January 2007 | Case Studies | I.T. Toolkit

Plugging Into Network Visibility

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A networked WMS sparks Eaton Corp.'s electrical business with a broad view of inventory and more opportunities to aggregate freight.

In an increasingly networked world, where you are located isn't always as important as what information you can see. If, for instance, you need to ship a customer 500 units of your product, but you have only 200 in stock at your facility, that doesn't have to be a problem.

Take the large view—across more than one building in more than one location—and you're able to fill the whole order from your virtual distribution center.

That's the theory behind the Networked Warehouse Management Solution (nWMS) from Sterling Commerce, Dublin, Ohio. The purpose of this approach is to get a single picture of inventory, says Corey Wiegert, vice president of product management for applications at Sterling.

Using nWMS to manage inventory, shippers get "a single snapshot of inventory, whether goods are in the user's warehouse, a warehouse across the country, or a global distribution center. To the inventory picture, it's all one logical facility," Wiegert explains.

That global view is one benefit the electrical business of Eaton Corporation will gain as it upgrades next year to nWMS from an older version of Sterling's WMS.

Eaton's electrical business operates three U.S. distribution centers, in Duncan, S.C.; Mira Loma, Calif.; and Memphis. Each receives products from Eaton's factories and outside suppliers, and ships them to customers throughout the country. Those customers include electrical wholesale distributors, electrical contractors, and do-it-yourself retail stores.

Searching for Integration

Eaton has been using Sterling's WMS at its Memphis and Mira Loma locations since 1998, and at its Duncan DC since 1999. All three facilities run the WMS from a single computer at Eaton's Pittsburgh location, but the implementations aren't integrated. An employee at one site can't easily look at inventory in the other locations.

"To see inventory in our other locations today, we would need sign-on capabilities at each facility," says Steve Sprecher, site manager at the Memphis DC. "We also can't access data about inventory moving between and across operations. We can only see inventory within one operation at a time."

That will change when Eaton completes the upgrade to nWMS in late 2007 or early 2008. At that time, if the Memphis DC gets an order for a product that is not currently in stock, a quick lookup will let the user determine if the Duncan facility could satisfy the order. "We would then transfer the order to that facility," Sprecher says.

Along with helping Eaton better balance inventory among its three facilities, having a broader view of inventory will help the company more efficiently schedule workers in those DCs.

Companies that use the networked version of the WMS also gain the ability to easily expand and reconfigure the solution as they make changes to their distribution networks, says Ken Ramatour, Sterling's director of product marketing for applications.

"Distribution networks aren't static; they continue to evolve," he explains.

With many WMS solutions, each time a company opens a new DC, it has to install new software and integrate it with other systems. With nWMS, companies can simply apply the processes from an existing warehouse.

"Users can 'copy and paste' processes they have already developed using our modeling tool," Ramatour says. "Because the software is designed to run across the network, they don't have to conduct a new implementation when they bring a new facility online."

Sterling's nWMS addresses four main functional areas. First, to improve efficiency for inbound and receiving functions, nWMS manages dock scheduling, receiving with quick putaway, and the receipt and disposition of returned goods.

Second, the solution improves storage and inventory management by determining the most effective way to store goods in the pick faces, given the company's own business imperatives.

"This gives users flexibility in terms of how they want to manage their business. The technology does not force them to manage their business in a certain way," Wiegert says.

The solution's third component addresses value-added services. It manages any kitting or assembly work that takes place in the DC.

Finally, nWMS contains a pick, pack, and ship module, which includes a "solver" for building pick waves based on demand for items in the warehouse.

"The picking process is not hard-coded in terms of pick face configuration," Wiegert says. Users can build waves based on the most efficient way to fill a cart, or load a truck for a certain delivery route; or with first-in/first-out criteria, among others.

While gaining a networked view of inventory will provide Eaton several benefits, two other needs drove its decision to upgrade to nWMS. First, the company needs a currency conversion function, which isn't available in the current version of the software.

Because Eaton's current WMS can't handle multiple currencies, it would have needed to install a separate version of the older software in each country. "Instead, we want to run a single version of the solution," Sprecher says, which it can do with nWMS.

Tracking Critical Data

Eaton also needs to record serial numbers for certain products at several points in the supply chain because some devices are used in power supply backups and other critical applications.

"If we have a problem with one of those products, we need to be able to follow it throughout its life: where it was manufactured and distributed, and where it was originally sold," Sprecher says.

To accomplish that, Eaton needs to receive products and pick orders by serial number. "Our order management system tells us the serial number we need to pick," Sprecher says.

"Our current version of the WMS only allows us to record a serial number upon shipment. It does not allow us to record receipt and work-in-process moves by serial number," he adds. The new version supports these functions.

The transition to nWMS is not Eaton's first attempt at achieving greater functionality from the Sterling software. Last March, Eaton began working with third-party logistics provider FedEx Supply Chain Services. As part of that relationship, Eaton integrated FedEx's transportation management system (TMS) with its own order management system and Sterling's WMS.

Each night, Eaton passes data to FedEx about all orders not traveling by expedited freight. FedEx then uses its TMS to determine the least-cost shipment option for each order. It also aggregates shipments to minimize transportation costs.

For less-than-truckload shipments, FedEx returns the transportation plan to Eaton, which makes its own arrangements with carriers. FedEx coordinates with these carriers for single- or multi-stop truckload moves.

For every shipment, FedEx's TMS passes to Eaton a unique identification number that includes the stop number for a multi-stop load, the assigned carrier, and other details.

"We record that information not only in our order management system, but also in the WMS application," Sprecher says. "We've created reporting within the WMS that allows us to perform wave release for orders to be picked up, by load number or by carrier."

That means orders are picked in a logical sequence, based on when and how they are shipped.

FedEx currently aggregates shipments and optimizes truckloads from each Eaton facility, but the setup offers little opportunity to aggregate across facilities. Upgrading to nWMS, with its view across all DCs, will provide a further advantage.

"With greater visibility of order information, we will be able to enhance shipment aggregation," Sprecher says.

Mix and Match

Sterling also offers its own TMS, a hosted solution it acquired when it purchased software developer Nistevo last year. But part of the company's philosophy is to provide integration services, so users can mix and match functions from Sterling with functions from other software providers, Wiegert says.

Sterling has designed its solution with a service-oriented architecture, so if a customer prefers another vendor's module for any of its logistics functions, nWMS can run in the background, exchanging data with that module as needed.

"We expect that we're only going to be one piece of the puzzle," Wiegert says. "We understand users' need to give and receive data through other pieces of the puzzle."

For Eaton, that philosophy is just the right fit.

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