The Supply Chain Information Technology blog

A few weeks ago on the SCIT Perspectives Blog David Meyers asked the question, "Where do you pick from when all the low hanging fruit is gone?"

This question stems from a WMS upgrade project that David is involved with which is actively seeking to reduce costs even though the operation is already running relatively lean. One potential area under consideration is new technologies – including Voice picking.

Having followed Voice Recognition for years, I believe it is a natural candidate for many WMS upgrade and implementation projects. Its hands-free, heads-up user interface gives it a definite edge over RF terminals. And I appreciate the value it can bring to other activities like cycle counting, replenishments, and putaways.

I’m not saying that it is a fit for every operation and every activity. But I believe it is worthy of becoming a mainstream data collection technology for the warehouse floor.

For mainstream technology, functional fit and usability are not the only criteria – integration and cost play a critical role. The integration landscape has matured with most top-tier and many mid-tier WMS vendors offering direct interfaces to Voice solutions.

As I am a voice technology consultant, I pointed out in a recent Tompkins white paper, Voice-Enabling Your SAP Warehouse, SAP WM/EWM users have a variety of approaches available for integrating Voice within their facilities. There are more application providers and hardware vendors chasing the Voice marketplace. More choice drives lower cost points making the technology even more attractive.

So is Voice ready for prime time? I definitely think so.

Is it there yet? I’m not so sure.

Based on what I hear and see, more and more DC operations are actively pursuing or considering implementing Voice.

However, I still hear a lot of folks saying that they’ll get around to it but not right now. I also know of some enterprises that are pursuing a new WMS implementation or upgrade who view it as a Phase 2 or beyond consideration. So it still hasn’t reached the same acceptance level as RF.

Some of this hesitation is due to critical mass. People feel more comfortable with the technology when they personally know other sites that employ it.

Also, I think some WMS vendors and integrators contribute to this condition. They may actively pitch Voice during the sales cycle. But their implementation folks may view it as another set of tasks on a project plan that is already overcrowded.

Anyone who has been involved in a WMS implementation can appreciate that sometimes it is best to walk on Day 1 and leave the running for Day 2 or beyond. However, I can’t point to any mid-to-large size DC implementing a new WMS that is waiting for Phase 2 or 3 to roll out RF.

Waiting until Day 2 or beyond may not be the conservative bet anymore. If the technology is mature enough to be mainstream, then waiting just leaves the benefits – which can be considerable – to a vague future date.

Installing Voice on Day 2 in an operation that went live, with RF or paper, can be more costly and time consuming than doing it in the original implementation.

Once again, I’m not saying Voice is right for every operation. It may even make sense to wait rather than include it in any specific implementation or upgrade plan. But I think it deserves the same level of Day 1 consideration given to RF, pick-to-light and other commonly employed warehouse management systems and technologies.

Am I overly optimistic in my assessment? Do you think Voice is ready for prime time? If not, what do you see as the barriers?

--Tom

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A few posts back, I asked, "Where is that last dime?"

Now, as I’m starting a new WMS upgrade / implementation project, the question is even more timely and critical to the success of this particular project.

So here’s the background:

This company has been using one of the more well-known "Best of Breed" (or BoB) SCM software packages (see Tom’s recent post on ERP vs. BoB) since the early 2000s.

The package has been highly modified over the past several years to accommodate incremental improvements in business processes. During this time, the company also added many reports to assist in four wall DC visibility.

Fortunately, since the original implementation, the software supplier has taken great strides in increasing the core functionality of its WMS so that some (hopefully many) of the enhancements and additional reports may be able to be retired.

With that said, why is it such a challenge to continue to find other ways to lower the Total Cost of Ownership (TCO)?

Also, did I mention that this company outsources its fulfillment to a logistics service provider?

To begin with, these guys are well known for operating on very slim margins. And, they are already using engineered labor standards and performance incentives, which drive costs down and increase service levels. Not a very target-rich environment – all of the low hanging fruit has already been picked.

Here is the plan:

This is not a "find and replace" type WMS upgrade. There is very heavy integration with other systems (ERP, TMS, LMS) and homegrown reporting tools. So I intend to carefully weigh the integration alternatives, which include:

• Decoupling external systems – What can be brought into the core application and what additional integration (or re-integration) may be eliminated, along with the staff required to support those external solutions?
• Automation of reports, queries, and other output files – What business critical reports require human intervention or manipulation and can they be automated?
• New technology integration – Are there opportunities where the integration of new supply chain information technologies (e.g., voice picking, etc.) can provide a payback with either improved service level, inventory accuracy, or reduction in labor cost?
• Host order profile – Are there opportunities to work with customers to change order line quantities prior to download to the WMS that could result in more efficient picking (e.g., round up/round down to layer quantities to reduce less efficient case picking)?

Where else can I look? I’d like to know.

-- David Meyers

Photo credit: wildxplorer

Tags: wms, total cost of ownership

Thanks to my friends at Vocollect, I had the opportunity to co-present a session on Voice-enabling the Warehouse at the SAP Logistics and SCM 2010 conference in Orlando last month.

I must admit I had a slight case of nerves prior to my presentation. It wasn’t a case of stage fright. But with an 8:30 a.m. slot for what was essentially a vendor presentation, I was concerned that I might have a very small audience. There is nothing more awkward than doing a presentation at conference for an audience of one or two people. Fortunately, I ended up with a decent crowd.

The SCM conference is one of five bundled into a week-long event, which includes Customer Relationship Management (CRM), Product Lifecycle Management (PLM), Procurement and Materials, and Manufacturing. Some folks come to the show seeking ways to get more out of their existing SAP Supply Chain Management (SCM) products. Others are SAP Enterprise Resource Planning (ERP) users who are considering various SCM solutions to address specific supply chain information technology needs that aren’t being met by core ERP functionality.

Attendance appeared to be good. So hopefully this is a sign that things are improving in the SCM application marketplace.

For those of you that have missed their marketing message, SAP is not just an ERP vendor that provides some supply chain functionality. They are a business suite provider with a vision of being a prominent player in the SCM application marketplace. This is completely understandable since their SCM suite offers a substantial source of new license revenue. These include:

• SAP’s Advanced Planning and Optimization (APO), which already occupies a premier position in the supply chain planning arena.
• Its Supply Chain Network (SCN) is a mature trading partner collaboration platform.
• SCM Extended Warehouse Management (EWM) 7.0 offers functionality comparable to top tier Best-of-Breed WMS packages.
• While Transportation Management 6.0 is still in ramp up, TM 8.0 is scheduled for release this November.  

Looking at the details, you can still find some holes in their overall footprint, but you cannot dismiss their vision or commitment.

All this brought to my mind the ongoing argument in the upper tier of the SCM application marketplace about Best-of-Breed versus ERP. Usually, SCM suite vendors are the ones driving this discussion by maintaining that top-tier supply chain operations need the top-tier functionality and performance provided by a Best-of-Breed solution. Core ERP SCM functionality doesn’t cut it for a complex operation.

SAP has an ERP solution set with supply chain functionality. But it also has a separate SCM suite that, in many ways, looks and feels like a Best-of-Breed solution set.

So what does Best-of-Breed versus ERP mean nowadays?

This question came to my mind sitting in a well-attended presentation on SCM EWM 7.0. Many of the attendees were undoubtedly SAP ERP WM users, who were considering their options. I could hear the wheels turning in their minds during the session: "Do I really need the additional functionality offered by EWM? How do I justify the addition cost in licenses and implementation fees? How does this fit within my overall SCM strategy?"

Certainly many of these folks are waiting for EWM’s install base to reach critical mass before seriously considering these questions. But that day isn’t too far off.

As the SAP SCM suite continues to gain momentum, it is only going to increase the natural tendency of SAP ERP customers who are seeking top-tier supply chain planning, collaboration and execution functionality to first look at SAP SCM. This is totally understandable for enterprises that have embraced SAP’s total cost of ownership paradigm and out-of-the-box integration value proposition. But SAP "first" can sometimes imply SAP "first and last," meaning that other solutions will not be seriously considered.

I’m sure many of these SAP "firsters" intend to do their due diligence when it comes to selecting mission critical supply chain applications. But exactly how does "prove to me it won’t work" work when selecting an execution system where closeness of fit, ability to deliver, and industry experience can spell the difference between success and failure? How do you run a competitive selection when you have given a single supplier the inside track?

All the questions aren’t limited to SAP customers. How will the Best-of-Breed SCM vendors address this changing landscape? What will they do to gain new business among SAP and Oracle ERP customers?

This is too huge of a chunk of the marketplace to ignore, but dusting off the old "Best-of-Breed versus ERP" whitepaper isn’t going to cut it as a response.

The landscape has definitely changed since the Best-of-Breed versus ERP argument first surfaced. It’s going to be very interesting to see how it continues to develop among vendors and top-tier ERP customers. So what does Best-of-Breed versus ERP mean to you?

-- Tom

Tags: best-of-breed, erp