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- Oct. 27 , 2010 -

 

Supply Chain News: With the Right Discipline, WMS Implementation Success Can be Assured

Cummins Filtration Points the Way to WMS Deployment Success; From Go-Live to "Clean Floor" in Just Three Days in 600,000 Sq. Foot DC


   
 


SCDigest Editorial Staff

 
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Perhaps most impressive of all, Cummins' DC operations barely took a hit from the start of go-live.


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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.

 

  

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"We knew if we didn't do that, we would not have a full implementation success. There would be pieces that were missed,"  Schmidt said.

Another key to success, too often forgotten by companies, was to keep management attention and assigned resources steady from beginning to end.

"We had to have that "corporate attention span" not just at the beginning of the project but all the way through," Schmidt said.  "We identified what we expected at implementation, at mid-maturity, and at ultimate maturity" of the deployment.

Those quantifiable goals at each milestone were shared with WMS vendor candidates and how they approach those targets became a key selection criterion.

Cummins had actually learned lessons itself previously on some non-WMS related IT projects that had had some disappointments. One such learning was the problems that can ensue if a company fails to keep internal resource assignments as planned.  Management was fully supportive of that commitment for the full term of the WMS project, Schmidt said.

Schmidt said she also realized it was more important to get the project right than it was to meet some fairly arbitrary deadline set for go-live.

"We weren't going to allow the timeline of the project to be the true guide of the project but rather have the quality of the project be the first driver," Schmidt says. "People don't remember if you implemented on the date, they remember if you implemented well."

Cummins also invested heavily in operator training. It set up a "real world" environment in the DC for training use, giving operators hands on instruction and experience with mobile devices and other functionality of the new system. That training occurred at many different times, including on-shift, overtime, and on weekends. Schmidt says the WMS team partnered with the Cummins' HR department to make sure the training worked well.

Besides the investment in training time and the physical space, another key to training success was that the operators had to demonstrate they had mastered the specific skills required for their jobs before they were considered "trained." The requirement was to pass both a written exam and an operational competency test.

The results at Cummins have been outstanding. Not only did it exceed its original ROI goals, but inventory integrity at a SKU-location level has soared from about 80% to the high 90s - levels possible by moving away from paper to electronic systems, and going real-time.

"With paper, you have that delay," Schmidt said.

Perhaps most impressive of all, Cummins' DC operations barely took a hit from the start of go-live.

"We had set expectations that would be back to reasonable levels of production in three weeks," Schmidt said. "But we were able to reach what we call "clean floor" in just three days."

She noted: "We had people come back to us and say 'When are you going to implement the WMS?' That was the biggest compliment of all."

What are your thoughts on Cummins' WMS implementation? What do you think are the keys to WMS deployment success? Are there still a lot of large companies/operations without a WMS? Let us know your thoughts at the Feedback button below.

 

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