Optimization of Warehouse Activities by usingOracle Warehouse Management System Implementation

A Six Sigma Project OF By: Somesvar Veeramani (WMS) WITH MOBILITY

WHITE PAPER

EXECUTIVE SUMMARY

The warehouse is at the core of our business operations – all day, materials are moving in, and out of this central business area. Efficiency of our warehouse processes is key to many business metrics — affecting the number of orders shipped to order accuracy, inventory availability and customer service levels. We are enjoying the many benefits of this leading supply chain execution solution, from improvement of facility utilization to an increase in order accuracy and improved customer service. But today’s business world is increasingly complex and competitive, with profits pressured by rising labor and fuel costs, offshore manufacturing and the difficulties associated with managing global supply chains. To address this pressure, factories are tasked with ensuring that each area of the business is running as efficiently as possible to offset shrinking margins and improve and protect profitability.

In this white paper, we are going to see the impact of implementation of Oracle Warehouse Management system (OWMS). We will study how this can enable us to fully leverage the data captured in the Oracle Warehouse Management system to significantly enhance the efficiency of our warehouse operations and finally giving as a saving of US $ 88,324.

Project SummaryAll the Warehouse activities are manually done resulting in duplication of work, excess manpower, data entry errors and scope for reduced inventory accuracy.Supporting for Production is also suffers due to manual processes

Project MetricsReduce Manhours in Warehouse operations. Optimize the current process for better efficiency

Project ValueUS$ 34k per annum

Problem Statement All the Receiving and Warehouse activities are being currently handled manually, which

is time consuming, duplication of work, scope for data entry errors and cost involved. [Avg. 3000 PO Receipts / Month, Receiver transacting @ minimum of 125 transactions per day, Picking - @ avg. of 20 transactions per day [150-200 line items]]

All the current locators in warehouse are manually controlled [Approx. 11,813 locators] FIFO controlled manually.

Project Goal (Team Charter)To Optimize the Warehouse operations, eliminating minimum of 30% manual operations by end Mar. 2012 and 100% completion till Physical Inventory verifications using RF Guns by Q4 2013

Critical to Quality [CTQ] – Tree

SIPOC-High Level Process Map

VOC – Voice of Customers

Cause & Effect

ANALYSE - Optimization of Warehouse Activities

Receiving

5 Different Internal teams – RT, PTS Printing, PTS Pasting & Put Away. No. of people – 50 EmployeesDuplication of entries – RT & PTS entries Data Entry errors - Wrong postings, etc. Different color labels for PTS. RT & PTS posting & printing separatelyDock to Stock – Avg. time – 5.8 Days

Picking

Manual Locator controls and no interface with Oracle Manual registers & Posting of transactions on shift basis – No live dataManual Cycle Count Manual posting & control of Expiry Date calculationsAll Parts are set up as “Pull Items” & manual control of Push Items Manual allocation of job & Total Manpower for Picking – 28 Nos.

EquipmentBar Code printers used for PTS label printing Normal color labels are used for PTS printing. Traditional method of printers using Cartridge Ribbons

Purchase50% of incoming materials are bar coded but not effectively usable in the plantAverage of 3000 P.O. receipts per month. Total Active items – 6220

Physical Inventory Counting without locators controls PI duration – 5 days approx.

Cycle CountCycle count manpower – 4 Nos. Open requests generation from Oracle Reconciliation and activities are manual controlled

Control

Man-hours reduction – Receiving process is simplified and reduced to two team operations in place of 5 internal teams before implementation

All details are captured through RF Gun, instant printing of Bar code labels and RT Elimination of duplication due to Integration of PTS & Oracle and Data entry errors

avoided TOT reduced to 8 hours compared to 2 Days earlier. All Items are LPN controlled and Oracle Locators controls. Put Away & Picking as per

OWMS Live Inventory updates as transactions are captured on the spot compared to Shift wise

updations OWMS FIFO Controls, Item set up upgrations and Implementation of “Kanban” Improved Employee productivity and motivation. Integration of PTS & Oracle and Standardization of Thermal Bar Code Labels and

elimination of color labels and printer ribbons.

Project Metrics

Material Receiving Process – Before OWMS

Material Receiving Process – After implementation of OWMS