The paper was presented at the Polish Logistics Congress Logistics 2008 – “New challenges – new solutions”, Poznań, May 7-9, 2008.
The article presents the author’s perspective on the most important problems and dilemmas encountered by Polish enterprises when implementing an IT system to support the operation of a logistics warehouse. A key issue is defining the place and role that a software and service provider should play in creating added value for the logistics processes carried out by the warehouse. Skillful identification of potential risks, estimation of benefits, ensuring symmetry in mutual relations, and proper protection of issues related to maintaining the confidentiality of data concerning the enterprise’s logistics potential and the course of logistics operations obtained during the implementation of such a project largely determine the final success of such an undertaking.
Observing the dynamic growth in the size of warehouse space available in Poland, which at the end of 2007 already amounted to over 3.52 million m2 (according to a Cushman & Wakefield report), the simultaneous increase in interest in IT solutions supporting the management of warehouses rented by companies should not be surprising. Providers of dedicated WMS (Warehouse Management System) software are therefore competing to convince customers of the unique functionality and utility of the products they offer in this area.
However, how to value the know-how transferred in warehouse logistics by providers of such solutions? It seems that, first of all, one should consider what its real exchange value is (comparative aspect). This is about answering the question of what price an enterprise has to pay for the proposed IT support for logistics processes carried out by a logistics hub, i.e., a warehouse. Secondly, one must obtain an answer to the question of what future profitability indicators the enterprise can achieve as a result. Does the level of technology represented by a potential partner (provider) have an impact, and to what extent is it significant for the future efficiency of logistics processes (profitability aspect)? In a word, one must find a binding answer to the summary question of whether a potential software provider should be treated as a VIP, i.e., whether the product offered allows for a clear (visible) reduction in logistics operating costs, which will also be significant (important) in the company’s future budget, and whether the functional features of the program and the accompanying service show a high probability (probable) of achieving the assumed logistics goals. This issue is all the more important as modern logistics optics is slowly moving away from the current imperative of excellence in all dimensions of logistics potential towards a new paradigm, which is the creation of added value for the market supplied by a given company. This is undoubtedly a key statement, as it requires considering all these issues from the point of view of creating added value for all supply chain stakeholders. It is therefore a matter of optimizing the market value of the entire sphere of the enterprise’s logistics activity in its network connections as fully as possible, where the logistics warehouse becomes an important focal point due to the functions performed, key by the very fact of properly positioning the role of innovation growth, supply chain risk management, and advanced global cost management, precisely on the basis of effective and efficient IT support.
It seems, therefore, that also with regard to innovation in warehouse management in terms of its support by an IT system (WMS), there are seven following steps that increase this state of awareness:
1) to see – this is the ability to perceive risk (also in the context of an individual employee), thanks to a further, broader, and deeper look at the surrounding logistics reality in the warehouse (potential, infrastructure, processes, etc.);
2) to suffer – a period of shortages or accumulation of work in the warehouse leads to the creation of a number of spontaneous initiatives (however, these may take the form of so-called firefighting);
3) to want – an impulse resulting from the desire to act for the systemic improvement of the situation in the warehouse, and not an obligation (this often causes internal resistance among employees);
4) to dream – the imagination of “tomorrow” for a smoothly functioning warehouse leads to creativity in action, both of individual employees and teams;
5) to decide – the ideas that arise are implemented (their guarantor is top management) in close cooperation with the system provider;
6) to do – carrying out actual activities in their operational dimension, which allows, for example, for optimal process mapping or determining the necessary work parameters (in terms of fragility, layer coefficient, portions, etc.);
7) to see through to the end – that is, to achieve the effects assumed in the project (the correctness of the pre-implementation analysis largely determines the final success).
As it turns out, however, this is not an easy task at all.
The entire article in PDF format.