Supply Chain
Article | May 26, 2023
At Schneider Electric, meeting our customers’ expectations is a key priority. As concern over COVID-19 (Novel Coronavirus) grows, we are monitoring developments to this situation globally, as well as following local health and government regulations, continually assessing and responding to changes.
Our Business Continuity Plan (BCP) has been tested and implemented in geographies impacted. This plan includes health and safety, supply chain, lifecycle management services, and IT infrastructure.
Schneider Electric operations meet the criteria of an essential critical infrastructure as defined by most governments. While we do not anticipate interruptions to our operations, local governments may require temporary containment measures. In these cases, we comply with local laws, and in most cases seek support from local authorities to maintain critical business operations as an essential business for our communities.
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Transportation
Article | April 26, 2023
The unsurprising investment eagerness of venture capital funds is manifesting in an automation tech glut in the distribution center space. Motivated by enabling trends like labor and land shortages, DCs are amid an automation transformation. Never has defining an automation strategy been more important.
There’s no shortage of VC cash available to logistics tech startups
With a brightly shining spotlight centered on supply chains for the past two years, it’s no surprise that total funding in logistics startups has seen a dramatic increase – growing at over 70% CAGR (Compound Annual Growth Rate). Logistics technology startups raked in over $25 billion in the first three quarters of 2021. That’s more than half of the total amount raised in the whole of 2020, and the incentives for continuing investment persist.
The rise of the of the “micro” DC
“Micro” is a relative term. The size of a micro fulfillment center (MFC) can range from 5,000 to 50,000 square feet. Those reduced square footages allow location in dense urban areas, typically within 40 miles of most of their intended customers. In addition, smaller footprints lead to reduced rents compared to a standard customer fulfillment center (CFC), and the proximity to consumers makes for lower final mile delivery costs. It’s no wonder that MFCs accounted for more than half of the logistics real estate leasing activity in the third quarter of 2021. The “urban logistics” trend is fueling demand for these highly automated, smaller locations.
Vertical logistics integration grows ever more fashionable among retailers
It’s a very “in” thing right now, these acquisitions and partnerships, and they won’t be going out of fashion soon. For example, American Eagle took in Airterra and its parcel optimization tech and third-party logistics (3PL) provider Quiet Logistics.
Target started early. They bought Grand Junction, a software platform that helps retailers determine the best delivery method and track carrier performance, in 2017. Their 2020 acquisition of Deliv brought with it same-day delivery routing technology that they’re now applying to their 2021 purchase, on-demand delivery service Shipt. Target uses Delivs’ tech to generate more efficient routes for Shipt.
Kroger has partnered with UK’s e-grocery specialist Ocado to build automated CFCs across the US and expand their retail footprint. The first CFC opened last spring in Ohio and their second in Florida later that year. They plan to open 20 CFCs over the next three years.
“The proliferation of DC automation solutions and modalities, the rise of MFCs in high-density urban areas, the increasingly automated vertical integration of logistics, and the need to rapidly expand order fulfillment capacity have all, in combination, advanced the need for and application of clearly defined strategies concerning the implementation of automation technology. Do not operate without one.”
Vikas Argod, Principal, Supply Chains Operations practice at Chainalytics
Coping with shortages in warehouse space and labor availability
Third quarter, 2021 US demand for industrial real estate exceeded supply by 41 million square feet. This pushed the national vacancy rate in the fourth quarter down to a record 3.7% in the Cushman & Wakefield US National Industrial MarketBeat report for Q4 2021. Who knows what the record might be when the Q1 2022 report breaks in a few weeks?
On the labor side, the December 2021 US unemployment rate was 3.9%, lower than in December 2019 (3.6%) yet reflecting a tighter labor market. Labor force participation rates are at 61.9%, nearly 2% below February 2020 levels, because of lingering effects of the COVID-19 pandemic. The rising wages and signing bonuses of the past year offer silent testimony to the ongoing constraints in today’s labor market.
Both trends will remain with us for the near- and mid-term, making an automation strategy a necessary part of your DC operations as you attempt to mitigate the effects of both. In addition, warehouse labor shortages are most pronounced in markets with high distribution center densities – Greater Memphis, In-land Empire, Allentown, PA, et al.)
Building the capability to rapidly open DCs at scale
No other factor drives home the need for a coherent DC automation strategy like this one. Let’s explore it with an example.
We’ll call this “A Tale of Two Companies.” One jumped on the automation bandwagon without hesitation – not a bad thing – but applied no strategic groundwork. The other is, well, Amazon.
Company one responded to increasing demand by creating DCs in their usual, strategically located fashion. However, with automation, the lack of a logical strategy led to adopting “the best that money could buy.” So, while these DCs work fine on their own (most of the time), each employs unique implementations from a variety of vendors, with little to no overlap of methods, capabilities, and management procedures between DCs. It’s functional, but a needlessly complicated hodgepodge.
On the other hand, it definitely looks like Amazon has a standardized automation strategy. One that can easily adapt to exploit the individual physical specifications of any space. This makes it simple to arrive and equip it with a standard package of automation solutions. That’s probably how Amazon blanketed the US with over 400 new DCs in just the last two years. They waste no time or money on repeating unnecessary decisions along the way.
Now, we all can’t have the resources of an Amazon. However, the rise of on-demand warehousing companies like Stord and Flexe allow organizations to dramatically decrease the cycle time of standing up additional fulfillment capability.
Developing an automation strategy will feel familiar. It begins with benchmarking, order profiling, current performance drivers, EBIT targets, and theoretical evaluations of newer technology options. All this leads to the creation of a decision framework for DC automation. The goal here is achieving alignment among the leadership on critical capabilities to focus on. These include rapid fulfillment, labor shortage, capacity constraints, safety challenges, or sustainability. Those that commit to this process will start slowly but finish with a strategy that will underpin thousands of decisions and enable sustained rapid growth.
If, in the end, you decide that automation is not right for your operation, that’s a perfectly valid strategy as well. So long as you have a method to evaluate all of your options, and you base your decision on cost-service-sustainability trade-offs, the right strategy for your organization may be no automation at all.
There’s no point in chasing shiny robotic objects if automation makes little sense.
The rise of automation and the multitude of technologies to choose from require the development of a strategic decision framework. Contact us and see how Chainalytics – an NTT DATA company – can be your guide in developing this critical part of your foundation for growth. Our top supply chain talent, enabled by proven, leading-edge digital assets – tools, methods, and content – deliver actionable insights and measurable outcomes to some of today’s largest and most complex supply chains.
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Supply Chain
Article | May 22, 2023
Unlock operational efficiency and deliver exceptional customer service with a WMS. Learn how cloud-based WMS improves control, enhances customer service, and prepares businesses to develop & succeed.
Contents
1. Importance of Warehouse Management Systems
2. How Warehouse Management Systems Optimize Operations
2.1. Productivity Tracking
2.2. Inventory Control
2.3. Labor Management System
2.4. Slotting
2.5. Batching Logic
3. Essential Warehouse Operations Procedures
3.1. Inbound Logistics Process
3.2. Outbound Logistics Process
5. Conclusion
1. Importance of Warehouse Management Systems
A warehouse management system (WMS) is essential for optimizing warehouse operations and delivering exceptional customer service. There are five compelling reasons to consider implementing a WMS. Firstly, it enhances inventory control and management by reducing inventory levels, improving order fulfillment, and increasing accuracy. Secondly, it improves customer service and tracking through improved picking accuracy and automated shipment organization. Thirdly, a WMS boosts company productivity by adding warehouse efficiency and quality control to the fulfillment process. Fourthly, it provides a significant return on investment by improving sales accuracy, reducing errors, providing safe warehouse and simplifying customer support. Lastly, a good WMS integrates seamlessly with existing business management systems and adapts to evolving needs. Additionally, WMS enables businesses to meet compliance regulations through real-time data recording, enhanced business intelligence, and process automation.
2. How Warehouse Management Systems Optimize Operations
2.1. Productivity Tracking
Warehouse management systems (WMS) are crucial in optimizing operations by providing comprehensive productivity tracking tools. These systems capture and analyze key performance indicators (KPIs) such as order fulfillment rates, picking accuracy, and labor productivity. Organizations can identify bottlenecks, allocate resources effectively, and implement process improvements by tracking these metrics in real-time and generating insightful reports. With WMS productivity tracking, businesses gain a clear understanding of their operational efficiency and can make data-driven decisions to enhance overall performance.
2.2. Inventory Control
Efficient inventory control is essential for logistics warehouse management, and WMS solutions excel in this aspect. WMS provides real-time visibility into inventory levels, locations, and movements. Businesses can accurately track stock levels, monitor expiration dates, and implement automated replenishment warehouse processes. With advanced features like cycle counting and stock level alerts, WMS ensures inventory accuracy and reduces carrying costs. By optimizing inventory control, businesses can avoid stockouts, minimize excess stock, and improve order fulfillment rates, enhancing customer satisfaction.
2.3. Labor Management System
WMS incorporates a robust labor management system that enables businesses to allocate and manage their workforce effectively. These systems provide tools for labor planning, task allocation, and performance tracking. WMS optimizes labor allocation by assigning tasks based on employee skills, availability, and workload. By monitoring labor productivity and efficiency, businesses can identify opportunities for improvement and implement training programs to enhance employee
performance. With WMS labor management capabilities, organizations optimize labor costs, minimize overtime, and improve overall operational efficiency.
2.4. Slotting
Strategic slotting is a critical component of warehouse optimization, and WMS offers advanced slotting capabilities. By analyzing data on product demand, turnover rates, and order frequency, WMS determines the optimal locations for different products within the warehouse. Efficient slotting reduces travel time, minimizes congestion, and streamlines order picking. WMS enables businesses to assign appropriate storage locations based on product size, weight, and velocity. By optimizing slotting strategies, organizations can significantly enhance picking efficiency, reduce errors, and improve overall warehouse productivity.
2.5. Batching Logic
Batching logic is a key feature of WMS that enhances order-picking efficiency. WMS intelligently groups multiple orders with similar product requirements, locations, or delivery routes. By consolidating these orders into batches, the system enables batch picking, where a picker can fulfill multiple orders in a single trip through the warehouse. Batching logic reduces travel time, minimizes labor costs, and increases order picking speed. By maximizing picking efficiency, businesses can improve order fulfillment rates, reduce order cycle time, and meet customer expectations effectively.
3. Essential Warehouse Operations Procedures
A robust distribution center network serves as the backbone of operations, transforming raw materials into finished products and ensuring their timely delivery to customers. To gain a comprehensive view of logistics network and improve supply chain visibility, it's crucial to understand the distinction between inbound and outbound logistics.
3.1. Inbound Logistics Process
Inbound logistics encompasses the services required to bring materials and goods into businesses. This includes transportation, storage, and delivery processes. With the help of warehouse management systems (WMS), purchasing can be streamlined by synchronizing vendor details and inventory control levels. WMS allows efficient receipt scanning and guides warehouse staff to shelve items accurately. It also recommends optimal put-away, slotting, and storage space utilization techniques. Additionally, WMS facilitates reverse logistics by providing real-time information on product availability, enabling timely restocking and preventing stockouts.
3.2. Outbound Logistics Process
Outbound logistics focuses on the storage, transportation, and delivery systems that ensures finished products reach their final destination. WMS plays a vital role in this process as well. It enables accurate order picking through barcode or RFID scanners, reducing errors and ensuring the right products are chosen. Warehouse management processes integrated with WMS can automate product packaging, allowing for differentiation across sizes and optimizing packaging channels. Moreover, WMS simplifies printing shipping labels, price tags, logos, and other necessary documentation, eliminating manual data input and reducing human errors. WMS enhances the overall customer experience and minimizes fulfillment errors by ensuring timely delivery and notifying customers.
4. Implementing Cloud Warehouse Management Systems to improve productivity
Using a cloud-based warehouse management system offers several advantages for businesses looking to optimize their inventory control and streamline operations in complex distribution environments. Cloud supply chain management solutions provide benefits like multi-warehouse tracking, sales forecasting, and on-time delivery. Here are three key benefits of implementing a cloud WMS:
Increased control over business growth: Cloud-based WMS provides real-time visibility into inventory, allowing businesses to manage operations and make informed decisions efficiently. With automatic updates and centralized access, stakeholders can access relevant information anytime, enabling better control over business growth and flexibility to adapt to changing market demands.
Improved customer service: A cloud WMS empowers teams to track shipments, update arrival dates, and effectively manage the supply chain. It enables seamless communication and collaboration across the organization, ensuring timely deliveries and enhancing customer satisfaction. Efficiently conveying information leads to better customer service and a competitive edge.
Preparedness for upcoming changes: Cloud WMS offers an affordable and scalable warehousing solution. With cloud computing, businesses can easily adjust resources to meet fluctuating demands and seasonal changes. The ‘self-service’ access to WMS applications in the cloud allows for increased agility and quick adaptation to evolving business needs. Unlike traditional self-hosted systems, cloud WMS eliminates the need for upfront hardware investments and provides seamless scalability.
5. Conclusion
In the rapidly evolving business landscape, a warehouse management system (WMS) holds immense importance for organizations aiming to optimize their operations. As we look to the future, the role of WMS becomes even more crucial. With advancements in technology and the advent of new platforms, a cloud-based WMS offers unparalleled integration possibilities. By harnessing the power of cloud supply chain planning systems, businesses can gain better control over their inventory and navigate the complexities of modern distribution environments. The benefits are significant: increased control over business growth, improved customer service through real-time tracking, and preparedness for upcoming changes. By embracing cloud, WMS empowers businesses to stay agile, enhance productivity, and drive sustainable success in the dynamic business landscape of the future.
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Article | June 27, 2020
We track our commitments and goals quarterly through the Schneider Sustainability Impact 2018 – 2020 (formerly called the Planet & Society barometer). The 2018 – 2020 Schneider Sustainability Impact ?shows our commitments by 2020, as well as our contribution to the United Nations Sustainable Development Goals to be achieved by governments, companies, and civil society by 2030.
For nearly 15 years we have been following a clear action plan with a dashboard called Schneider Sustainability Impact. It is based on our 2050 vision with tangible deliverables updated every three years. Our CEO and CFO announce our results on a quarterly basis, together with the company’s financial results.
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