Software as a Key Enabler
In logistics, the cost is still a leading concern. Advanced planning capabilities combined with predictability and visibility give warehouse operators the tools to effectively manage their operations. They can optimize their cost structures, while at the same time bringing down lead times. Planning is no longer limited to a single warehouse but can cover a group of warehouses acting as one distribution network. This creates economies of scale and the ability to leverage resources across the network. For that reason, software systems can be a key enabler.
According to Gleb Pozhemetskij, Commercial Director for Supply Chain and Warehouse Logistics at Ahlers, warehouse management systems occupy a special place in the warehouse management structure. It ensures stock can be effectively managed and orders can be fulfilled, whether spare parts deliveries to a repair shop or fast-moving consumer goods to store shelves.
It is the main reason Ahlers has developed its own proprietary Warehouse Management System (WMS). He gives an example of the flexibility and effectiveness of the system.
A WMS plays a vital role in supply chain management by managing order fulfillment processes, from receiving raw materials to shipping finished goods. For example, if raw materials are not received properly or parts are misplaced in a warehouse, the supply chain may be slowed or disrupted. Let’s say a producer of coffee works with five or six large retailers. Each can have its own requirements regarding the minimum residual shelf life of the products they sell. When shelf-life management is active for a particular SKU, you must enter the expiration date when you create an outbound order.
With this picking strategy, the system ensures that products that expire first will be picked first. Not only do we need to pick the right batch of this product, but we also need to consider the best-before date. At the same time, we ensure that we pick the products according to the FEFO (first expired first out) strategy demanded by our customers. When you partner with the right logistics service provider, they will provide you with this transparency and warn you in advance. As such, these trustworthy logistics service providers will become an integral and essential part of your supply chain.
Designed for Low Cost and High Efficiency
The warehouse layout, the configuration of the WMS, and warehouse processes can all be tailored to the needs of the individual customer. A producer will balance its choices depending on the demand of its customers. For some goods, the demand is low but critical and the customer is willing to pay a higher price, allowing the producer to have many items in stock, implying a higher storage cost. For other goods, the demand can be high, and the turnover of these goods is high. Therefore these goods evidently will spend less time in the warehouse and imply fewer storage costs. In this case, it can even be considered whether a warehouse is needed and the flow cannot be organized directly or through a cross-dock, from producer to customer, without any intermediate logistics warehouse operator specialized in distribution operations.
“As a warehouse operator, we have become like a chameleon, blending in with our customer’s processes and demands. Whatever the requirements, we can change our operators and adapt”.
The Network Effect
Ahlers’ Warehouse Management System turns a network of warehouses into one single virtual warehouse. Such a system increases flexibility. Goods are shipped to where they are needed from whichever warehouse is in the network.
Operating two geographically separated stocks, where you keep at both locations the goods with a high turnover, for example, if there is a stock rupture in one, then the other facility can step in and keep the lead times to an acceptable timing. As importing new goods takes mostly more than a week. This is again an example of how we can balance split stocks, remain process orders efficiently, and optimize service levels.