Automating Warehouse Management in Dynamics 365 Finance & Operations (Video)

This recorded webinar shows you what you need to prepare to automate your warehouse management in Dynamics 365 Finance & Operations. This will be useful to production managers and warehouse managers, especially in companies currently using the “Inventory management” module and preparing or considering moving to the “Warehouse management” module inside F&O.

We explain the terminology, best practices, use of mobile devices, changes in training, and more, that your company will need to automate your warehouse successfully – giving you real-time inventory information and control.

Transcript below:

– [Melissa] Hi, everyone. Thanks for joining us today. My name is Melissa. And today, we have Allen Shannon and Michael Hill, and they’ll be talking about “Automating Warehouse Management in Dynamics 365 Finance & Operations.” Just want to let everyone know that if you have any questions, just put them into the question pane, and we’ll take them at the end.

And we are recording today’s session, and everyone will be sent out a recording of the webinar today. So, with that, I will pass it over to you two.

– [Allen] All right. Well, thank you very much, and good morning, everyone. And thank you for joining us here today to discuss the difference in warehouse management from either not having any type of inventory management control, or to a standard inventory management that most companies use.

And the discussion is if an advanced warehouse management system is a right fit for you if you’re thinking of taking the next step in the controlling of your inventory. My name is Allen Shannon, and I am a functional consultant for Encore Business Solutions. And with me today is Michael Hill, a solution architect here at Encore with years of experience in the inventory management arena.

For our agenda today, we will take a look at the differences of a standard warehouse management approach that most companies have, the pros and cons of using this, and then we’ll go ahead and take a look at WMS, or warehouse management system, what it is, the pros and cons.

And with anything new, there’s terminology that may be unfamiliar for you that we’ll take a look at and run through to help you kind of determine, you know, the overall aspect of using the WMS. So, let’s go ahead and jump right into it, and by asking the question, first off, of what is inventory management?

And we’ll just have the three here that we see here. So, whether you’re a company that produces items or is a distributor of items, inventory management refers to the process of ordering, storing, using, and selling the company’s inventory. This includes the management of raw materials, components, and finished products, as well as warehousing and processing of such items.

So, depending on the type of industry that you’re in, I believe, you know, raw materials can be anything from nuts and bolts to steel beams, to whatever it might be that you’re using to either produce things or to distribute things and sell things. There are different types of inventory management, each of the pros and cons, depending on your company’s needs.

So, Michael, we now know what the difference, the definition of inventory management is, but before we get into what may help companies expand their current inventory management structure, let’s first take a minute to discuss where most companies are at in controlling their warehouse flow using standard inventory management and some of the pros and cons.

Could you discuss here by starting with some of the pros of a standard inventory management system?

– [Michael] Yeah. So, as you see on the screen, you know, one of the first things is… Oh, geez, that’s your…yeah, you switched the slide away that I was talking about.

– I’m ahead of myself, go ahead.

– So, first of all, you know, you’re going to have a more organized warehouse. So, by setting up the locations in the warehouse and being able to pull the material based on a more structured approach, right, you know, the system will indeed lead you down the path of how to pick material depending on the type of transaction it may be, whether it is a purchasing function or a production-related function, or picking for sales orders, okay?

You will always have better visibility on your own inventory, and you will be keeping…you’ll be able to keep a tighter ship on what the needs are and your demands within that facility. In the end, you know, you will save time and money, right?

Be costly upfront, but it’ll definitely…and that’s one of the cons, by the way, but it’d be a lot more costly upfront, but you’ll save time and money over time because you’ve gained additional efficiencies. You’ll also have the ability to, you know, again, see your quantities on hand in a more efficient manner, which will drive you towards your demand from a planning perspective and give you a lot more efficiencies in that area.

Thirdly, you know, you have better customer satisfaction, right, because now that you’re more efficient, you’re going to wind up with more of the ability to, you know, respond to your customers a lot quicker.

You’ll know in a more timely fashion whether or not you have material on hand. And, you know, of course, all that depends on how efficient you are currently versus how much more efficient it makes you… warehouse management will make you. So, that’s it, that’s it on this particular slide.

– Okay, fantastic. All excellent points, by the way, and certainly important for all business to understand what those benefits are. But, you know, as you know, Michael, a standard inventory management system also has some drawbacks, and occasionally even some weaknesses. So, what are a couple of those points to bring across to our audience today?

– So, as I started to allude to, you know, again, the time and money on the front end, well, the investment itself, that’s a con in and of itself because not only do you…is it costly for the equipment and the like to bring things up to speed, but you have your personnel, right, the training of your personnel and whatever source you use to get them trained up and the change, the warehouse changes, right?

Those infrastructure changes, you know, access points and all those types of things. Getting those in line and getting them tested properly, and getting the proper equipment tested, you know, can be a daunting task, right? But at the same time, you know, that you… the challenge of keeping up with too much inventory is also an issue, right?

So, you would gain some efficiency in that area, but we also wind up identifying those areas, and because, you know, in the past, you weren’t tracking those effectively, right? The business risks.

By controlling the inventory, the workers would need to understand and be trained in a way, which I’ve already alluded to, the way you’re going to do business, which can lead to frustrations if your process is too complex, right? So, it all depends on the levels of complexity that you would put into it. In a lot of cases, what companies do to alleviate this con is to put in a more simplified version of it, and then as the users get more comfortable with it, the material handlers and the likes, then you expand on that.

– Yeah. Overall, yeah, I totally agree, and overall, I believe we can certainly say that having an organized inventory management system is critical to the success of the company that needs this type of control, as Michael has laid out. So, for companies though that are finding some of these inefficiencies in the current logistics functionality, what may be the best option for a company to take a look at, Michael?

– So, we normally look at WMS or warehouse management to give you more production related to efficiencies. And/or if you’re a distribution company, obviously, you know, the Amazons of the world are using world-class WMS systems in order to be much more efficient.

– Absolutely. But before we get into the WMS side and maybe some of the pros and some of the cons of that, let’s take a look at what the definition of WMS is. So, as we can see here on the screen, a warehouse management system is a software application such as Dynamics 365 Supply Chain Management.

And that helps manage and intelligently execute the operations of a warehouse, distribution, or fulfillment center. So, WMS applications offer capabilities such as receiving the put-away function, stock locating, for those that do cycle counts on a monthly, yearly basis, what we call wave planning.

And we’ll get into a little bit more of what that means and some terminology definitions here later. Some order allocations, the picking of your orders for your sales orders, for instance, any replenishment processes that you may have for min-max types of things where if you reach to a certain level of minimum, that you can certainly do more automating to replenish those minimums, any type of packing, shipping, even some labor management, yard management and automated materials handling for equipment interfaces, all can be tied into the WMS flows and processes.

So, very powerful, very nimble. And obviously, the big key with WMS is seeing some of the real-time things that apply to each one of these capabilities that we just kind of went over. So, before we get into the pros and cons, let’s take what the…you know, some of the…I should say, let’s go ahead and get into the pros and cons and take a look at what some of the things that the WMS can do that would be beneficial.

And so, Michael, could we go through a couple of things here that companies could see by looking to upgrade to a WMS system?

– Yeah. So, yeah, so as it states on screen, management systems automate and streamline warehouse processes from inbound receipts to outbound deliveries for improved efficiency, smoother operations, and ability to handle higher volumes. What does that mean?

If, for example, you’re utilizing…you’re receiving material, instead of someone having to have a piece of paper that they look at, as long as the documentation that’s coming in is efficient, they could simply plug in the PO number and then go through the steps of receiving that material with minimal impact to the organization, print out a label for the LPN.

We’ll talk about those a little bit later. If you have date-restricted or perishable stock, right? So, if you’re, you know, food service or chemical companies where there’s expirations and the like, the software can identify which items need to be placed…you know, need to be picked first, right?

So, you can use fivefold type options to have the system direct you appropriately to pull the oldest first. And, you know, obviously, in the background, you can expire those lots or batches as well. So, that would help you minimize waste, okay?

It also can help you determine the most effective use of the warehouse space, right? What does that mean? You can take it as far as having it direct you to specific locations that have a certain size, right? So, if you have something that you know is not going to fit in a given location within the warehouse, you can have the WMS perform that directive for you and not consider a particular location because maybe there’s even already material there.

It also has the ability to use barcoding, RFID tagging. Also, the newly added was QR codes, you know, sensors or other tracking methods as well, you know, as needed.

They are obviously advancing forward to allow for additional functionality going forward. So, it gives you real-time insight into your inventory as it moves through the warehouse and onto the next location. So, you can scan things in and out of different locations and move them as needed, move them to your production areas from their storage locations, all those types of things.

And you’d also have improved traceability, right? So, what does that mean? So, if indeed there’s an issue with a particular item, maybe there is a quality issue, maybe there’s a recall on it, in addition to the functionality in the background of the system, that allows for batch functionality and traceability within WMS.

You’d also get a bit of a bump, right, in your efficiencies, in your ability to identify where those are.

– Well, all very powerful things. And I think that for, you know, like I said, the efficiencies, the increased process of visibility, I think they’re all enticing things for people that are warehouse managers, people that work on the material handlers, all definitely things that certainly are positives.

And, you know, once again, as with all things in systems, there’s also a little bit of the backside of the cons to this. And so, as we switch the screen here, Michael, name off here a couple of the cons, if you will, that WMS present.

– So, yeah. So, the point…this first point, if indeed you need a more advanced tool, right, for your logistics, right, so, in other words, if, you know, the standard functionality within D365 Finance and Operations is functioning fine for you, then, you know, continue along that route because it’s going to require some discipline to make a system like this work.

It can be a detriment if you don’t follow the rules that you place on yourself, right? And that’s true, even if you’re not utilizing a WMS. It’ll increase your need to maintain your master data both in terms of the data that feeds directly into the application, the solution, as well as the background data, you know, your product tables, you know, ensuring that they’re set properly and that they’re driving things forward appropriately.

So, troubleshooting even can be…you know, when issues decide to rear their ugly head for new items that you introduce and things of that nature, ensuring that they’re flowing properly. There are increased steps for receiving. However, the automation indeed does offer some level of an advantage.

But at the same time, there are increased steps that you have to follow in order to pick the items and receive them, right? And, you know, problems can be caused when you’re processing incorrect…processing the data incorrect. However, you know, there are means of recovering that data and ensuring that you’re able to effectively move forward.

And, you know, it becomes corrective action in terms of the personnel that are utilizing that. Lastly, it does require some expert knowledge to configure it for maximum benefit. And, you know, it’s a constant…at least in the implementation phase, you’re constantly tweaking to ensure that you’re getting the most effective value out of the system.

And that takes some time. It’s not flip the switch like you would do with some simple program like Excel or whatever the case may be. It does require some level of knowledge to be able to effectively get the system up…configured and up and running.

– Yeah, and agreed. Certainly, just like standard inventory system, WMS overall pros can certainly outweigh the cons as long as that, as you mentioned, that discipline and the process understanding is there throughout the warehouse, and of course, with its workers. Because if you’re workers and do not understand the processes of why you’re doing this and really kind of understand the positives that it brings, that always creates a little bit of, I suppose, pushback from your folks that you want to make sure it doesn’t happen.

But overall though, we’ve seen from people that are disciplined and really want to do this, some really great benefits from moving forward to the WMS side of things. So, we talked a little bit about… earlier about some WMS terminology. This is a little bit different than what you standardly hear between a site, a location, a warehouse, those types of things.

WMS brings some other terminology that you kind of need to maybe even not super understand, but at least be introduced to. And so, today, as you can see on the screen here, we’re going to talk just a couple minutes on each one of these about what is a wave, loads, license plates, which is always a very big functionality for it, work and work templates are things that are derived from your releasing of things to the warehouse and work is created so that material handlers can go out and pick things.

Michael touched a little bit about location directives and location profiles, and then mobile devices. This is where there’s a big key on the people out in the shop now or out in the warehouse, will be using mobile devices and barcodes and QR codes to scan things and to move things, rather than going through movement journals that you have to do with a basic user interface.

So, let’s just jump in here and take a look at the first step, and that is waves. Michael, if you could just kind of, you know, touch base here on waves and maybe some of the things that…what it is and how it can be used.

– So, I’ll jump right to the last point, which is the primary function is the grouping capability, right? So, it’s the waves themselves. You can generate a series of sales orders as an example that allows you to…and it allows you to group those together.

And then that way, a potential picker only has to go to the floor twice with that order mix that’s due to be shipped out that morning, let’s say, for example. So, he can make one pass through the warehouse with the wave technology and pick all the orders and then, you know, bring it back to a central location, and then that could be, you know, finalized, right?

The picking process or the shipping process can be finalized by a different set of individuals because maybe the person that’s doing that first level of the pick is a forklift operator. And then you have people on the floor that are actually taking those groups of items and placing them on the specific pallets for the shipment.

– Okay, loads. What do we know about loads?

– Well, loads is a function that’s going to allow you to, if you can imagine with… Again, I’m going to use Amazon as the example. When you order something from Amazon, you may order, you know, four or five different items that are smaller items as the example. Amazon, potentially, is going to take all those items and place them into a single container, right?

So, that is a function that allows you to perform that type of activity, to take a group of, let’s say, smaller items and place them into a single box. Okay?

– Okay, good. And this one, license plates, that’s with labels. And this concept’s a little similar, can certainly be done manually, but WMS certainly does this more automatically. So, what can you tell us about license plates?

– The license plates themselves, sometimes it’s a difficult concept to get across, but if you can simply imagine that a pallet of mixed material can contain…can all be housed on a single license plate. So, the best example of defining a license plate is to say that it is a either physical location or a pallet of material.

And you can have as many different items in a single license plate as that particular pallet will handle. But it is indeed the primary tracking mechanism that WMS uses.

– Okay. Absolutely. And then I touched bases briefly on the work and the work templates, but go ahead and give us a little bit of a definition of what you know here.

– Yeah. So, the work and the work templates. So, you would define the work templates and… first, and then within that, you’d make the determination of, let’s say if you have a production process, the system will allow you to release the details of that production order to the warehouse.

It could wind up in a wave as well if you need…if need be. But at its basic level, it is that list of work to be performed, right? So, if it’s a production-related order, here is a list of all the items that need to be moved to the production area in order to, you know, finalize the manufacturing or the consumption of material for that particular item that’s being produced.

So, in a nutshell, that’s what the work and work templates perform for you.

– Okay. And touch base a little bit on this, but location directives.

– So, the location directives, it’s a combo, combination of different requirements. So, for one, you can restrict what items can go into a specific area. So, for example, if you’re a food service organization, you can restrict the fact that you…this item when it’s received, needs to go into the freezer, right?

You can’t just put it on a shelf. So, it would not be allowed to go into any other location other than the freezer location, right? So, you can place…using the location directors, you can direct your materials with a function such as that. You can also set up specific areas of…set up specific areas that will allow you to not have to have license plates on those particular items.

– Okay, yep. And just a couple more here, but location profiles.

– I think I got a little bit ahead of myself with the location directives, although I apologize. But location profiles is actually where you can actually take off the restrictions. As the example I just used, you can actually go ahead and allow non-LPN-type items to go into certain locations because maybe you don’t need to track them in that fashion.

There may be some supply-type items that you need to put in the warehouse, but you don’t need to necessarily keep track of it all the time. You’d still know that it’s in X location, but maybe I don’t need an LPN to track it, for example.

– Yep. And the last thing we have is the mobile device. And, you know, this is kind of somewhat the key to make things happen, especially with the barcoding or the QR codes there. So, if you can just touch base just briefly here on what the mobile device will do for you.

– So, any transaction that can be performed within WMS can be placed on a mobile device. So, that can be quality control related to activities to receiving and picking for production and sales orders and the like. It can be replenished if you’re using the kanban functionality within the system.

You can have a mini structure to drive those pieces to the puzzle. It is highly configurable, and it only depends on what is configured in the background for WMS. So, it is the backbone in the end.

And it is what the user can see. You can restrict who sees what by function, you know, by role and things of that nature as well. So, one individual does not have to see what the manager sees, for example, or the material handler doesn’t necessarily have to see what the quality control person can see, all those types of things.

It’s highly configurable.

– Yeah, absolutely. Absolutely. Well, that kind of concludes what we have to present here today. Some of, again, the differences between the standard inventory management system and what WMS can provide, some of the terminologies that we’ve talked about, and some of the… Again, I think from my perspective, the mobile device also is a big driving force in making things work quicker and more efficiently for you, and certainly get some quicker response and quicker visibility on where you’re at and where your inventory’s at.

So, with that, we can turn it over and see if there’s any questions for us here this afternoon or this morning.

– Thanks so much, Allen and Michael. There aren’t any questions that have come in. But if anyone does have questions, feel free to reach out to us. I’m sure you both will be able to answer those. So, we can finish up the webinar today and say thanks to everyone for coming.

– Okay.

– All right. Well, we appreciate it. Thank you for everybody, and have yourself a great day.