Storage optimization specialists

It is well known that keeping a certain amount of merchandise in the form of stock involves costs. In fact, stock is a cash asset which requires a large capital investment and has a direct effect on delivery to customers.

Why does stock accumulate?

The reasons vary greatly, but on the whole stock is essential for covering any shortcomings caused by the temporal inconsistency between supply and demand. To counter this need in the 1980s, the Just in time method was born, an Oriental production philosophy developed within Toyota. “Just in time” fits into a broader methodology of organising production without any waste, pursuing continuous improvement with the aim of creating warehouses without stock and purchasing only when there is demand.  Obviously in many realities, if not exactly in all of them, this is a hypothetical and unrealistic attitude. However, the one thing that we must learn from this philosophy is that limiting the quantity and value of stock stored in warehouses allows large capital savings.

If the goal is to keep stock to a minimum, it is a given that purchases will have to be much more frequent, with little chance of volume-related discounts and high costs in terms of order preparation and despatch times for the procurement department.

On the one hand, therefore, we have the cost of ownership, referring to the stock of inventory goods, on the other the cost of supply, linked to handling a large number of orders.

Inventory management, or stock management, aims to reach a compromise between these two costs while at the same time meeting overall business choices and goals as well as the strategies of each department. In fact, while finance departments prefer to maintain low stock levels to save capital outlays, marketing departments push for high stock levels so as to allow them to offer and increase discounts.

MODULA Automatic warehouse systems

Stock management models: the variables to consider

There are multiple stock management models and there is not one that suits every company.

When deciding which road to go down and what system to adopt, you must consider the following variables:

  • Company goals and business types
  • Type of stocks: raw materials, semi-finished products or finished products
  • Goods Rotation Index: indicates the number of times that goods are “rotated” or “renewed” over a certain period of time within the warehouse
  • Lead time of supply, that is, the time it takes from issuing the order to receiving the ordered goods
  • Demand characteristics: volatility, unpredictability, etc. Two types of demand can be identified: independent demand refers to market conditions and is therefore dependent on factors outside the company and therefore by nature unpredictable, and dependent demand refers to companies that build and assemble a finished product. This is predictable and strictly depends on the final product
  • Available resources to devote to managing and organising stock: human capital and/or physical capital

Given these variables, there are three main questions to ask yourself and to get answers to:

  1. How much to order?
  2. When to order?
  3. How to check the efficiency of the system?

Let’s look at this last aspect.

Managing stock efficiently and effectively

As mentioned earlier, there are several systems for managing stock, and not one can be considered the best across the board. The optimal solution differs from company to company, but there are some common principles that can be implemented regardless of the type of system used and which guarantee effective stock management.

Ascertain the priority of items in the warehouse

An easy way to do this is to use the ABC system and subdivide the products into three categories based on their usage value (high, middle, and low). Generally, it is common to implement this system using Pareto’s law, according to which 80% of sales come from 20% of all items. Items in category A will therefore be those that need more attention. Classifying them in this way allows you to always keep control over availability of the most important stock for production, manage its reordering more efficiently and avoid production downtime.

Always keep inventory data up-to-date

Whenever an action takes place within the warehouse you have to monitor it because it changes the total value of your stock. Only with an up-to-date and true representation of your stock situation at any time can you make effective management decisions.

Plan shelf and compartment layouts so that they can provide a suitable environment for locating and picking items as quickly as possible. It must also be dynamic so that it can be reorganised according to future needs.

Adopt management software

With software, you can automate management of stock movements and simplify it, keep track of all transactions and reduce errors.

Managing warehouse

And what if there were a solution to automate and simplify stock management?

This topic gets talked about more and more, and the answer is automatic vertical tray warehouses. This is a simple solution, and much simpler than fully automatic warehouses. These automatic machines are able to facilitate the management of all items in the warehouseincluding stocks. Arranged vertically, they have an automatic tray handling system and an operator interface that allows you to handle picking and loading requests with just one click. In most cases, they integrate perfectly into your company’s network so that you can monitor all actions performed by any operator.

This solution requires only a limited budget (depending, of course, on the number of machines you want to acquire), and you can keep an eye on your stock situation which is updated in real time. Not only that, automatic vertical warehouses are able to manage your stock automatically and report any items in need of reorder.

Remember that they are machines, and so they will remain. There is therefore a certain amount of research necessary on your part beyond this current session to find the best solution for your business in order to decide when and how many to order. The above points remain valid (variables and decisions to be considered), but if properly planned, inventory management and automatic vertical warehouses can offer an absolutely optimal solution: they reduce errors (almost to the point of eliminating them entirely), save space, time and ensure maximum security for your goods and safety for your operators.

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Modula lift
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MODULA Automated Storage Systems

Storage optimization specialists

Doing inventory is always a chore for anyone, whether you are talking about a small or medium-sized business or a complex and multi-site supply chain.
The volume of items changes, and so do the staff involved, but it is always a boring operation that takes a lot of time which could be better spent in some other way.

Can you not just do away with inventory then?

Unfortunately, no, as it is a fundamental task for controlling your warehouse’s situation in terms of its stocks of materials, products and semi-finished products at the end of a given period. This activity is sometimes done periodically by some companies to avoid problems with reordering and production.

If you are managing an e-commerce store, doing inventory is even more important for reducing discrepancies between physical stocks and the numbers held in your online shop. The modern consumer is knowledgeable and demanding. They expect speed and cost-effectiveness from product distribution systems and for this reason Distribution Centres have taken on a strategic role in the supply chain. They must therefore be managed in the best way possible, even if this means doing the inventory several times a year to maintain precise information about product availability and quantities.

The advent of new technologies has brought many benefits to industrial processes and in particular to the automation of warehouse management with many positive implications for running inventory. But let’s not get ahead of ourselves, first of all we need to understand the three main reasons why inventory is needed.

Regulatory obligations

First of all, it is worthwhile remembering that doing inventory is required to fulfil statutory and fiscal principles for quantifying and evaluating remainders. In particular, inventory is fundamental to completing your year end accounts, must be completed upon setting up your business and every year thereafter.

In this last case, it must relate to the specific company year end date and contain all goods divided into categories according to type as well as the value of each individual item in order to be able to estimate your company’s worth in terms of assets and liabilities and then be recorded in your inventory records.

Ensure efficiency in the production process

The second reason concerns the management of the warehouse itself and of orders. A precise and consistently executed inventory allows you to keep track of all goods inwards and goods despatched.

Any delays due to, for example, the lack of a raw material needed for the production process will negatively affect your company’s overall profits.

Getting precise stock availability

A very common problem is not having precise information about actual stock availability due to discrepancies between the goods physically in the warehouse and their expected quantity.

To avoid such discrepancies, simply keep a meticulous eye on all operations carried out in the warehouse so that you can watch for any goods which are being depleted and proceed to reorder them in time for production and/or despatching the order to the customer.

To optimise this, the best solution is to schedule the reordering of items to take into account lead times for delivery to the customer and delivery from your suppliers.


How do you do a warehouse inventory quickly?

The ways you can carry out your inventory can be grouped into the following four categories.

Paper and pen (and calculator)

This is the traditional method and definitely only suitable if you have a small warehouse and a limited number of products. In this case, the first thing you have to do is to divide your products into categories; there are no pre-defined categories so it is up to you to find the best way to subdivide them according to your business.

Next, proceed with further product subdivisions, taking into account the speed with which the items are running out so you can keep watch on the ones that require frequent reordering.
To get an overview of the warehouse stock situation write information next to each product macro category which includes the names of your suppliers and your minimum required stock level.
Then label the shelves and catalogue the goods by annotating everything on multiple sheets and creating tables that reflect the physical subdivisions inside the warehouse.
You can then, for example, create a table with information on which category the goods belong to, product arrival date, product cost, quantity, etc., and thus create a proper database.
Keep the sheet constantly up-to-date so you don’t find yourself having too many cataloguing operations all at once. This would increase the likelihood of errors.

Excel spreadsheet

A simple solution to speed up inventory operations is to manage the warehouse efficiently, carefully and meticulously. This means constantly keeping track of all the operations that take place inside it: despatch, orders, stocks, returns, and so on. If you do not have the possibility of using business management software that can do this automatically for you, you can use a simple Excel spreadsheet.

In this way, at the end of the year you will not have to waste valuable time checking over everything, but instead you will have detailed summary tables in front of you.

Here are some tips for building a warehouse management application using Excel spreadsheets that allow you to speed up inventory operations.

  • Use three separate sheets:– one for products, where you record the complete list of goods with their relative supplier and stock information
    – one for goods inwards movements to record the date of arrival and quantity of goods in the warehouse
    – one sheet for despatches
  • If your warehouse is used for stocking raw materials, semi-finished products and finished products, in this case use three separate sheets to distinguish them
  • Connect these sheets together. How? For example, report the column containing the actual stock figure from the product table into the sheet containing despatch information. In this way, before confirming despatch, you can safely check actual availability without delay and, of course, by only having to update one single sheet you can keep all your data updated in real time
  • To automate operations, use drop-down menus. For example, in the order sheet, create a drop-down menu which allows you to select the products relating to the order to be despatched from those listed in the first “Products” sheet.
    There are many pre-compiled sheets available online that can help you build your Excel file. However, this is still only a tool which can certainly be very helpful but only if kept constantly up-to-date.

Warehouse Management Software

If this activity is central to your business and is worth making an investment that will repay you over time, then you may opt for management software.

A Warehouse Management System (WMS) actually allows you to keep track of all handling operations that take place inside your warehouse. Combining this with the use of mobile terminals, such as barcode or RFID readers, operators can very quickly and very easily keep the situation under control.

Inventory control using WMS is constantly up-to-date and this allows you to speed up the calculations needed for your Company Accounts, which, as stated above, are required for fiscal and statutory reasons.
In fact, your company accounts need to show details and values of the assets and liabilities relating to your business, and all goods divided into categories according to type and value must be listed, including an indication of each category’s value.

Your management system will also contain all your historical records, so auditing any mistakes will be really easy. As every single company is different, your software can be set up according to individual needs and individual production streams.


Vertical warehouses

An all-in-one solution. Automatic vertical warehouses are a solution that allows you to automate your warehouse at low cost, and also resolve your inventory problems. This technology will replace your old shelves, which are bulky and impractical for handling goods, and not at all ergonomic for your operators.
Automatic vertical warehouses are structures up to 16 metres tall, and in which trays move around. These trays can hold up to 990 kg and are propelled by internal elevators which bring them directly to the delivery level.

The trays inside the warehouse can hold products of different height, size, volume and weight. The software can adjust the unit height automatically thus maximising the vertical space inside the warehouse and avoiding waste, with a tray storage pitch of 25 mm.

The vertical warehouse WMS allows you to manage your orders automatically via a convenient PC interface: simply select the product you are looking for, enter the quantity and submit the request. In just a few seconds the product you were looking for will be made available on the delivery level. Not only that: the software will keep a record of this operation automatically and you will be able to do your inventory with one click.

In fact, the WMS monitors all movements and knows how many products there are in the warehouse and where they are located: get the stock situation at any time with just one click and have your inventory in real time.

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modula lift
Products that might interest you:
MODULA Automated Storage Systems

Storage optimization specialists

In the current economic climate, efficiency and integration play a key part in paving the way to success in business. A crucial contribution on this front is made by modern ERP (Enterprise Resource Planning) systems for comprehensive coordination of all of a company’s resources, including staff, machinery, goods and assets.

But what exactly would ERP implementation entail for your organization and how can it improve your business management processes? In this post, we’ll take an in-depth look at ERP software and highlight its benefits, while also explaining how it can be integrated with other systems, focusing in particular on warehouse management systems (WMS), to keep your storage facilities running efficiently.

What are ERP systems and where do their origins lie?

Today’s ERP systems could be described as the brains behind companies, because they are used for synergistic planning, management and monitoring of business processes in all departments. It’s all made possible by networked connections between the different areas of businesses and a constant flow of information that ultimately enables decision-making processes to be coordinated in real time.

The forerunners of ERP – MRP and MRP II systems – were created to boost communication between the logistics and production areas of organizations, at a time when profitability largely depended on the cost of raw materials. Over time, ERP systems became increasingly integrated and began to encompass other areas of organizations that would benefit from automation and monitoring, as people realized that the advances in computing had something to offer for all departments.

Nowadays, the name ERP II is used to describe increasingly open management systems that can be used for integrated interaction not only within companies but also with other stakeholders, such as banks, customers, suppliers, retailers and technicians.


Why should we make the move to an ERP solution?

The main reason for switching to Enterprise Resource Planning systems is the one mentioned above: the scope to integrate the different areas of your organization and create a single, all-embracing system that enables you to assess the impact of individual activities on your company as a whole.

It can be a key factor in the success of your business, because it boosts efficiency and profitability by providing various features to support your processes. Therein lie the core advantages of ERP software.

The benefits of ERP software

The comprehensive range of features offered by ERP systems and the integration of these solutions within companies open up a host of incredible opportunities. Modern business management software presents a vast array of configuration and customization options that can be tailored to suit an organization’s specific needs, by choosing between different modules.

The benefits of ERP systems generally tend to include the following:

  • Greater operational efficiency and fewer errors, thanks to the automation of processes that do not require human intervention.
  • Better coordination between departments, thanks to real-time sharing of data.
  • Better financial control, thanks to meticulous management of deadlines.
  • Enhanced capacity to respond to changes in the market, thanks to the constant availability of up-to-date reports that allow executives to react by making informed decisions.
  • In addition, ERP systems are designed to grow with the companies that use them, so they can be integrated and changed at any time in order to adapt to developments in the business.


The importance of integration between ERP and WMS for efficient warehouses

So far, we’ve seen how enormous the benefits of adopting an ERP system can be in terms of efficiency, visibility and coordination of decision-making processes when running a business.

However, when it comes to logistics management, ERP software alone is not enough because it does not come with all of the advanced features needed to adapt to various specific needs (such as supply chain management) or optimize all logistics processes.

Much of the efficiency in business depends on what happens in the warehouse. With that in mind, all companies that require sophisticated warehouse management features should adopt WMS software, a warehouse management system that is specifically designed to control the logistics chain.

In order to ensure that your business ecosystem remains cohesive and you’re making the most of your WMS and ERP systems, it’s essential for the two to interact with each other. Therefore, you need to integrate the two systems. The roles they perform might be different, but they all play a crucial part in your organization.

Integrating ERP and WMS

Integrating WMS and ERP systems involves enabling secure data sharing between the two, so that there’s a constant flow of information in both directions, with the roles of the master and slave being reversed as and when necessary. This means that – when integration is done properly – all updates in one system (which will have an impact on the other) are sent in real time.

Integration between WMS and ERP systems can be carried out using APIs, Web Services (XML/Data Sets), text files or databases. For example, integrating Modula WMS Premium with major ERP systems is quick and simple thanks to the standard integration options that are ready for use.

Our consultants are ERP-WMS integration experts and they’re aware of the importance of implementing everything properly in order to keep the shared data secure. They will plan every step in the process alongside you and carry out all the tests required to ensure there are no communication errors.

Nowadays, WMS and ERP systems have become essential tools for all organizations that want to optimize their logistics management and stay competitive in the market.

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Modula lift
Products that might interest you:
MODULA Automated Storage Systems

Storage optimization specialists

Warehouse logistics is an ecosystem of solutions and tools that coexist and operate in synergy to achieve common goals, including efficient storage and preservation of goods and order preparation. Technological evolution has made warehouses a key component of ongoing progress, thanks to the use of systems which are capable of speeding up the management of goods and order preparation, enhancing operating conditions, reducing errors, and increasing productivity. These efforts towards more efficient warehouse operations certainly involve personnel, too: warehouse operators are no longer simple workers but the coordinators of an advanced, easy to manage and innovative system designed to facilitate their work.

In the complex world of warehouse logistics, we can distinguish:

  • storage solutions, that is, the actual structures where goods are stored, such as automatic vertical and horizontal storage systems;
  • software designed to manage warehouse automation and to be integrated with automatic storage systems;
  • picking solutions, that is, systems that optimize the preparation of orders starting from the picking of goods from the storage areas.

In this article we will explore picking solutions and analyse their impact on warehouse logistics.

The put to light system and the elements that enhance its functionality

The put to light system is a picking solution developed to achieve greater efficiency in warehouse managementgoods picking, and order preparation. The put to light system can make use of two elements that enhance its functionality, designed to work in synergy and to further improve warehouse logistics: the picking cart and the picking station.

Let’s start from the heart of the system, the put to light, which is the perfect solution for faster, more practical and intuitive order preparation. The put to light is part of the outbound internal logistics flow and is a valid aid in the sorting of goods. In fact, in the put to light system displays positioned on counters or roller conveyors visually guide the operator to the individual areas where the picked products and items must be placed. More precisely, each specific position is dynamically associated with an order and is combined with a lighted display that indicates to the operator where to place the item(s) and in what quantity. Through the implementation of dedicated WMS (Warehouse Management Software), it is possible to manage different picking processes such as batch picking (same SKU to be distributed on different orders) or multi-order picking (simultaneous preparation of multiple orders without batch picking). The put to light system can be applied to both automatic storage systems and traditional storage structures such as static shelving.

After introducing the put to light (PTL) system, it is time to further explain the characteristics and functions of two critical elements supporting the put to light method, the picking station and the picking cart:

  • Picking station

Picking Station

The picking station can be considered the infrastructure (hardware) of the put to light (the core system). It is an intermediate storage point, consisting of a sturdy coated steel structure equipped with multiple shelves for the containers where the goods are placed. Each container is associated with a put to light display with its own control unit and power supply. The picking station can be used in combination with manual or automatic handling systems like belt conveyors. The picking stations are modular and thus can be placed side by side to expand the operating area (with operators on one side or both sides), which is very useful when it is necessary to process multiple orders simultaneously. The basic structure of the picking station can be customized with additional modules, to facilitate, for example, the installation of monitors, barcode readers, label printers or other accessories.

  • Picking cart 

Picking Station

The picking cart is a steel trolley equipped with 4 pivoting wheels, designed to be maneuvered with extreme ease. It has shelves for containers, put to light displays with the related control units, power or backup batteries, and WiFi systems for wireless connectivity. The picking cart can be moved manually by the operator or by autonomous mobile robots. The picking cart can be used with vertical or horizontal automatic storage systems as well as with “traditional” storage systems based on static shelving. Picking carts facilitate the handling of goods throughout the warehouse.

Picking stations and picking carts can also be supported by specific picking applications for smartphones and mobile devices which track picking and placing operations within the entire warehouse.

The advantages of picking solutions for warehouse logistics

All these new picking tools are aimed at improving the safety and efficiency of the warehouse personnel. The put to light, the picking station and the picking cart are 3 complementary elements which can work in synergy to improve productivity, a critical factor for many sectors such as distribution. Some of the main objectives of the picking solutions include:

  • improve operating speed (for example, the number of picking operations in a given time unit) and therefore obtain savings in terms of processing time;
  • increase precision and significantly reduce errors (which can occur in the case of manual processing);
  • minimize the impact of reverse logistics;
  • implement high-performance picking aids which require limited maintenance and upgrades to always guarantee top efficiency.

Article source

Modula lift
Products that might interest you:
MODULA Automated Storage Systems