4 steps to create a modern and efficient warehouse with ERP

It’s a perfect storm. Margins for manufacturing firms are under pressure from increasing competition, rising material prices, high labour costs and supply chain disruptions. Throw in inefficient warehouse operations, and your profitability shrinks even more.

You’re probably all too familiar with issues that can slow down warehouse operations. Things like inaccurate inventory data, redundant processes and mis-picks all waste time. The good news: an ERP system that incorporates a cutting-edge warehouse management system (WMS) can help ensure goods and materials are located where they should be, delivered to the shop floor just-in-time (JIT) based on demand, stored in compliance with regulations, and accurately picked for dispatch to the customer.

If you’re ready to embrace automation in your warehouse, follow these four steps to ensure your efforts result in greater efficiency:

Step 1: Map out your goals for ERP

Take some time to determine the gaps, pain points and areas for improvement within your warehouses, taking into account the priorities and requirements of various departments, including manufacturing, operations, and information technology (IT). For example:

• Your inventory manager likely wants better accuracy of the quantity and location of inventory. They may also want to enhance real-time visibility into inventory, allowing front office to react quickly to shortages, slow moving items or soon-to-expire inventory. In addition, their goals include preventing costly mis-picks by ensuring better organization in the warehouse.
• The main concern for your operations manager tends to be seeing the big picture and strategizing accordingly. Their goals may include developing better standard operating procedures to avoid wasting time or writing off inventory; and making sure warehouse and front office are on the same page.
• With a focus on producing finished goods competitively, accurately and on-time, your production manager is interested in reducing costly stoppages caused by material shortages; ensuring quality and compliance by using the correct materials; and tracking actual vs. expected material costs in case of scrap or over-usage.
• Finally, your IT manager wants to enable seamless, accurate and real-time information between different departments and provide complete end to end visibility of operations.

Step 2: Set up revised standard processes.

Once you’ve considered the needs of various stakeholders in your organization, use this opportunity to conduct a full review of standard processes in your warehouse – and be open to change. That means reassessing procedures around:

1. Receiving (verification of quantities, condition and location of incoming products)
2. Picking (in batches, by expiry date or by location, for example)

iii. Packing (by items that are scheduled to be first off the truck, for example) and

1. Shipping (printing documents, knowing weight/volume to obtain freight quotes, etc.)

Step 3: Develop a plan for ERP

Now it’s time to develop a concrete plan to align with your goals and your newly defined standard procedures. Regardless of the specific details of your plan, if you are not using barcodes in the warehouse, you should be. Using WMS software without barcodes is like the grocery store cashier typing in the item code manually instead of using the laser scanner.

Barcodes speed up every process in the warehouse; they increase inventory accuracy and make real-time inventory control possible vs. paper-based processes. You can label warehouse locations and racks, and even scan a pallet just once instead of scanning every item on it. The WMS system will automatically update your ERP system instantly for all warehouse transactions.

To maximize efficiency when using barcodes, think carefully about which information is crucial to include in the bar code and how the barcoding system is best implemented. For example, if you are a food manufacturer where lot tracing is critical, you may want to embed in the barcode both the item code and lot number, and possibly expiry dates or other information.

Also think about where the barcode labeling process for materials would begin. Will suppliers be providing barcodes on goods, or will you need to print your own labels? Or a mixture of both? Do other warehouse transactions, such as finished goods receipts, require printing labels? What features should barcode printers have, and where should they be located? An experienced ERP partner can guide you through these decisions to ensure a smooth implementation.

Step 4:  Test the system and train your team.

As with any new implementation, it’s advisable to do trial runs to ensure the system aligns to your processes, and to address any technical issues. For example, ensuring that barcode labels in warehouse locations are in fact readable at a distance by the scanning guns. Then it’s time to train your team to familiarize them with the new processes. The training on the actual software itself is lighter because WMS systems are designed with simple, user-friendly screens optimized for fast data capture and posting.

Many of the challenges facing your manufacturing business are external: competition, rising material prices, high labour costs and supply chain disruptions. But your internal warehouse processes represent a significant opportunity for improvement, within your control. By reviewing and improving your processes and implementing a WMS system integrated to your ERP system, you can reduce costs, protect margins, and increase efficiency.

SYSPRO ERP integrates with rightSCAN a web-based and mobile-optimized barcode scanning solution that you can deploy in your warehouse via an Android device, iPhone, iPad, tablet or PC. By taking advantage of SYSPRO’s cutting edge warehouse management capabilities, you can boost productivity, decrease warehousing costs and increase on-time delivery (and hence customer satisfaction).

To learn more about how you can modernize and improve your warehouse operations, check out this webinar.