more quickly and accurately, are ideal at the moment of reduce costs in the company.

Vocollect Voice is an innovative technology designed specifically to optimize the workflow in the distribution centers and, although initially its use was oriented to the tasks of picking, the benefits generated in these tasks and the need to extend the levels of performance in other processes such as reception, storage, loading and unloading, has led to extend the reach of this technology to each of the processes within the distribution center. The companies that already use this technology have reported improvements between 15% and 30% in the productivity of the Distribution Center and levels of accuracy above 99.5%.

The implementation of Vocollect voice technology has a positive impact on Order Preparation, Batch Control, Product Traceability, Replenishment, Cross-docking, Transfer, Audit and Control, Cyclic Counts, among other tasks.

The Vocollect Voice technology, therefore, represents a competitive advantage in the logistics operation, over other companies.

Author: Cerca Technology

Read also: Voice Technology | Good Practices in the Implementation Process of a Distribution Center

The Logistics Management Indicators

One of the determining factors for any process, whether logistic or production, is carried out successfully, is to implement an adequate system of indicators to measure the management thereof, so that indicators can be implemented in strategic positions that reflect an optimal result in the medium and long term, through a good information system that allows to measure the different stages of the logistic process.

Currently, our companies have large gaps in the measurement of the performance of logistics activities of supply and distribution internally (processes) and external (satisfaction of the final customer). Undoubtedly, this constitutes a barrier for top management, in the identification of the main problems and bottlenecks that arise in the logistics chain, and which ostensibly affect the competitiveness of companies in the markets and the gradual loss of their products. customers.

Everything can be measured and therefore everything can be controlled, there lies the success of any operation, we cannot forget: “what is not measured, cannot be managed”. The proper use and application of these indicators and the programs of productivity and continuous improvement in the logistic processes of the companies, will be a base of generation of sustainable competitive advantages and therefore of their positioning in front of the national and international competition.

  1. OBJECTIVES OF THE LOGISTICS INDICATORS
  • Identify and take action on operational problems
  • Measure the degree of competitiveness of the company against its national and international competitors
  • Satisfy customer expectations by reducing delivery time and optimizing the service provided.
  • Improve the use of resources and assigned assets, to increase productivity and effectiveness in the different activities towards the final client.
  • Reduce expenses and increase operational efficiency.
  • Compare with companies in the sector in the local and global scope (Benchmarking) 
  1. IMPLEMENTATION SCHEME

Indicators should only be developed for those activities or processes that are relevant to the company’s logistical objective. For the above, the following steps should be taken into account:

  • Identify the logistics process to be measured
  • Conceptualize each step of the process
  • Define the objective of the indicator and each variable to measure
  • Collect information inherent to the process
  • Quantify and measure the variables
  • Establish the indicator to control
  • Compare with the global indicator and the internal competition
  • Follow and feedback the measurements periodically
  • Continuously improve the indicator

 

  1. CLASSES OF MANAGEMENT INDICATORS 
  1. MAIN MANAGEMENT INDICATORS 
  1. CUSTOMER SERVICE INDICATORS 
  1. FINANCIAL INDICATORS

Technologies that Allow to Generate and Increase Productivity within the Distribution Center

Where do you see that you can support the increase in productivity, not only from what is now known as Voice Picking?

For more than 20 years Honeywell has worked in Voice Picking as its fundamental pillar of productivity. Nowadays we understand that, although this principle placed us at the top of the technologies in general, it is a paradigm, because it is believed today that we can execute in a more efficient way our assortment process based on everything that concerns the voice technology within the distribution centers.

Why is it a Paradigm?

I return a little to understand the way we see technology before we understand it. This comes in recognition of the operation based on process flows.

What is a workflow? Understood as the study of the operational aspects of the logistics activity, it is the beginning of everything within the Distribution Center: how the tasks are structured, how they are carried out, what their correlative order is, how they are synchronized, how the information that supports the tasks and how the compliance with them is monitored. Thus, the workflows within the distribution center are based on the study of them from the processes of entry, storage, cyclical counting, inventory, assortment etc.

For us at Honeywell, the principle of taking the voice to a Distribution Center, goes beyond the assortment or the Picking by Voice, is to understand all the workflows that arise in the distribution center and support them with voice technology. This is something we call the Talking Store.

The Talking Store

Many refer to the Talking Warehouse as the voice-enabled store and, in short, are the different areas in which voice technology can be applied to achieve greater business performance. This is the next generation in the management of merchandise handling in the distribution center and warehouse.

Today, many managers are reviewing the processes in their warehouse and are betting on voice technology as an enabler of productivity. In a talking store, for example, there are fewer alphanumeric keyboards and bar code scanning is only a secondary support. The argument in favor of voice technology is simple: quantitatively, the voice provides measurable business value.

What other things can we do, leveraging the success and experience of using the Voice in a Distribution Center?

Understanding that the principle of everything is the workflow, looking at the supply chain, we could say that we are in a previous link to what is the demand of the market. What happens if we go to the beginning of the chain? This is where we have the raw material, in this case who we are going to satisfy is not the market, but the production lines and finally the raw material warehouse, which has process flows that resemble those of the distribution center. finished product.

Another aspect is that in order to meet the demand for the products to be delivered, it is required that the transport is in good condition, which is known as an inspection and maintenance plan inside the talking warehouse. And in the face of retail, to be able to supply the gondola or the product that is not found, we can also leverage the principle of the Voice to supply products, take note of the non-existent product, make price changes in the gondola, among others process flows.

These are to mention, some of the uses and applications that we see in order to optimize distribution centers with Voice technology, to convert them into Talking Warehouse.

Study of Virtual Purchases and Monitoring of Delivery Logistics E-Delivery

The operations of electronic commerce have become a global factor in a decisive factor for companies, taking advantage of the advantages and technology offered by the Internet service and its great capacity to respond to final consumers in real time. Logistics becomes a critical success factor for companies that market their products in the network, it is an adequate logistics, with the purpose of effectively operating the goods and services to final consumers, generating competitive advantages, profitability in the business and satisfaction of customer expectations.

Due to the rise of e-business on the Internet, companies that sell their products virtually to their consumers via e-commerce are becoming aware that the sale is only consummated when the product comes physically into their hands of the final customer and satisfies the promises to final customer service and satisfy the promise of established service, if an adequate distribution logistics is used, the profitability of the business diminishes and generates problems of credibility and dissatisfaction to the final customer.

The traditional transport and storage companies are not prepared for the demands of e-commerce, for this to work properly, it is necessary to manage a totally new structure focused exclusively on the characteristics of “delivery”, that is, frequency-intensive distribution. of shipments, small volumes and at a low cost, ie the e-logistics, this new concept will have two major challenges: deliveries in less time possible and high efficiency to maintain competitive prices, transport companies that achieve excellence in those points will take an essential step in the war of electronic commerce.

The distribution function becomes a critical success factor in the companies that market their products in the network, which must select a transporter or distributor adapting the logistics variables of the orders (cost, price, volume), and in this way negotiate a freight that does not affect the margin of profitability of the product, especially if they are trading high volumes of merchandise that allow rates to be lower than those of the market.

In Colombia, the cost of transporting cargo is one of the most costly in Latin America and our companies are still not prepared to face the challenge that lies before them, especially in the area of ​​information technology, which is the key to connectivity between the client, the transporter and the virtual company, fortunately, a better panorama is visualized in this sense due to the alliances between national and international logistic operators that combine efforts to reduce the delivery times of merchandise anywhere in the world.

The companies that evolve first in the development of technologies of data capture and information in real time, generate competitive advantages in their sector and will be the ones that best adapt to the new demands of the clients, who need to know in a timely manner the status and tracking your orders, either through Internet access or with colts electronic devices available in the market.

 

Author: Luis Aníbal Mora, Manager of High Logistics

Social Collaboration Brings Innovation to “Sales & Operation Planning”

The main responsibilities of Sales and Operations Planning (S&OP) leaders are: establishing priorities, planning and executing supply chain strategies, driving improvements and quickly adapting to market changes and customer demands, and always thinking about financial results. But all of that is within the average activity of the day to day, also the development of changes in advance is expected to solve the limitations of the S&OP.

What is the most fundamental challenge? For most S&OP professionals, the basic answer is to keep all stakeholders aligned. But normally the technology in use does not have the proper framework for everyone to be synchronized. The greater pressure to include new internal and external participants can alter this process. When there are more participants, there is a greater amount of data that must be managed. The technology that supports these processes will optimize access to the right data, in the right place at the right time so that S&OP efforts are fluid and give the right results, which opens new doors for innovation.

The key to S&OP innovation

What is the key to S&OP innovation? Collaboration.

It must be systematized, horizontally and vertically, internally and externally, to include all the conversations and communications involved in S&OP. There must be a way to capture, follow and audit the path of each communication from conversations, and meetings to emails and social networks all in one system or resource that is widely used throughout the organization. It can be said that S&OP has traditionally focused on numbers, and that the process and the collaboration component have not aroused so much attention. But now, beyond the numbers, the combination of different views is the key to success.

The success of a contemporary S&OP strategy depends on good communication. This is because S&OP integrates different elements of demand (promotions, sales, forecasts, etc.), financial objectives (budgets, cash flow, etc.), supply (production and programming of origin), survey of the life cycle of the product and planning of inventory, and logistical requirements. To execute a successful S&OP strategy, there must be complex and fluid conversations between internal and external parties between multiple, sometimes conflicting, departments that encompass strategy, execution, problem and potential, management and marketing, supply and demand, vendors to CEO whatever the role and location.

The possibility of corporate social networks

How can an organization overcome these challenges? There is an innovative way that offers unparalleled advantages that are difficult to achieve in any other way. We talk about corporate social networks.

What is a business social network? In the same way that social tools, such as Facebook and Twitter, these social resources drive connections and communications in different geographies, time and subjects. It allows users to optimize data collection and discover and focus on the same interests, work together on projects, urgent issues, communicate immediately or on a regular basis, and have a way to track conversations over days, weeks and years.

Employees love social tools because they are familiar. But most organizations have no way to implement a good social network so that the company can benefit from the S&OP.

Through the use of a social collaboration platform you can effectively achieve these goals for S&OP by creating a much wider line of communication within the entire company. Social collaboration for the S&OP process allows to offer a line of communication to review alerts, tasks, workflows and exceptions. In the same way that you follow a person or company on Facebook or Twitter, you can follow a sales order, promotion, some customer, brand, work in production, place or event.

S&OP in practice

The following example will show you the practical application of social S&OP to achieve more efficient communication within the company.

An account manager receives a call from a major customer about an unusually large order. The account manager updates the demand module of the S&OP system to enter this atypical order in the sales forecast, and simultaneously posts a message saying that the order is real to avoid misunderstandings. The posting is visible to all who follow the client in question, and also triggers event alerts based on the exception rules of the S&OP system. This posting may also contain attachments, such as graphic images of the demand analysis screen showing the impact of the new order.

The sales director who follows the client sees the message posted and also the alert warning of this atypical demand. The director comments on the good news and sends it to the production manager who can approve the updated demand plan. The production manager sees the message posted by the sales director and evaluates the plan, verifies inventory and production levels. Once it guarantees that the plan will incorporate this additional demand, revises and publishes the new supply plan, it triggers a stock alert to require the levels of the product that the customer will buy.

One of the participants in this plan is the warehouse manager, who also receives the stock alert according to the inventory levels required for this product. He can see the product in question, and verify that he has inventory ready for this order.

Once you verify that the stock is available, add a message confirming that the inventory is ready for the customer’s order, with a label to receive an alert when the customer’s order arrives. The order and alert arrive and the warehouse manager updates the status warning that the order has already been sent to the customer. To close the circle, the account manager sees that the order has been completed and posts a thank you message to everyone in the circuit.

Through the social S&OP, the different departments were able to solve a critical issue, in a matter of minutes, instead of spending hours with calls, conversations, meetings, emails and other unstructured communications.

But there is also another advantage of the social S&OP. All actions and interactions are transparent for all users and are recorded in the original purchase order, allowing a clear follow-up. Something that was previously impossible or a tedious task, is solved quickly and efficiently through a platform of social collaboration.

It is clear that the social business will quickly be the way to unite people and processes within a successful S&OP strategy. If we consider the principle of social S&OP, beyond the four walls of an organization, it can provide a quick mechanism for communication with external suppliers, guaranteeing a platform of integral collaboration through the supply chain.

Author: Cerca Technology