WMS: The Fulcrum of Supply Chain Excellence

In a demand-pulled environment, customer service is essential in retaining business. Here’s how organizations should use WMS to enforce change in their supply chains.


Integrating WMS with TMS

As the central point of the supply chain, the WMS must be fully integrated with the TMS and be used as a tool to reduce costs within the larger supply chain. For example, when a sales order comes in, a WMS automatically processes all the documents required and assigns the packing of the consignment according to the urgency of the delivery. After integration with a TMS, the system will be able to calculate prices for different transport providers and identify the best option based on pre-set rules. The WMS already has data on the weight and volume of the goods being shifted, and is able to group consignments together or choose transportation modes to ensure that vehicles run at full capacity. The organization not only reduces costs significantly (by running fewer trips) but also improves its green credentials. Seventy-five percent of respondents to the Chief Supply Chain Officer Report 2011 attribute their push for sustainability as a way to create a positive customer image and enhance their brand equity, emphasizing the importance of having a “green” image.

Start with the basics

Customers want to know where their product is, how long it will take to assemble, deliver, etc. In a demand-pull environment, good service is essential in retaining your cash flow sources. Therefore, why not make information related to their products available to them? This will go a long way in building trust with customers, a key element in keeping them. Likewise, organizations should track the performance of carriers and suppliers, giving them regular feedback and setting KPIs with rewards for meeting them.

A WMS, when used properly, can have a large impact on the supply chain. However, the key is to first get a clear picture of the ideal processes in the warehouse and then implement the software based on these. Automatically, you operate faster and are more agile in responding to market changes. Once the warehouse and larger distribution network is optimized, extend information acquired from the warehouse to other points of the supply chain, such as the transport network and customer/supplier relations. Improving the supply chain is not a one-time strategy. It must be constantly monitored and looked at via a continuous improvement process. As the scope of work of WMS, TMS and more blur into each other, the real winners are organizations that have the tools on their doorstep to enforce radical change and remain competitive in a tough environment.

About the Author: Dr. Torsten Mallée is the General Manager of AEB (Asia Pacific) Pte Ltd, a provider of software solutions for logistics and foreign trade. For more information, visit www.aeb.com.sg.

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