Warehousing

and
Distribution Channels

Digital Transformation and Smart

Warehouses

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I would like to acknowledge
the people of the Kulin
Nations on whose unceded
lands we are meeting on.

I respectfully acknowledge
their Elders, past and
present.

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Areas covered

• New customer service demands

• Digital transformation in warehousing
• Smart warehouses
• Elements in IS and IT in warehousing
• The (increasing) need for IS and IT
• Warehouse management information
system (WMIS or WMS)

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 New Customer Service (CS) Expectations
• Orders processed in very short time
• Easy communications with customers
• Ability to cope with a wide variety of customer demands
• User-friendly order placing system

• Integrate business with customers

• Ability to establish, track & trace orders
• Ability to issue advance shipment notice (ASN) or alerts
if problems with orders
• Ability to advice estimated time of arrival (ETA) of
deliveries

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 Digital Transformation in Warehousing
Not all process can be automated.
Full automation does not necessarily increase productivity.
Artificial Intelligence (AI) does not create solutions.

Digital Transformation uses

digital technologies in business
processes such as sales,
Digital warehousing marketing, and customer
refers to services. Logistics adapted from
warehousing and an old traditional business
process into the new age of
distribution services digital trends.
that utilize modern
technology and
automation to
Digital transformation in
optimize warehouse supply chain is the process of
processes and applying and integrating
information, communication,
workflows. computing, and connectivity
technologies into supply chain
operations, from inventory
management, information
storage to transportation and
distribution.

https://enterprisersproject.com/what-is-digital-transformation

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Which process may be digitally transformed?

Put Away
Receive
Storage/
Stock Maintenance/
Returns Picking

Cross Dock
Delivery
Sortation/
Consolidation
Packaging/
Labelling

Inside Amazon’s
Smart Warehouse
School of Accounting, Information Systems and Supply Chain (SAISSC) 6
 YouTube – ‘the evolution of warehousing’ –
Smart warehouses
Unitronics - Automated Warehouses 5.36 published by rstoffman, Aug 29, 2007

Automated Warehouse 13:07 published by trommerinc, Mar 14, 2011

Texas Instruments unveils automated warehouse in Singapore | ZDNet, Sep 9,

2013

The Warehouse of the Future – WITRON’s OPM Technology at Meijer in Wisconsin

4:42 published by Witron Logistik, Mar 29, 2017

Inside Amazon’s robot warehouses 1.10 published by The Telegraph, Jul 5, 2019

JD.com Fully Automated Warehouse in Shanghai 2.44 published by JD.com Inc,

Nov 10, 2017

JD.com's vision for futuristic automation technology for urban logistics in smart
cities 4.00 published by JD.com Inc Jan 5, 2019

Automated Warehouse of the Future In Japan - Sagawa X-Frontier

published by Japan Go! Jan9, 2021

Comment – interesting to observe how technologies evolved over 10 years in automated warehouses.
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Challenges of Top 100 Logistics IT Providers
Which transportation/logistics challenges are most critical to your customers?

..in
2020…
Extracted form http://www.inboundlogistics.com/cms/article/2018-top-100-logistics-it-market-research-survey/
(accessed 28 April, 2018)

..in
2018… Extracted from https://www.inboundlogistics.com/cms/article/2020-logistics-it-market-research-survey/
(accessed 20 April, 2020)

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“Before you fly, learn to walk first”…

The basics of IT & IS in warehousing

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 Basic Management Information System

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 Warehouse Management Information
Systems

Company Management
Financial planning and
control, Inventory control,
MRP and DRP

Warehouse Supervisory Control

Receiving, put away, space allocation,
FIFO control, pick activities, order
process, order packing,
documentation, route & load
planning, equipment & people
control

Process Control
Produce indicators for paperless picking, diverters on
sortation, create receipt registration documents,
instructions to fork lift drivers

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 Traditional Order Distributed Order
Management Management (DOM)
Systems (OMS) Systems
Focus: Orchestration and
Focus: Order Processing
Fulfilment
Order Entry Optimal Sourcing Logic
Inventory Visibility across the
Line Item Management
Network
Inventory Allocation Supplier Integration
Pricing Process Automation
Multi-Node Inventory
Promotions
Allocation
Credit Checks Available- to-Promise
Credit Card Processing Drop Shipping Automation
https://mail.google.com/mail/u/0/?tab=wm#inbox/15a70bf2b08c548a

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 Q&A?

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Data and
Information Management

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 An Information System

• An Integrated Information System which allows

– Data made available to all parties involved
– Date consolidated in a common base
– Consolidate connected activities
– Resource sharing

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 Electronic Data Interchange (EDI)

• It is NOT email, fax or other data communication

• It is the exchange of machine-readable data in
standard format with standard content between
one organization's computer and another
organization's computer.

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 Basic Rules Of Using EDI
• all business trade partners must be committed
and cooperate in all aspects involved in adopting
this system
• support from top management of organisations
throughout the supply chain
• leadership to pilot the project, involvement from
key personnel as well
• willingness to spend time necessary for
successful implementation
• comply with procedure even if slow start

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 Automated Data Collection
(ADC)
• Uses computer technology to enter information
• Uses machine-readable bar codes and scanners
• Increases speed and accuracy of collected data

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 • Error rates (manual)
• Error rates (ADC)
• Labour costs
• Inventory costs

• Timeliness
• Accuracy
• Ability to upload data from remotes sites into
mainframe
• Quality control
• Customer service levels
• Creates new categories of information
School of Business IT and Logistics • Competitiveness
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22
 Read the article
here.

https://imageio.forbes.com/blogs-images/forbestechcouncil/files/2018/07/Evolution-of-Data.jpg?fit=bounds&format=jpg&width=960

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 ADC applications
• WIP tracking
• Labour tracking
• Quality Control
• Inventory
• Shipping & Receiving
• Invoicing
• Stock location

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 http://www.av1611.org/666/barcode.html

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 Bar Code Symbology

http://www.tamperco.com/Barcode_Types_s/40.htm 26
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 Numeric-only barcodes
Older code often used in library systems, sometimes in blood banks

Used primarily for labelling telecommunications equipment

Compressed version of UPC code for use on small products

Universal product code seen on almost all retail products in the USA and Canada

European Article Numbering international retail product code

Compressed version of EAN code for use on small products

Older code not in common use

Compact numeric code, widely used in industry, air cargo

Variation of the Plessey code commonly used in USA

Older code commonly used for retail shelf marking

PostNet - Used by U.S. Postal Service for automated mail sorting

www.barcode-generator.net 27
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 Alpha-numeric barcodes
Very capable code, excellent density, high reliability; in very wide use world-wide

General-purpose code in very wide use world-wide

Compact code similar to Code 39

Same as Code 39, this is the U.S. Government specification

www.makebarcode.com
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 2-Dimensional barcodes

• PDF417: Excellent for encoding large amounts of data

• DataMatrix: Can hold large amounts of data, especially suited for making very small codes
• Maxicode: Fixed length, used by United Parcel Service for automated package sorting
• Aztec code: Used to store information of customers e.g. used by airlines on self print tickets
• QR Code: Used for material control and order confirmation
• VeriCode: Used in manufacturing
• UltraCode: Consumer packaging
• Code 49: Used to track parts
• Code 16K: Used in healthcare industry

www.adams1.com 29
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 Industry Standards for Barcodes & Labels

OPC: Optical Industry Association

Bookland EAN encodes ISBN barcode for marking retail optical
numbers, used internationally to products
mark books

ISSN and the SISAC

Barcode: International Standard
Serial Numbering

UCC/EAN-128: Widely used

data formatting model for
Code 128

UPC Shipping Container Symbol: ITF-14

www,barcodegenerator.com 30
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 Q&A?

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 Radio Frequency (RF) Systems
• 3 major components:
– Terminals
– Network controllers
– Radio frequency units

www.pcbarcode.com

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 RF Design Considerations
• Real Time approach
• Expansion Capacity
• Downtime Planning
• Applications integration/support
• Operating Conditions
• Operator Acceptance

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 Increased productivity
Efficient movements
Reduce errors
Maximisation of storage space
Stock rotation, FIFO
Lead time reduced
Improved CS

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 What is RFID?
• Radio Frequency Identification
• Radio waves to identify people/objects
• Microchip attached to an antenna
– Person/object identity
– Other important information
• RFID Transponder/Tag
• Been around since 1970s
– Too expensive back then
– Standards yet to be established

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 YouTube
RFID IBM Commercial uploaded by wfaib Jun27-2008 (0.32mins)
IBM RFID Commercial-The Future Supermarket Cashless uploaded by
David Preece Jul23-2013 (1.01mins)
Century RFID Supply chain management solution uploaded by
Hangzhou Century Co. Ltd Jan17-2018 (2.16mins)
RFID in the Warehouse and Distribution Center uploaded by Alien
Technology LLC Nov17-2016
RFID vs Barcoding | Which Will be the Future of Business Innovation?
uploaded by AB&R (American Barcode and RFID) Aug24-2019
(3.05mins)

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 RFID better than Barcode?

www.vizbee-rfid.com

www.en.wikipedia.org

•Barcodes require line-of-sight

• RFID must be within range
of reader •Barcodes only contain
• RFID contains all information on manufacturer
necessary information & product
•Barcodes are easily damaged

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 RFID used for …
• Tracking cows, pets
• Trigger equipment eg inside oil wells www.newscenter.nmsu.edu

• Payment systems e.g. tolls, ERP, carpark,

E-Tag
• Commonly used for closed-loop systems
– Goods that never leave control
• Proprietary technology
– If reuse tag = cost-effective
– If tag for open SC, can’t be reused again

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 • Track goods in SC
• Reduce administrative errors
• Labour costs associated with
scanning barcodes
• Internal theft
• Errors in shipping goods
• Overall inventory levels

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 Types of RFID chips (1)

• RFID with sensors

– Can detect and read
temperatures, movement
and radiation
• Read-only RFID
• Read-Write RFID www.centrenational-rfid.com

– Can add information/write over existing when

within range of reader
– Serial number can’t overwrite but can add
additional block of information

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 Types of RFID chips (2)

• Write-once, read-many (WORM)

• Passive Tags
– Draw power from reader
• Active Tags www.polidics.com

– Own transmitter & power source (normally a battery)

• “Chipless RFID”
• Use RF energy for data transfer
• Plastic or conducive polymers
• Eg embedded RF reflecting fibres in paper

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Internet of Things (IoT)

Extracted from Oracle Australia website:

What is IoT?
"The Internet of Things (IoT) describes the network of physical
objects—“things”—that are embedded with sensors, software, and
other technologies for the purpose of connecting and exchanging data
with other devices and systems over the internet. These devices range
from ordinary household objects to sophisticated industrial tools."
Why is important?
"[it]connect everyday objects—kitchen appliances, cars, thermostats,
baby monitors—to the internet via embedded devices, seamless
communication is possible between people, processes, and things."

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 Internet of Things (IoT)
What is Industrial IoT?
"Industrial IoT (IIoT) refers to the application of IoT technology in industrial
settings, especially with respect to instrumentation and control of sensors
and devices that engage cloud technologies. Recently, industries have
used machine-to-machine communication (M2M) to achieve wireless
automation and control. But with the emergence of cloud and allied
technologies (such as analytics and machine learning), industries can
achieve a new automation layer and with it create new revenue and
business models. IIoT is sometimes called the fourth wave of the industrial
revolution, or Industry 4.0. Some common uses for IIoT:
• Smart manufacturing
• Connected assets and preventive and predictive maintenance
• Smart power grids
• Smart cities
• Connected logistics
• Smart digital supply chains"

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Read more about IoT here

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 Q&A?

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Warehousing Management
Information Systems (WMS/WMIS)

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 YouTube
• To-Increase's Warehouse Management and
Distribution for Microsoft Dynamics AX – 4.35
http://www.youtube.com/watch?v=o0XTU1vlTf4

• KNAPP Warehouse logistics systems 2.20

http://www.youtube.com/watch?v=b636oO5hi8U&feature=related

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 Warehouse Management
Information System (WMS)
• Good for labour intensive warehouse
operations
• Good for warehouse with high levels of
technology
• Helps streamline operations
• Increase CSL
• Saves money

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 Planning for a WMS (1)

• Audit your current operations

• Identify gaps in current operations
• Identify ALL information required
• What data is currently available?

www.bizdiagram.com

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 Planning for a WMS(2)
• What are the current data collection systems?
• Identify gaps in current data collection
systems
• Do you need ADC?
• Do you really need a WMS?

www.simoseastafrica.com

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 Systems Capabilities
• Conduct ABC analysis on items and classify
locations accordingly
• Determine location and quantity of live items
• Allocate items to locations stipulated by
management’s priorities
• Print picking dockets or interface with paperless
picking
• Produce management reports

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 Capabilities of WMS (1)
• Able to use graphical
interfaces
• Produce customised
reports
• Calculations and
Scheduling
• Desk top accessibility
• Simulation for training
& education www.disini.com.my

• Real-time communications

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 Capabilities of WMS (2)

• Radio Frequency equipment

• Integrate with other management systems
– transport management systems (TMS)
• Local area networks
• Barcode and scanning
• RFID
(asset tracking)

www.manh.com

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 Q&A?

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 WMS Specifications(1)

• Establish a checklist of functions required

• Compare with system functions available in
the market
• Flexibility of system
• User friendly

www.dnsc.co.th
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 WMS Specifications (2)

• Reporting capabilities
• Support capabilities
• Abilities of vendor to
support long term
plans
• Compare checklist
against potential
suppliers’ systems

www.atmglobal.com

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 WMS Specifications (3)

• Vendor must understand your needs and work

with you
• Modules necessary:
– Shipping & receiving
– Packaging
– Materials tracking
– Storage
– Order picking
– Staging
– Resource management
www.globalspec.com

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 Stand-Alone vs Best-of-Breed
•Stand alone or link with ERP
•If linked
–save time and expense
–eliminate interface difficulties
–real time updated information

•Stand-Alone
–limited databases or stores for synchronization
–delay in processes sing impact response ability
Extracted from an Epicor White Paper – Warehouse Management Solutions: Embedded or Best-of-Breed

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 Stand-Alone vs Best-of-Breed
• Timeliness of information is critical
• Cost factors
– Best-of-Breed increases costs in some areas
– Separate applications double costs
– Purchase+Licensing+Maintenance+Support costs
• Implementation phase
– Who is in charge
• Training

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 Stand-Alone vs Best-of-Breed
• Upgrades
• Industry consolidation
• Vendor’s references/testimonials
– Similar or related industries
– Obtain 2nd or 3rd or 4th independent opinions

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 Stand-Alone vs Best-of-Breed

Which version would cause the Which product and provider can
least disruptions? Initially or most easily accommodate change
Ongoing? and support future directions?
Which package provides an Provider is financially viable?
end-to-end solution?

Selection
Questions

How will customer service Who is the best long-term partner?

organization and warehouse team What about the Vendor’s capability
communicate order changes? to support in cases where issues
How quickly will changes in order and requests extend the WMS
and inventory status be available to solution?
customers on a self-service portal?

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 Q&A?

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Catch Group success story - GS1 standards in action published by GS1 Australia, Nov 12, 2019 –
3.36mind

SingPost Regional eCommerce Logistics Hub - From the First Touch published by Singapore Post, Nov 1,
2016 - 2.33mins

Inside Amazon's Smart Warehouse published by Tech Vision, Nov 29, 2020 – 10.48mins (a balance
insight into Amazon’s Smart Warehouse – a must watch)

Amazon's Robotic Empire: Jeff Bezos' Smart Warehouses published by Venture City, Oct 31, 2020 –
15.05mins

What are the Are COBOTS

factors to the answer to
determine ALL challenges
relevant related to
technologies to resource
be adopted? management?
..and many
more

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 Optimizing The Mobile Warehouse
Mapping mobile systems to meet warehouse
modernization initiatives
MHD Supply Chain Solutions – January/February 2017 page 26-27

•
ABOUT THIS RESEARCH
Wavelink appointed VDC BRIEF FINDINGS
•
Research
Surveyed 107 “decision • Majority supports Microsoft
makers with mobile
equipment purchase or • Almost 40% “either ‘on the fence’
specification
responsibility for use in or have plans to migrate away from
warehouse and
distribution centres.” legacy Windows devices in order to
• 41% from North
America run alternative operating systems”
•
•
59% from Europe
Metrics • Criteria for mobile OS selection
• Order accuracy
• Labour optimization
• Modern UI (user interface)
• Faster shipping • Customization options
orders
• Business continuity

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Key Findings
• Drivers towards warehouse modernization investments
– Increasing demand for faster orders
– Current systems lacking in order management
– High cost of labour
• Drivers towards equipment upgrades
– PLC of current devices
– Improve user interface e.g. better visual intuitive
interface
– Overall relevance of current mobile equipment
• Inhibiters
– Cost and time
– Security threats

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SUMMARY
Challenges in adopting
technologies e.g. costs,
disruptions in operations,
Purposes of adopting IS
ICT competence within
and IT in warehousing
supply chain, lead time in
and distribution e.g.
adoption e.g. installations,
company objectives,
training, upskilling
new customer
demands, challenges in
resources e.g. quality
labour
IS & IT in
warehousing &
distribution

Possible trade-offs &

Factors to determine challenges in adopting
relevant technologies to be technologies e.g. ‘plan
adopted e.g. findings in gap to fail vs plan to
analysis in current succeed’, People vs
processes, performance COBOTS (watch ‘Inside
improvement in which Amazon warehouse’
specific Youtube)
area/function/process

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 Q&A?

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