Warehousing On The Web

"Charlie? Joe here. What’s our inventory position on products X, Y and Z?"

"Hold on, let me check the warehouse management system… Looks like we’ve got 5,000 of X. 8,000 of Y and 15,000 of Z. That should be enough to support the retailers’ Labor Day push."

"Thanks, Charlie. How about what’s coming in from Asia? We’ve struck a couple of big deals and will need to fill the pipeline very quickly.

"Uh…I’m not sure. Can I get back to you on that?

"Yes, I’ll be at my desk for the next half hour."

"Sir, can it wait ‘til tomorrow?"

In a supply chain requiring multiple suppliers, freight forwarders, transportation providers and other partners, all on different systems, it has been difficult to get the visibility into inventory movements required to proactively manage the supply chain based on real-time information. But the shared network of the Web can extend this visibility beyond the warehouse. That broader visibility will be critically important as the strategic role of the warehouse evolves from being a central point of inventory control and replenishment to just one critical stop on the way to the consumer.

What impact does the Web have on warehousing and logistics management today? For many of the logistics professionals who crowd into the standing room only presentations at the CLM and WERC conferences on e-business, the topic is a mystery they feel they need to understand before it runs them over. The danger in all the hype about e-business is that it will intimidate us into inaction.

The truth is not that complicated. The best definition I’ve heard of e-business is also the simplest: e-business is about connecting people to information. The implication is that the Internet is the fastest, simplest, most economical way to do that. People need to stop worrying about how the Web works and focus on what it makes possible - connecting people to information to make faster, smarter decisions.

In the world of warehousing, e-business will have a significant impact on operations, customer service and the skill set required of professionals in our industry.

e-Business will require much greater operational flexibility.

Traditional distribution business is well defined. There is a history of product volumes, peak periods and turn rates that allow us to plan optimal space and labor. But Web marketing is much less predictable and yields forecasts that are no more than educated guesses. Shippers must be able to quickly and efficiently adapt to these demand changes. Third-party providers are ideally suited to address this need for flexibility, particularly those that can offer shared warehouse space under short term contracts.
As a higher percent of shipments go direct to the consumer, shippers must design warehouses to efficiently pick onesies and twosies - a very different challenge than typical bulk picking.

e-Business will herald a new age of self-service for internal and external customers.

This may mean fewer bodies to staff the customer service function. Anyone with a browser and security rights should be able to send queries to the warehouse management system for information on inventory, order status, shipping status and other product information. Kuehne + Nagel’s "Dashboard" is one such application designed to connect customers with their information. Technologies can take self-service to the next level by automatically alerting all relevant parties to situations requiring attention, such as low inventory levels and order changes.

e-Business will require that logistics professionals develop new skill sets.

Warehouse professionals took a big gulp when EDI truly took hold in the late 1980s since it required an orientation away from slow-but-comfortable paper-based processing and analysis. The Web forces logistics professionals to adapt their skill sets. According to placement firm Christian and Timbers, while logistics management as a career track has experienced a decline in opportunities for vice presidents of distribution/logistics, opportunities actually are growing for logistics professionals with knowledge of electronic commerce, warehouse management systems and other technology-based processes.

Those are some of the changes that are here or on the way, but the biggest leverage point is in using the Web to create the platform for supply chain partners upstream and downstream to share information and collaborate in order to turn the supply chain into a competitive weapon. It’s connecting people to information on a global basis - information that can be used to make smart decisions, resulting in reduced inventory, demand-based production and shortened time to market. In short, the biggest payback from supply chain efficiencies will no longer come from reengineering the way product moves through the supply chain, it will come from "e-engineering" the way data moves through the supply chain.

Improved information flow and the ability to adapt, real time, to changing demand and supply requirements is necessary to be a leading supplier or retailer. A collaborative e-business model with visibility into the entire supply chain can suggest revised inventory movements and trigger associated changes such as notification of affected suppliers, transportation partners and customers. Steve Rabin of InterWorld calls these "dynamic decision opportunities" -- the logistics holy grail. This Web-enabled technology can allow today’s logistics engineers to become tomorrow’s strategists, managing global inventory movements much like air traffic controllers manage flight patterns, and driving millions of dollars in savings in the process.

All this and more, just by connecting people to information.