WMS: Are You Ready in the Event Your ERP or WMS Goes Down?

In these times wherein it is not only expected that we automate (computerize) all our Operational functions but also that   all sources of information should be in our Database nto allow us to gain a competitive edge over competition.  Just like OPIUM, we become addicted to it:  It is too expensive to convert to an ERP and it is even more expensive to get out of an ERP.  We tend to forget that if something should go wrong with our beloved ERP or WMS, our whole company could go on a standstill.  Imagine the following scenario:

1.  This happened to one of the largest manufacturers of milk and other food products in the Philippines.  According to one of the IT personnel of the Food Company's major warehouse contractor,   the Food Company's  SAP ERP System went down for about a month (off and on) and this affected the warehouse contractor's ability to do invoicing, inventory stock allocation and other warehouse & physical distribution functions.

As a result, the Food Company required all their warehouse contractors (and it is a requirement if a 3PL wants to bid for any of its warehouses) that THEY INCLUDE IN THEIR WAREHOUSE BID A CONTINGENCY PROGRAM (to do Offline invoicing and inventory balances) and the ability to upload the offline transactions to SAP once it is working already ;

2.  A few years ago, the Philippines lost its access to the Internet after a severe earthquake affected the  submarine (?) cable that linked the Philippines to the Internet Gateway in the USA.  I understand from another ERP solution provider that since that time, a new Fiber Optics cable now links the Philippines apart from the submarine cable.

Still, whenever you rely on another party other than yourself for a function or facility, you have to assume the worst and try to reduce the risk of loss as much as possible. In the case of the latest trend for Cloud Computing wherein the software application program and your data is stored in the server farm of the software provider say in the USA, without a functioning Internet link-up, you cannot :

1.  Access your data (its in the USA);

2.  You cannot even run the program locally because the software is stored in the diskdrives in teh US of A;

3.  Off-Line transaction Processing is out-of-the-question.

I remembered what my EDP operator once said when I was still working and I asked her what program is she using as she was copying numbers from the screen onto a scratch paper and she said, "IBM!".

"You mean the company bought IBM computers.", I said knowing how thrifty the company can be.

She again said "IBM.  Its Better Manual.".  End of story.

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

SLEX Rate Horror! Fuel Price Shock!! - - - - Shipping & Trucking Managers Should Read What Might Happen Next!!

courtesy of ofwnow.com

I used to pay already a high P69 One-way from Nichols to Susana Heights.  Now, I was shocked that I have to pay P120 One -way or a 174% increase.  And that is not all, the new Toll Rates do not include yet the 12% eVAT in which case my Cash Out for a One-Way trip is P134.40 or a 195% Increase.

Fuel is now P54.20 per liter (Petron XCS) and my Toyota Innova G Gas gets only 8km per liter and since I travel from the boundary of San Pedro to SM North (about 100km est) or 12.5 liters times P54.20 or Total Fuel Cost of P677.50 One-Way  plus Parking fee of P60/day plus the above Toll Fee of P134.40 One-Way for a Total Cost of P1,683.80 for One Roundtrip.  Gads!!!!

The other side of the coin is of course, traffic flow along SLEX has really improved and I can tell all, Travel Time has been shortened although the Northbound Lane (going into Manila) still gets jammed with cars and trucks all the way from Nichols to beyond the Alabang Bridge and this is a limitation of the EDSA/Quirino Hiway. Though not the fault of the SLEX but it does negate some of the benefits of the SLEX.

Another is that having 6-lanes or more from Alabang to Calamba is not so good as all the vehicles have to narrow down to 3-Lanes and it causes a funnel-effect and PRAY there is not accident at the chokepoint that will cause right away a monstrous traffic jam.

From a Logistics point of view, a 200% increase in Toll Fees and the ever-spiralling cost of Fuel, tires and spare parts may not be offsetted by the Savings from a  shortened travel time on the SLEX as trucking freight rates will not go up correspondingly.  The Travel time, for most trucks, will not translate to more trips as trucks are still governed by the same Truck ban rule and in fact, like endangered animals, heavy trucks can only travel along Truck Corridors.  Add to that is the Maximum Load Limit imposed by Road Truckscales which limits the revenue that a truck can carry (albeit overloaded).

As an example on the limits to Truck revenue, I have a Logistics Manager who asked my help to source trucks for him.  When I asked the rate from Laguna Province to Manila, it is a certain rate plus only the increased portion of the SLEX Toll fee. Hmmmmmmmmmmmmm.

To make up for the increase in fuel and toll fees while trucking or hauling rates remain flat, Truckers may resort to:

1.  For toll gates without truck weighscales, the truckers may choose to overload their trucks;

2.  Truckers will be choosy about the trips they get (i.e. pick One-drops instead of multi-drops and avoid difficult supermarkets that take too long to unload) to the horror of  Supply Chain, Logistics or Shipping Managers;

3.  We will probably see truckers continue giving Bribe money allowances to their drivers/coordinators so they can get better trips from the Client-company's dispatchers;

4.  For companies that still pay on a per case or per kg, truckers will insist the truck is filled to the brim even if the cases start getting crushed;

5.  Truckers will start adding Chassis Extensions and increasing the Roof Height of their trucks which will overload the truck and make them very unstable on the highway;

6.  Another bad tactic is to give Rebates to shipping personnel for every good trip given to the trucker;

7.  Trucks may avoid the SLEX/NLEX and travel along the traffic-prone Service Roads to avoid paying the toll which results in delivery delays.


Am sure you Supply Chain,  Logistics or Shipping Mangers know all of the above and probable can add 100s of ways to my list but what to do?

During my time. FMCG companies used ot work on a 3% (of total sales) for Distribution costs which includes Warehousing and Transportation.  I do not know if this still holds true.

I hope I can hear from you  guys.  JUST CLICK ON THE TITLE OF THIS POST AND A COMMENT BOX WILL APPEAR BELOW.  PLEASE WRITE YOUR COMMENTS AND PRESS "POST A COMMENT"

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MATERIAL HANDLING: Know How to Read the Specs & Know How to Read In-Between the Lines.

As you know , forklifts (or Motorized Pallet Trucks as they are called elsewhere) are very expensive equipment.  In the Philippines, there are not only so many forklift vendors of brand-new equipment (TCM, Toyota, Jung Heinrich, Yale, Nissan, Linde (not Lindt the chocolate hehehehe) and so on) as well as countless importers of second-hand (or third-, fourth-, who knows?) equipment.

courtesy of tcmglobal.net

courtesy of toyotaforklift.com

A few years ago, a forklift supplier said the annual market for brand-new forklifts is about 600 units more or less while the second-hand market runs into the 2,000 units mark.  There is then pressure among the brand-new vendors to run after whatever sale is out there.

When I ask for quotes, they would also ask what did his competitor quote so he can better it (ie lower the price somewhat).  Not so ethical but it's done that way over here.

The more important thing to consider as the Logistics or Material Handling manager is to make sure you are comparing apples to oranges.  Sometimes for a given price point, the products presented are not equals.

Reach truck courtesy of jungheinrich.com

courtesy of clarkmheu.com

Ex  I asked for quotes for 1-ton capacity counterbalance forklifts as I will be using them for my racking system.  It turns out that one of the supplier did not tell me that his product is a one-tonner  when the Load is at Ground level but the Maximum Allowed Lifting Weight at Maximum Lifting Height drops down to less than 900kgs!!!! That now becomes a Safety Issue, sir.  No wonder his price per unit was lower.  BE CAREFUL.

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

Warehouse Management: The Bad Thing About Emails.

As a then newly-installed Operations Manager for a 3.2-hectare 4-Building National Distribution Center Facility east of Manila, I always made it a point to make a Quick tour of the whole facility before I step inside my Office.  The action is in the Warehouse floor and that is where I want to be.

Screenshot courtesy of Yahoo Mail

First building is in what they call the Consolidation Warehouse where Inbound goods from different suppliers including the plantation/cannery in Mindanao where the bulk of the goods come from are first off-loaded from 20-footer container vans and 10-wheeler trucks.

I saw my forklift operators unload the container van of loaded pallets.  I saw my checkers checking quantities and items versus the packing list and checking for damages to the goods. I heard my warehouseman barking commands on where in the warehouse to store the pallets.  I then saw my warehouse helpers laying down the pallets and with the use of pallet jacks, pull the stocks inside.  In fact, I saw everybody in the warehouse except my warehouse supervisor who heads the warehouse--- he was nowhere in the area!!

After an hour making my rounds, I finally stepped into the Office and found my warehouse supervisor in front of the computer answering emails!!!  I asked him why was he not in the warehouse floor and he said he will get into trouble if he does not answer the emails sent by our client-company (that's our principal, the one who pays us)!!! Second question, how long will it take him to answer the emails --- the better part of the morning, on most days!!! Terrific.  I just lost the use of a warehouse supervisor.  I told him starting tomorrow, I want to see him at the warehouse floor. (EMAIL EVIL NUMBER 1)

EMAIL EVIL NUMBER 2:  I noticed when we get an email from our client-company, they furnish copies (it's that "cc:" thing you see after the first line of Yahoo mail) to everybody including several recipients in my team including me as the Head of the facility.  And this is the bombastic thing, each of those recipients will now reply to the sender and of course, "cc:" me. Its a BACTERIA THAT REPLICATES GEOMETRICALLY!!!!
I now hold several copies of the same text of the original email plus several copies too of the replies of everybody!!!!  (hey, too many exclamation points)

Hah!!!! The client-company pays my warehouse supervisor P30,000/month give or take just to answer emails half of the time.  Is that cost-effective?

 
By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

WMS: A Sad Story About Claims About 100% Data Interface-ability

I was the Operations Manager of a 3PL that handled the 3.2-hectare National Distribution Center for one of the largest food companies in the Philippines.

The client-company had an ERP solution from one of the Top 2 ERP solution companies in Manila but for some reason, the ERP was not extended to the National Distribution Center i.e. the 3PL had to secure its own Warehouse Management System or WMS. 

Word had it that the WMS of the ERP company would have cost P35 Million which I could not verify if it was true but anyway, the ERP was said to be able to data interface with the WMS software purchased by the 3PL and there should not be any problem.  Or, is there?

As I was then new in the company, I had to ask the clerk in charge of the WMS (not a computer programmer) and he said between the ERP and WMS sits a Middleware that translates data to and fro the two software, more like a United Nations interpreter. 

I did not think much of it till crunch time came.  You see the client-company does most of its annual sales on the last 2 months of the year and outbound shipments can reach as high as 90 trucks (from trailers, container vans, 10-wheelers to small trucks) in a single day.  That's when I noticed that things were slowing down.

You see the customer's Sales Invoices were stock allocated and printed using the ERP but the necessary picklists needed by my warehouse crew to pick the stocks were printed on the WMS and naturally, things were slowing down due to the long Waiting Time waiting for the middleware to translate the data flow (21,000 line-transactions per day) between the ERP and the WMS.  It could not translate Nihongo fast enough!!!!

To humor you, the clerk told me the middleware prints the ERP data into a flat file (in Nihongo, an Excel worksheet) to which another clerk cuts and pastes it onto the WMS for it to do its thing.  Huh??????? Terrific!

I have an ERP worth P100 Million more or less and a WMS worth about P5 Million and am using an Excel program worth P3,000 to make it all work.  Jeeeeeeeeezzzzzzzz!!!!

I heard on the rumormill is that big ERP would not give the source codes pertaining to the data interface to the WMS local reseller to ensure 100% compatability because big ERP also is selling a P35-Million WMS of their own. Hmmmmmmmmmmmm. . . . whatever happened to Excellent Customer Service.

A friend of mine who is accredited by an ERP company as a Systems Consultant (or whatever they call them) said she never believed in 100% compatability.  The truth is it always has problems and the only way to use an ERP and WMS from the same company.

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

WMS or Warehouse Managment System: The lowly Customer Code

We see them every where.  In Utility billings, we see them as Account No.  In purchases from suppliers we call them Vendor or supplier code.  But no matter what you call them, Customer Code is always present in any Computerized or Manual Inventory document and system.

courtesy of rightideas-brightideas.blogspot.com

For companies starting out on their computerization of their Inventory or Billing System, they sometimes let the Software Reseller (who does not know a thing about your business except to sell his software product at all cost) do the thinking and implementation of a Customer Coding System BUT THIS IS THE WRONG THING TO DO.

You who has to live with the Inventory System forever, should get involved or at least, have a senior officer of your company get involve.  Why?

       A Customer Code should be able to tell you a story.  Ex A customer comes to you with a complaint about a certain new Discount Scheme that your company implemented.  You do not have any access to your laptop or you do not have remote access to your computer database.  The only thing you have is your Sales Invoice that is now being shown by your customer.  Who should you call?


Just looking at the code, the first prefix might tell what division the product falls, the second prefix should tell what product category or which District Sales Manager it falls under.  And the third prefix could tell whether the customer is paying Regular price or enjoying already some discounts.  With that, you could now give a call to the DSM and either ask him what that new Discount Scheme is all about or have your customer talk to the DSM, in which case your customer will be impressed.


Having a well-thought out Customer code can reap wonders for your Marketing Dept as they can do Data Mining by mixing-matching different parameters (or fields of a record) to sort according to say ethical pharmaceutical products for a given geographical location or sorting customers per sales manager per product, and so forth.  It will allow you to do demographic stats (on a limited basis as when a code includers gender and age group) for purposes of cross-selling products by different divisions.

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

WAREHOUSE MANAGEMENT: Does Expansion Always Mean an Increase in Manpower Headcount?

Involve your Crew in Planning (courtesy of google.ph)

As I always advice my clients, always look at what you have and see what is its True Capacity and if one is using that True Capacity in an efficient way.

Take for example the manpower in a typical Warehouse.  Normally, the reasoning would go like this:  If my warehouse crew of 5  can handle 1,000 cases a day of Outbound shipment, then a ten-fold increase in Outbound volume could mean one will need about 45 more people.  Not always true as one should consider the following:

1.  DETERMINE WHERE YOU ARE COMING FROM.  Is the existing crew of 5 operating at their maximum, or can they handle some more volume?  How much more without losing accuracy  in picking stocks for delivery & delays in loading of trucks?

2.  To minimize Peak Warehouse Workloads at any one time, schedule the receiving of Inbound goods at a time when there is a slack in the warehouse i.e the time between the loaded trucks have just left and the time when they have to prepare for next day's delivery.  ( Your supplier will always agree to your requested Delivery Time as he wants to sell to you!)

pallet jack image courtes of google.ph

3.  Do the existing warehouse crew have enough Material Handling equipment such as pallet jacks, forklifts and other handling aids or do they have to share thereby increasing waiting times?  (It is better to have an excess of Material Handling equipment than an excess of manpower.  During lean months, the former does not cost anything more but extra men cost money whether you use them or not and it is not easy to reduce them without risking labor problems.)

4.  Review the whole warehouse process from Receiving, Putaway, Picking, Issuing, Replenishment and Loading and implement WORK SIMPLIFICATION and minimize redundant work steps.

flowchart courtesy of google.com.ph

5.  Whenever possible, AUTOMATE.  I do not mean you buy an SAP P35-Million WMS (Warehouse Management System) software but you may have to invest in a simple Inventory Program that allows bar-coding.

             Aside from being more accurate and tamper-proof, a simple Inventory Program (maybe P30,000 ot P50,000 or US$1,000) and bar-coding will make the process of Receiving, Putaway, Replenishment, Issuing etc a lot faster by freeing the Human-Intervention part of the process (the slowest in any Workflow). 

barcode scanner courtesy of consumerschoicepos.com

Ex In Receiving goods, the warehouseman and checker individually have to go around the pallet and look for the product description on the upended carton, compare that to the supplier's invoice & put a tick mark (vs scanning the barcode in less than a second)

barcode by 

mperfect.net

4.  When you add manpower, this is what happens:

        4.1 You increase the complexity in supervising so many people.  You may now need Warehouse super-
                   visors to break-up management;

        4.2  You can lose the Team Spirit and Camaraderie as now parts of your Staff may feel alienated as
                   of course, you cannot talk personally talk to everybody daily;

        4.3  Your instructions used to reach your crew immediately but now it has to cascade to a few levels
                  and misinterpretations do happen.

5.   The most neglected step when planning for a warehouse expansion is to involve your warehouse crew (or the involved parties), to wit:

        5.1  Advice them of management's plan, the timeline of implementation and what exactly is the impact
                 or what does it mean to them;

       5.2  Tell them in clear and concise terms the problems that will result from the expansion but you do not
                have to present it to them in a threatening or negative way.  You can call the expansion an
                Excellent development for everyone and problems are Key Result Areas to ensure success;

      5.3  Lastly, ask your warehouse for suggestions and for good suggestions, include them in your plans &

               be sincere in giving credit to your Warehouse crew.

Involve your whole Supply Chain courtesy of google.com.ph

6. Involve all parties in your SUPPLY CHAIN including your suppliers.  For suppliers, you could:

      6.1  Schedule shipments to your warehouse during slack periods (as mentioned above)

      6.2  Minimize Final Packing on your end.  (Preferably goods arrive in your place ready for delivery to
               your customers. No Repacking, no  stickering for promo events, attaching of price tags, no bundling
               at your end etc)

      6.3 For your bulk customers, arrange for your supplier to delivery directly to your customers using
              your Sales Invoice (saves handling cost and avoid double-handling)
I am sure you could easily add to the List .  It is only when you have exhausted all the above that you may really have to add men but only just what you really need.

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

BUSINESS OPPORTUNITY: Am Looking for Trucker with Insulated Trucks

courtesy of automitsubishi.blogspot.com

Am looking for a trucker who has 5 to 6 2-tonner Insulated Trucks (no need of refrigeration unit) who will accept me as an Independent Sales Agent.

A colleague of mine is in need of 5 to 6 Insulated trucks to haul processed food from Laguna to Metro Manila customers on a Daily Basis.  My colleague's company is willing to guarantee the daily trips for as long as the trucker is willing to dedicate the trucks solely for his company's use.

I can be reached at 0917-5240965 or pldt 514-2905.


By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

Logistics: The Great Equalizer or The Formidable Edge.

In this highly-competitive economy where manufacturing best practices are as efficient as they ever will be or when costs have been pared down to the barest without affecting Product Quality and Operations and when Product Design has been so studied to the point of being a commodity all together, Logistics can be the only Competitive Advantage a company can hope to gain.




I was with a prospective client for Sea Freight and his Company is one of many producers of Styrofoam Packaging which is pretty generic if you think about it.  Their clients are the top market leaders in the Fast Food Industry in the country and it is presumed that it was the Fast Food Chain who provided the design specifications to all the styro makers in the country.  Since Food franchises thrive on Product Standardization (where they derive their cost efficiencies), you can be sure that the Top 10 Styro makers would probably produce indistinguishable products of the same design.  Of course!! These Fast Food franchisors would not allow any deviation from their specs.  Therefore, price is the only differentiating factor but that makes for very slim margins and is no guarantee that you will get the order. So how do get the order?

Did the Shipping Line leave your van behind? (courtesy of containerwest.com)

My Prospect told me in evaluating a logistic provider, they do not only look at rates as basis for choosing one over the other.  A more important factor is Customer Service.  In his business, these Market-leading Fast Food Chains are very demanding when it comes to Lead times and Product Integrity while in transit to their provincial warehouses.  Imagine a KFC or Jollibee that ran out of the Styro for their popular 1-piece Chicken order.  How will they serve their order without the styro pack?  They will never consider buying a substitute Styro pack without their Logo printed on it for the reason they do not know if the styro is food-safe or passed their own Quality Assurance Team nor will they dare risk their Brand should a customer accuse them of using unclean styro packs!!!!

Is the van fit for Food containers? (courtesy of containerwest.com)

Some of the complaints raised:

1.  The container van was smelling of animal feeds, dirty, with holes and rotting floors.  (Imagine if a KFC or McDo customer should take a picture of a dirty van unloading KFC or McDo styro packs.);

Did the ship arrive on the promised date, ETA? (courtesy of connect.in.com)

2.  The container van was late for loading at my Prospect's warehouse and as a result, the van missed the boat and has to wait for the next Sailing date (Jollibee or McDo cannot serve their 1-piece Chicken orders);

3.  The Shipping Line over-promised and as a result the van was Shut-Out (meaning the ship was too full to accomodate my Prospect's van);

4.  The ship was delayed and missed its ETA at destination;

5.  The container van helper was not properly-dressed, was not trained to handle the light but fragile styro cartons and could not count nor read the Bill of Lading  resulting in the wrong items being loaded into the van;

Am sure every shipper has encountered the above plus more but the bottomline, my prospect's client is angry over the poor service and that will reflect in whether my prospect will get his client's approval when next shipment is due.


By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with.  If you are interested, just click the Sulit Logo below:

Once a Logistics man, Always a Logistics Man.

After having worked in Logistics as a National Shipping manager for a major food conglomerate, as an Operations manager for a 3PL handling a National Distribution Center and for a domestic forwarder and in Sales offering forwarding services to corporate clients, I decided to leave the world of Logistics and set-up my own small business.

courtesy of fg-a.com

I was fortunate enough to be awarded the PCSO Lotto Franchise for a medium-size mall in Metro Manila and thankfully it has been my main source of income for the last 3 years.

Now its May 2011 and I am trying to get my feet wet again in Logistics. It all started about 2 or 3 months back when the ex-Logistics manager for Ericcson Phils was looking for a 1,000-sqm warehouse to use for their cellsite equipment and cables but I had to tell him I do not know. Next was another customer who was into animal feeds and asking me to help him sell his 1,000-sqm warehouse in Malabon for P10 Million. This was then followed by another colleague in Logistics who left his former company to join another who is into Cold Storage and Dry Warehouse facilities south of Manila. Last was the VP for Supply Chain of a former client but now with a major Meat Processing Company calling me up last December, 2010 if I could help him secure badly-needed Reefer trucks for his Christmas Sales surge.

I could go on but the point I wanted to make is I felt this crazy thing called Logistics calling me. It may sound corny but it is what has happened.

Next week, I start a Logistics Consultancy project with two of my colleagues for a Consumer company. At the same time, I joined a new domestic forwarding company, RebNet Distribution, as an Independent Sales Agent and I am now actively looking for clients for our Airfreight Service as well as Special Projects (such as mobilization of cellsite equipment & cellsite tower materials in remote provincial sites).

Amen.

By the way, I would like to invite you to visit my Sulit Homepage as there are some business opportunities that you guys might be able to help me out with. If you are interested, just click the Sulit Logo below: