The Integrated Distribution Center Brought to you by the WMS Solution
Use and expectations regarding e-commerce continue to grow. In order to meet customer expectations and grow revenues, companies need to carefully conceive their fulfillment strategy
An integrated distribution center couples the order intake and fulfillment seamlessly. However, enabling these two complex actions to occur without error is a tall task. In such a scenario, a warehouse management system (WMS) is crucial to ensure inventory is stored, handled, and distributed properly.
If operating an integrated warehouse and distribution center is so challenging, why bother? Why not separate the tasks of warehousing and delivery as companies have traditionally done? Because combining two elements of the supply chain under one roof can improve both processes and help companies meet customer expectations.
However, when steps are added to any process, inevitably more errors occur. And in today’s competitive market conditions, companies cannot afford to make errors with e-commerce.
Embrace Consumers Need to Know
Consider this recent National Retail Federation study, which found that 71 percent of consumers indicated that transparency and traceability are very or extremely important for them and are willing to pay a premium for brands that provide them. So, unlike baseball, where batters get three strikes, consumers will turn their backs on a company after one strike, aka a late order, wrong item, etc. that can’t provide fulfillment information.
Utilizing an integrated distribution center can help companies meet additional customer expectations. According to RetailWire, 73 percent of consumers want the ability to track orders across all points of interaction reducing the steps along the supply chain with an integrated distribution center simplifies the process of tracking orders.
An integrated distribution center improves efficiency and becomes the heartbeat of the distribution process. A retailer or manufacturer has only one partner/management team to deal with, which reduces administrative costs and makes communicating and implementing changes simpler.
If delivery is delayed or customers get the wrong product, it’s easier to determine the origin of an error, who or what is responsible, and the appropriate correction to safeguard against the error occurring again.
While the potential efficiencies from an integrated distribution center are clear, they can only be realized with effective communication and top-notch systems. A WMS can be the key to enabling an integrated distribution center to realize its efficiencies and function to its fullest capabilities.
A WMS is a software solution that enables companies to increase order fulfillment rates by streamlining operation processes that assist with managing inventory and picking tasks. The software guarantees the oversight of many essential distribution center components, such as returns processing, receiving, put away, picking, value-added services, packing, shipping, manifesting, and business intelligence.
An integrated distribution center with a WMS lets companies manage, track, and control inventory within one or multiple facilities. With a clear understanding of what inventory is in stock and what is in transit, companies can better manage customers’ expectations regarding delivery, leading to increased satisfaction and better supply chain management.
Because an integrated distribution center is bound to be massive and has many operations occurring simultaneously, it will have multiple automated systems to enable workflow. A WMS can communicate to downstream systems to manage the start of orders and/or any movements throughout a facility.
Such systems include the Host System or Enterprise Resource Planning (ERP), which creates the customer order, retains the customer details, creates purchase orders, and manages the relationship between upstream vendors. It also manages any production, accounting, and customer relationship management systems. An ERP and WMS work together, so after an order is considered valid it is passed from the ERP to the WMS system.
Other systems that connect to the WMS help manage an integrated distribution center include the Labor Management System (LMS), Distributed Order Management System (DOMS), and Yard Management System (YMS). An LMS takes historical data and provides prescriptive analytics to suggest changes to the labor force to affect overall fulfillment strategies. These dynamic expectations allow a facility to track each operator’s performance at the granular level and properly assign the amount of time for each work element.
A DOMS platform is critical to customers with multiple fulfillment points, as it allows them to assign priority by selecting a dynamic fulfillment point based on any set of repeatable rules. A YMS solution allows customers to plan, track, and view inbound shipments as well as plan and stage trailers in the yard for outbound movement. The ability to plan incoming work gives operations the ability to properly plan staffing rather than react to incoming work.
Beyond reporting, information is critical to the function of an integrated warehousing and distribution center, a WMS also offers robust reporting capabilities. In modern WMS solutions, a real-time dashboard displays information regarding order fulfillment, stock-outs, and inventory levels throughout the building. When coupled with modules in the rest of the ecosystem, analytics are available to help make real-time decisions to impact production. The combination assists in ensuring customers get their packages when they are expected.
In conclusion, the WMS serves as a coordinator for many of the automated systems that enable an integrated distribution center to function at its highest level. With a modern Warehouse Management System, companies can be confident that order fulfillment will go smoothly and operations will be streamlined. Most importantly, the WMS and integrated distribution center will help both manufacturers and retailers get inventory to customers when promised and at a reasonable cost. And that is the way to maintain customer satisfaction.