I believe they need to be, if you want to unlock efficiency, increase savings and boost profits. Not convinced that your warehouse and transport teams need to collaborate? Here’s a story that will make things clearer.
It´s the same procedure every day.
Steve, the head of transport at a large retailer and Eddie, the head of warehouse operations both look at their daily operations from a very different angle.
Steve is furious. “I don’t know why Eddie decided to do that,” he fumes. “These warehouse guys just do what they want and I have to deal with it. We need to work together, not against each other!” Steve looks at the problem again: The store on 51st street and the one on 52nd street have been assigned to lanes at opposite ends of the warehouse. This makes it impossible to load them together – two trucks will be needed to deliver to these stores, even though they are in the same neighborhood. Why are the warehouse guys trying to make his life more difficult than it has to be?
Eddie tries to clear the air with Steve. “Steve, you know we assign the lanes and gates to stores and orders in the way that best fits our warehouse resources,” he says. “Let’s take a look at the WMS plan.”
The plan shows that the store on 51st street ordered only products that are kept at the far end of the warehouse, while the store on 52nd street ordered products that come mainly from the other part of the warehouse. “So you see, this minimizes our paths in the warehouse,” says Eddie. “I’ll see what I can do for you.”
“We can’t continue like this.”
“We have to do something,” Steve says. After the pair come up with a feasible plan and enter the compromise into the respective systems—an extremely tedious task—they start talking. Eddie shows Steve the warehouse’s KPI report from the last few days. It looks good. In fact, the warehouse is actually doing better than ever.
The same can’t be said for Steve though. “The company loses thousands every day, because my KPIs are worse than ever,” he says. “But given your lane and gate assignment, there isn’t much I can do about it. How do you think we can divide the tasks in a way that will achieve the most benefit for the company overall?”
A possible solution
Steve and Eddie quickly realize that finding the most cost-efficient plan within the warehouse will result in a big hit on the company’s bottom line due to the significant impact on transportation costs. Turning it around wouldn’t work either ― it would just be the same situation, only with the roles reversed. “We should align warehouse and logistics operations better. Ideally, we directly integrate our two systems,” Eddie suggests. Steve calls one of his friends who works for another major retailer for advice. His friend’s reply is simple: “We implemented a solution recommended by Quintiq. We’ve not had any problems since. You should check it out.”
Steve researches the solution Quintiq offers:
“The highest value for the company is generated by considering constraints and boundaries of both systems and supporting each other to find the best feasible solution — for overall operations. Dynamic lane planning helps retailers handle the challenges of different order sizes every day by doing it shortly before pick-up starts. This allows the Quintiq platform to provide the WMS with an optimized preliminary plan before the start of pick-up based on the estimates of order quantities. Given the combination of orders on tours that minimize the transportation costs, the WMS can optimize the warehouse’s internal resources to fit these combinations.
“This yields restrictions for logistics scheduling during operations that planning needs to consider: Once the lanes are assigned, only limited changes are possible. Leveraging its flexibility and 100%-fit approach, Quintiq ensures seamless integration with virtually any WMS system. It is able to incorporate company-specific rules like changing the transport plan only if it does not impact the lane assignment, allocating additional time for loading from multiple gates, and utilizing limited resources to move pallets from one lane to another if the benefits exceed a certain threshold.”
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To cut a long story short, Steve and Eddie found a solution to their warehouse and transport logistics problem—with Quintiq. And yes, they still talk to each other. 🙂
Do you face barriers in integrating warehouse and transport logistics in your company? Let me know in your comment below. I look forward to hearing from you.