The impacts of digital transformation and connected commerce are resounding across industries. The roles of manufacturers, wholesalers, retailers, employees, technology and robotics are all rapidly transforming in today’s evolving e-commerce landscape. Changing consumer behaviours and new digital initiatives have also changed the game for distribution centres (DC) and supply chains, which are now expected to skilfully handle large B2B wholesale orders, retail store replenishment orders, as well as urgent, small e-commerce orders.
Some of the biggest shifts in expectations of the DC and supply chain are inline with the flexibility that consumers now expect from e-commerce. Manhattan Associates recently conducted research that revealed 56 per cent of Australian consumers would stop shopping with a retailer that doesn’t offer flexible returns options, and 71 per cent check to see if a retailer offers flexible delivery methods such as home/office delivery, parcel pickup lockers, click-and-collect and express delivery, before shopping online with them.
Today’s supply chain and warehouse need to keep up with a much more demanding omnichannel landscape, which will likely continue to grow more demanding as technology advances and competition rises.
Keeping up with the changing industry
Under pressure from rising consumer expectations, forward-thinking companies around the world are challenging themselves to serve more customers, more quickly, more directly and more personally. And these companies realise that omnichannel distribution projects aren’t just an issue for the consumer-facing retailer end of the business – it is also very much down to supply chains and warehouses to keep up.
In an effort to keep up with the omni-channel, distribution leaders are making unified channel fulfilment a key goal, because it delivers a holistic approach that is capable of factoring in the complexities and uniqueness associated with each individual channel.
Supply chain leaders are now taking note of the benefits other businesses have gained with this approach and are taking action. They have realised it’s no longer acceptable to operate channels with segregated warehouse space, duplicative inventories, excess labour, and redundant automation.
All of these assets are expensive and in order to improve throughput, profitability and customer satisfaction, maximum utilisation is critical. There needs to be continuous optimisation and orchestration of order fulfilment activities across all assets and all channels. That’s why advanced warehouse management systems (WMS) must now also feature an embedded Warehouse Execution System (WES) and Order Streaming capabilities.
Warehouse Execution System
The trend today is that more and more organisations are going down the multi-channel fulfilment route. Tasked with handling more SKU, greater numbers of smaller, more frequent orders, across more channels – all with shorter processing times – distribution centres are under constant pressure.
Rising demand for human labour and resulting labour shortages are driving many warehouses to investigate advanced automation and robotics. The appeal is obvious: automation is not impacted by regional workforce capacity, robots do not get fatigued, injured or sick, and they can work around the clock. Robots are also safer in some cases, helping to manage large, heavy, or hazardous loads to protect both worker health and the company’s liability.
DC robotics are getting more efficient, more sophisticated and faster than ever before, with innovations coming from vendors around the world. The challenge is that different types of automation do not naturally communicate and are often not aware of each other, much less the supporting workforce. In order to get maximum throughput within the DC, the various types of automation need to work together.
“More than ever, warehouse management must be approached with a holistic perspective that considers any combination of human and automation together.”
Previously, there was no standardising of systems and no limitation to the amount of automation – when supply chain leaders introduced automation, they were forced to work with various systems: a warehouse management system (WMS), or warehouse control system (WCS), as well as a warehouse execution system (WES). The systems worked independently of each other and remained largely siloed, meaning fulfilment organisations actually had to work harder to ensure inventories were not duplicated, and resources were maximised.
These legacy WMS were never designed to continuously manage the capacity and throughput across advanced automation, robotics and humans. Now, with fulfilment across multiple channels, supply chains need a lot more flexibility.
“The challenge for the supply chain is that it has multiple flows coming from all the different channels,” said Raghav Sibal, managing director at Manhattan Associates, ANZ. “This has created a need to optimise the flow of products through different channels, as throughput needs to be measured and optimised through each area of the warehouse to be able to maximise the overall efficiency of the operation, with the WMS integrating all systems used in all areas.”
Today, the WES module needs to be built inside the WMS, rather than being patched on later from the outside. Eliminating siloed integration challenges, a WES embedded into the WMS provides a comprehensive, coordinated approach that gives complete command and control of the warehouse.
“The challenge for the supply chain is that it has multiple flows coming from all the different channels.”
Many operations have both human and automation in the warehouse, and whilst automation can be optimised at maximum capacity, a bottleneck is often created in other areas. WES inside the WMS will optimise throughput through each zone or area in the warehouse, both automation and human, in order to maximise the efficiency in each area. The system is able to take into account how long an order has been sitting, as well as orders going through goods-to-purchase, to prevent a bottleneck occurring upstream or downstream, and ensuring operations are optimised.
A fully integrated WMS should work seamlessly with any type of automation, allowing robotics providers to simply plug in to the new system and be up and running quickly.
In a further effort to take charge of omnichannel management and success, many supply chain leaders are looking to Order Streaming, a sophisticated approach to order fulfilment. Order Streaming helps the DC operate with increased speed and flexibility by breaking down the boundaries between wave (bulk orders) and waveless (smaller e-commerce orders continuously streamed) fulfilment. It allows warehouses to use multiple processes to efficiently fulfil orders of any size or type rapidly from a DC of any size or type — both smaller, local, quick-response facilities, as well as larger, regional, high-volume, automated e-commerce sites.
Australia Post’s 2018 E-commerce Industry Paper revealed that in 2017 online spending saw a growth of 18.7 per cent, while traditional retail saw a growth of only 2.5 per cent. Additionally, Australia Post predicts that by 2020, one in ten items will be bought online. With this growth, Order Streaming will become more important in the supply chain to keep up with the increased volume and smaller pick orders from e-commerce.
Order Streaming is a waveless approach and allows smaller orders to be incorporated into the flow without disrupting the efficiency and productivity of the warehouse. Rather than batching orders and dropping them into the DC operation in waves, which will slow down production as smaller or single-product orders have to sit and wait until they can fit into a batch, Order Streaming continuously evaluates the order pool and automatically releases work based on variables such as order priorities and facility processing capacities.
While many types of orders and operations are best served by batch-wave processing, development of a waveless approach has been necessary to respond to growing omnichannel fulfilment promises. Waveless manages every order as a discrete allocation of work, enabling fast, responsive fulfilment for smaller, more urgent orders. It is ideal for direct-to-consumer order fulfilment.
“Order Streaming gives distribution centres the ability to process urgent e-commerce orders throughout the day without disruptions, which is only going to be more important as e-commerce continues to grow and delivery timeframes shrink,” Mr Raghav said.
Another key benefit of Order Streaming is that the system allows retailers to accept online orders later in the day, while still allowing them to turn around and ship orders quickly (often in the same day).
Whether a warehouse relies on a combination of manual and partially automated processes, or a fully automated, robotic system, Order Streaming supports the requirements of adaptive, changeable fulfilment and delivery. Today’s trends toward sophisticated autonomous robotics open an exciting set of opportunities for Order Streaming and its impact on business strategies.
Allowing for future growth
More than ever, warehouse management must be approached with a holistic perspective that considers any combination of human and automation together. Coordination and collaboration across discrete pieces of advanced automation – as well as the human workforce – only gets more powerful when those systems are integrated with each other. The combination of an embedded WES and Order Streaming capabilities makes today’s advanced WMS one that enables total visibility across the DC, complete flexibility for automation growth, as well as continuous analysis and maximum utilisation of all resources.
As e-commerce trends continue to emerge and impact supply chains, supply chain leaders must find ways to modernise their DC operations in order to remain competitive in the face of new pure-play e-commerce start-ups, international brands, and other omnichannel enterprises. Advancements in technology, equipment, and operational best practices will certainly provide opportunities and inspiration.
Achieving omni-channel success
Manhattan Associates’ customer Country Road Group completed a successful roll out of Manhattan’s WMS. The technology deployment was a key component of a business transformation project designed to deliver a unified brand experience for customers across channels and to drive ongoing business growth.
Country Road Group’s business and sales channels have evolved in complexity and scope as the company expanded its operating footprint. With over 700 stores and a growing online operation, the retailer had outgrown its outsourced logistics services model and recognised the critical need to take greater command of its supply chain. The company made the strategic decision to invest in a new DC and chose Manhattan’s system to orchestrate goods flows through the new DC.
Head of supply chain Australasia, Country Road Group/David Jones Peter Fouskarinis commented: “The Manhattan solution has enabled us to optimise our store replenishment and online order fulfilment processes, resulting in improved product availability and customer satisfaction.”
The Manhattan system’s advanced fulfilment logic for wave management, constraint-based selection and real-time replenishment has been critical in helping Country Road Group realise its omni-channel commerce goals. The system eliminates costly physical counts with auditor-approved cycle counting, and stores can now provide same day fulfilment as a result of a new cross-docking approach.