Warehouse performance can mean many things to many companies. To Wilson Transformers in Wodonga, Australia, warehouse performance means stock control accuracy, real-time data, reduced manufacturing variances, a clean warehouse floor and knowing the exact locations of stock. These benefits, and more, are the effects of Wilson Transformers' handheld barcode scanning software project.
Prior to the handheld barcode scanning software project, the company used partial bin control. Real time data was not available because Wilson Transformers back flushed materials from two warehouses at the end of jobs instead of recording material issues and receipts against individual operations. The inevitable time lags increased errors in stock updates. Inaccurate bills of materials (BOMs) and manufacturing variances caused stock inaccuracies.
Michael Vonthien, refers to that time as ‘zero stock accuracy.’ More than one person criticised Wilson's warehouse people for stock control inaccuracies and poor warehouse performance.
In general, users had no confidence in the warehouse’s stock accuracy. Critically, Wilson Transformers was forced to rely on people to have the necessary knowledge for finding stock items: Try the third level! Towards the back. In the far corner!
To improve warehouse performance an audit recommended a three-phase solution. Phase one quarantined one warehouse effectively tightening the associated inventory management. The audit recommended real time data recording for all stock transactions. The second warehouse was not permitted to use fixed bins. Interestingly, handheld barcode devices were not significant at the time of the audit. Quarantining one warehouse did not force the company to use handheld barcode equipment. However, it made it logical to use handheld barcoding devices.
That’s when Wilson Transformers asked COGITA (Click here to find out about COGITA) to supply expertise and consultancy. Wilson Transformers wanted to install and implement a barcoding software system on handheld barcoding equipment using Radio Frequency technology (RF).
Firstly, Wilson Transformers created physical locations in the warehouses. The locations, being the unique racks, rows, and shelves, were recorded in the company’s Epicor Enterprise Resource Planning system (ERP) sourced three years earlier from COGITA. Staff labelled all stock items, no exceptions, with a location and a tag. Wilson purchased three handheld barcode terminals, a bar code printer and three radio frequency base units. The units provided good RF coverage inside and outside the warehouse. With all the elements in place, warehousing operations began sending real time data to Wilson Transformers’ Epicor ERP system at the office. Wilson's warehouse began making updates in real time.
With real time data, warehouse staff, now track items in the warehouse with Epicor ERP Trackers. Staff also use bin tracker, part tracker and material handling functionality to carry out cycle counting and stock-takes at intervals suggested by the Epicor ERP system.
The company has improved warehouse performance so much it changed the quality of life for associated staff. Wilson stock control accuracy was 99% for the last two months. That is a huge warehousing performance lift compared to the initial goal: 75%.
Michael Vonthien: “The guys used to get a lot of heat but now there are no nasty phone calls. Two thirds of our total inventory is now under control.”
Here is the question everyone wants answered. Has there been a reduction in inventory with this amount of proven control? Michael Vonthien says, “not really but having inventory control accuracy is an important first step. It’s been hard to change attitudes and the mindset of buyers with respect to safety stocks. We now have a dedicated project to bring it down another two million dollars – to a total of seven million off its peak in March 2009.”
The success does not stop there. For the first year, ever, Wilson Transformers was able to omit the physical stock take for one of the warehouses. So the company has avoided the attendant overtime costs not to mention the disruption of a stopped plant undergoing a full, periodic, stock count. Now with weekly cycle counts the auditors signed off that a physical stock take is not necessary.
Lifting warehouse performance is not all about equipment and software. Nothing improves without the right processes and the right people. Lydia, the Stores Manager, was critical to the success of the handheld barcode scanning software and barcode devices project. Lydia did not merely make the new barcoding system stick, she improved it. A year later Wilson's warehouse continues to improve. Each week Lydia checks 200 bin locations and rotates the bins on a five to six week cycle. In this approach, Lydia counts the whole warehouse regularly. Michael Vonthien says “that it is not enough to make a change; the change must be lasting and improvement must continue.”
Clean-up is another very important factor that the company used to change the mind set of warehouse people. Michael Vonthien: “We now employ a cleaner to vacuum the floor once a month, for $100 a month, when previously you couldn’t see the floor for inventory and dirt. Our people tried to sweep but it was ineffective particularly when their efforts were hampered with inventory all over the floor.”
Staff receive (Purchase Order Receipts) inwards goods at the dock before storing them in their allocated lots. Inventory picking and transfers use the radio frequency (RF) handheld barcode devices. Wilson Transformers has now geared up for short lead times — supported by the company’s huge lift in warehouse performance.
Michael Vonthien told us, “Our business had confidence that we could survive the recession and so no one was made redundant. We are now geared up for the new projects expected. We are having alterations done at the main plant to physically secure the warehouse attached to production. We can then repeat the warehouse performance improvement process there. We can also work on reducing stock control safety stocks by our purchasers because they can now have confidence in our inventory numbers and don’t need to order extra just in case.”
COGITA
To find out more about this COGITA client, 76 years old as at 2009, click on the link to Wilson Transformers, in Wondonga, Australia.
COGITA Digital Media Archives 2009. All rights reserved.
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