The Future Legacy Warehouse Management System

The legacy warehouse management system (WMS) is powerful and essential, but it has its strengths and limitations.

A traditional WMS offers strengths in planning and inventory management, but its weaknesses - a focus on daily, sequential, waterfall-style task assignment - have proven to be a crippling shortcoming amid the e-commerce boom and the demand for rapid execution of increasingly complicated orders.

A growing trend suggests operations looking for an intermediate or alternative approach to a new or upgraded WMS have some options, including warehouse control systems (WCS) and voice solutions.

“A lot of companies we run into every day have a legacy WMS that is not as functional as it needs to be,” says Ian Hobkirk, founder and managing director of Commonwealth Supply Chain Advisors. “It’s extremely common, with probably 40% to 50% of customers in this situation to some extent.”

Hobkirk emphasizes that voice systems and WCS have their own sets of strengths and weaknesses, and are not a WMS replacement, but a complement. “If you have one or two needs that play to strengths of WCS and voice, great,” he says. “If you have half a dozen needs across the operation, look at a new WMS.”

E-commerce demands real-time responsiveness to single-line orders, challenging legacy systems geared toward daily cycles and case quantities.

If done right, the addition of voice and/or WCS can make a later WMS upgrade much less disruptive. “If you deploy voice right now in a legacy WMS and keep it doing what it’s good at, you can keep voice when you update,” Hobkirk says. “But if you stretch voice or WCS to things not in its wheel house, you might throw away a lot of that development.”

For many, the pace of change in the software market is shocking and certainly bears no resemblance to the historical 10- to 25-year lifespan of monolithic software systems. “In all my years, I’ve never seen so rapid a change,” says 30-year industry veteran Greg Cronin, executive vice president at Intelligrated. “Software used to be on a five- or eight-year cycle. Now it’s closer to three. Everything is speed and satisfying consumer demand.”

The Legacy of WMS
Ten to 20 years ago, systems were designed around cases and pallets. If the WMS did not have the data needed to support less-than-case quantities, it might be too difficult an engineering effort to add that capability. “It leads to dysfunctions, and some end up creating separate businesses,” says Curt Sardeson, managing principal at Open Sky Group. “If you’re operating one facility with two WMS solutions, you probably have a problem.”

Even if there are not yet functional problems, Hobkirk says there are some telltale signs they’re not far away. “If a system is not supported by the original developer, if it’s entirely homegrown, or if it’s in an outdated code base that will make it hard to find support with that expertise, you will have difficulties,” he says. “Then again, it can be as simple as an old system’s inability to recognize more than a single forward pick location for a given SKU.”

Historically, a WMS assigns a single pick location per SKU. This can create significant congestion as pickers try to access fast-moving SKUs. The seemingly simple act of distributing A-movers to several areas can challenge legacy systems. And, then there’s the complexity of integrating a legacy WMS with one or more automation subsystems.

As automation has migrated into the fulfillment space - Cronin says it has almost become a requisite for companies starting at 15,000 orders per day - WCS evolved as a real-time intermediary between the WMS or system of record and the dynamic needs of the facility. The hope when investing in a carousel, automated storage and retrieval system (AS/RS), pick-to-light system, automatic guided vehicle (AGV) or A-frame is that speed and efficiency will follow. But a legacy WMS geared toward daily cycles will struggle to keep up with the real-time capabilities of automation. Lance Anderson, vice president of sales for Invata Intralogistics, explains the importance of effective communication between the two.

“The WMS sends the carousel all the orders it wants to process for the day. Now, say the WMS didn’t know a sale was coming, and had populated the day’s replenishment based on historic algorithms. When orders come in, items are not in the carousel and you have to scrap the whole order and start over,” Anderson says. “Once the WMS batched at night and moved inventory to the forward pick area, you need to execute the order however it’s laid out.”

If a WCS has the authority to move inventory around, reroute orders, and make changes in the middle of the batching process, it can work to get orders out the door. It might also have access to the labor pool to reallocate accordingly. At that point, Anderson suggests an operation is less concerned with cost per piece than with filling the order. “Batch- and wave-based WMS algorithms are based on the lowest cost,” he says. “With e-commerce, if I tell my boss 80% got out efficiently but 20% didn’t get out at all, do you think he cares about the 80%?”

Instead, every time a WCS assigns the next work task to replenishment, picking or packing, it will run the algorithm again. What is the state of the operation right now? Is the pack line down? Is a print head down? What is the state of labor? Who didn’t come back from lunch? At that moment it makes the best decision on what to do next, and updates the WMS accordingly.

Distributor of Education Supplies Passes Inventory Exam
ASSET STEM Education is a distributor of professional development to educators, specializing in the kitting, delivery and management of hands-on curricula and leased supplies.

Reverse logistics and quality control are essential to the company, which often receives returned kits with missing, damaged or extraneous items. After deploying a series of custom software applications, the company was able to manage inventory on an item-level - rather than kit-level - basis.

The company operates a 20,000-square-foot warehouse on the south side of Pittsburgh. Its 3,000 SKUs include equipment and consumables for science, technology, engineering and math (STEM) lessons. SKUs are assembled into at least 100 different modules, with 12 lessons in each unit.

“We don’t want teachers to have to shop for supplies, so we provide everything they need,” says Cynthia Pulkowski, executive director of ASSET STEM Education. “But if one item is missing or damaged, they have to make a trip to the store, and we’ve missed that goal.”

Previously, the system assumed that if a kit came back it did so with all components intact. Because that was rarely the case, an accurate inventory count was impossible. Associates often borrowed from one module to complete another.

“It created a nightmare,” says Frank Arzenti, director of materials support center. “It was frustrating because we considered continuing to use our existing WMS or look at a new one, which probably would be too costly and big for what we need.”

A custom-engineered assortment of functional “apps” (DMLogic) now works with the existing system to provide item-level tracking and management of workflows in returns, picking and packing. The company executed the changeover to the new apps without any shutdown, while working to add all inventory to the system.

When orders are released to the floor, it creates a unique license plate for specific totes, each representing a module or portion thereof. One person can now pick to six totes at the same time, instead of six people picking to one module each.

Last year the company shipped about 10,000 totes containing a total of 3.6 million eaches.

The project reduced space needed for materials, so last year the company was able to give 10,000 square feet back to the landlord while also bringing materials back in-house from off-site storage. After reconfiguring the warehouse to store components instead of pallets of totes, it went from 1,000 linear feet of storage to 4,000 linear feet without breaking a wall.

“Item level has been tremendous improvement to inventory,” Pulkowski says. “One of the most important things was that the supplier always listened to the staff as they were developing. They never just gave us something and said, ‘use this.’ It was what we asked for and they checked at every step of the way.”

Mission: Control
But suppliers emphasize that WCS is more than “middleware” (which has almost become a dirty word) or something only intended to orchestrate automation. By taking control of fulfillment and working toward optimum productivity, WCS has become proficient in fulfillment execution, or the real-time direction of automation and labor in sync with incoming orders. That said, some call the WCS market a “Wild West” characterized by proliferating acronyms, customer confusion and a growing number of solutions to problems they only recently learned they had.

To simplify things, Jerry List, vice president of QC Software, describes three basic tiers of WCS. The Tier 3 WCS involves a more traditional interface with materials handling equipment. Tier 2 gets into order fulfillment, not necessarily using automation, and might coordinate picking and packing functions. A Tier 1 WCS is one that begins to overlap into the WMS space, offering more dynamic inventory control and management.

The goal at any tier, List says, is a good understanding of an important formula: productivity equals efficiency times percent utilization. “A lot of people use the words ‘productivity’ and ‘efficiency’ interchangeably, but they’re not the same,” he says. “If a voice-enabled picker has to wait a few seconds for a tote to arrive, that’s zero utilization. He’s efficient, but not necessarily productive. The only way to improve is with a real-time execution system.”

“A lot of companies we run into every day have a legacy WMS that is not as functional as it needs to be, it’s extremely common, with probably 40% to 50% of customers in this situation to some extent”Ian Hobkirk, founder & managing director of Commonwealth Supply Chain Advisors

Voice is among the many solutions for the increased amount of each picking, and enjoyed a warm welcome in the execution software environment. “The software foundation in the WCS was already there,” says Ken Ruehrdanz, manager, distribution systems market for Dematic. “WCS systems had been directing warehouse activities using pick-to-light and put-to-light technology for perhaps 20 years prior to the arrival of voice. Many legacy WMS do not accommodate voice, while many legacy WCS software modules do. Because of this early start, WCS software has expanded the functionality and performance that voice technology can provide in warehousing applications.”

Still, there is no hard and fast rule about which solution should be deployed in which order. Conventional wisdom held that a WMS was needed to drive the workflow, that planning had to come before execution. “You can think of planning, execution and reporting as linear, but it’s more of a cycle,” says Jennifer Lachenman, vice president of product strategy and business alliances for Lucas Systems. “Some customers have chosen to upgrade planning or WMS prior to implementing execution including voice. Some start with execution knowing they will upgrade the planning system later. Some have done both simultaneously.”

As businesses change, Lachenman says a central benefit to voice and WCS is their ability to insulate employees from changes in interface and processes. Even as a legacy WMS is entirely replaced with a new one, the interface on the execution side can remain identical to pickers and operators, reducing the disruptive impact of such a project.

There’s An App for That
A shiny new WMS is likely to be transformative to an operation, but the smallest of software point solutions can be just as impactful.

“Voice and WCS are better than just a Band-Aid for a struggling system,” Sardeson says. “I’m a big fan, and they can be a good investment for an old or new system. I hope the days of ‘screenscrapers’ are over, and in the future we’ll see a more open ability to pass data around to software and hardware.”

The à la carte approach is already gaining steam, with systems offering plug-and-play functionality. Whether it’s one of the many variants of voice and WCS systems or tasks traditionally handled by WMS, Bob Kennedy, vice president at DM Logic, notes a proliferation of targeted, small-scale software solutions. They all reside under the umbrella of “adaptive software,” which he says is analogous to the “app” approach, with an emphasis on ease of deployment, interface and change.

“It’s a radically different paradigm shift in how software is developed and delivered,” Kennedy says. “And it’s not unique to our solutions. The concept is to allow less tech-savvy people to create software so the customer can take control of the direction, evolution and maintenance of their WMS system.”

Kennedy offers the example of a customer who used a lot of seasonal employees. “When they picked using RF, sure enough they made a lot of mistakes,” he recalls. In a matter of hours, the customer built a new message stream for temporary worksers with a picture of the target pick and a couple extra scans for verification. Seasoned pickers continued to use the standard message stream. “Over time, they can migrate these workers from the introductory stream to standard, or can build new streams very quickly. To build, test, deploy and confirm that in the past would have taken days and help from the supplier.”

Taking it one step further, Kennedy says if the customer and supplier are building apps they might make them all available to the community on an “app store.” Before creating a new app, the customer could look at the app exchange to see what already exists. “Maybe they pay a fee, maybe they make a couple tweaks, but you’ll develop a community to foster an exchange of best practices,” adds Kennedy.

Companies mentioned in this article