Order management systems (OMS) and WMS allow companies and buyers to plan proper replenishment of products to match forecasts and sales. These just-in-time systems reduce inventory size, freeing up cash that was traditionally locked up in warehouses or in transit.
While they provide great visibility on inventory in transit or in the warehouse, visibility is lost between the gate and the warehouse shelf. When buyers lose sight of inventory, typically they will over-buy to create a buffer. This effect can be magnified when inventory transits through a third-party distribution center (DC) or cross dock. With supply chains often stretching from Asia to a store shelf thousands of miles from the closest DC, not having visibility and control of inventory in the yard or at a cross-dock facility can cause a major degradation in the efficiency of a just-in-time supply chain.
Your ERP, TMS, WMS and OMS are all working together to make sure that where there is demand, there will also be supply. Meeting market demand on time with the right product at the right price is now a basic requirement of any top-tier organization in any competitive market.
But what happens when none of your brand of toothpaste is on the pharmacy shelf, or car parts don't make it to a dealership on time or the strawberries featured in your flyer show up a day late? The easily quantified answer is that you lose sales on the day. The more difficult question is: "What's the impact on customer satisfaction?" Will your clients switch to the new toothpaste they tried, will they think twice before buying their next car from you or will they get fed up and switch to another grocer?
While all the systems listed above have increased service levels and reliability, customer expectations have grown at the same pace. What about a missed shipment caused by shutting down a manufacturing line because components were stuck in a warehouse? What about late grocery route caused by not being able to forecast trailer demand? Or even an advertised special sitting incognito in a trailer somewhere in the yard just waiting its turn to be unloaded? Are these types of events acceptable? After you've invested so much in your supply chain, is it acceptable that the yard is the last weak link in the chain?
Increasing Productivity, Reducing Inventory and Optimizing Service with a YMS
Investing in a full-featured, modern YMS can bootstrap your yard out of the 19th and into the 21st century, allowing it to become an effective part of your overall logistics chain. Here are a few examples of how a YMS can work with your existing systems to provide real improvements in logistical performance.
One of North America's largest retailers experienced a 12.5 percent leap in throughput when it implemented a YMS. With no increase in warehouse staff or shunters, the retailer was able to increase throughput from 1.6 to over 1.8 million cubic feet per week.
But even more importantly, the retailer was able to use information from the OMS to capitalize on the extended visibility it had on product in trailers in the yard to prioritize unload sequences for trailers containing the products that need to ship soonest. This level of information on inbound shipments allowed the retailer to cope with increasing peak demand periods without building new facilities or adding manpower.
A major North American car manufacturer implemented a YMS at one of its parts redistribution centers. The YMS implementation was part of an overall initiative to streamline the facility to handle high-volume parts, to trim inventory levels by a whopping $500 million and to network the center to 23 other satellite distribution centers.