All about WES: Holistic Approach in Warehouse Management

Automation and robotics conquer more and more space in warehouse management. Using the latest AS/RS and AMR technology will not optimize the operation of your warehouse or distribution center (DC) by itself, though. You need synchronized planning across all resources including equipment and labor to make the most of the technology you (can) have. That’s where Warehouse Execution System (WES) enters the picture.

As mentioned in our previous article, effects of Covid-19 pandemic are urging the logistics sector to adopt digital technologies more rapidly. Due to the waves of the pandemic, production and demand are in a constant flux. Customers’ interest in several goods grew significantly when the first wave of the pandemic started, but it often faded away at the same pace.

According to US statistics, there was a 400 percent growth in bread machine sales between mid-March and mid-April, while 5 times more jigsaw puzzles were sold in April compared to the same month last year. But interest can vanish as easily as it came as statistics about the Hungarian market show. As credit card related data at Erste Bank suggests, in Hungary the turnover of the DIY stores saw a 90% increase during the weeks of lockdown, but demand decreased to regular numbers just as quickly as it peeked when the lockdown restrictions eased.

These rapid changes require more flexibility and re-planning from warehouses and DCs than ever before. Such a challenge can hardly be conquered without a WES.

The pandemic is without a doubt a catalyst of changes; but new consumption habits also necessitate a shift in warehouse management towards precise, flexible and holistic planning relying on real time data. Consumers value personalized shopping experience more and more. They expect to be able to choose from numerous sales channels and pick the most convenient way of delivery (including home delivery, in-store pickup or other pickup points). Omnichannel sales strategy requires an accurate, well-orchestrated order, DC and warehouse management.

Quick, even same day delivery is becoming a general demand. At the same time, tolerance for delays is decreasing. Any dissatisfaction can easily motivate customers to check out other vendors.

To reduce delivery time, DCs need to move closer to the customer. This entails switching to several smaller DCs instead of a big, central one. Due to urbanization, small DCs often need to be located in city centers to reach their clientele easily.

Such locations usually come with limited space and high real estate costs. As a result of the higher expenses, it is common to use a shared storage building. In these smaller, urban DCs there is only minimal storage space so the limited stock must be matched to the customers’ demand in the area. To get the most out of the limited storage space and to handle orders arriving from several channels, and to manage the diversity of deliveries, DCs must be optimized near perfectly. Which, yet again, necessitates the holistic approach of WES.

WES is a software system that manages the material and product handling throughout the entire supply chain. It uses real time data to dynamically optimize, among many others, the movement of products and materials, and picking routes considering the available resources.

WES evolved from two separate directions. Some organizations started to upgrade their Warehouse Management System (WMS) with features foreshadowing a full-fledged WES in order to respond to the changing demands. In other cases, similar updates of the Warehouse Control System (WCS) indicated the inevitability of WES.

No matter its evolution, WES isn’t equal to the sum of WMS and WCS. WES doesn’t even intend to take over the tasks of these systems. (Yet, it’s needed to be noted that there are overlaps in functionalities.)

WES is a system that connects all participants (software and other assets) of material and product handling to create a complete picture of the entire process. WES plans the smallest details of order fulfillment in the DC or warehouse using real time data arriving from integrated systems. Then, it informs the subsystems and resources participating in material handling about their tasks.

WES aims to fulfill the maximum number of orders with the minimum number of steps while ensuring a balanced material and product flow. This is made possible by a vast amount of real time data arriving from the entire supply chain. However, the soul of dynamic optimization is automatic decision making concerning every detail.

To meet deadlines and use resources the most effective way, the order of fulfillment needs to be well planned. To react to changes and urgent requests, WES plans the order release dynamically instead of thinking in waves and batches as WMS does.

WES considers several factors for successful order ranking depending on the profile of the service provider. Just to mention a few, WES takes into account the delivery deadline and the delivery method (for instance, if the order will be picked up at a store, at a pick-up point or it needs to be delivered to house.)

WES judges if the picking process can be accelerated by synchronizing the fulfillment of two or more orders, for instance, because they contain the same products. It calculates the time needed for the product flow based on the availability of the resources.

WES decides on the best release time of each order regarding the above factors. If there are several possible workflows to fulfill an order, it also picks the most suitable one for each case.

For example, there might be a difference in handling single item orders contra orders containing multiple items. In the latter case, the order is better processed through a put-wall while in case of a single item order, a put-wall means an unreasonable extra step. Similarly, differences may occur in B2B and B2C order fulfillment within the same DC or warehouse.

After the most suitable execution path is chosen, WES plans the picking, handling and release process considering the workload of each zone and position of the resources.

A crucial part of optimized material and product handling is dynamic storage planning. Instead of every item having a fixed place, location is dynamically determined to be optimal for the picking process. As a result, traveling distance or the number of resources necessary for picking and handling can be reduced.

Many excess steps can be omitted from the workflow with dynamic decision making. For example, WES may direct an incoming delivery partly or entirely to a working station instead of sending it to storage if it accelerates the throughput. Cross-docking can be useful when a fresh delivery of boxes with the right branding is moved immediately to the packaging station when needed.

Based on the prioritized orders, WES calculates the tasks necessary for fulfillment. Each task is connected to the right resources including automated systems, manually operated equipment and human resources. When distributing tasks, WES takes into account the position of the resources and the workload of stations and zones.

As a result, tasks are allocated in such a way to ensure the most effective approach while balancing the workload throughout the entire process. Consequently, WES eliminates bottlenecks and idle time.

WES plans the order of the picking related tasks and the route for product or material handling based on real time data. This way the travelling distance of employees can be minimized, the fulfillment process can be optimized while the productivity of automated systems increases. Careful route planning prevents congestion and resulting delays or hazardous situations.

No doubt that optimized material and product handling can be ensured when WES relieves employees of decision making regarding the details of picking and routing. WES is able to make quick decisions using copious quantity of data available from each link in the supply chain – a task humanly impossible. Due to pattern recognition, the decision-making process gets shorter and shorter.

Human supervision or intervention is a more relevant question in case of more critical, management level decisions. Indeed, it’s crucial for the WES to meet the unique needs of the organization; this includes allowing expert supervision and confirmation in the workflow wherever it’s necessary. Nevertheless, human intervention should be kept to a minimum as far as the operation of WES is concerned. Human-bound decision-making points usually cause bottlenecks in the daily operation of WES-governed warehouses and DCs.

WES needs to collect data from the entire supply chain to control the material and product flow. Yet, WES isn’t responsible for operating every inch of the warehouse or DC. That’s why the key to a smoothly running warehouse or DC is flawless integration between WES and any system affecting material and product flow.

Inside the warehouse or DC, WES needs to be closely integrated with the WMS and WCS. WES communicates through WCS with the automated storage and retrieval system (AS/RS), robotics, automated guided vehicles (AGVs), automated mobile robots (AMRs), conveyors, and any other equipment and sensors participating in material and product handling. WES also needs to be connected to the Labor Managements System (LMS) to optimize the work of employees.

WES needs to track the product and material flow and any factors that may influence handling related tasks outside the warehouse or DC. If the site has a yard due to its size and profile, integration between the WMS and the Yard Management System (YMS) is a must to ensure seamless delivery. To plan with incoming and outgoing shipments, constant data transfer between the WES and the Transport Management System (TMS) must also be guaranteed. In case of most warehouses, data arriving from Enterprise Resource Planning (ERP) systems is just as crucial for extensive planning.

WES integrates with systems that have overlaps with WES functions, tasks, and responsibilities. Such overlaps are prominent in case of WES and WCS, since, in a sense, WES evolved from these systems. (We’ll discuss the overlaps and differences between these systems in an upcoming article.)

When WES is introduced to the ecosystem of a warehouse or DC, it’s primordial to precisely clarify the responsibilities of each system in the given environment. Each overlapping function and task, the coordination of each equipment must be allocated to one of the systems based on the unique conditions and workflow of the given site to end up with an optimized ecosystem.

A WES developed to fit the unique needs of the warehouse or DC is a beneficial investment in many ways.

Balanced workload leads to the fulfillment of more orders and completion of more tasks in the same amount of time. Any congestion and bottlenecks can be eliminated. An optimized storage also means increased efficiency and capacity.

WES can also improve on-time fulfillment rates. Dynamic prioritization of orders is more effective than batch planning, especially in case of orders with extremely short delivery deadlines. Plus, WES can allow for and react to external factors that may cause delays (such as a delayed packaging shipment) by adjusting the task queue to minimize the negative effects. Optimized picking and routing also lead to shorter execution time. As a result, short deadline orders can be completed on time even with increased demand.

While balanced workload resolves bottlenecks in busy zones, it eliminates idle time in others. Additionally, tasks are dynamically allocated by WES significantly boosting the utilization of the capacity of the equipment and the performance of the employees.

In certain industries, such as pharmaceutics, manufacturers need to comply with extremely strict regulations. In some cases, storage and handling conditions of each batch or product must also be documented in addition to the details of manufacturing. Tracking how much time the product spent in a given environment (for example, at a given temperature) including storage, handling and delivery is a must.

With the help of WES, material and product handling becomes an easily and precisely controllable, transparent process. Accurate data is available from every step and moment of the material and product flow. Consequently, regulatory conditions can be maintained; the required documentation can be prepared without hurdles. The administrative procedure can even be partially or fully automated.

Malfunctions and mistakes may happen even in case of the most advanced manufacturing systems; thus, warehouses need to be ready for recalls. WES can identify which products were produced on a certain production line in a given period of time and it can locate them even if they’ve already left the warehouse. As a result, WES can minimize the number of recalled products to the actually contaminated or defected ones.

WES can also guide the staff through the correct recall process including the right way to store, handle or dispose of the products in question. WES can also help to decide if there are additional steps required for those products that were in contact with the contaminated batch during storage or shipment with special regard to regulations, environmental conditions, and the nature of contamination. With an attentively executed recall process, profit loss can be minimized, while regulatory compliance and brand integrity are also ensured.

Nevertheless, these benefits will only prevail if WES is designed to fit the existing ecosystem of the warehouse or DC, while the unique pain points and industry specific regulations are addressed during development.