Managing Global Supply Chain in R12 with Oracle® Warehouse Management System

The quality of an enterprise’s supply chain management can make or break a business. While minimizing costs, and maximizing quality, a focus on responsiveness and reliability results in a competitive advantage. Most Oracle® E-Business Suite users turn to Oracle Shipping Execution for supply chain logistics, but few take advantage of the Warehouse Management System (WMS). Designed to support distribution and manufacturing, WMS provides a single platform across a global supply chain to improve operations. This white paper explores how to implement WMS alongside Shipping Execution for better deployment strategies. 

Defining the Oracle® Warehouse Management System (WMS)

The Oracle® Warehouse Management System (WMS) is a system that is responsible for managing the flow of inventory into, within, and out of a warehouse with the goal of minimizing cost and fulfillment times. WMS functionality can be broken down into four main functions, which are:

• Receiving: The process of verifying, counting and adding items into the WMS system.
• Storage: The process of locating a product in specific warehouse locations, and maintaining accurate inventory levels in the WMS.
• Picking: The process of selecting items stored in the warehouse and associating them to client orders.
• Shipping: The process of sending completed orders out of the warehouse and decrementing the item inventory from the WMS system.

Order Fulfillment:

Before the product can be added to the WMS system several things need to occur. The product needs to be inspected to verify it is in good condition and ensure it is the correct expected item. The product then needs to be counted. This can be done in several ways: (1) a hand count, which is typically used for high value items; (2) a scale count, which is used to speed up counting of difficult items; (3) a sample count, which is used when product is boxed consistently; or (4) an inch count, which is used for paper products. Typically, product dimensions and weight are also gathered, and products with expiration dates need to be inspected to ensure the dates are within acceptable receiving guidelines.

Once the counting and verification are complete, the inventory is added into the WMS system. Addition of the inventory can be done through several methods, depending on the WMS and technology available at the facility. Some examples include manual entry into the WMS, RF receiving using mobile RF devices, voice-based receiving using a headset and receiver worn by the receiver, and automated receiving using barcode scanning and ASN data.

Putaway:

Once the product has been received into the WMS it needs to be moved to a location in the warehouse. This process is known as putaway. Putaway can be system-directed or manual. A product is typically putaway to a storage location, but it can be moved directly to a picking location or dock location depending on demand. Often, putaway is driven by license plates, which help speed up product movement through a warehouse. Regardless of method or type of putaway, the item is associated to the destination location after putaway is complete.

Storage Inventory Control:

Once the product has been putaway in the WMS, it needs to be monitored to ensure inventory accuracy. This process is known as Inventory Control (IC).  IC uses several methods to ensure inventory accuracy:

• Cycle counting
• Empty location verification
• Physical counting
• Issue investigation

WMS systems provide tools to support IC – system logs and history are available to help research issues. An accurate receiving process is one of the best ways to ensure inventory accuracy, while accurate picking also helps keep issues to a minimum.

Inventory Movement:

After product has been stored in a warehouse location it may need to be moved to other locations to facilitate other processes. Examples of different types of inventory moves include location-to-location transfers, inventory consolidation, replenishment to a production area, replenishment to a picking location, transfer to an on-hold area, or scrapping. Moves can be made in the WMS based on the technology and WMS in use.

Picking:

Picking is a broad term that includes any gathering of a product and packaging that product for shipment outside of the warehouse. Picking is typically based on orders received in the WMS system, with methods that include full pallet picking, ship-alone picking, and line Jobs. Picking can include a packing step, or the packing activity can take place independent of the picking activity.

As picking is the largest warehouse expense, this white paper will go into further detail about the process.

Order Picking with WMS

Order picking is the single largest warehouse expense item. Approximately 42 percent of warehouse labor expenses can be attributed to the time associated with order picking, with most of the time incurred during picking activity being the travel time. In the absence of picking automation, this incurred time amounts to productivity inefficiencies directly hitting the bottom line.

In addition to capacity optimization, an efficient and productive warehouse must be optimized for product flow.

Source diagram: Intelligrated

When implementing WMS, it is very important to understand different aspects within a warehouse including the following:

• Nature of the business
• Product types stored in a warehouse
• Order fulfillment model: Pull or Push
• Storage requirements
• Bulk versus parcel shipments
• Level of automation
• SKU velocity
• Warehouse layout

Lines per person per hour (LPH) is one good measure that most warehouses adopt to understand and optimize picking efficiencies.

Source diagram: Intelligrated

Achieving higher LPH is a function of advanced WMS picking functionality and available automation within a warehouse.

Oracle Warehouse Management Methodologies:

Oracle WMS provides different picking methodologies that can be used to fulfill a group of orders. By using multiple picking methodologies, one or more orders can be picked at the same time. Picking multiple orders at the same time increases efficiencies for the warehouse. The type of picking methodology a warehouse uses depends on the kinds of operations that run in the warehouse.

WMS supports the following picking methodologies:

• Order picking:The system assigns picks for one order, job, or schedule at a time to a user. When a user accepts a task for the first line of a job, schedule, or sales order, the system assigns the user all other picking tasks associated with that job, schedule, or order.
• Wave picking:The system dispatches one task at a time to the user.
• Zone picking:The system assigns picks for a given sales order, job or schedule in a given sub-inventory to a user. If a user accepts a task for the first line of a sales order, job, or schedule, the system assigns the user all other lines on that sales order, job, or schedule that are sourced from the same sub-inventory.
• Bulk picking: The system groups tasks to pick the same items that are sourced from the same locator so the picker only sees one task that might represent picks for several order lines. Bulk picking can be performed within a delivery or across deliveries.
• Cluster picking: The system dispatches a specified number of clusters to a single user. A cluster is all the tasks related to a sales order delivery, manufacturing job, or schedule.
• Paper-based picking: Users pick according to a paper pick slip that is printed at pick release. This enables a user to dispatch tasks to themselves when working in a paper-assisted environment.
• Pick and Pass/Label picking: The system generates LPNs during cartonization and prints the labels prior to picking. In order to pick, the user scans the LPN and the system dispatches the picking task associated with that LPN. The user can then pass the LPN to the next user or continue picking all material for the LPN. The system does not prompt the user to drop the LPN in the staging lane until the user picks all of the lines.
• User-defined pick grouping: This is based on user defined rules.

Cartonization with WMS

Cartonization is an advanced WMS function that supports the order fulfillment process by assigning the most appropriate carton(s) required to ship contents of an order. The following are some of the criterion on which carton selection is dependent:

• Item weight
• Item dimensions
• Items nesting
• Packing requirements
• Customer specific carton requirements
• List of available cartons/containers in the warehouse (carton dimensions and max weight limits are recorded in the system)

Without cartonization, packers have to manually determine the carton(s) to be used for every order. Utilizing the cartonization process takes that thinking part away from the packer, thus increasing efficiency and reducing errors in the packing process.

The following diagram summarizes, at a high level, the intelligence that cartonization function provides:

Source diagram: Invata

The key benefits of using cartonization are:

• Packing efficiencies
• Reduction of errors in the packing process
• Freight cost savings
• Consistency in using same cartons for similar orders
• Effective implementation of Pick-to-Carton methodology

Consider the example below of two orders and available containers.

Source of diagrams: Oracle WMS User’s Guide

As the example illustrates, the cartonization process will look at the order contents and available containers and then will advise which containers should be used for each order, along with the items and quantities that will go in each container.

The Oracle WMS setups for cartonization are as follows:

1. Enable cartonization function
2. Define cartonization groups
3. Assign cartonization groups to cartonization category sets
4. Define containers items
5. Assign containers to cartonization groups
6. Define contained items physical characteristics
7. Assign contained items to cartonization groups
8. Define container-load relationships

Shipping with WMS             

Once picking and packing activity is complete, the product is ready for shipping. Shipping is the process of assigning the packed order to an outbound carrier and decrementing the inventory from the WMS system.

There are several carriers that vary depending on business needs, such as parcel carriers like USPS, UPS, and FedEx; LTL carriers; TL carriers; couriers; and of course, customer pick up.

An order is considered a “perfect order” if it is shipped with correct items, correct quantities, damaged-free, and if it is delivered on time. KPI metrics that are directly related to picking efficiencies are:

• Order fill rate: Orders filled complete/total order shipped
• Order accuracy: Orders error-free/total orders shipped
• Order cycle time (hrs): Actual ship date/customer order date
• On-time delivery: Orders on-time/total orders shipped

Implementing and Utilizing WMS

As described in the Oracle WMS product guide, “with Oracle Warehouse Management customers require only a single, global warehouse management solution for all aspects of business including distribution, discrete & process manufacturing, maintenance, spare parts, and field service.”

Source of diagram: Oracle WMS Datasheet

Warehouse Automation:

WMS has a built-in Warehouse Control System (WCS) module to integrate with voice equipment; material handling equipment (MHE) solutions (e.g., conveyors, carousels, pick-to-light, and automatic storage and retrieval systems/ASRS); open API device integration to request tasks, and receive responses from diverse equipment type; and managerial workbenches, which enable real-time monitoring of the equipment and provide real-time visibility to the entire automation environment.

Supply Chain Execution Convergence:

Oracle WMS can execute on an optimized transportation plan and release orders based on the dock appointments, with picked material staged to the correct dock door. WMS also uses the optimized transportation plan to recommend trailer loading in reverse stop sequence.

WMS can be leveraged in combination with Oracle Transportation Management and/or Oracle Global Trade Management as a stand-alone supply chain execution solution. The Distributed Warehouse Management System (DWMS) feature is a deployment option that provides upgrade flexibility and allows you to run Oracle WMS against multiple ERP systems, including legacy and non-Oracle systems.

Cost Reduction through Resource Optimization:

WMS supports resource optimization, enabling users to optimize resources such as storage space, labor and equipment. Resource optimization includes:

• Directed Put Away Rules: Recommend storage locations based on configurable parameters such as velocity, volume and/or weight, and material classification to dynamically slot material. These rules can minimize storage fragmentation, enforce compliance with hazardous material, reduce obsolescence or implement other storage restrictions.
• Wave Planning: Allows customers to balance the number of orders to release with the amount of labor on-hand and then monitor the outbound progress.
• Task Management: Streamlines warehouse operator picking by optimizing the pick path and dispatching queued tasks only to qualified warehouse operators who have the required equipment to perform the task.
• Labor Management: Allows warehouse managers to define labor standards and then measure their workforce’s productivity from an individual level to across the entire warehouse.

Cost Reduction through Material Optimization:

 In addition to resources, WMS allows for material optimization. Material optimization includes:

• Cross Docking: Minimizes material handling by eliminating unneeded put away.
• Forward Pick Replenishment: Optimizes the material picking of high volume distribution centers which fulfill a large number of smaller orders.

Cross dock opportunities may be planned in advance or executed on an opportunistic basis. In distribution operations, finished goods may be cross docked from inbound directly to outbound staging for customer sales orders. In manufacturing operations, opportunities may exist to cross dock raw materials from inbound directly to manufacturing, and to cross dock finished products from manufacturing directly to outbound staging.

Forward pick locations are dynamically replenished such that picking tasks are only dispatched after the replenishment has been completed. For items with uniform demand, Pull Replenishment automatically tops off a forward picking locator as soon as a shortfall is detected. For items with irregular demand, Push Replenishment fills forward pick locations with the quantity of that item in demand.

WMS Benefits:

With its single platform, WMS is ideal for solving current business challenges – including cost reduction, simplification, visibility, consolidation, and organic growth – while also working towards building your next generation enterprise – such as acquisitions, new solution offerings, state-of-the-art technology solutions, and taking the steps toward becoming a leader in the marketplace.

Driven by business objectives, WMS simplifies distribution center operational systems and consolidates multiple WMS into one, is easy to implement, and offers a proven methodology that will ease the integration for future acquisitions.

Other WMS solution attributes include:

• Supports fulfillment and project (push/promotions)
• Incremental service offerings
  • Reverse logistics
  • Inbound transportation
  • Supports B2C
  • Supports high volume distribution
  • Supports retail compliance
  • Distributed order routing (intelligent DC routing)
  • Complex kitting
    • Kits within kits
    • Supports serialized and lot control SKUs
  • Uniformity across systems and processes across DCs and clients
    • Experts on vertical processes – retail, big box, gift cards, pharma, auto, food and beverage
    • Built around best practices
    • Value added to the client
    • Helps with selling process
    • Minimize custom solutions
    • OMS business rules for order validation
    • Multi DC
    • Multi-client
    • Uniform workflow for print on demand

New Features of WMS in R12:

In Release 12, Oracle improved the functionality of the Warehouse Management system, introducing new features to WMS:

• Mobile transaction pages
• Cancelling tasks using the Warehouse Control Board
• Defining custom label fields for label formats
• Dock scheduling and load sequencing with OTM integration
• Replenishing a forward pick area
• Supporting high volume case picking
• Receiving LPNs
• Using a mobile device
• Using opportunistic cycle counting
• Using catch weight management
• Cross docking
• Over allocating for pick release
• Reusing LPNs
• Implementing the wave planning process
• Managing logistics service providers (LSP)
• Using distributed warehouse management

Conclusion

With the Oracle Warehouse Management System, companies are provided with a single-platform across an entire global supply chain. Specifically designed to support the needs of distribution, manufacturing, asset-intensive, and service businesses, WMS can mean more efficient operations and increased flexibility. After implementing WMS successfully, companies improve labor and space utilization, reduce fulfillment costs, advance shipment accuracy, and better control inventory.