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"Sage provides business software, services and support to small and medium sized businesses.
Manage your operations in the warehouse software to handle supply chain, manufacturing and distribution management "
Source : Sage
Cost-justifying Warehouse Management Technologies in Small and Midsized Warehouses
Warehouse Management System (WMS) is also known as :
Warehouse Software,
WMS Warehouse Software,
Warehousing Logistics,
System WMS,
Warehousing Management System,
Warehouse inventory control,
Warehouse Picking Systems,
Warehouse Management System Resources,
Distribution Management,
Inventory Management Systems ,
Manufacturing Resource Planning,
WMS Systems,
Warehousing Management,
Warehousing Functions,
Warehouse Management System.
Table of Contents
- Introduction
- RF-based Integrated WMS
- Working with WMS
- Receiving and Put Away
- Picking and Packing
- Shipping
- Inventory Control
- Return on Investment
- Typical Configuration Diagram
- Sage Accpac WMS Components
- Software Components
- Hardware Components
- Minimum System Requirements
- Conclusion
Introduction
In today's competitive marketplace, the primary focus of many organizations is to reduce the costs associated
with operations and customer service. To accomplish this, companies are embarking on a wide range of processimprovement
initiatives. One proven method for increasing customer service without incurring additional longterm
expenses is to take advantage of new technologies to improve a company's supply chain efficiencies-
including the implementation of a warehouse management system (WMS). The WMS concept has now
matured into a collection of time-tested technologies that reduce inventory costs and increase overall inventory
management efficiencies. By implementing WMS technology with an integrated back-office accounting system,
organizations can achieve a higher return on their software dollars and provide the best possible service to their
customers.
A WMS can provide an organization with tangible benefits that quickly and dramatically improve warehouse
operations and increase material management efficiencies without adding headcount. By implementing a WMS,
a company achieves a number of significant benefits that include:
- Reduced picking/shipping errors
- Improved inventory count accuracy
- Increased employee productivity
- Elimination of most warehouse paperwork
- Improved space utilization
- Reduction of physical inventories
- Better workload control
- Improved labor management and reporting
- Better support of customer EDI requirements
- Ability to better prioritize warehouse activities for preferred customers
In this document we will discuss how Sage Accpac WMS can pay for itself through effective inventory
management and cost savings, and how it is a key component in the end-to-end business management solutions
of Sage Software.
RF-based Integrated WMS
Sage Accpac WMS is a real-time inventory management and order execution system that intelligently directs
all warehouse functions by directing operators through their tasks and managing material flow throughout
the warehouse. Sage Accpac WMS is radio frequency (RF) based-that is, it operates on a RF network with RF
terminals, access points and antennas, and utilizes barcode technology, thus enabling a paperless environment.
One of the most important elements of Sage Accpac WMS is its ability to provide real-time transaction
verification. The system performs instant verification of data entry and provides error notification while an
operator is still performing the current task. This real-time verification ensures accuracy, prevents errors in
receiving, stocking, picking, and promotes productivity by guiding operators through their tasks based on
accurate inventory quantities and locations-all of which leads to enhanced customer service.
The scalable wireless backbone is built to meet IEEE1 802.11b open systems standards for wireless
communications over a TCP/IP (Transmission Control Protocol/Internet Protocol) network, and allows the addition
of third-party devices to operate cost effectively by using the same RF system.
Working with WMS
Every warehouse, large and small, performs four basic functions: receiving and put away, picking and packing,
shipping and inventory control. Below are a few functionality highlights that Sage Accpac WMS offers.
Receiving and Put Away
Sage Accpac WMS provides a RF-based solution to automate inventory receipt and put away processes. Tightly
integrated with the Sage Accpac ERP Purchase Orders module, Sage Accpac WMS eliminates receiving errors and
short-shipments by matching the receipt of goods (through barcoding technologies) with the original purchase
order details while reporting any variance.
Sage Accpac WMS receipt and put away effectively moves received goods from the dock into the warehouse and
the right location, storing these items efficiently in reserve or pick bins. As a result, companies can facilitate timely
and accurate order fulfillment by creating an optimized order-picking environment for warehouse staff.
With Sage Accpac WMS, warehouse managers can assign multiple employees to the receipt and put away of a
large inbound shipment. Conversely, multiple receipts can be simultaneously checked-in by a single employee.
These features contribute to a highly effective receiving environment and allows for greater control in the
allocation of human resources, while eliminating the introduction of transcription errors. Further, with the help of
an integrated EDI system (such as Sage Accpac Exchange) that provides advanced ship notifications, warehouse
staff can plan ahead for in-coming shipments and allocate required resources.
During receiving, Sage Accpac WMS allows companies to capture important information on items such as weight,
size, expiration date, and so forth. Sage Accpac WMS can also be configured to store products either in a default
location or many locations throughout the warehouse, accelerating the put-away process. Sage Accpac WMS
determines whether to store an item in a primary pick bin or in a reserve bin based on the quantity of unit being
put away, and the quantity that currently exists in the primary pick bin. It also monitors the quantity available in a
primary pick bin and directs operators to replenish from the oldest unit in a reserve bin when necessary.
The final phase of receipt and put-away processing is the automated update of purchase orders and inventory
information into the Sage Accpac accounting system. This automation eliminates manual intervention and errors,
while providing accurate and up-to-date inventory control information.
Picking and Packing
Since the warehouse should remain focused on its primary task of fulfilling customer orders, Sage Accpac WMS
offers a feature rich and efficient "picking and packing" solution. Taking advantage of RF-based barcoding
technologies and seamless integration with the Order Entry module, Sage Accpac WMS tightly orchestrates the
activities within the warehouse, helping to maximize human resources.
Following order receipt, fulfillment is made easy as Sage Accpac WMS matches available stock to the order,
enabling the warehouse manager to see at a glance which orders can be filled immediately. Staff, equipped with
RF-based handheld computers, are given explicit direction in picking every order, including verifying "picks" by
reading barcodes to confirm the product selected, the shipping carton in which it is placed in and the quantity
required. Further, staff may even pick multiple orders during a single "walk" through the warehouse. Sage
Accpac WMS streamlines the picking and packing process through the automatic generation of shipping labels;
by indicating the volume of the order; by guiding warehouse employees to the right direction in the most
efficient sequence; and through serial number and lot number tracking. As a result, picking speed and accuracy
is greatly improved, orders are filled on time and customer satisfaction is increased.
Advanced kitting functionality of Sage Accpac WMS directs the assembly of kits on demand, reducing the need
to keep finished goods in the warehouse. Kitting allows Sage Accpac WMS to manage multiple inventory items
as a single-unit. Instead of placing an order for individual sub-components, only the assembled item is ordered.
Sage Accpac WMS then, based on the bill of materials, performs the "explosion" to guide the picker to pick the
required sub-components needed to build the assembly.
Whichever picking style works may work best for a particular warehouse-wave, batch, simultaneous or
sequential zone-Sage Accpac WMS manages the process efficiently. Picking inventory in a warehouse that
is managed by Sage Accpac WMS means never having to look for "missing stock" or "walking around the
warehouse" to fulfill customer orders. Whether you are picking items that expire in the next seven months or
picking items with pre-allocated serial/lot numbers, Sage Accpac WMS guides staff through the warehouse in
the most efficient way.
Furthermore, Sage Accpac WMS offers the ability to maximize the productivity of a company's warehouse
staff. By maintaining detailed information on the flow of inventory from both a "pick" and reserve bin,
warehouse staff can be assured that when they are directed to a specific bin-the item will be there. Requests
to replenish empty bins may be managed during off-peak hours or coordinated to run simultaneously with
picking activities without interruption.
Shipping
Sending the wrong package or items to the customer may be more than just embarrassing-it may cost a
company a customer. In addition, it may cause a client great expense and downtime if they are counting on
this particular organization to deliver the right product...on time; and with additional compliance fines and the
violation of service level agreements, and it becomes clear that the shipping dock is the last chance to ensure
shipments are perfect-every time. Sage Accpac WMS eliminates these errors and helps deliver the service
excellence customers deserve while keeping shipping costs under control.
Sage Accpac WMS provides a streamlined shipping solution that produces packing slips, carton content labels
and shipping labels before the carton is packed, eliminating errors in transcription from the customer order. It also
automatically calculates shipping weight and keeps track of cartons shipped for an order. When integrated with a
multi-carrier shipping system, Sage Accpac WMS offers companies the ability to shop for the best shipping rate,
potentially saving thousands of dollars annually. Additionally, Sage Accpac WMS can generate the required labels
for hazardous materials and customs requirements, packing slips and generate Advanced Shipping Notifications
(ASNs).
Sage Accpac WMS saves on labor costs by significantly reducing the need for dedicated shippers and checkers,
freeing up warehouse personnel for other activities. Upon completing an order, pickers merely verify the package
weight, tape up the box and put it aside for the carrier. With Sage Accpac WMS companies know exactly what's
going out the door and can give customers immediate information about when their shipment will arrive. Equally
important, the Inventory Control module is immediately updated, ensuring everyone across the organization, from
the warehouse staff to the customer service staff, have complete access to all order shipment information.
Inventory Control
Sage Accpac WMS provides accurate and immediate information on the quantity, location, condition, status and
history of any item in the warehouse at any time, eliminating transcription errors throughout the warehouse
operations process. Fully integrated with Sage Pro ERP and Sage Accpac ERP, Sage Accpac WMS ensures complete
control and flow of information between the back office and warehouse floor, while a browser-based interface
provides the ability to generate reports and track inventory movement across the enterprise.
Complete control over inventory-including up-to-the-minute notification of when replenishment is needed and
a full audit report of every product moved through the warehouse-enables a clear picture of what is going on
in the warehouse and reduces reliance on "just in case" inventory levels. With less capital tied up in inventory and
the possibility of reducing the amount of needed warehouse space, this can amount to considerable bottom-line
savings. Also, with complete inventory control management (down to the contents of particular bins), pickers
are no longer sent to an empty bin - increasing productivity and saving on labor costs. Precise up-to-the-minute
inventory control helps you keep up with the fast-pace of e-business, enhancing the effectiveness of Web store
operations and overall customer service. Sage Accpac WMS supports FIFO (first in, first out) and LIFO (last in, first
out) stock rotation, serialized inventory and lot and expiration-date tracking, ensuring complete control over the
shipped product.
When it comes to physical count of the inventory, Sage Accpac WMS supports by-date, product or bin cycle
counting2. Sage Accpac WMS dramatically improves the accuracy of cycle counting by taking advantage of
RF-based barcoding systems, eliminating transcription errors. Automatic updating of inventory information
with Sage Accpac WMS Inventory Control system further improves efficiencies across the enterprise.
Return on Investment
Sage Accpac WMS is designed to bring order and control to the warehouse, directing the efficient movement
of goods and labor, in turn reducing costs and improving customer service. Inventory accuracy is the key to
maintaining an efficient warehouse and avoiding poor productivity, poor purchasing practices and poor customer
service. Sage Accpac WMS offers a solution that ensures companies know what they have and where they have it
in real time.
Sage Accpac WMS also allows for the development of efficient procedures for completing daily tasks that are
used to create audit trails for productivity tracking. These audit trails enable companies to perform two very
important management functions: 1) determine where things are going wrong; and 2) manage labor. As the
system directs operators through the warehouse, it maximizes time and space utilization while minimizing
errors, increasing productivity levels by an estimated 20 to 30 percent. Management can also track operator
activity based on real-time reports generated from the system.
Sage Accpac WMS increases operator accountability and improves management control so managers are free
to focus their efforts on warehouse improvements rather than on dealing with unwarranted emergencies.
Sage Accpac WMS also decreases training time and reduces overall training costs. This self-checking, intelligent
system enables new employees or temporary workers to work productively without extensive product
knowledge.
For the purpose of an example, we will assume that a company is shipping 250 orders (around 600 cartons)
a day, pays an average of $10 per carton for freight and has fully-burdened labor costs of $20 an hour. In a
manual or disconnected warehouse operation, typically it takes 30 keystrokes to ship a carton and update the
host computer. If we multiply that by 600 cartons a day, that comes to 18,000 keystrokes a day, multiplied by
22 working days a month, equals an astounding 396,000 keystrokes! If we assume one error for every 800
keystrokes, a 0.12% possibility, we would find 495 errors per month or about 23 per day-approximately 4%
of the total daily shipments.
In a warehousing setup, a mistake can typically mean that a wrong product was sent and has to be picked up
again; and normally the company shipping the product pays that expense. Additionally, it includes the cost
to reship the correct product, and many times there is the added expense of expedited freight to keep your
client happy. Plus, let's not forget the cost of administrative time to change and correct the invoices. Clearly,
errors are easily a $50 cost each. So, even if we are extremely conservative, and use only 7 errors a day as
significant, (which is 98.83% accuracy) at $50 each, our costs come to $350 a day; multiplied by 22 working
days, $7,700 a month and $92,400 per year.This alone can justify the investment in Sage Accpac WMS.
Next, let's consider the direct saving in labor gained from eliminating the manual rekeying of data in the
accounting department. Ask your accounting clerk how long it takes to type in the freight charges, the 18
character alphanumeric tracking number, other data, and the keystrokes necessary to complete the order. Let's
say it takes one minute per order, multiplied by 250 orders or 4.2 hours a day. This is assuming that this clerk
types non-stop and does not take a single break or gets interrupted. At a labor rate of $20/hr with benefits,
multiplied by 4.2 hours, we have a total labor expense of $84 a day, $1,848 a month and an additional
$22,176 a year. Sage Accpac WMS linked to the shipping system can cut labor costs significantly and pay
for itself over and over again.
Another area where we can reduce labor costs is customer service. Find out how many times you receive
inquiries about the status of shipments. How much time do you spend researching such inquiries? Let's say that
10% of your shipments trigger a phone call and you get 25 per day. If you spend 10 minutes on each one, you
are spending 250 minutes x 22 workdays or 5,500 minutes/month, which comes to 92 hours a month. At $20/
hr that equals $1,840 a month or $22,080 a year.
Sage Accpac WMS linked with Sage Accpac Exchange, an Internet-based EDI system, can automate the
process of notifying the customers of the shipments through Advance Ship Notices (ASNs) and significantly
reduces the number of calls received for shipment status. Using EDI-based communication also reduces the
collection time for receivables. If at any time, you have $1 million of receivables, collecting them 5 working
days earlier will have significant impact on cash flow. Further, you no longer need to send paper-based invoices
to the customer. At 250 shipments a day x $.37 (for the postage), you would save $93 a day or $2,046 a
month ($24,552 per year). This, too, goes right to the bottom line. Most large retailers are requiring their
suppliers to accept EDI transactions for orders and advance ship notifications. In case of shipping errors,
backordered items or the absence of complete documentation, including shipping labels, contents lists,
packing lists, ASNs, and so forth, a customer might bill back with a penalty and "charge back, as much as
$500 per order. If out of the above-mentioned 7 errors in a day, 2 of the errors were with those customers
who transact using EDI and the "charge back" on these two orders was $100, our costs will come to $2,200
per month and $26,400 per year.
Another area where Sage Accpac WMS saves money is in the inventory management arena. Let's assume your
company loses $300 worth of inventory items every month through shrinkage, damage, misplacement or the
"unknown." These lost materials must be replaced with profit dollars, assuming your distribution profit margins
are 6%. To cover the loss of $300, you must sell an extra $5,000 each month or $60,000 annually. This
puts an additional burden on any salesperson. With RF-driven perpetual cycle counts and inventory movement
control, you can achieve up to 99.99% accurate inventory information. Companies often find themselves
taking orders and making promises that they cannot deliver. When the back office is not in sync with the
warehouse operations, and when the inventory information is not accurate, some customer orders remain
backordered, fully or partially. Someone then has to make the painful call to advise the expectant customer of
the discrepancy and make the necessary adjustment. This can affect future sales prospects for those customers.
Further, with 99.99% accuracy, you will need to book fewer expenses in inventory write-offs at the end of the
year, once again positively affecting the bottom line.
Improvement in work efficiencies is yet another benefit that Sage Accpac WMS helps achieve. The directed
movement of pickers through aisles, simultaneous input of data, real-time validation and accurate location
positioning of items (pickers never go to an empty bin, never wonder if some quantity is available in the
overhead bin, and so forth.) all contribute to quicker, easier, and hassle-free picking process in the warehouse,
thereby increasing the efficiency and productivity of the warehouse staff.
With increased work efficiencies, companies can benefit from fewer staff to maintain the same shipping
volume. In other words, companies can either reduce cost or use the existing staff to expand business
to higher volumes and hence higher revenues. Fewer staff would also mean buying and maintaining less
warehouse equipment such as forklifts, RF handhelds, and so forth. All these savings can positively affect the
bottom line.
The above diagram shows the typical configuration of Sage Accpac WMS. The two distinct locations,
Corporate Office and Warehouse, might be in the same physical location connected on the same high-speed
Ethernet network or in different cities connected through a T1 line. In the Corporate Office, Sage Accpac WMS
is installed along with other Sage Accpac end-to-end business management applications such as Sage Accpac,
Sage Pro, Sage Accpac CRM or other applications. For example, users in the Corporate Office can be entering
sales and purchase orders. These sales and purchase orders, entered in Sage Accpac, ACCPAC eTransact Web
store, or Sage Accpac ePOS, are visible to the warehouse users. The warehouse manager is then able to
schedule and manage its resources for receiving, put-away, picking, packing and shipping. Warehouse users
are connected to Sage Accpac WMS through RF-based handheld devices and their activities are immediately
reflected in the Corporate Office and inventory is updated in real time. A sales manager in the Corporate Office
or the warehouse manager in the warehouse has an option of expediting or holding the picking of an order, as
the business situation demands.
As business grows, organizations can connect more warehouses to the corporate office and link them to
the centralized WMS system for automated and accurate pick, pack and ship. The only additional cost comes
from the communication link, additional hardware and in some cases, additional user licenses for Sage
Accpac WMS.
Sage Accpac WMS Components
Software Components
- Sage Accpac WMS
- Sage Accpac WMS Link to Sage Accpac or Sage Pro
- Database Server
- Sage Accpac WMS Link to Sage Accpac Exchange for ASN
Hardware Components
- RF-based Access Points
- RF-based Terminals
- Barcode Printers
Minimum System Requirements
|
Client Workstation |
Server* |
| Operating System |
Windows 98, or Windows ME, or
Windows NT Workstation, or
Windows 2000 Professional |
Windows NT Server 4.0, or
Windows 2000 Server, or
Windows 2000 Advanced Server |
| Processor |
350 MHz Pentium II |
1 GHz Pentium 4** |
| Memory |
256 MB |
For a 10-user system: 1 GB |
| Monitor |
SVGA with 256 or more colors |
SVGA with 256 or more colors |
| CD-ROM Drive |
Required |
Required |
| Other |
Serial/Parallel port for printing bar code labels,
Support for thermal printers |
TCP/IP support, Sage Accpac or
Sage Pro workstation software,
fixed IP address, Raid 5 SCSI hard
disk support, dedicated network
switch, T1 connection between
buildings, and 100BaseT Ethernet
network |
| Pointing Device |
A mouse, supported by Windows |
| Free Disk Space |
100 MB for application files |
|
Minimum System Requirements for Terminals |
| Wireless |
Integrated IEEE 802.11b or 2.4 GHz 802.11b |
| Scanner |
Built-in one-dimensional scanner |
| Display |
8 lines by 16 characters |
| Interfaces |
RS-232 serial port |
| Terminal Emulation |
VT 220 terminal emulation |
* For Sage Accpac WMS installation, depending on the number of users and transactions, separate servers recommended for database,
handheld, Web dispatch and Sage Accpac or Sage Pro integration management.
** Recommended dual processor system for database management server.
Conclusion
Sage Accpac WMS can help companies achieve increased customer satisfaction and competitive operational
efficiencies. In today's competitive marketplace, it's imperative for companies to allocate resources to service
and support to maintain customer loyalty and win new business. In fact, every one of the following top
eleven reasons cited for Sage Accpac WMS implementation is customer-centric. Quite simply, most companies
implement Sage Accpac WMS to ensure that their customers get what they want when they want it. If an
organization cannot provide the following list of services, someone else will.
- Reduced picking/shipping errors
- Improved inventory count accuracy
- Increased employee productivity
- Elimination of typical warehouse paperwork
- Improved space utilization
- Elimination of physical inventories
- Better workload control
- Improved labor management and reporting
- Compliance with customer EDI requirements
- Support for value-added customer compliance programs
- Ability to better prioritize warehouse activities for preferred customers
Sage Accpac International, Inc.
6700 Koll Center Parkway
Third Floor
Pleasanton, CA 94566
925-461-2625
800-873-7282
www.sagesoftware.com