Managing growth with warehouse management systems

When you’re in the warehousing and transportation business, getting bigger is not as simple as adding warehouse space and trucks. The experiences of a couple logistics service providers in the Greater Toronto Area demonstrate the importance of having the right technology to underpin growth.

Cavalier Transportation Services and QRC Logistics have both been growing to meet demand. And the two companies realized they needed to improve their ability to manage inventory if they were going to successfully expand. Separately, they decided to adopt a warehouse management system from Mississauga, Ontario-based Automation Associates (AA).

Modernizing at Cavalier

For Cavalier, which runs a 200,000-square-foot facility in Bolton, Ontario, north of Pearson airport, the RF Pathways system was an upgrade from a legacy set-up. Their old WMS was an outdated Unix-based green-screen system that required a lot of manual inputs for receiving and inventory control, said the company’s warehouse manager, Tony Saunders. It had been in use for about 15 years before it became obvious that an upgrade would be needed.

“We wanted a more modern, Windows-based, user-friendly system,” he said. “We needed to move to RF (radio frequency) guns and have our warehouse barcoded – aisles, bays, pallet spots etc – for ease of receiving and better inventory control through automation.”

Cavalier evaluated the options from numerous WMS vendors in a process that took about a year, before deciding on Automation Associates. The smaller, local company made it into the mix against the likes of heavy-hitters Tecsys, Red Prairie, Maves and Great Plains because Cavalier’s founder George Ledson knew the company.

After doing a full comparison of the different systems, Cavalier felt that they’d get “more bang for the buck” from AA. “It did all the things we were looking for at a much better price point,” Saunders said.

Implementation was a year-long process, as the two companies worked together to design the software and customize the warehouse with the necessary barcoding. Start-up began with smaller customers being brought online first because they could be launched without shutting down operations. The final initialization, with larger customers, was done outside of work hours.

Saunders explained that each customer had to have a profile established within the software with all their SKUs. The process required manually associating all stock with unique license plates, which means physically touching every pallet in inventory. “If their cartons and pallets had barcodes, we added them, which helped with the initialization,” Saunders said.

The largest customer at the time had about 3,000 pallets in the warehouse, and it took a team of 10 people a full day to register all of them in the system. “We got it done in about seven hours, in one day,” Saunders explained. “With that particular customer, we had to have it completely done so that there would be no downtime. We planned it so that we wouldn’t have any days where we weren’t able to pick.” For the smaller clients, Saunders and his lead hand would stay for four or five hours after shift and add them to keep the operation moving.

Since implementing the system, Cavalier has found they are better able to maximize the space in the warehouse to generate more revenue. Previously, staff had inventory locations memorized, so they specialized in certain parts of the warehouse. “They had one account that they were responsible for, right from putting it away, to picking the orders and shipping them out,” Saunders said. “Now, anybody can pick any order in the building without prior knowledge or experience picking a particular customer.” It means labour can be more efficiently deployed.

“We are able to provide our customers with a level of service that would not have been possible previously,” he added. “Every pallet is fully tracked from the moment it is received, through to the day it is shipped, giving us the ability to provide our customers with the data indicating where each carton is shipped from a specific receipt. Included in the software is a link to an online portal where the customer can generate a variety of inventory reports.”

If there’s a flaw, Saunders said, it’s the system’s inability to create back-dated inventory reports. But generally, he is impressed with the system and the service from AA. “They’re great to work with. Any time there’s an issue, even if it’s not necessarily their issue, if it’s an issue on our end, they’re quick to jump in and help find a solution,” Saunders said. “I think because they are a bit of a smaller operation they’re able to better service the customers they have.”

Cavalier’s vice-president and general manager, Brian Ledson, is happy with the way the warehouse performs with RF Pathways. “Tony’s the main man that has to work with it. We just try to give him the, the best tools that we can to operate as efficiently and in the best way we can. As far as I’m concerned, Automation Associates is forthright, they’re timely, and they get me what I need. It’s a good relationship.”

QRC’s ten-fold expansion

For QRC Logistics based in Halton Hills, Ontario, growing into a 300,000 square-foot warehouse that is 10 times bigger than its previous space was the catalyst for needing a new WMS. The operation includes 24-hour pick, pack and ship operations. An average day sees 800 to 1,000 B2B or B2C orders, accounting for an average of 18,000 to 20,000 items that get delivered by courier, LTL or TL, in-house or outside carriers. Picks range from an inner each, to a case, master case or a skid.

With that kind of throughput, the company needed a “robust WMS system, that could deliver inventory control and better visibility and management of the floor,” said James Drew, QRC’s president. Its requirements included inventory control; picking and packing accuracy; cycle counting; pick-route optimization; 3PL billing; and customer visibility.

Drew noted that QRC assessed multiple vendors before choosing RF Pathways. “RF Pathways came out to be most cost-effective, local, hands-on provider with a great team,” he said.

A major consideration was that AA is a local company. Drew said he wanted to be able to lean on them for in-person training, and “with our company growing at the speed it is, it was very important to not overspend on capital and time required for set up and implementation.”

Another deciding factor was the ability to pivot quickly and get things customized for QRC’s customers and processes. RF Pathways’s EDI capabilities also helped to automate a lot of data entry and streamline the pick process, Drew noted.

Implementation took eight to 10 weeks. “We did not stop our operations,” Drew said. “We had to stop only for a few hours when we wanted to switch the system to transfer real time inventory into RF Pathways.”

The bulk of the work was identifying dimensions, weights and pallet ti-hi’s so that clients’ SKUs could be correctly configured. “We received the majority of the information from our clients but some things we had to do on our own, which required a dedicated team just creating SKUs in spreadsheets to be imported,” Drew recounted.

Drew said that getting staff up to speed was the most significant challenge in the whole process. “There is always resistance to change no matter how good a system,” he noted. “But once the team started using it and realized how much easier it was for them, everybody loved it.”

Since going live, the operation has seen dramatic operational improvements. Picking accuracy went up from 85 percent to 99.78 percent. Inventory accuracy for every client is approximately 99.2 percent. Order picking time has been reduced by 25 percent. As well, the system allows for better insight into inbound and outbound schedules on a day-to-day basis, while being able to consolidate while receiving has helped with space optimization.

The real proof is in customer satisfaction. Drew recounted: “Realtime visibility of inventory and their orders has been really appreciated by our customers and we no longer get phone calls asking how much inventory is on hand. This means the coordinator can focus on processing orders rather than answering customer calls.”