Omnichannel approach requires a waveless WMS

Rather than being a necessary evil for retailers, the supply chain has now become a key success factor for greater customer satisfaction. According to Consafe Logistics during a recent Supply Chain Media webinar on omnichannel warehouse management systems (WMS), this calls for a different approach to planning and control of the warehouse processes. Handling orders as efficiently as possible is no longer the top priority. It has been replaced by fulfilling promises to customers – and a waveless WMS offers the solution.

By Marcel te Lindert

“We’ve been talking about the retail revolution for at least ten years,” stated Remy Malchirand, the managing director of Consafe Logistics for Central Europe, during the webinar. “The growth in e-commerce is not only having an impact on traditional retailers, but also on other links in the consumer products chain. More and more brand manufacturers are positioning themselves as retailers and embarking on their own e-commerce activities. This is an ongoing trend that’s shaking up the entire retail market.”

The pandemic has accelerated this development, as Malchirand illustrated with some statistics about store closures in the USAs. In 2017 around 7,000 stores closed down, and in 2018 and 2019 there were around 9,000 closures. “In 2020, that figure skyrocketed to 12,200 stores. Retailers that have not yet embraced the omnichannel revolution are really suffering now. They are realizing that they urgently need to switch to omnichannel – but it’s not too late.”

No longer a necessary evil

For omnichannel retailers, the supply chain is more important than ever. Whereas the focus used to be mainly on the efficiency of getting products to their final destinations at the lowest possible cost, the primary aim nowadays is to optimize customer satisfaction. As a result, the most important supply chain task is to deliver on promises made to consumers about delivery times, delivery locations and other additional services. “For a long time supply chain was a necessary evil, but it has now become a key success factor in the customer journey,” said Malchirand.

According to him, the store can still play an important role in that supply chain – not only as a point of sale, but also as showroom or fulfilment point. “Amazon and Alibaba are opening warehouses everywhere to deliver to consumers ever faster. But retail stores are often much closer to the consumers, so stores remain an important asset,” explained Malchirand. He added that there is a growing number of scenarios and that almost anything is possible, such as a consumer spotting a dress online, trying it on in a store, using her smartphone to order it and then returning it at a store. “It’s up to supply chains to make all those options possible – profitably, of course.”

From waves to a waveless WMS

Among other things, this requires a different approach to managing the order picking process in the warehouse. So far, the process has been aimed at maximum efficiency with large store orders, often comprising dozens of order lines, being collated in the WMS. The WMS subsequently uses algorithms to allocate all the order lines to the order pickers as efficiently as possible. The same process is repeated, with a new ‘wave’ of order lines washing over the warehouse every two to four hours. “The sole goal of these waves is to keep the order picking process running as efficiently as possible. And the bigger the wave is, the bigger the efficiency gains are,” he continued.

But that no longer works in an omnichannel operation. In addition to large store orders, the warehouse also has to pick consumer orders that cannot wait for the next wave. “If you want to offer fast delivery, a WMS with wave-based planning creates major challenges. The alternative is a waveless warehouse management system that is focused on fulfilling promises rather than reducing costs. To keep customers happy, it’s sometimes necessary to prioritize certain orders. Customer satisfaction should be the factor that determines when orders are released to the floor.”

Optimum capacity utilization

It is only possible to deliver on customer promises if the WMS has insight into the available order picking, packing and shipping capacities, and that can be a challenge – especially in highly mechanized or automated warehouses. Henk-Jan van Donkelaar, Chief Sales Officer of Consafe Logistics, talked about the new warehouse of CB, a Dutch logistics service provider that fulfils online and offline orders for books. “CB noticed a shift in the order pattern: an increase in the number of order lines, but decreasing quantities per order line. Therefore, in addition to its automated pallet warehouse, CB has now built an automated bin warehouse to be able to hold items in stock in smaller volumes,” he explained.

At Consafe they strongly advise that the WMS should be tightly integrated with the warehouse control system (WCS) used to control storage systems and other machinery. “In the past, the WMS was often leading and the WCS was merely implementing, but more interaction is needed between the two systems nowadays. The capacity of systems and machines can only be optimally utilized if the WMS and WCS work together more closely,” said Malchirand. However, he cautioned retailers not to phase out wave-based planning altogether: “In a warehouse where 80% of the volume still goes to stores, wave planning can still be of value… albeit in combination with waveless planning, perhaps.”