Logistics software implementation

Logistics Software Implementation-ILM

With logistics towards the future, thanks to the right IT links.

The demands on logistics are changing due to the con­stant changes in tech­nology. Not only within logistics today a mul­titude of new tech­nologies are used, but also the logistic envi­ronment is in a con­stant tech­no­logical change.

Today’s cus­tomer of a logistic service wants to be able to call up current infor­mation about the products at any time and any­where. Whoever thinks that this phe­nomenon is limited to the B2C sector, which has been growing strongly in recent years, may be mis­taken. Also the B2B sector is cur­rently under great pressure to develop along new tech­nologies towards more trans­parency for the customer.

In order to meet these cus­tomer require­ments, it is essential to make the available infor­mation available at all times and across the entire IT system hier­archy. The existing IT land­scape and the ware­house man­agement software used play a central role in the col­lection and trans­mission of this information.

Hier­archie einer „state oft the art“ IT-Systemlandschaft

Hier­archy of a “state oft the art” IT system landscape

If you are dealing with the opti­mization of the IT system land­scape in the logistics envi­ronment, you should first know the common levels, the IT system land­scape used in ware­house logistics. The levels / instances are arranged hier­ar­chi­cally and exchange infor­mation with each other in a tar­geted manner. They thus form a common IT network.

The top level — the admin­is­trative level — is respon­sible for the strategic and oper­a­tional planning of resources in the company. Here, in addition to pro­duction planning, order pro­cessing also takes place on the basis of cus­tomer infor­mation using an Enter­prise Resource Planning System [ERP system]. The admin­is­trative level con­trols the sub­or­dinate levels and thus acts as HOST. Therefore it is also called HOST or HOST level.

On the second level — also called client or control level — com­mands and inputs of the admin­is­trative level (HOST level) are exe­cuted and cor­re­sponding status reports are reported back. This is where the ware­house man­agement system (WMS) is located. The client or control level has a com­manding function for the sub­or­dinate levels.

The sub-client level or material flow level is located below the client level. This is where the addi­tional func­tions of the WMS run. In most cases, this level is an integral part of the higher-level WMS and is pro­vided by the same provider.

The fourth and last level com­prises the hardware rel­evant for all goods move­ments on the control level. The degree of automation depends on the indi­vidual require­ments of the company’s logistics.

Is your IT system land­scape struc­tured sim­i­larly? Compare yours and build it up according to the “state of the art” model.

The path to a homo­ge­neous IT system landscape

Since IT system land­scapes have often grown his­tor­i­cally, a homog­e­nization of the entire logistics IT should be con­sidered prior to the intro­duction of logistics software.

First, the existing IT system land­scape, as well as all existing links between indi­vidual systems, should be recorded across all levels. With a graphic rep­re­sen­tation including a description of all inter­faces as well as func­tions of the indi­vidual systems, a good overview can be created. System ver­sions and system man­u­fac­turers should also be included and eval­uated according to their support times and oper­ating and main­te­nance costs.

We rec­ommend that the same system man­u­fac­turers and system ver­sions are used at the same level. This reduces inter­faces and above all costs.

In summary: Analyze and describe your IT land­scape. Graph­i­cally depict the actual sit­u­ation. Define your future IT land­scape, as homo­ge­neously as pos­sible in terms of system man­u­fac­turers and system ver­sions. Determine the GAP between ACTUAL and TARGET and derive your mea­sures for imple­men­tation from this.

Process mapping & require­ments def­i­n­ition of your logistics IT

New process require­ments due to company growth and the asso­ciated higher goods and material throughput in logistics are classic reasons why com­panies are looking to optimize logistics IT. A struc­tured approach is important in IT opti­mization. For example, if you want to introduce a new ware­house man­agement system, you should first record and doc­ument your logistics processes. These can be influ­enced by the use of new systems, so that an adjustment must be made. As a rec­om­men­dation: we map processes within the process doc­u­men­tation, for example in the BPMN 2.0 standard.

Which logistics processes are to be con­sidered specif­i­cally here? The focus should be on the regular logistics processes from goods receipt to goods issue, including labeling, transport, storage and picking. Special processes such as inventory, transport (from and to the cus­tomer) or cus­tomer billing should also be con­sidered in the process recording. Take a holistic view including all adjacent logistics processes.

After the process doc­u­men­tation is com­pleted, the require­ments for the new logistics software are defined. The recorded processes as well as the tech­niques used in logistics such as “pick by voice”, “pick by light”, cor­re­sponding forklift control systems or ware­house automation serve as a basis to define your target state or the IT require­ments. A more estab­lished pro­cedure for the elab­o­ration of the IT require­ments / target processes is the exe­cution of process work­shops. Due to our long expe­rience we are happy to support you in the holistic process survey, the process work­shops as well as the cre­ation of the process spec­i­fi­cation sheet.

Eval­u­ation of a ware­house man­agement system — sup­plier selection 

Which is the right ware­house man­agement software for the indi­vidual company purposes?

The pre-defined system require­ments form the basis for cre­ating a selection list of pos­sible system sup­pliers. Research dif­ferent system sup­pliers on the market and create a bidder list. Once the bidder list has been created, initial contact should be made with the system sup­pliers with the aim of offi­cially including them in the bidding process. The tender can now be pre­pared. During the ten­dering pro­cedure, there are several points to con­sider in order to choose the best pos­sible sup­plier. In addition to com­plete tender doc­u­ments, such as a detailed description of the require­ments, the schedule, the cost cal­cu­lation tem­plate — here a uniform tem­plate should be created to facil­itate the eval­u­ation of the bids, we rec­ommend that appro­priate on-site inspec­tions be carried out with the potential system sup­pliers. On the one hand, a first acquain­tance takes place, on the other hand, the offer quality and accuracy can be improved. After the offers of the system sup­pliers have been received, the eval­u­ation of the offers begins.

Tender eval­u­ation and sup­plier selection

On the basis of the pre­pared tender doc­u­ments and on-site inspec­tions with the potential system sup­pliers, qual­i­ta­tively good offers can now be expected from the sup­pliers. The deadline for the sub­mission of the offer should be absolutely deter­mined. After receipt of the tender doc­u­ments, a first pre-selection can now be made. This includes cri­teria such as “punctual sub­mission” or “com­pleteness of the offers”. In the second step, the ser­vices and costs of the offers are com­pared and eval­uated. In the end, 3–5 system sup­pliers should be available for the decision phase.

In the next step, we rec­ommend that ref­erence visits be made in which the sup­pliers present their ware­house man­agement software. A good prepa­ration for the appointment with an appro­priate ques­tion­naire should be assumed.

Before the final decision is made, the con­tractual framework con­di­tions must be examined more closely. In addition to the initial costs, ongoing service and main­te­nance costs must be con­sidered. In general, the entire con­tract man­agement is a very important project phase in which a decision is made about long-term cooperation.

Our expe­rience has shown that “going it alone”, lack of expertise, coupled with false ambition, is often not a good way to suc­cess­fully implement a software. External support is recommended.

Advan­tages of a ware­house man­agement software

What are the reasons for using a ware­house man­agement software?

A logistics without an appro­priate ware­house man­agement system can cer­tainly (still) function, but the risks should be con­sidered. A man­ually managed ware­house depends heavily on the oper­ating employees, who have inter­nalized the processes as well as the exact storage loca­tions of the goods. But what happens if employees sud­denly leave the company? Strongly increasing access times, untraceable goods or unclear goods avail­ability and the asso­ciated risk of a delivery bot­tleneck, to name just a few pos­sible effects.

A ware­house man­agement system offers clear doc­u­men­tation and admin­is­tration of the ware­house loca­tions and articles as well as the ware­house processes. In addition to ware­house and inventory man­agement, scanners can be used for paperless man­agement or for system-guided inventory, for example. The con­nection of auto­mated or par­tially auto­mated ware­house systems can also be considered.

Con­clusion: The imple­men­tation of a ware­house man­agement software offers a variety of pos­si­bil­ities for com­panies to optimize their own processes and work­flows, which will ulti­mately be rewarded with eco­nomic success.

How can a ware­house man­agement software be inte­grated into your warehouse?

Basi­cally it should not matter whether you need a ware­house man­agement system for small ware­houses with manual processes or a system for highly auto­mated solu­tions. Most system sup­pliers offer a flexible and com­ponent-based system. Due to the modular design, the ware­house system is freely scalable and can grow with increasing require­ments. As an operator, you have various con­fig­u­ration and indi­vid­u­al­ization options at your dis­posal. When adapting the system, always make sure that the changes are care­fully doc­u­mented. A well planned test and release man­agement is indis­pensable. Involve the system sup­plier from the beginning and build up your own qual­ified test team.

As an alter­native to the modular structure, there are so-called indi­vid­ually pro­grammed systems, in which the func­tions are pro­grammed cus­tomer-spe­cific and almost from scratch. Here, there are almost no limits to the func­tions, but this is asso­ciated with a very high pro­gramming effort and thus high costs.

Con­clusion: We rec­ommend a modular and com­ponent-based system solution. Stan­dardized inter­faces ensure easier inte­gration into your system land­scape. In addition, the initial and running costs are much more transparent.

Which inter­faces are nec­essary to the ware­house man­agement software?

The use of a ware­house man­agement software (WMS) is indis­pensable when it comes to an optimal control and man­agement of stocks and storage loca­tions within the dis­tri­b­ution center. The WMS forms the interface between the ERP system and, as far as con­veyor tech­nology or other automation tech­niques are available, the material flow com­puter (MFR). The ERP system transfers cus­tomer orders to the ware­house man­agement of the dis­tri­b­ution center. The ware­house man­agement, which coor­di­nates the flow of goods, sets the material flow com­puter in motion, which triggers transport orders for the respective goods from storage area to storage area.

Most of the ware­house man­agement systems are equipped with addi­tional func­tion­al­ities such as yard, dock, customs or transport man­agement, thus pro­viding a fully inte­grated solution. However, if these systems already exist in your own IT land­scape and are not to be replaced, they can usually be con­nected to the WMS via an interface without any problems. Ulti­mately, the func­tion­ality of a WMS can be expanded indi­vid­ually and as needed, regardless of whether it is an inte­grated or non-inte­grated solution.

Change man­agement — an essential part of the WMS implementation

After having reported in our BLOG series “IT system land­scape in the logistics envi­ronment” on the general structure of an IT system land­scape as well as on inte­gration pos­si­bil­ities, inter­faces and imple­men­tation of a ware­house man­agement software, we would like to con­clude by talking about change man­agement. The imple­men­tation of new strategies, struc­tures, systems, processes or behaviors requires far-reaching changes within an orga­ni­zation. A change process is any­thing but con­ve­nient. It is always pro­vided by fear of the future, uncer­tainty and skep­ticism among your Per­sonal. All the more reason why coor­di­nated change man­agement is becoming an essential success factor. Prepare your Per­sonal in advance for your new activ­ities, tasks and processes. With the appro­priate trans­parency, the accep­tance of your employees will improve.  In addition, you should not do without the nec­essary expertise of your employees during the entire project/implementation phase. Let your employees be a part of the entire change process. You are glad to talk to us. Together we will prepare you and your employees for the new environment.

Summary

If you have decided on the imple­men­tation of a ware­house man­agement software, we rec­ommend to con­sider the fol­lowing steps (in short form)

  • Provide resources / project team
  • Coor­di­nated change man­agement — timely involvement of your employees
  • Define system require­ments / conduct process workshops
  • Tender Man­agement
  • System/supplier selection
  • Exe­cution of cor­re­sponding detail process work­shops along all processes of the process spec­i­fi­cation / cre­ation of specifications
  • Create an overall schedule for the implementation
  • Create training plans / train employees
  • CR and release man­agement / planning and exe­cution of system tests
  • Com­mis­sioning prepa­ration, imple­men­tation and Go Live
  • Con­sider sta­bi­lization phase (approx. 3–6 months)
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