Warehouse Management System Pays For Itself In Less Than a Year

Background
A leading supplier of paper and corrugated container products had multiple distribution centers consisting of a 200,000 square foot central warehouse/distribution center with 80,000 square foot, 40,000 square foot, two 60,000 square foot facilities and a number of smaller satellite warehouses servicing the Southern California region. These facilities handle three types of orders: normal orders of regularly stocked items, buy-out/special orders of non-stock items and custom orders. Some custom orders are stored in the warehouse for extended periods of time, with product periodically shipped to the customer, and the customer charged on a monthly basis for storage of custom items. Approximately 3,000 SKUs are stocked.

As their business continued to grow, they began to experience all of the problems associated with running a manual warehouse operation. The facilities were organized in a semi-random slotting fashion, resulting in space utilization of only 60%. Not every item had a unique SKU, and receiving errors propagated discrepancies to all areas of the operation. Bar codes for location, item, or pallet were not utilized. Data collection was not real time, and there were a significant number of data entry errors. As a result, a great deal of extra time was wasted trying to locate items, and considerable overtime and extra shipping was incurred.

The Solution
The company called upon Motek® to provide a turnkey solution for automating information capture in the warehouse, interfacing with existing corporate information systems, and to interface with planned future information systems such as Roadshow™ and JD Edwards™. The solution was centered around Priya®, Motek's Warehouse Management System for Microsoft Windows®. Priya® is a real-time warehouse solution that manages all of the activities within the four walls of the warehouse. Through the use of bar codes and wireless mobile computers, Priya® provides real-time access to key inventory information like location and quantity on-hand. Because of Priya's built-in interface generator, it linked easily to the existing order entry and accounting systems, which were running on an IBM AS/400.

Now, put-away locations are displayed on the mobile computers by scanning the pallet label. Put-away assignments can also be printed on the pallet label for use as back-up in the event of RF or systems failure. Put-away assignments can also be determined in real-time on a pallet-by-pallet basis by having a forklift operator scanning a pallet label tag of a pallet not yet assigned to a put-away location. The system then determines the pallet's optimal location, and sends this information via RF to the operator's mobile computer.

The system can instigate replenishment, has the ability to easily generate and track emergency replenishments, and gives management the ability to re-prioritize and re-direct the replenishment process in a flexible, dynamic manner.

Cycle Counting was implemented and Physical Inventories are now performed with bar code scanning RF computers eliminating errors and speeding data entry. Inventory information is entered directly into Priya® by the counter, eliminating clerical after-the-fact keypunch and reconciliation reporting.

The Result
Computer directed picking and put-away resulted in a dramatic increase in worker productivity. Utilizing bar codes eliminated the data entry errors associated with manual data entry. The real-time inventory updates resulted in fewer shorts, less chasing, improved space utilization, and better inventory control.

In less than one year, overtime and unnecessary shipping charges were eliminated, saving the company $400,000. Inventory turns went to double the industry norm. In the second year, the company saved an additional $200,000. As a result the cost of the system was recouped in less than one year.

About Motek®
Motek provides an advanced, Windows-based, user-configurable warehouse management system that helps mid-to-large sized companies in the retail, wholesale, and third-party distribution markets save money and improve customer satisfaction by streamlining their warehouse operations. Since 1991, Motek's Priya warehouse software and technology has been leading the market in innovation, implementation time and ease-of-use. Privately owned, Motek has garnered numerous industry awards for innovation, entrepreneurship, and technical excellence, and consistently ranks as one of Southern California's fastest growing companies. Information on Motek is available at www.motek.com