Project Proposal Sample: RFID on Warehouse Management System

Warehouse Management System on RFID

System Integration Development

A thesis

submitted in partial fulfillment

of the requirements for the degree

of

Master in Information Technology

at

Asia Pacific College

by

CHERI AMOUR P. CALICDAN

2013

Revision History

Revision Date Revised by Approved by Description of change

Page 2

Tables of Contents

Revision History........................................................................................................................2

Tables of Contents.....................................................................................................................3

Introduction................................................................................................................................4

1.0 Project Goal.........................................................................................................................6

2.0 Problem / Opportunity Definition .......................................................................................6

3.0 Proposed Solution................................................................................................................8

4.0 Project Selection and Ranking Criteria................................................................................8

3.1 Project Benefit Category.................................................................................................8

3.2 Project Urgency...............................................................................................................9

5.0 Cost-Benefit Analysis........................................................................................................10

3.3 Tangible Benefits...........................................................................................................10

3.4 Intangible Benefits.........................................................................................................13

3.5 Budget Control Analysis...............................................................................................16

3.6 Financial Return............................................................................................................17

6.0 Business Requirements......................................................................................................21

3.7 Major Project Activities.................................................................................................21

3.8 Out of the scope activities that are critical to the project success ................................24

7.0 Major Obstacles.................................................................................................................24

8.0 Risk....................................................................................................................................24

9.0 Schedule Overview............................................................................................................26

3.9 Major Milestones...........................................................................................................26

3.10 External Milestones Affecting the Project...................................................................26

3.11 Impact of Late Delivery...............................................................................................26

10.0 Estimated Project Completion Date.................................................................................27

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Introduction

Supply Chain Management

Supply chain management (SCM) is the term used to describe the management of flow and

storage materials, information, and funds across the entire supply chain, from suppliers to

producers to final assemblers to distribution centers (warehouses and retailers), and

ultimately to the final consumer. In fact, it often includes after-sales service and returns or

recycling.

The product flow includes the movement of goods from suppliers to customers, as well as

any customer returns or service needs. The information flow involves transmitting orders and

updating the status of delivery. The financial flow consists of credit terms, payment

schedules, and consignment and title ownership arrangements. Supply chain management

involves coordinating and integrating these flows both within and among companies.

Warehousing

The warehouse is a point in the logistics system where a firm stores or holds raw materials;

semi finished products, or finished products. By using warehouses, companies can make

goods available "when" and "where" customers demand them.

With the evolution of supply chain philosophies, strategic alliances, just-in-time; the last two

decades have seen a new role for warehousing. Today's warehouse is not a classical

long-term storage facility. Attention is given to the warehouse role in attaining the logistics

goals of shorter cycle time, lower costs, lower inventories, and better customer service.

Warehouses processes are being redesigned to achieve cost and order-processing goals and

are being relocated to achieve overall customer service goals.

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Warehouse Management System (WMS)

A warehouse management system, or WMS, is a key part of the supply chain and primarily

aims to control the movement and storage of materials within a warehouse and process the

associated transactions, including shipping, receiving, putaway and picking. The systems also

direct and optimize stock putaway based on real-time information about the status of bin

utilization.

Warehouse management systems often utilize Auto ID Data Capture (AIDC) technology,

such as barcode scanners, mobile computers, wireless LANs and Radio-frequency

identification (RFID) to efficiently monitor the flow of products. Once data has been

collected, there is either batch synchronization with, or a real-time wireless transmission to a

central database. The database can then provide useful reports about the status of goods in the

warehouse.

The objective of a warehouse management system is to provide a set of computerized

procedures to handle the receipt of stock and returns into a warehouse facility, model and

manage the logical representation of the physical storage facilities (e.g. racking etc.), manage

the stock within the facility and enable a seamless link to order processing and logistics

management in order to pick, pack and ship product out of the facility.

Radio-Frequency Identification (RFID)

RFID stands for Radio-Frequency IDentification. The acronym refers to small electronic

devices that consist of a small chip and an antenna. The chip typically is capable of carrying

2,000 bytes of data or less.

The RFID device serves the same purpose as a bar code or a magnetic strip on the back of a

credit card or ATM card; it provides a unique identifier for that object. And, just as a bar

code or magnetic strip must be scanned to get the information, the RFID device must be

scanned to retrieve the identifying information.

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1.0 Project Goal

The project goal is to create a Warehouse Management System and integrate an RFID-based

technology that can facilitate the automation of all manual processes within the warehouse.

The system will prove beneficial to the company as it aims to reduce paperwork, eliminate

human error and improve data accuracy, gain more control over the warehouse, increase

speed and labor utilization, as well as to provide instant inventory and other types of

pertinent reports.

This Warehouse Management System is integrated with Radio Frequency technology that

has the ability to communicate with specialized tags that are embedded in pallets, shelves and

various locations (e.i. ingress and egress points) within the warehouse. Likewise, forklifts

will also be equipped with intelligent terminals as well as an RFID reader and antenna to

support automatic data scanning and storage location checking. With fixed RFID readers at

ingress and egress points, mobile RFID readers on warehouse automation equipment, and

RFID asset and location tags on waypoints and assets, the RFID Warehouse Management

System will provide greater levels of automation, error reductions, and decision support.

2.0 Problem / Opportunity Definition

CSG Incorporated is a provider of warehouse and storage services. Located in Imus Cavite,

the company’s warehouse facility occupies a land area of almost 8,500 square meters. This

immense product depot houses nearly 200,000 stocks of various elements from blank product

to blank product, which are delivered, disposed and accounted every day.

Over the years, CSG Incorporated has relied on a paper-based and semi-automated system of

inventory manned by over 65 personnel daily. This method of product tracking and

classification has been seen as ineffective and inefficient as it reflects a significant

probability of errors and inaccuracy. More so, the tedious process of manual inventory

further narrowed the bottleneck in the facility’s operations; thus affecting the entire

production cycle.

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Similar to many warehouse facilities, CSG Incorporated needs to streamline their current

warehouse operational procedures. An automated warehouse management system (WMS)

such as Radio Frequency Identification (RFID) is highly recommended to eliminate the

setbacks and improve productivity and control. In this system, RFID tags are attached to

products in the warehouse. These tags wirelessly broadcast information about the product

itself and its location; thus, providing accurate and real-time product identification in the

supply chain management and warehouse operations.

The RFID system will improve warehouse maintenance and increase warehouse efficiency.

This streamlining initiative will expedite mobility and categorization in the warehouse while

improving accuracy in numerical data. More so, this provision can particularly reduce labor

and logistic costs which have been identified as levers that pull the company’s profit

margins.

From a paper-based scenario where a warehouse personnel has to manually check and

encode products against the manifest, an automated and paperless tracking and checking

system will be in place. More importantly, from a tedious, time-consuming, and fallible

approach, a faster and more precise inventory control will be rolled out. All of these will be

made possible through the technology of radio frequency (RF) communications embedded in

the RFID tagging system.

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3.0 Proposed Solution

The proposed solution is to create a Warehouse Management System with an integrated

RFID-based technology that will improve the entire inventory handling process by providing

an automated, systematic and accurate warehouse management cycle that is error-free,

efficient and updated real-time.

The warehouse performs four basic functions: (a) receiving of goods and other materials

from a source, (b) inspection, storage, cross-docking and protection of goods, (c) retrieval of

goods according to customer requirements, and (d) preparation of goods for shipping and

transportation.

To illustrate, pallets, cases, cartons and all other storage items in the warehouse will be RFID

tagged, plotting them in the system back-end. These tags are recognized by readers installed

in all the shelves, transporting equipments, and ingress and egress points in the warehouse.

As a result, all movements of goods within the warehouse are tracked and accounted, use of

space, equipment and labor is maximized, and retrieval of goods as needed becomes

systematic- all these contributing to increased customer service, productivity level, and

warehouse utilization.

4.0 Project Selection and Ranking Criteria

The utilization of this system will result to higher efficiency, reduction of cost and increase

in revenue through the following:

3.1 Project Benefit Category

INFORMATION AVAILABILITY

Status updates of receipts, manufacturing requests, and customer orders are made

available real-time. This gives warehouse management the responsiveness in

managing activities as they occur; hence, changing needs are immediately addressed,

labor is appropriately deployed, while space resources are maximized.

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LABOR PACING

Communication between the system and the operator allows the system to pace the

operator from one assigned task to the next. The operator does not need to return after

each task to a central location to get the next instruction. The system can select the

next task for an operator based on metrics and instructions applied (e.g. priority

queue, capability of operator, schedule of tasks, etc.). The result is workload

management that maximizes task accomplishment and minimizes labor idle time.

MATERIAL TRACKING

RFID allows verification of all transactions that affect materials location. This

verification updates status records used for future transactions, eliminates most

material location errors, and provides immediate instructions for resolving errors that

are identified. Real-time communication allows the warehouse to operate more

efficiently. Storage locations that are emptied are immediately marked in the system

and assigned to incoming loads and goods.

SECURITY

Shrinkage can be reduced with secure, item-level goods tracking, assuring that items

only leave the location when authorized.

3.2 Project Urgency

The client is already in the process of acquiring a third-party provider for the needed

RFID devices. Consequently, the proposed system has to be put into place as soon as

possible to avoid impeding the utilization of these devices.

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5.0 Cost-Benefit Analysis

3.3 Tangible Benefits

This project can provide the company with tangible benefits that can quickly and

dramatically improve warehouse operations and increase material management

efficiencies without adding headcount. By implementing an RFID-based WMS, the

company will achieve a number of significant benefits. That includes the following:

• Reduced warehouse labor costs• Reduced clerical labor costs• Reduced overtime costs• Reduced of physical inventories• Lower shipping/freight costs• Lower costs to rectify errors• Reduced equipment costs

ASSUMPTION DRIVING VALUE

Inventory Savings - Historically, firms have found that the deployment of WMS

leads to significantly improved SKU by location, quantity, and lot accuracy as well as

reduced safety stocks. Other inventory related benefits have also been realized as

shown below.

Area of Savings Description/Logic Savings Metric

Reduction of Safety Stock - Eliminate extra stock, increase turns - Improve cash use

- Annual carrying costs

Reduction of Loss/Shrinkage - Tighter inventory control by location

- Product write-off cost

Reduced Shelf Life Losses Due to Expiration Issues

- Tighter inventory control by lot


Reduced Product Damage, Scrap & Rework

- Minimized handling - Product write-off cost

Reduced Returns - Shipping the right products at the right time


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Labor Reduction/Avoidance Related Benefits

This category is typically the primary driver of ROI. Establishment of labor savings

requires a thorough review and match of each current warehouse process against the

projected time/cost of process execution with the WMS and adoption of best practices.

A sampling of labor cost reduction opportunities is shown below:

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Process Best Practice/Benefit Savings Metric

Pre-Receiving - Eliminates data entry - # hours/cost for indirect labor

Receiving - Streamlined paperless receipt/inspection of goods via RF terminal. Reduced receiving/ labeling time

- # hours/cost for direct/indirect labor

Inspection - WMS directed inspection and system-wide holds - Streamline receipts, eliminate paper holds and ticket generation

- # hours/cost for direct/indirect labor - Reduced cost of supplies (paper, etc.)

Directed Putaway - WMS automatically selects and assigns storage location - Minimizes dead heading

- # hours/cost for direct/indirect labor

Cross Docking - WMS automatically allocates stock and cross docks - Eliminate significant labor in handling and storage and cost of storage

- # hours/costs for direct/indirect labor - Storage space usage costs

Wave Generation/Shipment Planning

- WMS organizes picks in optimal sequence, builds truckloads. Reduce indirect labor for printing and sorting of orders, and truck load building

- # hours/costs for indirect labor - Reduced cost of supplies

Pick Preparation - WMS drives printing of shipment sets in optimal pick path, by type, etc. Reduces indirect labor for paper handling

- # hours/costs for indirect labor - Reduced cost of supplies

Picking - WMS assigns picks via RFID - # hours/costs for indirect labor

Equipment Related Savings

Taking labor out of an activity often results in the reduction or elimination of

associated equipment. Equipment savings may include:

Benefit Description/Logic Savings Metric

Elimination of Excess or Obsolete Equipment

- Remove the operator….remove equipment - Eliminate leases/rental charges

- Annual lease/rental cost

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Eliminate Maintenance Costs for Excess or Obsolete Equipment

- Less equipment = reduced maintenance, parts and/or labor

- Annual maintenance cost for labor and parts

Reduced Cost for Existing Equipment

- Higher utilization rate leading to lower per hour cost - Reduced per user cost

- Annual maintenance cost for

Space Related Savings

A WMS should improve space use through better inventory deployment and

consolidation based upon advanced cube utilization algorithms. The resultant savings

may occur in several areas:

Benefit Description/Logic Savings Metric

Eliminate Existing Overflow Space

- More efficient storage based on WMS storage optimization logic

- Lease/rental costs - Utilities, etc.

Reduced Transportation Costs with Elimination of Overflow Space

- No shuttling product to/from overflow facility

- Transportation costs

New Construction Avoidance

- Better utilization reduces requirement for new space

- Lease/rental costs

3.4 Intangible Benefits

• Increase in organizational transparency and responsibility.

• Accurate and faster access to data for timely decisions.

• A wider reach in terms of vendors, thus producing more competitive bids.

• Improvement in customer response time.

• Significant decrease in time and effort needed in data entry.

• More controls thereby lowering the risk of inappropriate utilization of resources.

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• Ease in gathering pertinent data needed for strategic planning.

ASSUMPTION DRIVING VALUE

Information Systems Related Savings

In assessing potential savings from a new Warehouse Management System, the cost

of the system being replaced must be considered. Typically, legacy WMS or

homegrown, host-based systems are expensive to maintain and upgrade. Use of newer

packaged solutions will eliminate the heavy annual investment in development and/or

system administration necessary for legacy systems. Deployment of a Warehouse

Management System will also require one or more system administrators. Generally,

however, when viewed against the backdrop of total IT administration costs, the

utilization of such a system should provide overall lower costs.


Reduced Legacy Support - Less IT support given efficient operation of WMS

- Personnel costs

Reduced Enhancement and Upgrade Costs

- Greater functionality in the WMS package

- Development costs

Eliminate Legacy Equipment/Software

- Eliminate legacy hardware and software

- Lease & support costs

Employee Related Savings

Positioned as a productivity tool, given a well-managed training program, a WMS can

generate substantial goodwill within the labor force and improve employee retention.


Improved Morale & Reduced Turnover

- Higher operational efficiency due to better attendance and individual performance - Reduced temporary labor

- Workforce turnover - Personnel hiring costs

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Reduced Supervision - WMS directs high percentage of activities - Lower direct supervision

- Supervisory costs

Reduced Training - Less turnover due to desire to work with system - Lower training costs

- Cost to retrain staff

Reduced Accidents - Elimination of stock search tasks - Reduced travel distances - Lower accident rate

- Accidents & related costs

Customer Service Related Savings

While perhaps difficult to quantify, lost sales or customer goodwill due to inefficient

warehousing operations has an economic effect. Nonetheless, every effort should be

made to quantify these costs. Ask sales or marketing for help.


Increased Sales - Faster order processing and data availability - Improved client relationships based upon better order inquiry response, turnaround, etc.

- Incremental sales

On-Time Delivery - Improved order processing based on required delivery date - Minimize missed dates, lower returns

- Expediting costs - Cost for returns processing

Customer Satisfaction and Improved Service

- Access to WMS data for CRM purposes

- Incremental sales - Customer service costs

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3.5 Budget Control Analysis

Personnel Cost Estimate Salary / Month Total Mandays

Rate/Hour Total

Project Manager 120,000.00 80 681.82 436,363.64

Business Analyst 60,000.00 10 340.91 27,272.73

Dev Technical Lead / Sr. Web Developer 75,000.00 55 426.14 187,500.00

Web Developer 50,000.00 50 284.09 113,636.36

Web Designer 30,000.00 18 170.45 24,545.45

Sr. System Quality Assurance 45,000.00 45 255.68 92,045.45

Quality Assurance (tester) 30,000.00 45 170.45 61,363.64

Total Mandays/ Resources 303 2,3

30 942,727.27

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PROJECT COST ESTIMATES

Units/Hrs. Cost/Unit/Hr. Subtotals Totals % of Total

1. Project Management 942,727.27 60%

1.1 Project Manager 640 681.82 436,363.64

1.2 Business Analyst 80 340.91 27,272.73 1.3 Dev Technical Lead / Sr. Web Developer 440 426.14 187,500.00

1.4 Web Developer 400 284.09 113,636.36

1.5 Web Designer 144 170.45 24,545.45 1.4 Sr. System Quality Assurance 360 255.68 92,045.45

1.5 Quality Assurance (tester) 360 170.45 61,363.64

2. Hardware 280,000.00 18%

2.1 Servers (Database) 2 280,000.00

3. Software 0.00 0% 3.1 Licensed software (IDE and Test Tools) Open Source 0.00

4. Testing*

4.1 Testing 85,000.00 5%6. Reserves (20% of total estimate) 249,545.45 261,545.45 17%

Total project cost estimate 1,597,272.73

* See mandays and Personnel Cost Estimate

3.6 Financial Return

Getting the ROI of this project investment requires articulation of:

• The total price of the solution including internal and external costs.

• Recurring savings for target payback period. ( Annual savings figures )

• The required rate of return based upon internal standards for financial analysis;

e.g., simple payback, NPV, etc.

PROCESS SYSTEM INTEGRATION ROI

Inefficiencies managingpaper pick tickets

Order dashboard /RF or voice picking

Decrease Costs

Random inventory storage Optimize storage Decrease Costs

Receiving to paper Purchase Order Handheld RF receivingto Purchase Order real time

Decrease Costs

Difficulty locating product Real-time RF inventory moves for your complete inventory visibility

Decrease Costs

Shipping errors resulting in credit memos & customer complaints

RF shipping verification to the actual order

Decrease CostsIncrease Sales

Inefficiencies throughout the shipping process

Increase fulfillment speed /reduce overhead

Decrease CostsIncrease Sales

Misplace product Handheld RF real-time bin or location transfers

Decrease Costs

Physical inventory time consuming

Increase inventory accuracy Decrease CostsIncrease Sales

Serial & lot tracking and shelf life requirements

Serial & lot tracking visibility Decrease Costs

Reduce credit memos RF shipping Verification to the actual order

Decrease Costs

Slow inventory turns RF or voice increases fulfillment speed to reduce overhead / increase turns

Increase Sales

Freight costs Reduce expedited freight costs Decrease Costs

RFID requirement Integrated RFID Decrease CostsIncrease Sales

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This analysis should be undertaken as soon as the opportunity has been identified and

subsequently refined and recalculated upon package selection using the vendor’s final

costs.

ROI based on Key Performance Indicators

KPI Definition Objectives Influential

Readiness to Deliver No. of request delivered in due time

No. of requests

Delivery service customer satisfaction

Order handling, throughput, capacity

Warehouse fill degree No. of occupied locations

Storage capacity

Utilization of storage capacity

Inventory management

Transshipment level quantitative

Retrieval

Storage capacity

Warehouse dynamics Size of shipping units

Transshipment level quantitative Value-based

Total turnover

Stored value

Inventory cost Ordering system

Cost / Storage location Total cost

Storage capacity

Choice of warehouse technology

Warehouse technology

Inventory coverage quantitative

Current stocks

Warehouse turnover

Inventory costs, warehouse dynamics, service level

Ordering system

Inventory coverage quantitative Value-based

Stocks

Warehouse turnover

Inventory costs, service level

Ordering system

Picking way/item Average picking route

Line items

Choice of picking technology

Process control, picking principle, information management

Picking density No. of line items

Gripping space

Average way times, picking performance

Supply management rack technology

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Financial Analysis Estimates

ORDER FULFILLMENT MEASURES

MEASURE CALCULATION TODAY FUTURE VALUE

On-Time Delivery Orders On-Time

Total Orders Shipped

% % ₱

Order Fill Rate Orders Filled Complete


% % ₱

Order Accuracy Error-Free Orders


% % ₱

Line Accuracy Error-Free Lines

Total Lines Shipped

% % ₱

Order Cycle Time Actual Ship Date (minus) Customer Order Date

Hrs Hrs ₱

Perfect Order Completion

Perfect Deliveries


% % ₱

WAREHOUSE OPERATIONS PRODUCTIVITY MEASURES


Order per Hour Orders Picked/Packed

Total Warehouse Labor Hrs

Order / Hr Order / Hr ₱

Lines per Hour Lines Picked/Packed


Lines / Hr Lines / Hr ₱

Items per Hour Items Picked/Packed


Items / Hr Order / Hr ₱

Cost per Order Total Warehouse Cost


% / Order % / Order ₱

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Cost as % of Sales Total Warehouse Cost


% % ₱

INVENTORY MEASURES


Inventory Accuracy Actual Qty per SKU

System Reported Qty

% % ₱

Damaged Inventory Total Damage $$$

Inventory Value (cost)

% % ₱

Days on Hand Avg. Month Inventory $

Avg. Daily Sales/Month

Days Days ₱

Storage Utilization Avg. Occupied Storage Fit

Total Storage Capacity

% % ₱

Dock to Stock Time Total Dock to Stock Hrs

Total Receipts

Hrs Hrs ₱

Inventory Visibility Receipt Entry Time – Physical Receipt Time

Hrs Hrs ₱

Net Present Value

NET PRESENT VALUE

YEAR ANNUAL SAVINGSNPV¹

YEAR 1 ₱ ₱

YEAR 2 ₱ ₱

YEAR 3 ₱ ₱

YEAR 4 ₱ ₱

YEAR 5 ₱ ₱

TOTAL ₱ ₱

¹Future Value =Projected Savings / (1 + interest rate)n

Where n is the year in which savings occur

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6.0 Business Requirements

3.7 Major Project Activities

Stakeholder List

STAKEHOLDER

PERSONNEL CONCERNS QUADRANT STRATEGY

Warehouse Manager

Eluetero Hernandez

#09178546623

Ensuring proper handover of business process documents to the development team

Minimal Effort

Communicate project specifications as required

Business Analyst Judi Anne Supelana

#09179023312

Resource and scheduling constraints for production once project is transitioned to operations

Key Player Solicit stakeholder as member of steering committee and obtain feedback on project planning. Frequent communication and addressing concerns are imperative

Steering Committee

Joseph Nepomuceno

#02-8389985

Ensuring on time delivery of materials

Minimal Effort

Communicate project schedule and material requirements ahead of time to ensure delivery

Project Coordinator

Cherie Mae Cirilo

#0932554864

Ensuing proper alignment of all activities on both the development side and client side

Key Player Solicit frequent updates and develop plan for alternative supply source

Project Manager Cheri Amour Calicdan

#09228447877

Product performance must meet or exceed current product

Key Player Communicate test results and performance specifications and obtain feedback on customer requirements or any changes. Provide frequent status reports and updates.

Sr. Software Developer

Arian Dave Mabanag

#09178237841

Concerns regarding resources to assist project team with product design

Keep Satisfied

Communicate resource requirements early and ensure resources are released back to engineering when they’re no longer required

System Quality Assurance

Vincent Acero

#09245584136

Questions regarding design of system

Keep Informed

Allow technical staff to work with stakeholder to answer questions and address concerns

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and provide test results for validation

Define System Requirements Specification

1. System Architecture – A description of the network and hardware design for the

solution.

2. System Design – A description of the system flow and integration with internal

and external systems that includes communication protocols, formats and

frequency.

3. System Process Flows – A collection of all the system process flows showing all

the key points of system interaction and integration with internal and external

systems.

4. RF (Radio Frequency) Design Flow – A description of the RF flow and

explanation of the logic including exception handling on each RF screen.

5. Reports – A description of all the reports required (operational and planning).

The details should include descriptions of all online reports, purpose/usage,

intended audience, parameters and corresponding validations on screen, data

extraction source and logic, report format/layout and report export requirements.

Functional Requirements based on Business Requirements

MODULE DESCRIPTION

RECEIVING The receiving module lets you track the receipt of material from vendors or from internal production operations. Bar code labels may be produced for items, containers or pallets. If desired, items and quantities may be validated against an expected receipts list. Because the system is a real-time system, received material is immediately available to fill customer orders. Material may be set aside for crossdock, received directly to a storage location, or placed in a temporary staging location to be handled later with the Putaway transaction.

PUTAWAY The Putaway module is used to move material from staged receiving locations to final storage locations. Based on system configuration, material may be moved to prime locations, locations holding like items, empty locations and

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more. Users may specify the Putaway sequence or use the system's suggested sequence which directs users through the warehouse in an optimized travel path.

ORDER PICKING The picking module provides an extremely flexible and efficient method for picking orders without any paperwork. Many options are offered including order picking, group picking and zone picking. If desired, orders may be picked by priority or user-defined type (customer order, production order, etc.) Consistent with other sytem functions, the system suggests pick locations in an optimized travel path, and alternative pick locations are available at the touch of a key.

PACKING AND SHIPPING The Packing and Shipping modules are used to box, verify and ship orders that have been picked. Packing lists and bar code labels may be produced to identify boxes and order contents.

PHYSICAL INVENTORY AND CYCLE COUNT

The Cycle Count module can be used to verify inventory for a specific item or location, or it can be used to perform a complete physical inventory. Cycle counts, like other system tasks, may be performed in user-directed and system-directed modes. Inventory discrepancies may be corrected automatically and immediately, or they may be flagged for later review. Because the system is a real-time system, there is no need to "freeze" inventory during the cycle count process.

REPLENISHMENT The Replenishment module lets you move material from bulk storage to forward pick locations that are running low on material. The system maintains maximum and minimum quantities for any desired item and location. As an on-hand quantity falls below the defined minimum, the system creates a replenishment requirement for that item and location. Users are later directed to move material to depleted locations.

REPORTS AND STATISTICS

The Reports and Statistics module will provide daily, weekly, monthly, quarterly and annual data based on all the information stored in the system’s database.

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3.8 Out of the scope activities that are critical to the project

success

Activities that are critical to the success of this Warehouse Management System but

are beyond the scope of this project includes the successful acquisition, installation,

implementation and maintenance of all RFID devices. The system will be dependent

on the inputs generated by the RFID devices since the system will gather all its data

from the database populated by the said RFID devices.

7.0 Major Obstacles

The following are the challenges that are highly likely to be experienced related to creating

and implementing this system:

The transition from a manual to an automated system will require extensive

preparation specifically on the operations-side. Flows and processes should be

thoroughly examined to ensure that the implementation of this wireless technology

does not hamper operations, supply-chain and warehouse management in place. Alignment of the RFID WMS with the primary business software must be rolled-out. Procurement of equipment such as RF/barcodes scanners, portable as well as heavy

duty printers, and the appropriate type of labels must be done after careful selection

from various options, taking into consideration the adaptability of existing systems

and software.

8.0 Risk

Although the implementation of an RFID WMS will greatly benefit key areas, there are still

risks associated with the system. Primarily, if the RFID tags fail, the system will not be able

to track the movements of goods inside the warehouse. Moreover, the following issues are

considered risks:

DEAD AREAS AND ORIENTATION PROBLEMS – RFID works similar to the

way a cell phone or wireless network does. Like these technologies, there may be

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certain areas that have weaker signals or interference. In addition, poor read rates are

sometimes a problem when the tag is rotated into an orientation that does not align

well with the reader. These issues are usually minimized by proper implementation of

multiple readers and use of tags with multiple axis antennas.

PROXIMITY ISSUES – RFID tags cannot be read well when placed on metal or

liquid objects or when these objects are between the reader and the tag.

SECURITY CONCERNS – Because RFID is not a line-of-sight technology like bar

coding, new security issues could develop. For example, a competitor could set up a

high-gain directional antenna to scan tags in trucks going to a warehouse. From the

data received, this competitor could determine flow rates of various products.

Additionally, when RFID is used for high-security operations such as payment

methods, fraud is always a possibility.

GHOST TAGS – In rare cases, if multiple tags are read at the same time the reader

will sometimes read a tag that does not exist. Therefore, some type of read

verification, such as a CRC, should be implemented in either the tag, the reader or the

data read from the tag.

HIGH COST – Because this technology is still new, the components and tags are

expensive compared to barcodes. In addition, the software and support personnel

needed to install and operate the RFID reading systems (in a warehouse for example)

may be more costly to employ.

UNREAD TAGS – When reading multiple tags at the same time, it is possible that

some tags will not be read and there is no sure method of determining this when the

objects are not in sight. This problem does not occur with barcodes, because when the

barcode is scanned, it is instantly verified when read by a beep from the scanner and

the data can then be entered manually if it does not scan.

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VULNERABLE TO DAMAGE – Water, static discharge or high-powered magnetic

surges (such as lightning strike) may damage the tags.

9.0 Schedule Overview

3.9 Major Milestones

Define scope of project.

Identify stakeholders, decision-makers, and escalation procedures.

Develop detailed task list (work breakdown structures).

Estimate time requirements.

Develop initial project management flow chart.

Identify required resources and budget.

Evaluate project requirements.

Identify and evaluate risks.

Prepare contingency plan.

3.10 External Milestones Affecting the Project

Installation of all RFID devices.

RFID device implementation and testing.

User Acceptance of RF technology.

3.11 Impact of Late Delivery

Delay in project roll-out will result to an increase in the project cost. This will also

impact the usability of the acquired RFID technologies.

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10.0 Estimated Project Completion Date

Total production duration is (87) working days / (4) months. Please note that weekends and

holidays are excluded in the schedule. Any public holidays and announced no-work day will

affect our schedule and extend the corresponding deadlines using a ratio of one-is-to-one.

(2) Months will be dedicated on product development. Time estimates is based on the initial

Work Breakdown Structure (WBS).

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Work Breakdown Structure Mandays Resource

1.0 Project Initiation

1.1 Develop Project Charter 1 Business Analyst

1.1.1 Identify Problem Statement / Opportunity (Business Case)

1.1.2 Meet with Stakeholders to identify Major stakeholders

1.1.3 Secure approval /sign-off

2.0. Project Planning and Scoping

2.1 Business Requirement Specs 5 Project Manager

2.1.1 Data gathering / elicitation of requirements

2.1.2 System Requirement Analysis

2.1.3 Scope Specification

2.1.4 Peer Review and Phase Sign Off

2.2 Systems Requirement Specification 12 Dev Technical Lead / Web Designer2.2.1 Analyze Requirement / Impact assessment

2.2.2. System Design

2.2.3. Data Modeling

2.2.4 Database Structure

2.2.5 Prototyping or Wire Framing / Preliminary Conceptual Design

2.2.6 Final Design Presentation

2.2.7 Phase Sign Off

2.3 Develop Test Plan and Strategy Project Manager / QA Lead2.3.1 Test Case / Scrip development

2.3.2 Identify Resource and man-days

2.3.3 Identify Tools required

3.0 Execution

3.1 Coding and Development 45 Project Manager / QA Lead / Dev Team

3.1.1 Coding

3.1.2 Build Release

3.1.3 Code Review

3.2.3 Unit Testing / Module Testing

3.2.1 Iteration Testing

3.2.2 Progress Archiving

4.0 Quality Assurance

4.1 Final Quality Assurance 16 QA Lead / Dev Team4.1.1 System Testing

4.1.2 Integration Testing

4.1.3 Performance / Load Testing

4.1.4 Use Acceptance Testing

5.0 Implementation

5.1 Production and Implementation

5.1.2 Production Server Final Testing

5.2 User Training 3 QA Lead OR Dev Team5.2.1 Set Schedule

5.2.2 Conduct Training

Total Working Days 87

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