Exel is a global company providing core expertise in contract logistics and freight management. Exel Sweden is currently in a growth phase and as part of its development, Exel strives to establish a homogenous IT structure. A vital part of an IT structure for logistics purposes is a Warehouse Management System (WMS). To make full use of a WMS, it is imperative to attain knowledge regarding the capabilities of these systems. Exel has on a global level decided to use a WMS from the WMS vendor Red Prairie. The intended system for Exel Sweden is a budget version, containing only the most basic functions, but with the possibility for future upgrades.
The aim of this thesis is to create a knowledge base concerning the capabilities of such a system and with its help, analyze the need for WMS at the first site, LC GOT, where Red Prairie’s WMS is to be implemented.
In the knowledge base I have defined a number of benefits that can derive from the effective utilization of a WMS. Each benefit is catalogued under one of the following categories:
Reduction of operational costs
Less capital tied up
Increased customer service levels Moreover different functions and technologies of WMS are identified and defined.
In order to provide with a holistic view of the potential role of a WMS in warehouse processes, these processes are presented with descriptive flowcharts. (This is the public version of the thesis and as a consequence it does not include the case study. The reason for this is that it contains sensitive information). In the case analysis, the specific needs for WMS at LC GOT are checked against the functions and technologies defined in the knowledgebase. Finally, Red Prairie’s responses to the needs of LC GOT are analyzed. The main conclusion of the case study is that the present need for WMS at LC GOT is, due to a very low workload, very rudimentary, limited to a few basic functions and technologies;
Basic transport administrative functions
Electronic Data Interchange (EDI)
Web interface technologies As a consequence of the low workload, substantial improvements should not be expected to derive from the implementation of the WMS.
Red Prairie’s WMS is fully covering the present need for functions but does however lack EDI and web interfacing capabilities. The present system, GTS2000 provides with these technologies. Due to the high implementation costs for EDI, this capability should be
EFFECTIVE UTILIZATION OF IT WITHIN A LOGISTICS FACILITY sustained by the old system, until financially motivated. It is however not suitable to
maintain the web interface of the old system as it would practically double the administrative work. Despite the lack of expected improvements and problems related to lack of technologies, the new WMS will be a great asset in a possible, more work intensive future. But for this to be true, it needs to be effectively utilized with the appropriate upgrades. The conclusions of the thesis as a whole are that a WMS can deliver significant improvements to a warehouse if properly utilized. In order to achieve this, a number of factors have to be taken into consideration:
The technology factor: To facilitate most functions of a WMS, it needs to be supported by different technologies, of which Radio Frequency (RF) and Electronic Data Interchange (EDI) are the two most vital.
Capacity: Many of the improvements a WMS can deliver are related to the reduction of operational costs. This is practically done by making different warehouse processes more efficient. If a warehouse is operating well below its maximum capacity there is not much for a WMS to make more effective.
Critical mass: The implementation of a WMS can be very cost intensive and the costs are not completely correlated with the warehouse size. A larger warehouse will also experience more considerable improvements than a smaller. As a consequence of this, a complete WMS can be hard to financially motivate for smaller warehouses.
Even though some of the capabilities of a WMS can be difficult to financially motivate, other things have to be taken into consideration. The single most important factor is customer demands. On a highly competitive market like that of 3PL/4PL providers, the capabilities to offer the best possible services will always be imperative for success. The effective utilization of WMS and other IT systems is and will continue to be essential for attaining this success.