Oracle WM

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Warehouse Management Oracles Answer
NCOAUG - Chicago February 13, 2002
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Topics

• Speaker Background
• Why Bother With WMS?
• Quantifiable Improvements ROI
• Qualifiable Improvements
• Case Study Oracles Solution at Tenderheart
• Questions/Discussion

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Speaker Background Why am I here?

• Accomplishments
• Development for 2 separate WMS
• Experience 10 years in SCE
• Interface Development
• Including MHE
• Project Management
• Assessments
• Software Selection Studies (Right Fit)
• Supply Chain Strategy

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What is a WMS? Cant be that hard, right?
INVENTORY
Receiving
Shipping
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Total Logistics Cost
of Total Logistics of Sales
Transportation 43 3.44
Warehouse 25 2.09
Inventory Carrying Cost 29 2.32
Administration 3 0.24
TOTAL 100 8.09
See next slide for a further breakdown
Source Collection of Multiple Studies and
DigiTerras Experience - Best Practice Data
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Total Warehouse Cost
of Total Warehouse Cost of Sales
Labor 45.7 .96
Space 21.5 .45
Energy 4.4 .09
Equipment 6.9 .14
Materials 8.3 .17
Other 13.2 .28
TOTAL 100 2.09
Source Transportation and Distribution - Best
Practice Data
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WMS Benefits - Quantifiable

• Reduction of Inventory Carrying Costs
• 8 to 15
• Increased Inventory Turns
• Eliminate Some Safety Stock
• 100M Company
• 3 reduction in inventory achieves savings of
  500K
• Improved Space Utilization
• 10 to 40
• System Directed Putaways
• Enhanced Consolidation
• Cross-Docking Opportunities

Source Gartner Group / APICS
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WMS Benefits - Quantifiable

• Reduction of Scrap
• 13 to 30
• WMS Picking Logic through system monitored shelf
  life
• Reduction in Inventory Loss
• Reduction in Mis-Ships
• Better Utilization of Equipment
• 10 to 30
• WMS reduces idle time by
• balancing the workload more evenly
• 50-60 of warehouse workers time spent traveling
• WMS can reduce that to

10 to 20
Source Gartner Group / Global Logistics and
Supply Chain Strategies
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WMS Benefits - Quantifiable

• Picking Productivity Increases
• 16 to 25
• Optimized Picking route
• Use of Labor Standards
• Reduction in Customer Returns
• 11 to 25
• Less Picking Errors
• Productivity Improvements
• 10 to 25
• Optimize total workload
• Optimize work force task assignment

Source Gartner Group
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WMS Benefits - Quantifiable

• Rework Reductions
• 5 to 20
• System Management of Product Recovery
• Labor Savings
• 5 to 15
• Elimination of Redundant Data Entry
• Transportation Cost Savings
• 3 to 8
• Order Consolidation

Source Gartner Group
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WMS Benefits - Quantifiable

• Reduce Inventory Carrying Costs by Reducing
  Inventory Float Dollars
• 3 to 6
• Faster Receiving/Update reduces float
• dollars (inventory received, not yet recognized)
• Paperwork Reduction
• 10 to 20 cents per document
• Real-Time data Collection decreases paperwork
  transfers and many standard documents

Source Gartner Group
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WMS Benefits - Quantifiable Summary
Area Savings (Low Estimate) Savings (High Estimate)
Reduction of Inventory Carrying Costs 8 15
Improved Space Utilization 10 40
Reduction of Scrap 13 30
Better Utilization of Equipment 10 30
Picking Productivity Increases 16 25
Reduction in Customer Returns 11 25
Productivity Improvements 10 25
Rework Reductions 5 20
Labor Savings 5 15
Transportation Costs 3 8
Reduce Inventory Carrying Costs by Reducing Inventory Float Dollars 3 6
Paperwork Reductions 10 cents per document 20 cents per document
Source Gartner Group
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WMS Benefits - Qualifiable

• Support for web-based order taking
• Support for web-based order status
• Improved visibility through entire organization
• More data, easily accessible and real time
• Increased competitive situation
• Facilitates collaboration between
  suppliers/you/customers
• Warehouse is last opportunity to manage customers
  expectations
• Take care of your product
• Dynamic customer requirements

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Tenderhearts goals accomplished through Oracle WM
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Tenderhearts goals accomplished through Oracle WM
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Summary of Improvement Goals

• Improved Customer Service
• Reduced Customer Errors
• Order Accuracy
• Complaints
• Damaged Sales
• Promises Kept
• Reduced Customer Lead Times
• Order Lead Time (Order Placement - Delivery Date)
• Real Time Visibility

Improved Customer Service
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Summary of Improvement Goals

• Reduced Operating Cost
• Reduced Labor Cost
• Worker Productivity
• Improved Space and Equipment Utilization
• Cube Utilization (Facility and Locations)
• Travel Distance
• Increased Capacity
• Fill Rate
• Inventory Accuracy by Location
• Reduce Capital Investments
• Increased Inventory Turns
• Carrying Cost (Cost of Money)

Reduced Operating Cost
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Summary of Improvement Goals

• Enhanced Performance Measurements
• Performance Information Systems
• Management Reporting Tools
• Productivity Tracking
• Distribution Statistics
• Operational Control System
• Real-time Visibility to Performance Concerns
• Warehouse Management Control Board

Enhanced Performance Measurement
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Questions/Discussion

• Who has the first Question/Comment?

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Thank You!
Brent Peters ???? www.aflux.com.cn