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Warehouse Management to the Rescue?
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Guest Expert Insight - SaaS 2.0: How the Logistics Industry is Driving an Evolution in Software-as-a-Service
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Overall, it was more of the same on Wall Street last week with most stocks closing on a positive note. Our Supply Chain and Logistics stock index finished the week with mixed results.

In the software group, Descartes fell 6.6%, while i2 was up 5.6%.  In the hardware group, Intermec was down 3.9%, while Zebra was up a slight 1.2%.  In the transportation and logistics group, Prologis fell 4.7%, while CSX was up 3.6%.

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When Toyota first conceived "lean" manufacturing, it found that up to what percent of its factory activities were not directly associated with value creation of turning materials into product?

Click to find the answer below
Warehouse Management to the Rescue?


This may be one of the oddest columns I have ever written, but I think Warehouse Management Systems (WMS), or at least one of the core concepts, could solve some problems in retail stores and – believe it or not – in our healthcare system.


As some of you know, I have quite a bit of experience in the WMS area, and must confess to having a soft spot in my heart for this type of software – as challenging as WMS implementations often can be.


Central to the operation of a modern WMS is the concept of “task management,” in which the WMS understands the work that needs to be performed, what operators are capable of doing it, and where they are. It then doles out the work electronically (radio frequency terminal, voice system) to the best worker for the task, and receives confirmation that the work was performed. Then, it’s on to the next task. This is happening across dozens or even hundreds of workers simultaneously in a building.


Those next tasks can also be “interleaved,” meaning that different types of tasks can be combined to optimize efficiency. Do another task next to one you just finished, for example, rather than travelling a distance to repeat the same type of task.

Gilmore Says:

A task management engine would simply bring order to the chaos."

What do you say?

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your Feedback here

So, I am thinking about the retail “out of stock” problem, and how some huge percent of the time, the goods are actually in the back room when the customer finds no product on the shelf.


The industry, in large part, has lately viewed RFID as the answer to this particular problem, and Wal-Mart made a run at it with its program. There is both the general issue of shelf-level stock outs and the frequent failure to execute promotional displays effectively (on-time, where they should be, etc.). Earlier this year, Procter & Gamble famously ended its pilot with Wal-Mart on tagging displays after calling it a clear success – with the implication that Wal-Mart was just not acting on the data.


There is, in fact, a growing form of “task management” in retail, but it is at a much higher level of granularity, but even that apparently is paying big dividends, according to reports. There, it is tied to employee scheduling to optimize what staff is needed where and when, based on sales history and other factors. I believe it can also direct staff at a high level to do some tasks – say receiving in the back room, or cycle counting. But not at the level of real individual tasks – more like as “blocks” of work.


Last time I looked, most decent sized retailers had lots of RF terminals lying around in their stores – and I mean literally lying around. They simply do not appear to be used very effectively or consistently, from what I see. That’s a management issue.


Could we not largely solve the out-of-stock problem by leveraging these under-utilized devices and adding a type of task management system, maybe morphed from a WMS, to direct workers to get product on the shelves?


What it would take is:

  • A perpetual inventory (PI) system at the store level (largely in place);
  • A basic inventory location system in the back room (sometimes in place);
  • Wireless terminals (largely in place); and
  • The task management engine, integrated with the other pieces (or maybe all from one source).

Retailer Target said early on in the RFID saga that it has a light form of this – its system generates a type of “pick list” for shelf replenishment, based on POS. But that is a paper-based system, and not really capable of dealing at a specific task level (or so I think – haven’t really seen it).


Pretty simple – the PI says a location needs replenished (at whatever level is set for that SKU), and a specific task is set for the move. It goes into the queue, and is prioritized based on other variables (just for example, perhaps high-margin items generally go to the top of the queue); if more units of that SKU are sold, meaning it is increasingly in danger of going to zero at the shelf, the task rises in the queue.


Stock personnel don’t have to wonder what to do – their terminal tells them exactly what to do, and they confirm it is done electronically. By the way, they could be asked to do a cycle count when they do the shelf replenishment.  If they see an empty shelf or peg, they could also do a cycle count, and/or check to see if a replenishment is on the way.


We did a story awhile back on how outdoor retailer Cabela’s had implemented a light version of their DC WMS inside their sprawling retail stores. The drivers there were physical store size, the huge amount of SKUs they carried, and the fact that often there were just 1-2 items of a SKU on the floor. Made perfect sense. (See Cabela's Uses WMS to Drive DC Efficiency across Distribution Channels.)


I don’t know if a true “WMS” is really needed, but the basic, highly-proven concept of the WMS task management engine certainly could be. The wireless terminals are largely in place. The bar codes are largely in place. A location management system in the back is often in place, and easy enough to develop if not.


Integrating the PI may take some effort, but I don’t think especially that much.


Early on in the EPC story, Jeff Woods, an analyst at Gartner, saw the best fit for RFID versus bar codes was in “chaotic” environments, without much process discipline. He cited a battlefield or military theater, for example – and RFID has done much to improve material flow there. Interestingly, he also cited a retail back room as another area of often chaotic processes.


Dick Cantwell, then of Procter & Gamble, made much the same point in his famous interview with me about the failure, to that point in time, of any approach to getting displays to the floor on time and correctly.


Is this how it really has to be?


A task management engine would simply bring order to the chaos. It does for material movement in thousands of DCs across the US and the world.


Certainly, a task management engine could work with RFID, and indeed the vision even for the displays was that the RFID data would generate tasks of some sort. What system would manage that was not clear.


But WMS already has a model and technology that could solve the problem quite well, with bar codes or RFID, without re-inventing the wheel.


The WMS would need to be much slimmed down, and I am sure some changes made versus the DC variety to have the right fit.


I am out of space, but, believe it or not, I think the same basic task management concept could improve efficiency and quality in our hospitals. I say that after having visited someone in the hospital this summer, and seeing how uncoordinated and informal the execution of work seems to be. I am not proposing a robotic task management system for everything there, and will admit that I am not clear how the task requirements would be generated, but I have no doubt that someday we will see something like this in healthcare.


Am I nuts on the retail thing? Shouldn’t more retailers be looking at this? Couldn’t we take a big chunk out of the overstock problem at shelf right away, without a whole other industry program that never seems to work?


If any retailers out there are interested in exploring this, I would be happy to help them take a look.


What do you think of the idea of real task management, maybe even light WMS, in retail? Could it solve the out-of-stock problem, at least for those items with inventory in the back room? Have more taken this approach than we know about? Let us know your thoughts at the Feedback button below.

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We received a number of letters, many asking to be anonymous, on our piece earlier this summer on Worrisome Trends in Retail Labeling Requirements, which described how fairly recent changes in carton labeling specs for retailers is causing real problems for consumer goods manufacturers and, ultimately, the whole consumer goods-to-retail supply chain.


We publish a selection below, including our Feedback of the Week from Gino Giombetti, Vice President Operations at Randa Luggage, which is among the many companies very concerned about this trend. A selection of other great letters as well.

Feedback of the Week: On Retail Carton Labeling Requirements


We have been hit by chargebacks in some case, and certainly complaints from Macys because of the existence of “extraneous” bar codes on our cartons—in fact, our ‘item identifiers” or even pallet license plates.


It is clear to me that this is going to become an overwhelming problem, and once you add in unique placement requirements for GS1-128, you really begin to lose some sleep. I believe that your conclusion of having VICS “re-energize” retailers understanding of the original rules of the game might help, certainly it wouldn’t hurt, but the fact of the matter is that the retailer’s see either productivity gold (or not to be negative, but chargeback gold) in their own operations.


The only thing this will do in the last analysis is continue to help raise costs, which are going to have to be passed on somewhere. Perhaps the answer is to get the retailer’s buyers and logisticians to recognize that they both have a distinct need to co-operate with the manufacturers and distributors of consumer products in order to keep the entire supply chain from grinding to a halt, and not just their own little piece of the conveyor.

Gino Giombetti

Vice President Operations

Randa Lugguage

More on Retail Carton Labeling Requirements


Another worrisome development is coming from Canada, where folks are developing an “Industry Implementation Protocol” for Case Date Coding (see the GS1 Canada website).  This document would require date sensitive products to have human-readable expiration or “best used by” dates on each case.  More importantly, the document would require the application of a new label, where this case date coding information would be printed in the form of a bar code!


Larry Roth
Kimberly-Clark Corporation

Regarding the story on bar codes, if the requirements from individual customers could not be harmonized, wouldn't the best supplier response be to postpone applying the customer-specific bar code until as late in the process as possible (perhaps even applying it at the DC right before shipment to customer) and to use one internal bar code until that point? 

So, the internal bar code gets you through the process and to the last DC, at which point, the supplier uses a blacked-out label to cover the internal bar code and applies the customer-required bar code on the required carton location.

David D. Hinko
North America

Editor’s Note:

In theory, this could be done, but for one retailer in particular, its compliance guide prohibits that approach. Even if allowed, it would add somewhat to the time required to apply the label, and make automatic apply very difficult. Labels with black backing are also more expensive.

Dan Gilmore

ABSOLUTELY!!!  The non-standard formats coming out of the woodwork have been happening more and more frequently. GS1/VICS does need to address this by publishing 'the' standard. As recently as last week I looked on their website for GS1-128 guidelines and could not find them. While experienced folks know what should be in the zones, there are a lot of folks new to this that are making up what they want to see. It is a Carton Label after all, intended to be a link to the ASN data, not a contents label with infinite customizable properties.

Howard Hoyle
Lead BSA - EDI Business Exchange
Nike, Inc.

The time demands much more collaboration among all parties that participate in supply chain. Labeling automation can be achieved only through collaboration among participants.  Only with such level of integration and partnership can any brand, supplier, manufacturer or retailer will have eventual competitiveness. I really wonder how the equipment manufacturers and logistics leaders of retailers are ignorant of big waves that will reduce waste in the chain. I am hopeful that the drive you and your team are making can mitigate or preempt such moves.

Fortunately, I am working with relatively small customers in the market and am not forced to make such changes.

YungJun Kim

Supply Chain

Nike Sports

I must have missed it in the story, but why are these retailers asking for these changes?  Is it because of designing material handling systems that are not in step with current label layouts?  Wouldn't the equipment manufacturer of the conveyors, scanners, etc... keep them aware of the industry standards?

Scott Brutosky

Vice President, Supply Chain

Brunswick Marine in EMEA

This is definitely going to trigger some level of revolt – or at least it should… Sure there are ways to accommodate these challenges with the right automation, logic, and controls (and fat budget) – but I agree with you, Dan, that the best solution for the supply chain would be for the retailers who are pushing the compliance to program their OWN scanners (or controls logic) to ignore barcodes they do not need – this is NOT a big deal – we do it all the time.

By the way – does anyone know where the “standards” guys are?

David Meyers, CSCP
Tompkins Associates

The stupidity of this is extraordinary.


Every barcode scanner made can be setup to read only the barcodes you select and ignore all others.


As a matter of fact, setting the scanner to only read the GS1-128 (formerly UCC-128), will substantially improve scanner performance and accuracy.


Chris Kapsambelis

Barode Data Systems Corp.


When Toyota first conceived "lean" manufacturing, it found that up to what percent of its factory activities were not directly associated with value creation of turning materials into product?