2008_04_08_WMS

Warehouse ManagementSystem Definition,

Selection, &Implementation Webcast

Series

Solution Implementation

? IBM and SAP AG 2007

Introduction

This is the final in a three part series about implementing anew warehouse management solution.

Prior sessions covered topics such as selecting yourwarehouse management vendor and executing a RFPprocess.

Todays session will discuss the actual act of implementing awarehouse management solution.

The talk will be facilitated by:

Jeff KazanowDirector - SCM Value NetworkSAP Americas, Inc.

[email protected]

Chris MooseIBMPartner - Global Business Services

[email protected]


Agenda

? Are you ready?

? Team structure

? Implementation methodology

? Cut-over planning

? Closing


Are you ready?Getting started activities

Make sure you also have these activities complete:

? Review goals, objectives, and project charter? This will form the guiding principle for the project

? Establish team? Secure team members? Make sure executive sponsor is supportive

? Confirm that the Business needs / requirements have notchanged? Make sure the decisions made to date around project rational,

software selection, etc. are still valid


Are you ready?Current State of your Facility

There are may initial items to consider as you draft the initialtimeline

? Infrastructure considerations? Will you use RF equipment; re-use equipment; RF site surveys,

etc?

? Facilities preparation? Do you have bins labeled in a format consistent with the new

warehouse system? Are they bar-coded if you intend to scanthem?

? Conversion activities? How will you get the inventory into the new WMS? Are your

current bin positions accurate?


Agenda

? Are you ready?

? Team structure


? Cut-over planning

? Closing


Project team structure

This approach makes someone responsible for each site whilethere is still a common process team; some people will sit inmultiple boxes in this approach

Site 1Site 1 Site 2Site 2 Site 3Site 3

Project Subject MatterExpert Professionals



Project ManagementProject ManagementProject ManagementProject Management

Steering CommitteeSteering CommitteeSteering Committee

Configuration and Technical Resources

Training & Change Management

Testing team

Final decision on scope questions andresponsible for achieving the business case

Expert advice for complex challenges the teammay occasionally encounter

Responsible for day to day projectmanagement and issue closure

Responsible for making sure each sites needsare met

Configure the solution and provide overallprocess / approach consistency

Manage change / training

Delivery testing

Also makesure youhave an

executivesponsor!


Agenda

? Are you ready?

? Team structure


? Cut-over planning

? Closing


Implementation Methodology

Attempting a large technology project without a roadmap is unwise

? It is likely your technology department has an approach? If not consider a system integrators methodology

? It should help you to identify critical project steps and establish atimeline

? Make sure change management is also addressed!Go Live /CloseoutGo Live /Closeout

Construction(Realization)Construction(Realization)

Design (Planning& Blueprint)

Design (Planning& Blueprint)

Analysis(DefinitionConcept &

Design)

Analysis(DefinitionConcept &

Design)

? Final User Acceptance? Etc.

DC Layout & MHEDC Layout & MHE

? Final User Acceptance? Etc.

Change ManagementChange Management

? Support Turnover? Etc.


? User Procedures? Etc.


? Performance Testing with MHE? Etc.

? Production Configuration? Etc.


? Change Readiness Assessment? Etc.


? Reengineer Facility Layout andFlow

? Etc.

? Opportunity Assessment

? Etc.

SoftwareSoftwareSoftwareIntegrated Solution

? Define To-Be Flows? Etc.

If you are working with a firmdedicated to the warehouse spacetheir methodology may include bothwarehouse-centric operationalactivities along with thecorresponding technology activities


Implementation methodology and project activities

TechnologyKnowledge

Process

PeopleEvaluation

ProjectPreparation Sustain

BusinessBlueprint Realization

FinalPreparation

Go Live andSupport

There are many different methodologies? Pick the one that is right for you based on your needs

? However make sure that it addresses the key areas of: People Process Knowledge Technology



TechnologyKnowledge

Process

PeopleEvaluation



FinalPreparation

Go Live andSupport

During evaluation you must understand the context? Often the operations department and the technology

department have different opinions? Important to remember this is just the first decision; do not

allow the evaluation to become so contested that you cannotwork together during the implementation

Waffling on selecting a package or failing to finalize adecision can result in unnecessary requirements designed tomimic the legacy solution with the goal of forcing a decision

one way or another; make sure you are evaluatingrequirements in the future not past tense



TechnologyKnowledge

Process

PeopleEvaluation



FinalPreparation

Go Live andSupport

Project preparation has many stakeholders? Must consider the team, the site, and the overall enterprise

How does the busy season compare to my projectphases from a key user, implementation, etc.,

perspective?

What other technology initiatives are going on?

Do I have the right skills within my team?



TechnologyKnowledge

Process

PeopleEvaluation



FinalPreparation

Go Live andSupport

Blueprinting is expectation management? Virtually everything is a factor of time and money? Take the time to accurately map the requirements and identify

GAPs? This will then form the basis for testing, training, etc.

documents

Be sure to stay true to the business case andremember that optimization happens across the

enterprise, not in silos


Conduct the Conference Room Pilot

Work with the software vendor and your implementation partner

?Review the software functionality in great detail compared to yourrequirements? Ideally supply a sample of your order data in advance? Understand how each function, action or activity is accomplished? Determine the data requirements? Identify, document and evaluate any and all gaps between desired

function and software capability Prioritize the gaps by function and importance Identify the must haves vs. the work arounds or tolerates Determine if software modifications are necessary and how much they will

cost- Use your SI as an advocate or alternate source for modifications


Map the As Is and To Be System Operations

Map As Is and To Be systems?Major functionality? Integration points? Interfaces? Software, hardware, MHE Interface requirements? Databases and Middleware


Identify the Information Flows for theDC Operations

Identify the information flows and dependencies for all warehouseprocesses

?From each of these develop integration and interface points? Identify source and destination systems? Data format and

method of interface

?Each identified pointmust be addressed? Connected? Verified? Tested? Tested again

Confidential

Activities11.1 - Receiving 5? Rec't Insp. & Verification11.1.1 - Put Away/Storage11.1.2 - Stock (available to customer)11.2 Pick, Pack, Sort, Stock 5? Str Order Fulfillment & Process? Srt & Segregate Receipt Replenish/

Pick.Pack,Sort & Load11.3 - Asset Utilization Mgt 5? Facility Upkeep? Q.A.? Equipment Mgmt? Inventory Mgmt? Manage SOP's? Product Integrity? Work Assignment creation? Reload? Effective Labor Utiliz.? Dispatch Assignments

Outputs? Stocked Shelves? Assembled Orders? Quality product (Safe,

Presentable, to specs)? Facility delivery/sorted? Safe / Efficient Operating

Environment? Inventory Integrity

Policies andControls? HACCP, FDA / Gov

Regs(Fed, State, Local),OSHA

? SOP

Metrics? Shrink /damaged? Productivity labor, asset? Rework? ABC? Work Standards? Lead Time Compliance? Variance to perpetual? Product handling must be a

subset of each metric

Triggers? Inventory Management? Sales/POS / Orders? Inventory degradiations? New Items / Promotions? Channel Management

Inputs? Item Attributes/characteristics

(sequenced and pre-assigned)? Orders (PO's, store & whse

specific)? Store specific Planogram / Aisle

Relationship? Channel Attributes? Order & Delivery Schedule? Facility Layout? Standardized SOP's? Facility & Equipment Spec's? Replenishment Optimization? Forecast Optimization? Inventory Mgt? Labor Mgt? Capacity? Resources? Work Standards

Constraints? Layout? Time? Resources? Capacity

Resources? Labor? Equipment

Systems/tools? Exception Reporting? SRS? Perpetual Inventory System? RF/mobile Connectivity

11.0 ProductHandling Mgmt


Perform a Gap Analysis vs. Identified Requirements

? Compare the To Be system requirements and information flows withactual new system performance capabilities

? Identify the Gaps between requirements and capabilities? Prioritize the gaps? For each Gap; Develop work arounds, modifications or accept the gap



TechnologyKnowledge

Process

PeopleEvaluation



FinalPreparation

Go Live andSupport

Realization can be an iterative process? Need to build time for gotchas? Expect this to include development (code and output) and

configuration? Allow time if external dependencies (MHE, etc.)

Surprising users with functionality is risky; best to involvethem throughout the process and hopefully include a few on

the day to day team and consider a conference room pilot

It is not too early to start on training; you can always edit foritems that changed during the realization


Develop the Integration and Interface Plans

Utilizing the previously completed mapping exercises and CRPresults:

? Identify a full list of integration touch points, and Interfacerequirements? Interface type

MHE PLC Software

? Data Sources Uses Results Record layout


Define the Applications Use Cases

Define and document how the system will be used and accessed byoperators, other systems and/or software, MHE; external parties,

?For each usage activity develop a short Use case to:? Support the development of

testing scripts? Assure that all potential

activities and contingenciesare covered

? Serve as the basis fortraining materials

? Document system capabil-ities and functionality


Develop Software Test Cases

From the Use Cases, develop a comprehensive series of system tests toassure that the software will accomplish the requirements with the datathat you produce in your business environment:

? The test cases will define the activity in detail:? Activity detail? Trigger? The action that should be

taken? The expected result? Whether Automatic or

Manual? People, hardware, or

software involved? Definition of a successful result

? From these Test Cases , Test Scripts will be developed for SoftwareAcceptance Testing that involve actual data and equipment in a similarenvironment



TechnologyKnowledge

Process

PeopleEvaluation



FinalPreparation

Go Live andSupport

Final preparation is critical? Make sure data loads and testing are both realizing high

success rates? Monitor the training delivery; do the users get it?? Alert your customers; order ahead to minimize ramp-up

volume

This is a great time for a mock shift

And, if things are not well, a delay now is better thana bad go-live



TechnologyKnowledge

Process

PeopleEvaluation



FinalPreparation

Go Live andSupport

Go-live and support? WM support takes more people than most expect (lot of

ground to physically cover in the warehouse)

If there was new code developed keep a fewdevelopers around for the first couple weeks

Expect to be on the warehouse floor talking to theusers

Be sure this is not the first time you meet theassociates / your end users



TechnologyKnowledge

Process

PeopleEvaluation



FinalPreparation

Go Live andSupport

Sustaining a system requires a support group? No WMS solution will run itself? Due to the physical nature of warehousing, appoint someone

onsite to help troubleshoot

Ongoing issues will include process (how do I dothat action?) and hardware (my RF died)

How will you train new users (temporary workforceduring peak season or regular staff turnover)


Agenda

? Are you ready?

? Team structure


? Cut-over planning

? Closing


How to Cut-over

Practice cutting over a few times before the real event

Consider building out the training server via mock data loads

And when testing Cut-over, dont just look for load kick-outs? Do finance and the warehouse (inventory management) match?? Are all other systems updated with the results and/or statuses

from the WMS?


Sample Cut-over Plan

Have an independent project plan specifically for Cut-over activities

Planning interval will be 2-3 weeks around the Cut-over

Timescale will literally need to be down to the hour especially during theCut-over weekend

Prepare this plan well in advance and review it throughout the organization



Preconditions before entering the Cut-over phase may include:

Freeze new item creation so load file can be created

Correct any inventory discrepancies in legacy system

Complete item slotting moves if required for the new system

Certify all infrastructure is in place (RF, printers, etc.)

Customer notifications


Training

Utilizing any available materials develop Super-user, Train-the-Trainer and Role based training materials

?Training materials may be obtained from? Your Software Vendor, or Integration Partner

On-site or Off-site classes CD based or on-line tools

? Materials may be developed or supplemented from the contentcreated in the Use and test cases

? Third party training may be available

?Training should be:? Done as close to go live as possible, for maximum retention? Training should be reality based, ideally in a similar environment


Acceptance Testing

A parallel software environment should be set up, separate fromyour regular production environment, for testing

? It should involve:? Identical operating systems and IT infrastructure? Identical hand held terminals, MHE and PLC interfaces? Copies of actual saved production data that is/was running in your

current operation? Actual operators and team members for testing

?The DC may be linked to the test environment during down time

?All software functions should be tested with actual data in waysthat you will be using the system.? All variances from expectation should be documented and resolved

with the vendors prior to formal software acceptance



Pre-Cut-over weekend activities may include:

Advance shutdown activities for legacy systems

Shutdown activates for key warehouse processes (receiving, shipping, etc.)

Completion of facility preparation (bin re-labeling, etc.)

Any advance data loads / etc. that can occur (customer and vendor master?)

There is always a desire to ship until the last possibleminute under the legacy system

But remember every moment taken out of the conversionweekend is additional risk to the startup date



Cut-over weekend activities may include:

Physical inventory if accurate bin inventory is not available

Data loading into the new system

Locking of the old system so users do not accidentally log into it

Validation that data loads were successful

Reconciliation of new WMS with host systems

Make sure all key parties are available preferably on site for this activity



Startup activities may include:

Sequence of turning on host environments

Controlled release of work to the warehouse

Slow picking volume; use buddy system for first few orders

Make sure that expectations have been managed in advanceof the system startup; things will be slower for first several

weeks


Agenda

? Are you ready?

? Team structure


? Cut-over planning

? Closing


Common mistakes

Issues to watch:

? Bad data? Warehouse systems are especially sensitive to material master

data and bin conversion information; either can case animplementation to fail

? Interfaces? If the system is not integrated make sure sufficient time is paid

to interfaces between host and warehouse system; this isharder than many think

? Training? Extensive training and mock-shifts can greatly accelerate the

ramp-up process


Summary

Closing points to consider as you implement a warehouse:

1. Use a methodology; this is a roadmap to make sure you do not skipsomething

2. Consider the documents you must produce and understand how they feedfrom one phase to the next (requirements -> Test Scripts and Trainingmaterials)

3. Test and test and test . . . And then test some more

4. Plan extensively for the conversion weekend

5. Make sure the interfaces work

6. Train and train and trainand then train some more

7. There are tradeoffs; not allowing user to train or compressing the Cut-overwindow increases project risk


Questions

Jeff KazanowDirector - SCM Value NetworkSAP Americas, [email protected]

Chris MooseIBMPartner - Global Business [email protected]

2008_04_08_WMS

Documents

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