10 steps to choosing a warehouse management system

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Choosing the right warehouse management system can often be as simple as taking a few considerations into account:

Step 1. Understand your current systems

If you are already using software to manage your warehouse operations or part of your warehouse operations, then you should start by looking at it in detail. What functions does it have that you like? What functions does it not have that you want?

You will also need to know what integrations you require from your warehouse management system. For example, you may require it to integrate it with your shipping carriers or sales channels.

Step 2. Decide if your picking process requires a WMS

If you are running a very small ecommerce operation, like a side-hustle, a WMS is unlikely to be necessary. But, if you are moving any reasonable number of products or you have any ambitions to scale you will need a more sophisticated solution.

Step 3. Understand what you are looking for in a warehouse management system

This is where you make your checklist of ‘must-haves’ and ‘like-to-haves’. You can then compare this list against your options.

Step 4. Decide on your budget

Of course, good warehouse management systems will cost money. So you will need to know how much money you can commit from your cash flow to purchasing one.

Step 5. Create a shortlist

There will be a few different options you can choose from. The easiest way to decide which ones to shortlist is simply to create a list or spreadsheet listing prices and features.

Once you have created a shortlist you can then go and use free trials or book demos with those you think are right for you.

Step 6. Check it integrates with your entire fulfillment process

Warehouse management is only part of the puzzle of ecommerce. Your WMS should also connect with your inventory management system and shipping carriers.

Step 7. Check it gives you the reports your need

A good warehouse management system will give you reports that can make definite improvements to your business. It should provide these reports in an easily accessible way.

It’s also good if the WMS provides demand forecasting as this will help prevent under and overstocking in the future.

Step 8. Check it works with your ecommerce tech-stack

You probably use a range of platforms, marketplaces, sales channels and shipping carriers. You need to check that your warehouse management system either has a native integration, seamless workaround or open API to do this.

This is where you can make use of a free trial. As it’s hard to know if a system works for you without testing it out.

Step 9. Is it easy for pickers to use and understand?

A good WMS will be easy for your pickers and warehouse team to understand and use. While there will always be a training period with any new software, you should look for an intuitive interface and easy-to-understand processes. This will make it easier for your team to pick up the new system and cut down on training time for new hires.

Step 10. Does it come with support?

Your business will be unique, therefore it’s important that any service you purchase comes with support. This support will be able to help you through any issues that arise with the product.

Article by:- Akshay Patel

Capacity Planning for Manufacturing

Posted on 11/02/2022 by gembaAdmin22

In this blog we will be learning the basics of capacity planning and how to do it, With help of this you can perform capacity analysis for any manufacturing facility. So let’s get in to details of it.

What is capacity?

As name suggests capacity is the maximum amount that something can contain or produce, in manufacturing terms we can say that capacity is ability to manufacture a particular quantity of products in a particular duration of time.

So what about the planning

Capacity planning is basically an analysis done to check whether a manufacturing plant can produce a particular no of products in a given period, with available no of resources.

The capacity is calculated over days or weeks or months. The measurement is done in a way that we can adjust our production capacity according to the demand from the market.

Normally capacity planning is done on machines or equipment. There will be two outcome of this analysis; either there is capacity or numbers.

If want to take in to consider the number, then we can tell how much more machines to be required to fulfil the demand.

Calculation of Machine hour Capacity

Our first step is to understand and calculate the capacity of the machine hour in the factory. For an example if a factory has 200 machines, and the workers in the factory utilize the machine from 8 am to 6 pm for 10 hours a day, then the capacity would be 10 multiplied by 200, which comes to 2000 machine hours.

Production capacity with a single product

1^st step to calculate capacity with single product is to determine time to produce a single product, and then it is divided by the plant capacity in hours.

For example, if one worker takes 40 minutes (0.66hrs) on a machine to make one product and the capacity of the machine has 2000 hours, then the production capacity would be

2000 / 0.66, then this would be 3003 units per day

How to do capacity planning

For better understanding let’s see an example

Suppose manufacturing plants needs to produce 100 units per day and we need to do capacity analysis

And if this product requires two operations A and B and its standard times are 5 minutes and 10 minutes respectively.

So the standard times are calculated by a method called time study.

And also operation A and B use two machines X and Y respectively. And presently have one each.

Standard working time of this plant is 420 minutes per shift breaks are excluded and this plant operates three shifts per day.

Also on an average 30 minutes is required for both machines for maintenance or we can say for down time, change overs, etc.

Suppose 98% is the yield of the both machines. Also these two machines is only able to run at 85% efficiency of its standard speed, if we take in to consideration of minor stoppages.

So let’s calculate.

Considering the minor speed loss, cycle time per product for both machines will be 5/(0.85) and 10/(0.85) minutes, respectively.

This is 5.88 and 11.76 respectively.

Also since yield for these machines is 98%, to produce 2% more of the demand, which is, 100 x 1.02 = 108

Now let’s calculate load on each machines.

Calculate load of the machine X…

This is equal to demand per shift x cycle time

= (108/3) x 5.88

= 211.68 minutes.

Calculate load of the machine Y…

This is equal to demand per shift x cycle time

= (108/3) x 11.76

= 423.36 minutes.

Now let’s calculate no of each machine required for meeting the demand.

No of the machine = Load per shift / Available time per shift per machine.

= 211.68 / (420 – 30)

= 0.54

This is one machine. And we have enough capacity for doing the operation A. No need to worry.

Now let’s check the capacity for operation B.

No of the machine = Load per shift / Available time per shift per machine.

= 432.36 / (420- 30)

= 1.11

So we require two machines for doing operation B.

We can conclude that there is a capacity issue. We only have one machine for doing operation B and we need one more.

This is how the capacity planning is been done

Article By – Shivank Kumar Choubey

Total Quality Management (TQM)

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Let us first understand what is TQM and after that we will look into its 4 major pillars which helps us in TQM for achieving desired results.

Total = Made up of the whole.
Quality = Degree of excellence of a product or service provides.
Management = Art of Planning, Organizing, Controlling etc.

TQM can be further divided into 3 parts as follows

System = All persons of all divisions at every stratum.
Method = In methods there are different tools and methods which are used to
achieve desired result such as Kaizen, QC Circle, 5S, TPM, MSA, OEE etc.
Purpose = Purpose can be any of the following from (QCDSME).
▪ Q: Quality improvement
▪ C: Cost reduction
▪ D: Delivery execution
▪ S: Safety maintenance
▪ M: Morale boosting
▪ E: Environmental protection

TQM can be defined as a management approach for an organization, centred on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society. And the main motive of TQM is to “Do the right things right the first time, every time”

❖ 4 Pillars of TQM

Customer Focus: Studying customer needs, gathering customer requirements, and measuring and managing customer satisfaction. Customer satisfaction is seen as the company’s highest priority. The company believes that it will only be successful if its customers are satisfied.
Process Management: Develop a production process that reduce the product variations. Applying the same process; the same product should be produces with the same level of quality every time. Teams are process-oriented, and interact with their internal customers to deliver the required results. Management’s focus is on controlling the overall process, and rewarding teamwork.
Employee Empowerment: TQM environment requires a committed and well trained work force that participates fully in quality improvement activities. Ongoing education and training of all employees supports the drive for quality.
Continuous Improvement: TQM recognizes that product quality is the result of process quality. As a result, there is a focus on continuous improvement of the company’s processes. This will lead to an improvement in process quality. In turn this will lead to an improvement in product quality. Measurement and analysis id the tool that has been used for that

Article By.

Dhavalkumar Gohel

5S An Opportunity

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5S is a methodology that helps in organizing our workplace and ensures that work is performed efficiently, effectively and more importantly in a safe environment. This helps in making our work environment secure, non- hazardous and improves communication and discipline between the workers.

5S consists of 5 terms that define the whole methodology of this process.

1S – Seiri(Sorting)

This term involves sorting out the required and non- required items of our workplace. After this Red tags are assigned to the periodically used or non-required items and a separate place is allotted to the Red Tag material called as Red tag area. This helps in improving the space utilization and also results in monetary

2S – Seiton(Set in Order)

According to this term “Everything must have its place and Everything must be at its place”. In this process we define and fix the layout of the work area and arrange everything in order that reduces search time/waiting time, helps in faster movement

3S – Seiso(Shine)

This term means to keep our working environment clean. This helps to detect leakages if any, provides a hygienic and safe working environment and improves working efficiency. It involves of providing cleaning check lists, CLIT checklists etc. to ensure cleaning action is being carried out regularly and timely.

4S – Seiketsu (Standardize)

In this method Standard Operating Procedures (SOPs) are created for more visual display, engagement of the It helps to assign regular tasks, create schedules and enforce instructions so that the activities become daily life routine. It helps in uniform implementation of 1S, 2S and 3S in the organization.

5S – Shitsuke (Sustain)

Sustain means to ensure discipline throughout the implementation of 5S. It is the centre of the whole 5S process and unless it is carried out perfectly by the work force of the organization 5S cannot be implemented. It involves keeping a record of the improvement and analyse the loop holes for which 5S is not getting implemented. Here a 5S audit is done and score is provided to each zone that helps to understand where the particular organization or area stands in terms of 5S.

Article by

Taksh Agarwal

Top 24 Warehouse KPIs

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Receiving

Among the most critical warehouse KPIs are the metrics that measure receiving performance. Warehouse operations begin with this process, and any inefficiencies here will snowball through all the subsequent processes.

Warehouse KPI metrics that correspond to the receiving process are:

1. Cost of Receiving Per Receiving Line:

The expense that the warehouse incurs on the receiving process of each receiving line. This includes handling costs as well.

2. Receiving Productivity:

Determined in terms of labour by measuring the volume of goods received per warehouse clerk per hour.

3. Receiving Accuracy:

Percentage of accurate receipts, i.e., the proportion of correctly received orders against purchase orders.

4. Dock Door Utilization:

Percentage of how many of the total dock doors were utilized.

5. Receiving Cycle Time:

The time taken to process each receipt.

These warehouse KPIs help managers identify any lapses in receiving and avoid a chain reaction of inefficiencies down the process line.

Catching inefficiencies, such as a long receiving cycle caused by busy dock doors, can reduce deficiencies as early as in the receiving stage.

Putaway

Once goods are received, the process of putaway begins with placing each item at a designated location selected for most convenient retrieval.

Effective putaway ensures a smooth picking process, thus significantly reducing lead time.

Here are some of the important warehouse KPIs that you must track to measure the efficiency of the putaway process:

6. Putaway Cost Per Line:

Expenses incurred for putting away stock per line, including labor, handling, and equipment costs.

7. Putaway Productivity:

Volume of stock put away per warehouse clerk per hour.

8. Putaway Accuracy:

Percentage of number of items put away accurately at the designated location.

9. Labor and Equipment Utilization:

Percentage of the labor and material handling equipment utilized during the put-away process.

10. Putaway Cycle Time:

Total time taken during the entire process of each put-away task.

Evaluating the putaway through these warehouse KPIs gives you a clear picture of potential inefficiencies in the process. Recognizing snags such as inaccuracies or scarcity of labor will help you to optimize and streamline the process.

Storage

Whether your warehouse is dependent on storing goods manually or uses AS/RS (Automated Storage and Retrieval System), you still need to measure efficiency. Here are some important warehouse KPIs to measure storage efficiency:

11. Carrying Cost of Inventory:

The cost of storage over a particular span of time, including the cost of inventory, capital costs, service costs, damage costs, and costs of obsolescence. The longer the stock stays in storage, the higher the cost to the warehouse.

12. Storage Productivity:

Volume of inventory stored per square foot.

13. Space Utilization:

Percentage of space occupied by inventory out of the total space available for storage.

14. Inventory Turnover:

The number of times the entire inventory passes through during a period of time.

15. Inventory to Sales Ratio:

Measure of stock levels against sales. This helps managers identify monthly increases in inventory against falling sales.

These storage & inventory management KPIs are of immense value when it comes to maximizing storage utilization and reducing cost of inventory. For example, a low inventory turnover spurs you to track down a reason and helps you improve inventory management.

Pick & Pack

The process of picking & packing directly impacts lead time. Greater accuracy in picking means shorter lead time.

Picking in the right order decreases the rate of order return and increases customer satisfaction.

16. Picking and Packing Cost:

The cost incurred per order line, including handling, labeling, relabeling, and packing.

17. Picking Productivity:

The number of order lines picked per hour.

18. Picking Accuracy:

The percentage of orders picked and packed without error.

19. Labor and Equipment Utilization:

The percentage of labor & pick/pack equipment out of the total labor and equipment utilized during the process.

20. Picking Cycle Time:

Time taken to pick each order.

Distribution

As the roles and responsibilities of warehouses expand with the growth of always-on supply chain, the added function of distribution exerts additional pressure on warehouse management. Here are some warehouse KPIs relevant to distribution:

21. Order Lead Time:

The average time taken by an order to reach the customer once the order has been placed. This is one of the most crucial KPIs for warehouses and distribution centers.

22. Perfect Order Rate:

Number of orders the warehouse delivered without error. It indicates the success rate of the warehouse/distribution center.

23. Back Order Rate:

The rate at which orders are coming in for items that are out of stock. There are situations wherein unexpected spike in demand causes this. However, if this rate is consistently high, it is an indication that there are lapses in planning and forecasting.

These distribution KPIs will help you diagnose underlying problems.

For example, a high back-order rate indicates that a warehouse or distribution center isn’t stocking the appropriate inventory volumes. In this case, the problem lies in understanding consumer behavior and better forecasting demand so as to properly set inventory levels.

Reverse Logistics

The returns and reverse logistics is another crucial process where warehouse KPIs need to be measured. In most cases, the always-on warehouse is exposed to this process, and it’s essential to measure its efficiency and effectiveness.

Here is a warehouse KPI that should not be ignored if you are exposed to this process:

24. Rate of Return:

The rate at which goods, once sold, are being returned. This is most effectively used when segmented by reason for return.

This is one of the top warehouse KPIs that can help the warehouse/operations manager diagnose the exact reasons for rising warehousing costs and customer dissatisfaction, as it lets you dig into the reasons for returns.

VALUE STREAM MAPPING

Posted on 24/12/2021 by gembaAdmin22

Value Stream Mapping shows where you can improve your process by visualizing both its value-adding and non-value-adding steps.

What Is VSM?

Value stream mapping is a lean manufacturing or lean enterprise technique used to document, analyze and improve the flow of information or materials required to produce a product or service for a customer.

A value stream map displays all the important steps of the work process necessary to deliver value from start to finish. It allows visualizing every task that the team works on and provides single glance status reports about each assignment’s progress. It enables the team and leadership to see where the actual value is being added in the process, allowing them to improve on the overall efficiency associated with the delivery of a product.

VSM can be used for individual products and services for every type of business.

Terminologies in VSM

· Information Flow

This section shows the communication of process-related information and the transmission of data.

· Product Flow

This section maps the steps of the development lifecycle from concept to delivery. It shows both the task being performed & the person or team performing task.

· Cycle time (C/T)

It is the frequency of units produced or the average time between the completed production of one unit to the completed production of the next.

· Setup Time (S/T)

It is the amount of time needed to prepare for a given step.

· Uptime (%)

It gives an idea of the percentage of the total time that the processes or systems are actually active.

· Time Ladder

The Time Ladder provides a visual representation of the value stream timeline.

The upper portion of the time ladder represents the average amount of time that a product spends in the queue or waiting at each stage.

The lower portion of the time ladder shows the average amount of time that each product was actively being worked on, or more specifically when value is actually being added to the product during that specific stage.

How to map the first Value Stream

Define your focus –

This is probably the most important step of the entire VSM exercise. Start with clearly defining the objective. With a clear objective in mind, identify the appropriate focus, scope, and process to be mapped.

Next, determine your fence posts, or the start and endpoints of your mapping exercise. A value stream map is not a process flowchart. It doesn’t need to map every possible inflow or outflow of the process. By maintaining focus on the predetermined objectives and fenceposts, the mapping activity is likely to stay on track and focused.

Go to Gemba (Walk the Process) –

“Go to Gemba” means go to the place where the work is being done. Visit the customer where the production is taking place and understand why they need the features they are requesting.

Define the basic Value Stream –

Start with preparing basic VSM as a starting point. The key thing here is to outline only the process basics and hereafter add the other details step by step.

Develop Current State Value Stream Map –

Starting with the basic VSM add the additional processes and their corresponding data, including current cycle times, lead times, up times, takt times, SLA’s, etc. This should reflect all stages within the defined fence posts, and their respective values as they currently are. This is known as your “Current State” VSM. This current state will be immensely important to keep the process baseline.

From this current state, the mapping team will be able to better understand the entire process. This enables the team to discuss productive what-if and to develop better solutions to identified hot points. It enables to provide a before and after comparison of the process and its performance figures to know if the changes have any desired impact.

Develop Target State Value Stream Map –

Once the current state VSM has been completed, the team will need to develop a Target State VSM. The target state represents a clear target of where you want to end up. These targets can be expressed in delivery velocity, quality-focused metrics, compliance, or any combination of these. The important thing here is to identify a goal to work.

Develop Future State Value Stream Map –

As improvements to the process are identified and planned, the VSM team will need to develop an implementation plan. These improvements will often require a phased approach to introduce necessary changes to achieve the target state.

To do this, a future state VSM should be created for each state of the implementation plan, which typically includes a 30, 60, 90-day view. This allows validating your assumptions at each stage of the implementation plan, to make sure the changes are having the desired impact and moving the value stream performance in the right direction. The future state VSM gives team members a unified view of the overall process as well as targeted objectives to work toward.