Technology eases distribution for 3P
- 11 March, 2004 15:50
Using a paper-based system to track orders and shipments across over 400,000 square feet of warehouse space in Toronto and across the country was not proving to be the best option for Andlauer Management Group.
Not only was picking time -- the time it took warehouse employees to locate products in the warehouse and place them in a shipment -- slower, but accuracy was also becoming an issue, said Bill Gurd, vice-president of IT, CIO of Andlauer, a third party logistics provider (3PL).
"The drive to be competitive has moved to the warehouse," Gurd explained. As more and more companies are looking to cut costs, "distribution is now a critical way to do that."
As the 3PL for about 50 clients, mainly for healthcare and pharmaceutical industries including Shoppers Drug Mart, Andlauer decided to move to a warehouse management software (WMS) on an IEEE 802.11-based system that integrates barcodes and wireless data-collection from Radio Beacon.
"It was very important for us to set up a system that can drive staff to the right place to pick up a product," Gurd said. The new system directs staff to the correct product using hand-held scanners and also provides real-time information which improves the decision making process.
The 3PL provides such things as inventory control, order processing, regulatory compliance, electronic data interchange (EDI), sales analysis and vendor compliance.
Visibility in the warehouse increased with the Radio Beacon solution and Gurd said his company was able to fill and ship orders while being able to track employee's movements, ensuring employee productivity.
Workers can also fill more than one order at a time and that reduces travel time in the warehouse and the time it used to take employees to fill orders, Gurd said. The use of the audit trail system enables the company to have a solid record of what is happening in the warehouse with the products and the employees, as well as providing real-time information.
"Paper-based systems didn't give us enough information," he explained. When one of Andlauer's retailers was missing product that had been delivered, Andlauer was able to provide them with a complete printout of the picking and shipping activities on its end.
"We discovered that there was theft happening at the retailer's end," he said, adding that with the older system, the company might never have been able to track what was happening to the product.
Gurd also said the distribution manager is the first person to receive the order, which is an added bonus for the company. That person can allocate the goods before the order is released to the floor for picking.
Employee training has also been reduced. On the paper-based system, it traditionally took two days for staff to learn the system. Now, with Web-based tools, if the employee is familiar with the Internet they can be up and running in 20 minutes.
"It's less intimidating for them," he explained. "Before when we threw up a DOS-based screen people would start to get nervous."
Gurd said Andlauer aims for about 99.9 per cent accuracy. When dealing with such products as narcotics, they require 100 per cent accuracy, and it's something that many retailers are expecting now. In many cases, he added, they won't accept anything less.
Another advantage of Radio Beacon's technology was that it was based on Microsoft's SQL server 2000 and Windows 2003.
"We saw SQL emerging as a database and we wanted all of our products to be Microsoft-based," he said. "Integration and stability with our retailers was key."
Radio Beacon recently rewrote its legacy application built using non-relational tools, to the SQL server and noticed market improvements, said Tom Berend, founder and chief architect for Radio Beacon.
The company boasts that with the SQL server not only have response times to orders at the dispatch board improved -- from five seconds to a sub-second response for 5,000 orders -- but Berend also said the process of calculating stock can happen on demand.
"What used to be an all night job, now takes us three seconds," Berend said.
Multi-processor servers, ADO.Net optimization and the ability to have native extensible markup language (XML) documents, have delivered performance improvements for the company's products.
Radio Beacon's clients can no have access to 24-hour operations and can also conduct backups without having to shut down their warehouses, he added.
"We looked at other companies like Oracle but we realized we couldn't afford it," he said. "Pricing with SQL is competitive, even the Linux systems are more expensive."
Radio Beacon has less than two per cent of its customers using the legacy application and about 50 per cent are now using the SQL server, said Carl Martin, vice-president, marketing and business development of Radio Beacon.
"We expect rapid adoption of the next format release," Martin said, especially as the Microsoft heads into Longhorn.
Radio Frequency Identification (RFID) is the next step for both companies.
Andular's Gurd said he is waiting for standards to be in place before his company jumps on the bandwagon, but he said there is huge potential with RFID.