For the customer, the path to purchase is as quick as point and click. But when it comes to the supply chain, it’s not that simple. Made up of various people, components, processes, and parts, the supply chain — and supply chain operations – is highly interwoven and immensely intricate. For furniture, food, or fabrics to go from producer to end-user, there are a series of steps along the way, from picking to packing, sorting to shipment.
Many of those sequences take place within the ever-expanding confines of warehousing space, which is growing not just in size nowadays, but also in number — jumping from 14,600 warehouses in 2007 to nearly 19,200 in 2020 in the U.S. alone, according to Statista. Organizations that once had one now have multiple warehouses.
Everybody has a job to do in the warehouse to achieve order fulfillment and customer satisfaction. Whether it’s personnel who are charged with ensuring inventory accuracy or a logistics management professional who oversees the distribution process, warehouse operation is, in many ways, a supply chain in and of itself. A single disruption at one end of the warehouse can compromise the processes occurring at the other end of the facility.
These complexities make having an effective warehouse management system indispensable. With an effective warehouse management system in place, supply chain managers have the ongoing visibility they need to coordinate the operations and logistics involved in getting products to retail stores or to customers’ front doors.
Oracle Warehouse Management Cloud brings added simplicity to supply chain management complexity. Leveraged by a variety of logistics teams and inventory tracking vendors, the Oracle Warehouse Management Cloud streamlines the vast variety of activities that occur in today’s warehouse locations by delivering innovative capabilities and mobile solutions with an intuitive user interface.
But before we get into the specifics of what makes the Oracle WMS Cloud so special — and how Inspirage clients have successfully leveraged it to address their challenges — let’s get a better understanding of why warehouse management is more vital today than ever.
What makes a Warehouse Management system uniquely crucial to warehouse operation success?
The rapid rise of e-commerce
Prior to the internet, the typical customer had a handful of ways to purchase merchandise: in person, by mail, or over the phone. Generally speaking, though, most people did the majority of their buying in brick-and-mortar settings such as grocery stores, big-box retailers, mom-and-pop shops, and boutiques.
E-commerce has truly been a game-changer. Whether you’re shopping on a tablet, desktop computer, laptop, or by downloading mobile apps to a smartphone, buying has never been easier or more efficient. According to Insider Intelligence, e-commerce sales are poised to top $1 trillion in 2022 — two years faster than initially predicted.
With more avenues for customers to make purchases, warehouse managers face increased pressure to coordinate and plan so orders can be processed and shipped in a timely manner. But without a warehouse management system, order fulfillment is easier said than done, even with highly seasoned staff actively engaged in traditional warehouse activity.
The age of ultra-convenience
E-commerce is not new, of course, but the level at which customers rely upon the internet for their daily needs is at an all-time high. That’s largely due to COVID-19 and the long-term effects the pandemic has had on people’s shopping habits and their desire for even more convenience than they had previously.
Willy Shih, a professor and supply chain expert at Harvard Business School, told The Wall Street Journal the coronavirus has led to greater utilization of the purchasing channels that make shopping easier and more one-stop in nature. This has made supply chain management that much more critical to satisfy buyers’ expectations.
“I don’t want to call it a tipping point, but there is obviously a big change happening now,” Shih explained, referring to the more widespread adoption of e-commerce as an all-in-one shopping and purchasing tool. To better address and respond to elevated demand, retailers and brands are investing in the supply chain management technology solutions that streamline work processes in the warehouse. For customers to receive their purchases more quickly and conveniently, the work processes occurring within the warehouse must be convenient as well.
One of the ways supply chain management teams are finding success with this is by leveraging robotics. Take Accelerate360 as an example. Based in Kansas, Accelerate360 is an omnichannel and logistics company that helps facilitate how checkout counters at grocery stores are set up, outfitting the service stations with magazines, pamphlets, gum, and candy. As The Wall Street Journal reports, this organization is utilizing robotics to assist with order fulfillment for grocery stores and big-box retailers selling items traditionally available at the registers. Matt Ratner, who serves as Accelerate360’s chief strategy officer, noted that these robotics have simplified warehouse operations through the power of automation.
This is another way warehouse management system technology can work wonders. It improves workforce productivity and automates warehouse operations to enhance throughput and order processing times while maximizing warehouse space.
Amid the so-called “Great Resignation,” a period that has led to millions of Americans leaving their current jobs in search of something more to their liking, many employers are struggling to find replacements to fill the positions that others have left. Warehouse and logistics firms — as well as businesses that rely on warehouses to better serve their customers — are among those that are hurting in this regard and are now in full-on recruitment mode. For instance, in July 2021, there were approximately 490,000 openings nationwide in the warehouse and transportation professions, according to The Washington Post. In an attempt to close the gap, household-name companies like Walmart, Amazon, Target, and Overstock.com are offering more comprehensive benefit and compensation packages, as well as sign-on bonuses and higher starting pay. They’re also encouraging current employees to reach out to people they know to see if those connections are interested in new work opportunities.
While some companies have indeed seen applications roll in with greater regularity — evidenced by a modest decline in the so-called “quits-level,” which tracks employee turnover — others say that these inducements haven’t moved the needle enough, with openings still surpassing applicants. Indeed, based on the most recent figures available from the Department of Labor, there were 11 million job openings in December 2021 versus 4.6 million people who were looking for work, CNBC reported.
Sabrina Wnorowski, vice president of human resources for the order fulfillment and management firm Radial, told The Washington Post that the labor crunch is not new; it’s been an ongoing issue.
“Every year we say, ‘Wow, this is really difficult’ — and every year, it gets more challenging,” Wnorowski explained.
The result is not only reduced output but a greater workload on the employees who are currently in place. As workers are forced to handle multiple tasks at once, quality ultimately diminishes and burnout rises. Ricardo, who works at a warehouse based in El Paso, Texas, told the newspaper that the labor shortage makes an already challenging job that much harder.
“I feel like I’m doing the work of six people,” he said. “You know when you’re worked to the bone, and you just want to go home, eat, and sleep? It’s like that all the time.”
This is another way that warehouse management can make up for lost time or output. The optimization of inventory operations and better coordination of merchandise movement enables enhanced workforce productivity reducing labor inefficiencies and maximizing production.
Unlike many other types of businesses, which are downsizing and reducing their footprint, warehouses and fulfillment centers are getting increasingly larger. This has mainly been in response to the high level of demand among customers (as well as retailers) and greater competition from other logistics providers and e-commerce firms. Amazon, for example, operates well over 100 fulfillment centers in the U.S., and dozens more including those in other countries or that are in the early planning stages. Some of these order fulfillment centers span one million square feet. That amount of warehouse space leaves plenty of room for movement — but perhaps even more room for error. From the moment an item arrives in the warehouse to the time it leaves, that product goes through a series of stops, from picking to packing to receiving and more. But if there is no way of tracking or cataloging where those items have been in the warehouse supply chain pipeline, workflows get bogged down and processes are repeated when they needn’t be. Additionally, resources are wasted and customer satisfaction deteriorates when merchandise doesn’t arrive by a certain date at customers’ doors or grocers’ freezers.
Warehouse management software solves this issue. From picking to packing to de-kitting and shipping, Oracle Warehouse Management supports and tracks all the activities that occur within the warehouse. Items get where they need to be, and you know where they are every step of the way.
Unpredictable demand affecting inventory management
Inventory is a vitally important component of any business’s day-to-day operations, warehouse-related or not. When there’s demand for a given product, what’s readily available in inventory ultimately determines when and how customers will receive the items that they request.
During the pandemic, manufacturers, retailers, and producers became keenly aware of what can happen when world events throw a wrench into an inventory management system. Supply chain issues were immediately apparent and persisted for several months after the first COVID-19 infection. Shortages are still an issue for consumers, retailers, and the economy at large.
Perhaps the best example of what can happen when demand chases after supply involves the story of Peloton, the fitness manufacturer that specializes in web-enabled spin bicycles, treadmills, and other in-home exercise equipment for consumers (as opposed to fitness centers).
While the company has been around since 2012, Peloton became more of a household name in 2020 when health clubs around the world closed — some permanently — due to the COVID-19 crisis. Seeking an alternative fitness solution, many people turned to Peloton for their home-based bicycles, which are paired with streaming capabilities. This feature allows riders and runners to exercise with fitness instructors through their internet connection.
Almost overnight, an already popular company achieved a greater level of acclaim, with membership levels soaring to 3.1 million and revenues rising 172% on a year-over-year basis, as BBC News reported at the time.
But this sudden and intense increase in demand led to massive inventory challenges for Peloton. Because the company was unable to keep up with the pace of individuals buying their bicycles, customers were forced to wait for several months to receive their exercise equipment. In June 2020, for example, Peloton had approximately $230 million worth of backlogged orders that hadn’t been delivered to its customers due to those ongoing inventory and capacity problems, CNBC reported.
Peloton certainly wasn’t the only organization that experienced inventory adversity during the COVID-19 pandemic. For months, big-box retailers and grocery stores had trouble keeping toilet paper and paper towels on the shelves amid a surge in panic buying. There was also a run on a variety of cleaning agents used for disinfecting doorknobs, tables, and other surfaces.
Fast forward to today. Inventories have generally recovered after manufacturers made strategic adjustments to improve capacity and output. But those struggles speak to the importance of — and need for — end-to-end visibility when it comes to inventory management.
A comprehensive warehouse management system — such as Oracle Fusion Cloud Warehouse Management — provides advanced inventory tracking capabilities so logistics teams have a 360-degree view of their inventory. This can help them determine whether supply will align with current and prospective demand. And with cycle counting, which is made possible through the power of automation, workers can perform multiple tasks at once without compromising inventory accuracy.
Dealing with returns
The path to purchase has gotten easier for the consumer, enabling buyers to obtain the products they want at any time and at any place. But warehouse management isn’t only about getting merchandise to customers as quickly as possible. For example, if products are damaged as a result of hasty handling during picking or packing, those items may end up coming back to the warehouse.
Regardless of the reason, returns are a common challenge for retailers. In fact, of all the merchandise that retailers sold in 2021, approximately $761 billion of its value wound up back with the store or warehouse from whence it came, according to the National Retail Federation (NRF). More than 26% of respondents to one NRF survey said returns have risen significantly compared to the volume they received prior to COVID-19.
Returned items not only represent a lost sale, but also lead to increased costs for businesses, including those associated with restocking, additional warehouse labor requirements, markdowns, and added logistical and transportation expenses.
A warehouse management system accounts for the inevitabilities of returns with a comprehensive set of capabilities that are leverageable by all the parties involved in reverse logistics, including retailers, manufacturers, shippers, and third-party logistics providers. This way, supply chain management teams have a broader spectrum of visibility and more tools for bringing greater simplicity and predictability to the return process.
Oracle Warehouse Management Cloud in action
It’s one thing to say that a warehouse management system can improve overall warehouse operations. It’s another thing to actually put that technology into place and achieve the desired results. Inspirage makes does exactly that by implementing Oracle WMS Cloud solutions for clients in a wide range of industries.
For example, one Inspirage client (a competitor of Peloton’s) encountered a tremendous surge in business during the pandemic. It began receiving an average of 150,000 to 200,000 orders per month, up from approximately 100,000 before the pandemic. At the time, the client was handling order fulfillment with a system called NetSuite Warehouse Management, which was integrated with NetSuite ERP. (Enterprise resource planning technology, or ERP, is a tool that many mid-size and large organizations in a use to assist with decision-making and increase visibility into their day-to-day operations.)
While this solution had performed adequately for a number of years, it wasn’t scalable. While our client had been aware of this shortcoming prior to the dramatic uptick in demand (especially with its direct-to-consumer sales), it soon become apparent that they needed to increase production to fulfill the growing number of domestic and international. Simply put, the client’s legacy system was making order fulfillment much more difficult than it needed to be.
Working in tandem with the Inspirage WMS team, the client determined that a more scalable warehouse management solution was appropriate. Since its NetSuite solution was behind on licensing and versioning — which prevented the client from upgrading to the most recent edition — the legacy system’s best days were undeniably behind it. The client had decided to stick with the outdated system because integration can often take a long time and get in the way of regular business operations. However, the status quo was simply no longer sustainable.
Our client then turned to Inspirage to perform the system integration of Oracle WMS Cloud.
The complete integration took only eight months, and the client was actually able to begin using features of the solution before the Inspirage team had even finished adding its final touches. Since custom labeling and tagging is one of the many warehousing business functions enabled by the Oracle WMS Cloud system, the client was able to immediately increase its inventory accuracy and improve its workforce efficiency on the warehouse floor. It also reduced operational costs by eliminating the need to rely on other businesses to take care of these simple, yet critical, warehousing tasks.
Oracle WMS Cloud also immediately outperformed NetSuite Warehouse Management with respect to reporting. When the client first met with us, they described their reporting challenges and the ways those issues created communication breakdowns. Once Oracle WMS Cloud was set up, staff could more easily customize reports and coordinate other processes through the system’s drag-and-drop interface.
All told, this fitness company is now equipped with warehouse management functionalities that will enable the firm to improve its current processes and expand at the same time. It also began planning to open a third warehouse shortly after the Oracle WMS Cloud was fully installed.
Warehouse management isn’t about working harder; it’s about working smarter. The Oracle WMS Cloud is the intelligent solution your team needs to level up without burning out. Contact us at Inspirage and let us help you make your warehouse better in every way imaginable.