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Data Analytics in Warehouse Management Systems (WMS) Implementations

Article  in  International Journal of Computer Applications · April 2019

DOI: 10.5120/ijca2019918542

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 International Journal of Computer Applications (0975 – 8887)
Volume 181 – No. 47, April 2019

Data Analytics in Warehouse Management Systems

(WMS) Implementations – A Case Study

Natesan Andiyappillai
Senior Business Analyst, NFI Industries
1005 Laurel Oak Rd, Voorhees, NJ, 08043, USA

ABSTRACT Being one of the key entities in a supply chain, Logistics has
Supply Chain management helps businesses to gain the same kind of challenges in having delivered the right
competitive advantage in the market and Logistics plays a product, right place and at right time. The Logistics IT
vital role in the supply chain when it comes to managing and systems help businesses monitor and control the logistics
maintaining the inventory accurately and efficiently. The IT channel to keep the inventory accurately and optimally. And,
Logistics systems help the businesses to run the processes the IT Logistics systems also help to communicate with
efficiently in the IT applications. Warehouse Management external partners for real time communication. The key
Systems (WMS) is one of the key elements in IT Logistics logistics processes that are managed by the IT Logistics
systems that help keeping the logistics flow seamless while systems are; Warehousing, Distribution, Transportation and
fulfilling the customer orders as expected. Logistics Value Added Services and the below model shows how these
businesses use the WMS application not just to run the functions or systems are integrated under Logistics and its
warehouse processes in the IT systems but also to optimize Systems.
the processes by diligently analyzing the various data
available in WMS. This article describes and details the
various data captured by a WMS and how the Data analytics
plays a key role in optimizing the logistics channel by the
business by conducting a case study in a leading logistics and
supply chain company.

Keywords
Logistics and Supply Chain, Warehouse Management
Systems, WMS and Data Analytics.
Fig 2. A Model of Logistics Processes or Systems
1. INTRODUCTION
Supply chain has become an integral part of an enterprise Warehouse Management Systems (WMS) is helping the
since last few decades in order to manage the supply chain businesses to manage all possible Warehouse processes in the
partners more closely to ensure the smooth material flow IT systems or applications and thus helps to increase the
across the channel with no or very little interruptions they operational efficiency. WMS is also playing a key role in
currently face. When there are more entities and more partners communicating with customer and other external partners for
involved in a business, the supply chain becomes complex and sharing the information electronically for quicker lead time in
so dynamic. Hence, the Supply Chain IT systems come into processing the customer request. The WMS provides the
play to streamline their processes; hence it becomes easy to Logistics channel visibility across all the parties involved.
manage the supply chain efficiently and effectively. A typical
WMS application can store a large number of data based on
supply chain model is shown below to depict the key business
the architecture of the product. Based on the WMS product
partners involved.
capability and functionality, it is generally be classified as
Tier-1, Tier-2 etc. Though there are many types of data that
can be made available in WMS, it is critical to analyze the
data and apply them to the business for process optimization.
There are a number of tools available in the market but how
an enterprise use the tools or build the tools to analyze the
data for their business matters for the success.

2. LITERATURE REVIEW
The supply chain management concept arose from the
manufacturing field where the business wanted to manage the
material movement in a more controlled way within the
facility for the operational efficiency improvement, especially
when there are multiple processing units in the facility. This
supply chain model eventually helped them to be lean by
eliminating the time lag or waste when the material is moved
from business unit to another. And, ideally this concept had
been adopted by all the other enterprises or businesses as it
provides the benefits to the business.
Fig 1. A Typical Supply Chain Model

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 International Journal of Computer Applications (0975 – 8887)
Volume 181 – No. 47, April 2019

Logistics is an important element in a supply chain as this planning and execution. Performing proper and necessary
ensures the materials flow thru the channel with high visibility analysis of these data is crucial for any logistics service
and easy to collaborate with the logistics partners. There are provider to be successful in the Logistics and Supply Chain
many IT logistics systems available in the market and WMS is business. This insight data analysis will also help the company
considered as one of the critical systems in a Logistics to make their supply chain more visible and also to make
company. This is because of the core principle of having the better informed decisions.
different data captured by the system for operational
transparency and easy to communicate and collaborate with The three different types of data that are captured and stored
all the business partners involved in the business model. The in WMS are shown in Fig 3 and listed down with the details.
more data captured in WMS and the more data analyzed thru The Master Data primarily contains the following;
Data analytics opens up the new potential for business growth.  Supplier Master
Analytics plays a pivotal role in running a more successful  Item Master
business, and new capabilities exist within today’s WMS to
deliver a wide range of performance analytics and reporting  Customer Master
that highlight how successful or unsuccessful your team is at
The Transaction Data primarily includes the following;
delivering goods to your customers [1]. It helps to measure
the performance of the business and takes necessary
 Receiving
corrective actions accordingly. Data analytics offer a new way
to look at all that data so visibility results in the right actions  Shipping
at the right time [2]. This is exactly correlates the core
principle of the IT Logistics systems which helps to compete  Inventory Tracking
in the very tight logistics industry or market.Warehouse  Cycle Counts
management systems continue to improve, and the leading
systems today are beginning to provide predictive reporting  Inventory Adjustments
capabilities as well. Not only do you get actionable real-time  Value Added Services
analytics, but also reports predicting the future based on your
past information [3]. The WMS product vendors been The Business data helps to understand the mapping and
continuously working to upgrade their products based on the configuration of WMS application based on the customer
market behavior and on the technology advancements to be requirements. With all these three types of data, much more
able to gather more data in WMS for making better business useful business information can be extracted and analyzed
decisions. Today, predictive analytics software are capable of thru Data Analytics.
taking digital data across the entire supply chain network,
analyzing it, and predicting consumer behavior, the demand
for products, as well as the risks and the opportunities in the
future [4]. Companies have been investing in the Data storage
and Data analytics in the last decade or so due to globalization
and ever changing market trend. If a business is able to predict
the consumer behavior correctly based on the Data and Data
analytics, then it will be the potential market leader on that
business at any given time. Based on the literature findings, it
is very clear that there are only few research articles been
published in the media platforms on the application of Data
analytics in Warehouse Management Systems. But, realizing
the importance and key role of the Data analytics in WMS, it
is attempted here to do a case study in a leading logistics and
Supply Chain Company to identify the different data that are
captured by WMS and how these data are analyzed and Fig 3. The Data Types stored in WMS
visualized for better and well-informed decisions makings on
the operational performance metrics and opportunities for 4. A CASE STUDY ANALYSIS
process improvement. This case study has been conducted in a leading logistics and
supply chain company. The necessary information for this
3. DATA IN WAREHOUSE case study was collected from the project documentations,
discussions & learnings from the expertise, analyzing the
MANAGEMENT SYSTEMS WMS application and also the Data Analytics tool. It was
Warehouse Management Systems help to capture the
observed that this company is operating the business at
warehouse operational and process data in the system. This is
International level and also using the sophisticated IT
an important task for any logistics service provider to capture Logistics systems to monitor and manage all their processes
the necessary data and use them to mitigate the challenges that and partners. This company has been using Tier-1 and Tier-2
they face on; faster product cycle, dynamic market behavior,
WMS applications across the enterprise based on the
extreme customer expectations and cost benefits.
individual business complexity and cost model.
The data that are stored in WMS can be from different sources A decade ago, the company has started to see the growth of
and can be made available as long as the business needs it. the Logistics business at the range of 10 to 15% a year and
The more complexity involved in a business and the more
started to make remarkable investments in IT WMS solutions
advanced WMS used for the business, the more data can be
and infrastructure. Few years later, the company realized the
derived and analyzed for the expected Logistics & Supply importance of analyzing the Data that are being captured by
Chain benefits. And, extracting and analyzing these data from WMS solutions, since the same business from different
WMS becomes inevitable for efficient business forecasting,

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 International Journal of Computer Applications (0975 – 8887)
Volume 181 – No. 47, April 2019

facilities provided different results but the customer users

expectations remains the same. The company then realized the
importance of the Data analytics tools to analyze the WMS 10 Data visualization –
data for the visibility of each facility. After the decision was how easy it is
made to get a Data Analytics tool, the company had visualize and interpret
researched all the market leaders in data analytics and the data
reporting tools. It also had evaluated the option of building a Total
custom product within the company, given the fact that the
company runs on all major business verticals and IT Fig 4. The Key Factors Value chart
organization had the expertise to build the product.
Based on the Key Factors Value chart and the interest of the
The below table shows the different key factors evaluated to Leadership team in the organization, the company had
determine if the company can opt for a Commerical Off-the- decided to develop and build a Supply Chain Reporting Tool
Shelf (COTS) versus Custom product in developing the tool (SCRT) internally within the organization.
for Data analytics and reporting. The value indicator point
The company had envisioned that the SCRT to help the
was assigned to each of these key factors (1 – Very Low, 2 –
business get the right data from the all the data stored in WMS
Low, 3 – Medium, 4 – Good and 5 – Very Good) by the
and to identify the opportunities to make changes to the
expertise group setup by the organization and the aggregation
warehouse processes to be better, faster and cheaper. And, it
of the value indicator points had been one of the critical on the
also helps the business to measure the defined metrics per
decision making process.
customer requirements and also to meet the service level
S.No Key Factors COTS Custom agreements (SLA) per business contract with the customer.

1 Product Functionality Understanding the various business or industry processes and

– How would the preparing the business metrics and requirements matrix
product support the accordingly are crucial than actual building up the tool. The
business in analyzing company had categorized the data needed for the analysis and
the data reporting and developed a model for Data Analytics as shown
below in Fig 5. After the tool was built based on the
2 Product Flexibility – operational requirements across the enterprise, the tool went
How flexible the thru a numerous rounds of testing and validation before rolled
product would be to out into Production environment.
make changes as
needed
3 Deployment Cost –
the Initial cost for
installation,
development and
deployment
4 Maintenance Cost –
the on-going
maintenance cost to
use the application
5 Product Support – the
vendor support on the
product usage
6 Product Scalability –
how scalable the Fig 5. A Data Analytics Model
product is to expand
The businesses have started using the tool SCRT for the
the roll out across the
below data collection, analysis and reporting in a much more
enterprise
user friendly manner;
7 Product Expertise –
 External Customer metrics
the availability of
product expertise at  Internal Operational metrics
the enterprise
 Management metrics
8 Product supports
different industry  Dashboards
verticals – the ability The insights into the different categories of data that are being
of the product to analyzed in WMS thru the Data Analytics and Reporting tool
support different (SCRT) are discussed below besides how it is benefitting the
industry verticals business;
9 Training Cost – how i) Order and business profile
much it would cost the The data that are being analyzed here are the Inbound /
company to train the Outbound volume such as # of orders, order profiles such as

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 International Journal of Computer Applications (0975 – 8887)
Volume 181 – No. 47, April 2019

destination, service levels etc. This helps the business to The Transactional charges are calculated based on the
forecast, plan and align the resources accordingly. It also warehouse transactions happen at the facility for a given
helps to see the business growth, not just on a specific period of time and these transactions include;
warehouse or distribution center but in the industry as a
whole. New business opportunities are being explored with  Receiving and Putaway
this data. This also gives the opportunity to measure the  Picking and Packing
customer Returns.
 Shipping
ii) Hardware / Software Configuration
Data analytics helps the company to take pro-active decisions  Adjustments
on the application hardware / software requirements based on
the available business data. This includes the software  Cycle counts
upgrade or new software, sizing the database / application  Value Added Services (VAS)
server and security upgrade/ deployments. This also helps to
determine the integration of external systems such as EDI and  Miscellaneous
other applications as applicable.
Variable charges include the Labor charges and any over-head
iii) Labor Productivity charges primarily. And, the fixed charges include the Facility
The appropriate Labor are being planned and deployed at any Rent, Management Fees and any other recurring charges.
given time based on this Data. It includes the # of seasonal / It has been observed that the company has been extensively
specialized workers and the productivity in each warehouse using the Data analytics tool, the Supply Chain Reporting
area / function to make the improvements and adjust the Tool (SCRT), for identifying the issues or challenges in
Labors accordingly. It also provides the opportunity for meeting the metrics and SLAs and also identifying the
business to identify the training requirements for the operators opportunities for continuous process improvements. By doing
and users based on the labor data profile. so, the company has confirmed that it has been making
iv) Warehouse Space Optimization changes to the Logistics and WMS processes accordingly for
This data helps to optimize the warehouse space more better practices which results in the savings of time and
efficiently as the analytics would help with the location space warehouse space at the range of 14% to 18% on the
utilization at any given time and beyond. This also provides warehouse processes.
the SKU count, profile and categories that are being changed
as per the market behavior. And, the business makes the better
5. CONCLUSION
decisions to optimize the warehouse space accoringly. The researches show that Logistics business becomes
complex due to globalization and ever changing market and
v) Devices / Equipments Scalability consumer behavior. And, it is critical for the business not only
There could many devices / equipments be used at a to use the sophisticated IT WMS systems to capture the right
warehouse based on the business nature, complexity and data as much as possible but also to analyze the data
volume. Some of the common devices to mention are; Access extensively and optimize the Logistics channel accordingly to
Points, RF devices, MHE equipment, Printers and its be competitive in the market. By conducting a case study in a
Accessories. This data helps to determine the # of devices / leading Logistics and Supply Chain company, it is evident
equipments to be used at any given time based on the various that the business is able to gain competitive advantage by
business data available, extracted, analyzed and reported. This delivering the right product, right place and right time thru the
provides the feasibility to upgrade the IT infrastructure as deployment of the Data analytics and reporting tool. This tool
needed. helps to company to provide the better customer service by
keeping the inventory or stock optimized and helps the
vi) Inventory Data
company to be a technology leader in the logistics business.
This data helps to track the inventory end-to-end on the entire
Importantly, the company has observed and realized that this
supply chain starting the vendor who supplied the product to
Data Analytics tool provides the ROI very clearly to the
the facility and the customer who returned the product and see
business as it helps the better informed decision makings,
the patterns on the product profile and behavior in the market.
business growth, capacity and capability.
The amount of inventory to be stocked up in a warehouse will
be determined and eventually help the vendor to determine the 6. REFERENCES
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 Transactional charges [4] Should You Adopt Predictive Analytics in Warehouse

Management?, https://articles.cyzerg.com/should-you-
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