January 30, 2013
“….. and its all tied together by software.”
That was the phrase I heard at nearly every press conference I attended last week at ProMat. It reflects a significant shift in our industry. Equipment is what you see when you walk the floor. Software is the real star of the show. Its what enables the solutions we are deploying to solve the increasingly complex business problems manufacturers and distributors are confronting in their operations.
Most of these software solutions are being deployed to handle store replenishment and e-commerce orders in the same facility or to build mixed-SKU pallets in the food, beverage and wholesale grocery industries. These are tricky and remarkable achievements.
I’m not the only one to have noticed how software is transforming operations. “What we’re starting to see is automated materials handling solutions that are superior to conventional processes,” says Steve Banker, service director of supply chain management for ARC Advisory Group. “There is a lot of optimization in the software that’s making that possible.”
In fact, in 2009, Banker published a report that presaged this trend titled Warehouse 2025. “A new generation of cutting-edge ‘robotic’ order selection and material handling solutions has emerged,” he wrote at the time. “… These solutions change the way we think about optimization in the warehouse, the way various warehouse processes will be conducted, what types of companies will be willing to invest in highly automated warehouses, and even what a warehouse will look like in the future.”
The only point he got wrong, Banker pointed out during our conversation, was that he expected the adoption of these solutions to happen slowly, over time – hence the 2025 in the title. “I’m surprised by how fast this is happening,” Banker told me.
The question Banker and I wrestled with yesterday is what to call the software that’s making e-fulfillment and mixed SKU pallet building possible. The equipment manufacturers and systems integrators refer to them as a warehouse control system, or WCS. But that doesn’t get at what this new generation of software really does. In part that’s because much of the end user community doesn’t really know what a WCS does and in part it’s because WCS has traditionally been the engine that controls equipment.
I’m tempted to call it an order fulfillment system, not that the world needs another software acronym. That’s because e-fulfillment and grocery DCs today are less about warehousing and more about order fulfillment. Retailers and e-tailers like the Gilt Groupe, Wet Seal and rue21 are designing and building DCs where reserve storage is nearly non-existent. The systems and processes in use are all designed to fill orders and allocate inventory as quickly and efficiently as possible using technologies like those identified in Banker’s report. None of them would be possible without the software that powers them.
