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Optimizing Logistics in Wholesale Distribution

Most distributors in the U.S. are privately held family run businesses. Their margins are very thin and as such, investments in IT are heavily scrutinized before being executed on. Generally speaking, most distributors are years behind their suppliers in the adoption of current digital technology platforms to help improve their businesses. In the past when distributors have typically invested is technology, it is within the four walls of their distribution centers. Many of the warehouse management systems implemented are either home grown, or best-of-breed point solutions heavily interfaced to order management and financial systems. Now, many of these systems are aging, unsupported, or outdated.

During many of my customer engagements over the past several months, I have seen a laundry list of new functional requirement requests piling up in IT. These requests are originating from the logistics area of the business to improve and update WMS solutions. Some of these requests include asking for new features and functional capabilities to enable improvements in the following areas:

• Integration into voice directed picking
• Yard management visibility
• Directed put-away
• Product kitting or breakdown
• Performance management connected to engineered labor standards
• Interleaving
• Recall protocol management
• Batch management
• Slotting
• Automatic let-down management
• Pallet building
• Realtime warehouse analytics on a mobile device

Coincidently, in this month’s Modern Distribution Management newsletter, there is an article about using a WMS to measure and reward performance, which is a common request. The article highlights the importance of optimizing warehouse performance. Its suggests the time is right for distributors to closely examine the versatility of a new WSM and its ability to generate useful data to increase customer satisfaction, lower error rates, and create better programs to lower turnover and improve performance through pay incentives.

Streamlining warehouse operations will be a focus of SAP for Wholesale Distribution in 2019. All the requirements listed above are covered in SAP logistics solutions. Not only does the SAP Extended Warehouse Management (eWM) solution exceed the functionality is most WSM systems, it eliminates interfaces required in other solutions, and allows distributors to tap into the power of the SAP HANA platform. Distributors can radically simplify their IT landscape through EWM, which is embedded in SAP S/4 HANA. It converges transactions and analytics in-memory on a single copy of data. Existing SAP ECC customers moving to SAP S/4 HANA with eWM embedded, can gain flexibility and scalability in system and process configuration, and the upgrade is faster and easier than ever before.

For logistics operations to contribute effectively to a distributors bottom line, they can automate and optimize traditional warehouse operations from goods receipt, through storage, to packing and shipping. Distributors can now begin to exploit the end-to-end vision of SAP S/4 HANA, leading the journey with a business case validating optimized logistics with a comprehensive, connected and contemporary supply chain execution solutions.

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