Omni Nutraceuticals Lean and Mean Warehouse

Transcription

1 Omni Nutraceuticals Lean and Mean Warehouse Managing warehouse operations without automation can be costly, as Omni Nutraceuticals, a publicly traded company, that develops and markets vitamin/herbal remedies, found out. According to Craig Reedich, Warehouse Manager: We were running close to a $700,000 negative at our inventory, which was an embarrassment to us. Omni quickly realized that in order to correct the problems in the warehouse, they would need a systems integrator that was experienced in warehouse management. Omni chose ADC Technologies and the EasyTrac Warehouse Management System. As a result: Our latest inventory had a variance of less than $1,000.00, says Craig. Warehouse Challenges ADC Technologies analyzed Omni s business, and it s current warehouse problems, challenges and objectives. The initial idea was to correct the inventory variance, receive and ship products, become EDI compliant with mass markets (Kmart, Wal-Mart) and to do cycle inventory quickly. Before installing EasyTrac, Our inventory s were taking seven plus days and we were thousands of dollars off, says Craig Reedich. All of the inventory was frozen, and the orders stacked up. We then had to work Saturday s and Sunday s and the next ten days to catch up. Not to mention phone calls from customers wondering where their orders were. There were also problems with product trace ability and short dated product. We tried our best to be a true FIFO (First in First Out) before purchasing EasyTrac WMS. We would have pallets of older product that needed to be picked, but weren t, says Craig. Omni also had no way to track the actual products shipped to their customers. The System Details Omni s EasyTrac system imports the sales order data from their MAS90 ERP System to the Warehouse Management System (WMS) which runs on a SQL/Radio Frequency (RF) Server, that connects via their wireless RF communications LAN, which consists of three Symbol Spectrum 24 Access Points, that run seven Symbol 3140 RF data terminals and three print servers. Residing on the SQL server are the following software modules: EasyTrac Warehouse Management System, which includes receiving, put away, picking, packing shipping, and inventory modules; EasyTrac Datalink Server; EasyTrac System Administration Software; BarTender Label Generation software; Crystal Reports; SQL 7 Server; Microsoft NT Back Office; and backup software. Craig described how Omni s warehouse management system now works. The physical process is broken down into different stages, starting with receiving and ending with physical inventory. During each stage or if a product is moved, a 1

2 new label is generated with the following information: PO number, item number, lot code and location. There are three types of receiving that occur in Omni s warehouse: Receiving a purchase order generated in MAS90, Receiving Returns (RMA s), and Production receive. Receiving a Purchase Order (P.O.) A purchase order is generated in the MAS90 ERP System and imported into the EasyTrac WMS. When the product arrives at Omni s dock, the receiving clerk scans or inputs the P.O. number using the Symbol 3140 RF data terminal. EasyTrac WMS queries the database, then sends information about the P.O., via RF communications, back to the PDT. Next the clerk scans the items bar code and inputs the quantities received; if the item scanned is not on the P.O., the system will not allow the clerk to receive the product. Once the product is accepted it goes into Quality Control or QC, to be approved before moving on to putaway. Receiving Returns (RMA s) When a customer needs to return an item, EasyTrac WMS is used to generate an RMA number. At the dock, the returned item is received by an RMA Number and goes into QC, where it will be determined whether it will be destroyed or returned to stock. Production Receive Before raw materials are sent out to be packaged, EasyTrac WMS generates a P.O. with a Production Item Number. When the items return to Omni, as finished goods, they are received using the Production Item Number and quantity. Next EasyTrac looks up the Bill of Materials (BOM), does the math and depletes the raw materials and adds the finished goods to inventory QC, with a new Finished Goods Number. EasyTrac WMS generates Bills of Materials, and creates and prints all reports that relate to managing the warehouse. The next step in the WMS process is putaway. 2

3 Putaway Putaway is the process where an item is moved from Quality Control (QC) to some location. The item number and new location are scanned into the 3140 RF data terminal, and a new label is generated, with the item number, lot code, and location. Only items that are in QC can be putaway; and the only way to get into QC is to be received at the dock. The next stage in the WMS process is order processing and picking. Picking Sales orders are entered in the MAS90 ERP system and imported into EasyTrac WMS. EasyTrac creates a pick list that Craig Reedich, the Warehouse Manager, uses to fill the orders. EasyTrac WMS creates the pick list through the following process. First EasyTrac checks the inventory level. If it s ok, it prints the pick list. If the items are not in inventory, EasyTrac checks raw materials. If there are enough raw materials, EasyTrac prints a pick list for raw materials and a build order. If there are not enough raw materials, the pick list does not print, instead an order is created for raw materials. The raw material order demand is printed, and a PO is created in MAS90. EasyTrac will create a pick list for partial orders and order the remaining materials. Picking is done in a true First in First out (FIFO) method. EasyTrac tells the warehouse via the 3140 RF data terminal, which location contains the oldest product. Once the order is complete, it moves on to packing. Packing Once the order has been picked it moves on to the packing station, where it is packed as a carton or packed as a pallet. Packing a carton is done as follows: The 3140 data terminal asks for the sales order 3

4 number, which is scanned in. The sales order number relates back to a database with complete information about the order. It knows what s picked and what s supposed to ship. Next the 3140 data terminal asks the user to scan the UPC number. It doesn t matter which one the user scans. They can scan the interpack, out-pack, or carton and EasyTrac will know how many items there are, since all UPC numbers are in EasyTrac s item table. Next it adds the number of items to the carton number, which has a unique ID in the system. Once this is completed, the process starts all over by asking the user to scan the UPC number again. When all the items are scanned and packed, the user closes the carton, and a customer specific carton level UCC-128 label is printed out. Next the 3140 data terminal asks the user if they want to continue to pack cartons, or they can exit. Packing a pallet is similar but different from packing a carton. The user starts by scanning in the sales order number; then they scan the carton s UPC number; the user inputs the number of cartons; EasyTrac takes the quantity per carton times the number of cartons, and adds it to the unique pallet number. The process then starts all over until all cartons are accounted for. The user then closes the pallet and a customer specific pallet level UCC-128 label is created. The user can continue to pack a new pallet, or they can exit. The next stage is the Aristo shipping station, where the pallet or carton freight is processed. Shipping The pallet or carton arrives at one of the Aristo shipping stations and goes through the following process. The user scans in the UCC-128 number, which gathers all the information about the order from EasyTrac. The Aristo screen populates with; what, who, address and shipping method. The Aristo software gets the weight, freight charges and tracking number, and passes the information back to EasyTrac. EasyTrac then creates a customer specific Advanced Ship Notice (ASN), and a customer specific Electronic Data Invoice (EDI), and then populates the invoice fields in MAS90. Before the package leaves, an invoice is printed from MAS90 and sent with the shipment. Concerning EDI, EasyTrac generates raw EDI documents that are sent through Gen-Tran to the customer. 4

5 Inventory The process of taking physical inventory is as follows. The user scans the location of the product, then scans the item number, and lot code. Next they enter the quantity of the items they counted. This data is exported to the MAS90 system, which will produce a reconciliation report that is compared in EasyTrac s Administration module that resides on the SQL server. The EasyTrac WMS has increased the efficiency and accuracy of Omni s warehouse. Not only has inventory accuracy improved tremendously, Omni is doing double the business with less staff. Warehouse Automation Success The success Omni has seen since the implementation of the EasyTrac Warehouse Management System has been tremendous. Since the system went up, we can do an inventory in 6 to 6 ½ hours, and our last inventory, that was close to $5 million, was only $89 off. A huge difference in what used to be 7 days and $700,000 off, says Craig. Becoming EDI compliant with the mass markets was also mandatory. According to Craig Reedich, the Warehouse Manager, EasyTrac saved our lives with Kmart and Wal-Mart. Prior to EasyTrac WMS, Omni s Mass Market division was warned that they would have to be EDI compliant. The fines reached $10,000 a month before Omni contacted ADC Technologies. ADC had us EDI compliant in four days, from the first call, says Craig. Product trace ability is no longer a problem. According to Craig, A customer complained of short dated product. I went to the WMS and printed a report for the day we shipped the product and it showed us clear as day, that we pulled their products within their requirements. I faxed the report to them and put a halt 5

6 on sending the products back. Someone had looked at the bottom of bottle wrong. The WMS saved us time and saved us money! EasyTrac is very accurate. It does what it s supposed to do. It takes the guess work out of it. The WMS has made Omni much more efficient. Two years ago the largest shipping day was $400,000 and required an 18-hour day. With the WMS in place, Omni has increased its efficiency to a point where they can ship $1 million in a normal 8-hour day. The efficiency of the WMS has also allowed orders placed between 3:00 p.m. and 4:00 p.m. to ship the same day. Omni expected the return on investment (ROI) to be around one year. We actually came in under a year, probably due to the fact we were able to reduce our labor force, resulting in a $100,000 savings in the first year, says Craig. This is organized work. That s what the WMS has done for us. It has structured us, disciplined us, and it shows in the workers. We have weaned out some of our weaker workers and advanced our stronger workers. They work faster and happier. They (warehouse employees) feel apart of it all. They take pride in what they do, says Craig. Our warehouse is lean and mean now. EasyTrac System Summary The Sales order or Purchase order is entered into MAS90 The Sales order is then imported to the EasyTrac WMS using the Datalink Server. EasyTrac WMS communicates with the workers using Symbols Spectrum 24 LAN and the PDT 3140 RF hand held terminals. Depending on whether it s a Sales order or purchase order will determine if the order is sent to receiving, or sent to be picking. If it s a sales order, EasyTrac will generate a pick list, and then communicate via the 3140 RF terminals where and what to pick; the order is packed (either carton or pallet); and an UCC-128 label generates; the carton or pallet is then sent to the Aristo Shipping System. The Aristo Shipping System operator will scan the UCC-128 label EasyTrac created, and accesses the EasyTrac WMS database to look up the order information. Aristo then passes back to EasyTrac the weight, freight charges and tracking number. EasyTrac then generates a customer specific ASN (Advanced Ship Notice), and raw EDI documents that are sent to the customer through Gen-Tran. EasyTrac populates the invoice fields in MAS90, and an invoice is printed and sent with each shipment. Receiving uses purchase order numbers (PO) when products arrive at the dock. The products are scanned in referencing the PO number. They are then sent to quality control (QC), where they wait to be put-away. 6

7 EasyTrac WMS has allowed Omni to have a true FIFO system, with full product trace ability, and customized reports. It generates compliance labels, and compliant EDI for over ten different customers. EasyTrac WMS is a feature rich system, but easy to use. 7