Improving Order-picking Process Through Implementation of Warehouse Management System

Abstract

For the purpose of timely response to requests of any participant in the supply chain, as an integral part of every logistics system, warehouse can be found at any place in the supply chain, between suppliers and customers. In that sense, warehouse management involves the control and optimisation of the complex warehouse and distribution system. It might be said that warehousing and inventory management represent support to the production process and strive to complete coordination in relations with all functions, such as marketing, finance, human resources etc. Therefore, any disruption in coordination can cause serious problems throughout the whole business process. When there is a need for achieving operational efficiency and cost savings, warehouse management and warehouse operations are appropriate areas, in terms of achieving savings which will not jeopardize the quality of products and services. Especially, order-picking, as part of the warehousing process, is one of the most important activities when it is about providing savings. Order-picking process involves taking raw materials/products from a specific location in the warehouse, so as to respond to requirements of production and/or customers. It is estimated that the costs of order-picking participate with 55% in the total cost of warehousing. However, elimination of this activity can increase the level of dissatisfaction of partners in the supply chain, and, in that way, increase the cost of lost sales. In this regard, one should not consider elimination of orderpicking from the warehousing process as an option, but rather find a way to increase its efficiency. Due to their flexibility in the order-picking process, people cannot be fully replaced by machines and technologies. However, equipment of order-picking process by the adequate technology could increase efficiency of process and productivity of employees in the warehouse. In that sense, warehouse management system (WMS) is an information technology whose implementation has the aim to increase efficiency of processes performed in warehouse. Therefore, the aim of the paper is to emphasize the importance of implementing a warehouse management system for improving the order-picking process, as warehouse activity. In order to accomplish this aim, empirical research has been conducted. A random sample of companies specialized for performing distribution activities has been chosen. The authors of the paper have analysed which segment of order-picking process can achieve maximum benefits from implementation of this technology, but also whether there are any limitations in terms of implementation of WMS. Based on the statistical methods (descriptive statistics and cluster analyses), through the SPSS software package, the results presented in the paper indicate the segments of order-picking process which are mostly improved by implementing the WMS, as information technology.