ROI for Warehouse Management System: The Business Case for a WMS

1. Start Time: 2:00pm EST Welcome! Webinar Audio: You can dial the telephone numbers located on your webinar panel. Or listen in using your microphone or computer speakers.

2. Webinar Details • Presentation is roughly 1 hour • All phone lines are muted • If anyone has any questions during this webinar – please type them in your Questions Box located at the bottom of your webinar panel

3. Today’s Presenters Kelly Hummel | Net@Work Sage 300 Practice Director Chris Barnes| HighJump Solution Consultant

4. Agenda #SageBeTheDriver @SageCustomers @HighJump

5. #SageBeTheDriver @HighJump@SageCustomers SOLUTION COMPLEXITY / FUNCTIONALITY WAREHOUSE USERS Bar Coding / Data Collection Low Functionality 1-5

6. #SageBeTheDriver @HighJump@SageCustomers “Efficiency is doing the thing right. Effectiveness is doing the right thing.” Peter F. Drucker

7. #SageBeTheDriver @HighJump@SageCustomers SOLUTION COMPLEXITY / FUNCTIONALITY WAREHOUSE USERS Enterprise / Tier 1 Hybrid / High Functionality 200+ Bar Coding / Data Collection Low Functionality 1-5 Warehouse Advantage

8. #SageBeTheDriver @HighJump@SageCustomers Warehouse Advantage SOLUTION COMPLEXITY / FUNCTIONALITY WAREHOUSE USERS Enterprise / Tier 1 Hybrid / High Functionality 200+ Full-Featured AccellosOne WMS Configurable / High Functionality 5 - 250 Bar Coding / Data Collection Low Functionality 1-5

9. In the mid 90’s - mid 2000’s WMS was considered a “We had to implement a WMS to keep our key customers” Director Distribution, Industrial Products Company Competitive Advantage 9 @SageCustomers#SageBeTheDriver @HighJump Status quo is no longer an option.

10. In the mid 90’s - mid 2000’s WMS was considered a Now WMS is considered by some to be a “We had to implement a WMS to keep our key customers” Director Distribution, Industrial Products Company Cost of Doing Business. Competitive Advantage 10 Status quo is no longer an option. @SageCustomers#SageBeTheDriver @HighJump

11. 11 @SageCustomers#SageBeTheDriver @AccellosInc

12. • Order volume • Inventory value • Customer service • Inventory/order accuracy • Employee turnover Space Full Time Equivalents Active Dock Doors SKUs Lot/Expiry/SN 12 > 50,000 ft2 > 5 Yes > 10 WMS Fit @SageCustomers#SageBeTheDriver @HighJump > 5,000

13. 13 @SageCustomers#SageBeTheDriver KPIs @HighJump Measure Z BP Median On time shipments >= 99.8% 98.5% Order picking accuracy >= 99.9% 99.50% Location utilization >= 92% 85.0% Annual Workforce Turnover < 0.8% 6.8% On time ready to ship >= 99.9% 98.6% Peak warehouse capacity used >= 100 97.0% Fill rate – Line >= 99.8% 98.0% Dock to stock cycle time < 2.3 hours 9.1 hours Inventory count accuracy – bin >= 99.8% 98.5% Fill rate – Order >= 99.83% 98.7% DC Metrics Report, Dr. Karl Manrodt

14. 14 @SageCustomers#SageBeTheDriver KPIs @HighJump Measure Z BP Median On time shipments >= 99.8% 98.5% Order picking accuracy >= 99.9% 99.50% Location utilization >= 92% 85.0% Annual Workforce Turnover < 0.8% 6.8% On time ready to ship >= 99.9% 98.6% Peak warehouse capacity used >= 100 97.0% Fill rate – Line >= 99.8% 98.0% Dock to stock cycle time < 2.3 hours 9.1 hours Inventory count accuracy – bin >= 99.8% 98.5% Fill rate – Order >= 99.83% 98.7% DC Metrics Report, Dr. Karl Manrodt

15. 15 @SageCustomers#SageBeTheDriver KPIs @HighJump Measure Z BP Median On time shipments >= 99.8% 98.5% Order picking accuracy >= 99.9% 99.50% Location utilization >= 92% 85.0% Annual Workforce Turnover < 0.8% 6.8% On time ready to ship >= 99.9% 98.6% Peak warehouse capacity used >= 100 97.0% Fill rate – Line >= 99.8% 98.0% Dock to stock cycle time < 2.3 hours 9.1 hours Inventory count accuracy – bin >= 99.8% 98.5% Fill rate – Order >= 99.83% 98.7% DC Metrics Report, Dr. Karl Manrodt karl.manrodt@gcsu.edu

16. 16

17. x 111,111,111 = 12,345,678,987,654,321 17 111,111,111 Speaking of numbers… @SageCustomers#SageBeTheDriver @HighJump

18. 18 Hard and Soft Dollars #SageBeTheDriver @HighJump IntangibleTangible “On-time delivery performance improved to 97%. Our order accuracy went from 75% to 95%. We were very pleased with our results.“ VP IT, Industrial Products Manufacturer

19. • Real-time and accurate • Costs of Inaccurate Inventory: – Poor Buying Practices – Processing Delays – Lost Sales – Excess Inventory – Low Productivity – Increased Freight Costs Improved Inventory Accuracy Expect 99.9+% 19

20. 50+% of the project benefits • Direct & Indirect ‒ Adding Value ‒ System Direction ‒ Online Reports • Administrative Savings Reduced labor costs by 20-30% Improved Labor Productivity 20

21. Storage 20% Receiving 15% Shipping 15% Order Picking 50% Source: Logistics Resources International, Inc. Reduce inventory search time by 50-100% 21 0% 10% 20% 30% 40% 50% 60% Travel Search Pick Other Operator Time Improved Labor Productivity

22. Improved Labor Productivity 22 “The type of pick process you use is driven by cost, handling characteristics and order profile.”

23. Thank You! 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6-10 11-20 >20 Lines Per Order 30% of Orders are Single Line 75% of Orders are 5 or Fewer Lines Improved Labor Productivity

24. Thank You! Type Description % of Orders I Single Line, Single Unit 50% II Large multi-line (100+) 35% III Mid range multi unit 15% Improved Labor Productivity

25. 25 Discrete Improved Labor Productivity

26. Improved Labor Productivity 26 Batch Pick

27. Improved Labor Productivity 27 Cluster Pick

28. Improved Labor Productivity 28

29. 29 “We doubled our volumes with 25% fewer people.” Director IT, Packaging Supplier Improved Labor Productivity

30. Improved Labor Productivity 30 Zone Pick

31. Thank You! Pre-routing is the process of mapping out the pick travel path to reduce wasted motion and travel during the pick tour. Improved Labor Productivity

32. Thank You! Pre-posting is the process of making certain the inventory is available in the bin prior to sending the operator to pick. Improved Labor Productivity

33. Thank You! Grocery List Milk Pickles Bread Eggs Soda HighJump WMS Improved Labor Productivity – Pre Route

34. Thank You!CheckOutAreaEntrance Grocery List Milk Pickles Bread Eggs Soda HJ WMS As-Is Improved Labor Productivity – Pre Route

35. CheckOutAreaEntrance Grocery List Milk Pickles Bread Eggs Soda HJ WMS As-Is Improved Labor Productivity – Pre Route

41. CheckOutAreaEntrance Grocery List Milk Pickles Bread Eggs Soda HJ WMS As-Is Improved Labor Productivity – Pre Route

42. Thank You! Grocery List CheckOutAreaEntrance Pre- Routed Improved Labor Productivity – Pre Route

43. Thank You! Grocery List Soda CheckOutAreaEntrance Pre- Routed Improved Labor Productivity – Pre Route

44. Thank You! Grocery List Bread Soda CheckOutAreaEntrance Pre- Routed Improved Labor Productivity – Pre Route

45. Thank You! Grocery List Pickles Bread Soda CheckOutAreaEntrance Pre- Routed Improved Labor Productivity – Pre Route

46. Thank You! Grocery List Pickles Bread Soda Accellos WMS CheckOutAreaEntrance Pre- Routed Improved Labor Productivity – Pre Route

47. Thank You! Grocery List Milk Pickles Bread Soda Accellos WMS CheckOutAreaEntrance Pre- Routed Improved Labor Productivity – Pre Route

48. Thank You! Grocery List Milk Pickles Bread Eggs Soda Accellos WMS CheckOutAreaEntrance Pre- Routed Improved Labor Productivity – Pre Route

51. “The process of identifying the most efficient placement for each item in a distribution center.” Improved Labor Productivity – Slotting

52. • ABC • 80/20 • Cube Movement • Golden/Strike Zone Improved Labor Productivity – Slotting

53. • Improved pick productivity • Better pick accuracy • More efficient replenishment • Workload balancing • Ergonomics and safety Improved Labor Productivity – Slotting

54. C = Slow Movers B = Medium Movers A = Fast Movers Shipping Improved Labor Productivity – Slotting

55. A = Fast Movers B = Medium Movers C = Slow Movers With the ABC slotting design theory in mind, what is the best shape of a warehouse? Improved Labor Productivity – Slotting

56. C = Slow Movers C B = Medium Movers B A = Fast Movers ADocks Improved Labor Productivity – Slotting

57. Improved Labor Productivity – Slotting 1,000 ft Shipping

58. Improved Labor Productivity – Slotting 1,000 ft 500 ft Travel w/o slotting = 1,000 ft Shipping (500 + 500) X 1.0 = average travel point w/o ABC

59. Improved Labor Productivity – Slotting % of SKUS % Activity % Area A Items 20 80 20 = average travel point using ABC 1,000 ft Travel w/o slotting = 1,000 ft Shipping 200 ft = average travel point w/o ABC

60. Improved Labor Productivity – Slotting % of SKUS % Activity % Area A Items 20 80 20 1,000 ft 100 ft Travel w/o slotting = 1,000 ft Shipping 160 ft (100 + 100) X .8 = average travel point using ABC= average travel point w/o ABC

61. Improved Labor Productivity – Slotting % of SKUS % Activity % Area 1,000 ft B Items 30 15 30 Travel w/o slotting = 1,000 ft Shipping A Items 20 80 20 500 ft = average travel point using ABC= average travel point w/o ABC

62. Improved Labor Productivity – Slotting % of SKUS % Activity % Area 1,000 ft B Items 30 15 40 Travel w/o slotting = 1,000 ft Shipping (350 + 350) X .15 105 ft 350 ft A Items 20 80 20 160 ft = average travel point using ABC= average travel point w/o ABC

63. Improved Labor Productivity – Slotting % of SKUS % Activity % Area 1,000 ft B Items 30 15 40 Travel w/o slotting = 1,000 ft Shipping A Items 20 80 20 C Items 50 5 10 750 ft 75 ft (750 + 750) X .05 105 ft160 ft = average travel point using ABC= average travel point w/o ABC

64. Improved Labor Productivity – Slotting % of SKUS % Activity % Area 1,000 ft B Items 30 15 40 Travel w/o slotting = 1,000 ft Shipping A Items 20 80 20 C Items 50 5 10 750 ft 660 ft savings = $$$ w/ slotting = 340 ft 75 ft105 ft160 ft = average travel point using ABC= average travel point w/o ABC

65. Improved Labor Productivity – Slotting

66. Thank You!Improved Labor Productivity – Putaway

67. Thank You!Improved Labor Productivity – Putaway Labor Productivity Improvement Directed Putaway Suggested Bin

68. Thank You!Improved Labor Productivity – Putaway Receiving Secure HazMat Cold Storage

69. • Can inventory be reduced? ‒ Demand Variability ‒ Lead Times ‒ Lot Sizing ‒ Corporate Policy ‒ Other Projects This could be a slippery slope. Target 15-30% reduction 69 Inventory Reduction

ROI for Warehouse Management System: The Business Case for a WMS

ROI for Warehouse Management System: The Business Case for a WMS

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ROI for Warehouse Management System: The Business Case for a WMS