SCDigest Editorial Staff
While Warehouse Management System (WMS) implementations can be among the most challenging of any supply chain software category, the right focus and discipline on the project can lead to outstanding success - and even take away most of the usual stress associated with WMS deployment.
That is a key lesson from Cummins Filtration, a division of truck engine giant Cummins Inc. and which makes and distributes makes a variety of filter and exhaust products for high performance engines.
The Cummins story also illustrates that despite widespread WMS adoption, a surprising number of even large companies with complicated distribution centers are not necessarily up on current technology.
Cummins, in fact, with a 600,000 square foot DC and complex order fulfillment requirements, was until recently still using a paper-based system to run its facility. That caused lots of problems with inventory accuracy and productivity, and at times put aspects of its customer service in jeopardy.
"Why did it take so long for us to move to WMS? I think we were able to mask some of the pain internally, so customers were still getting the service they needed," said Melissa Schmidt, director of North American Logistics for Cummins, during a recent Videocast on the Supply Chain Television Channel.
Of course, some of that "masking" meant throwing additional labor at the problem. "Ultimately, we realized we could improve our cost proposition through a WMS," Schmidt said. (To view the full Videocast, go to: Cummins Makes it Happen in Distribution.
Scott Wells of RedPrairie, Cummins' new WMS provider, added that "I often see very large companies that are still using paper-based systems, especially in plant warehouses. We've seen a clear trend towards many of those companies looking at automation with WMS."
As is often the case, selling the deal internally involved both a compelling ROI and a path to even better customer service. In the end, Cummins specifically focused on three main goals for the WMS effort:
- Increasing DC productivity
- Improving inventory accuracy
- Improving customer shipment integrity
These three goals were used both as the focal points of the project from beginning to end and also as the main buckets of expected ROI. Cummins conservatively estimated a 3-year payback, a target that the actual implementation ultimately exceeded.
Discipline to Keep System "Out of the Box"
Schmidit says from the start, Cummins wanted to avoid WMS modifications for the project.
"We wanted to take a system in and allow it to operate as vanilla as possible and allow that to operate our distribution centers," she said.
However, that didn't mean there weren't the usual pressures to "pave over cow paths" and force the WMS to replicate existing processes that may not add any value.
"We certainly wanted in part to bring it back to the way we were operating, because that's what was comfortable to us," Schmidt added. "But in the end, we realized it would be a lot more attractive to us from a return on investment perspective if we allowed the system to operate our system versus the business change the system."
To that end, Cummins actually appointed gatekeepers that had to OK any changes to the base product to meet Cummins's needs. While in the end the company had a few modifications performed, they were very minimal, Schmidt said.
Key to ultimate success was also inclusion of a very broad-based team to develop the "to be" process. That included not only distribution managers and IT but representatives from customer service, sales, manufacturing, etc., as well as floor level DC employees.
(Distribution Article - Continued Below)
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