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Implementing A Warehouse Management System

Our customers use WMS to successfully manage warehouse activities.
Why wouldn’t it work for us?

Storage Equipment, Inc. is a Minneapolis-based distributor of storage and handling products. During these challenging economic times, our company has been fortunate to experience a 17% sales increase during 2001 and a 26% sales increase during 2002. We hope for a 25% increase in 2003.

As we started 2002, it was very apparent that if our company was going to continue to grow, we would need to change how we operate our warehouse. About 60% of the products we distribute ship from our inventory.

Storage Equipment after

BEFORE Storage Equipment's warehouse team spent 10-15% of their time looking for product, and 25% of their time moving “stuff” so they could get to what the customer needed.

Looking at our warehouse I felt like the garage mechanic whose car never worked. The 40,000 sq. ft. warehouse held over 2,300 actual SKUs, $1.4 million worth of inventory. We had product in aisles and inventory all over. Each day our warehouse team would spend 25% of their time moving “stuff” so they could get to the products our customers needed. They also would spend 10-15% of their time looking for product.

Our warehouse was a disaster and an embarrassment to vendors and customers who would visit. It became very clear that we needed to “practice what we preach.” Our customers look to us to help them implement the best storage and material handling practices in the business. We did not offer much creditability when you looked at our warehouse.

In addition to having a disorganized warehouse, all too often we would incorrectly ship product to our customers. Their order would call for a right and left and we would ship two rights, or the order may have four pallets and one pallet would be left behind on our dock. When this happened, we would correct the error by sending the right product by next day air at a huge expense to our company.

Storage Equipment after

AFTER Each rack is marked with bar coded labels to establish specific storage locations for over 2,300 SKUs. Picking and shipping errors have been eliminated, productivity has improved 35%, and orders are shipped the same day.

If we were going to continue to grow, we had to take the fire drill out of our operation. We knew something needed to be done.

Options for Improvement: Some Worked, Some Didn’t
The first thing we looked at to improve our operation was implementing ISO 9000. ISO 9000 is a process a company puts in place to provide consistent results to its customer base. We quickly ruled out ISO 9000 because it would take too long to implement.

The second thing we looked at was bringing in new personnel, and this too was quickly ruled out. Our company has a good warehouse team; they just needed better tools to do their jobs.

Finally, we looked at Warehouse Management Systems (WMS). WMS has successfully been used by many of our customers to manage their warehouse activities. Why wouldn’t it work for us?

We found a local company that offered systems geared to small to medium sized business. After a thorough analysis, we concluded that installation of a WMS would correct many of our ills.

In March of 2002 we contracted with Infoscan Systems to install their Dynamic Wireless Warehouse Management System. Implementation began immediately. As part of the implementation process, we also decided to reorganize our warehouse the correct way, to more or less “practice what we preach.”

The Warehouse Management System
Our warehouse team, together with our CAD team and a number of our salespeople, developed a new layout. The layout incorporated the best practices we often recommend to our customers.

With WMS, picking and shipping errors have been eliminated, no more pallets are left on the dock, warehouse productivity has improved, orders are shipped the same day, and our customers couldn’t be happier.

Previously, we used only selective storage rack. The new layout added cantilever rack and pushback rack. We even installed two mezzanines, one for small products and one for bulk storage.

Each rack was then marked with bar coded labels allowing us to establish specific storage locations for our products. We also purchased handheld scanners and installed a radio frequency communications system which allows us to transmit information to and from our warehouse electronically, eliminating paper.

Finally the big day arrived for us to turn on the Warehouse Management System. We reorganized the warehouse layout for maximum efficiency, relocated product to improve productivity, and now we were going to manage warehouse activity electronically.

It all worked.

Practice What You Preach
Today, almost all of the activity in our warehouse is managed electronically. Product is scanned into inventory immediately upon receipt. Our system directs where in the warehouse receipts are to be put away. Customer’s orders are transmitted to the warehouse via R/F and the team is directed the sequence the order is picked. Finally, when an order is shipped, our customer is notified by e-mail.

With the implementation of WMS, picking and shipping errors have been eliminated, and no more pallets are left on the dock. Warehouse productivity has improved 35%, orders are shipped the same day, and our customers couldn’t be happier.

Storage Equipment, Inc. now “practices what we preach.” Our warehouse is a model of how today’s distribution center should work.

Material Handling Equipment Distributors Association

Michael Dubbs Meet the Author
Michael H. Dubbs, MHEDA director, is president and CEO of Storage Equipment, Inc. in Minneapolis, Minnesota.

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