 Welcome back to this NPTEL course on Supply Chain Digitization offered by IIM Mumbai, IIM Professor Swashpathan Arang. We are discussing about supply chain digitization and in this specifically we were focusing on digital infrastructures for supply chain. This is a continuation of the previous lecture where we spoke about ERP implementations in supply chain management and we had a broad overview of ERP implementation. Now in this specific lecture I will be focusing on two types of popular information systems that are more related to logistics management that is warehousing and logistics management namely these two are warehouse management system and transportation management system. So, in this specific discussion I will be covering the warehouse management system and the transportation management system with an overview firstly of the WMS and then we follow this up with the overview of the TMS and then we have a little bit summary on implementation aspects of WMS and TMS. Now, proceeding to understanding the WMS and TMS, when we speak about what exactly is a warehouse management system and a transportation management system as you can see over here they are actually a bit interrelated in nature, but slightly different but quite different in the kind of focus they have and the kinds of processes they look at. So, if I look at a warehouse management system, a warehouse management system is the information system that is designed for the activities and processes within a warehouse. So, it is related to all those processes and activities and managing those activities within the warehouse. So, as we already know from a variety of lectures that we have had up till now it is not necessary that you have a warehouse itself you could also be dealing with distribution centers or fulfillment centers or perhaps a sort center or as well. Now, these are different types of nodes within a supply chain right and at each of these nodes we have some kind of material that comes to that node and stays for a while before proceeding to the next stage. So, this could be a warehouse where you know the material comes and stays for a long period of time perhaps for a few months before it is actually moving to the next stage maybe in the form of pallets or maybe in the form of cartons or it could be a sort center or a cross dock for that matter where the items are going to come in and maybe within a span of 8 to 12 hours they are also going to leave the system. Now, in such cases how do we manage the processes and activities within the facility? This is very important for us to focus on if we are again looking at bringing in efficiencies within the warehousing facility which is the general nomenclature that I will be using for a WMS. Now, dependent upon the kind of processes and activities that we have the functionalities within a warehouse management system will also require to differ as well. And hence again just like we were speaking about ERP systems we can develop a warehouse management system in-house from scratch it is possible or we can look at procuring these solutions, but again the development cost the technical proficiency required for developing warehouse management systems might be quite complicated and hence it may be worth while looking at procuring solutions perhaps these solutions could also be open source solutions. A lot of work is actually happening on warehouse management systems in India, a lot of organizations in the logistics industry and manufacturing companies are seriously looking at understanding the role of WMS systems in their company or in their facilities because the infrastructure of all these facilities needs to be upgraded at a very fast rate if we really need to bring down the costs of logistics itself. So, like I said the role of ERP systems would be to help bring in efficiencies into the processes that we have and focus on value adding activities rather than non-value activities. So, in a warehouse one of the critical assets that we have is the inventory that is going to be sold or moved through the supply chain in some form or the other. So, we should not be wasting time on non-value adding activities within the warehouse and we should explore all possible opportunities for automating it, for planning it well and hence it is very crucial for integrating warehouse management systems into modern day warehousing systems that we have across the country. And you would see that this is a practice that is happening across the country in terms of how much infrastructure is being developed in terms of warehouses themselves, fulfillment centers across the country. A lot of companies are investing in real estate meant for development of warehouses and once they do that they would prefer to develop these warehouses in a more world-class manner and bringing the best kind of infrastructure over there. So, in a warehouse you have the technical infrastructure which is the kind of equipment that you use for storage for movement of products. And on the other hand you have the warehouse management systems which is the software aspect and application aspects of it which is the information system that is used to manage the activities. Now, since the warehouse management system is focused on products and inventory management. So, we are dealing with materials and materials management. So, this can actually be integrated with the enterprise resource planning software of the organization because usually we do not get WMS as an integrated part of ERP solutions. The reason for this is the kind of activities that actually take place in a warehouse are very different from typical business activities that take place in an organization right. There are some commonalities and some integrations that could be possible, but there are a variety of activities which take place in a warehouse and now this is similar in concept to that of manufacturing where the manufacturing activities that take place are very very different depending upon the type of product you have, depending upon the type of process that you are going to have and this is not necessarily going to be reflected in an ERP right. So, in an ERP typically we are looking at common activities of accounting finance, project management, so on and so forth which are common across organizations and will really cut across lines of products and different types of services. But in production in warehousing, there are activities and processes that are specific to the requirements of warehouse activities or manufacturing activities themselves. So, usually we see that ERP solutions are distinct from warehouse management systems solutions, but they can be offered by the same kind of you know the solution provider and integration can be carried out between them. So, usually it might be that it might be the case that you get an ERP solution and some modules of it and warehouse management system with a different kind of a module or solution that could be developed by the same company or by a different company which would then look at integrating that with your ERP as well. So, when we look at material requirements planning and production and assembly systems, these could be connected to the warehouse management system module as well, because a material which is going to be dispatched from let us say a factory or from a plant will need to be stored somewhere right. So, one of the places that it could come to is the warehouse or it could have supply of materials from a warehouse or a store and hence there is integration which is possible in terms of planning, in terms of monitoring and control that can happen between these two systems as well. And of course, we can have interaction between the warehouse management system and the transportation management system or TMS as we call it. Now what exactly is a transportation management system? Just like warehouse management system is focused on the warehousing aspects of the supply chain, a transportation management system focuses on the transportation processes related to material movement in this entire supply chain right or in some part of the supply chain may not be the entire supply chain. It could be implemented in some parts of the supply chain and some portions of the supply chain so to speak, but the warehouse management system would be specific to that particular warehouse activities only. Now just like the warehouse management system since the transportation management system is looking at aspects such as how much manpower is required for transportation, how much equipment is required and what are some of the terms related to commercials, commercial terms related to transportation and shipping for that matter. We have a lot of shipping terms that are going to be used especially when the product is moving across regions right. So, when there is regional transfer of product there will be lot of conditions and terms and conditions that need to be really managed for such that you are satisfying the regulatory requirements of that particular state or that particular country that you are supplying the materials to. So, here since it relates to invoicing and commercials and freight and all of that it can again be integrated with the ERP because in ERP we also have vendor management modules that need to be looked at and this can be integrated into the transportation management system as well. And since it is related to material movement which could be happening between let us say a factory and a WMS or between a WMS of between a factory and a warehouse or from a warehouse to another warehouse perhaps from one central warehouse to a regional warehouse or a distribution center. Then we can look at integrating the transportation management systems with the WMS systems as well. Now, just to give you an idea as to what the WMS would really look like in terms of the scope of activities what I have done here is I have picked up a very simple idea of what a warehouse could look like. So, this is the overview of a warehouse and you can see it is the top view of a warehouse and I will just spend a few minutes explaining this diagram to you. Now, what does this diagram represent? This is a diagram which is a very standard way of you know denoting or representing warehouses and storage systems. Let us say this is an entire warehouse facility this border that you see over here this represents the entire land which is dedicated to the warehouse facility right and there would be several things that could be present within this land one of them is the building itself of the warehouse. So, this is the top view as I am showing over here and these small square boxes that you see are representing the dimensions of the warehouse in terms of the you know the storage containers that it can hold. Let us say the storage containers that we are talking about or storage units that we are talking about are pallets right. So, each square is representing a pallet from the top ok. So, pallets can also be stacked up, but we are seeing this from the top view of the warehouse and you can see here I have highlighted some of these cells in different ways. So, these are all the pallet positions that we have on the floor. So, this is the number of pallet positions we have on the floor. So, this gives an idea as to how much area is available to us in the warehouse not the height and all, but the area part of it. And we can see over here that these positions are also shaded in different colors. The space which is shaded in gray it represents the area within the warehouse where no storage as such is dedicated to this, but you can move the items within this space. So, usually this movement area is called as aisle space and typically this aisle space exists between storage locations. So, this is the more accurate definition of where the aisle is going to be there, but I have denoted this also in gray which indicates that this is also space where movement can happen of the materials. And what kind of movement could that be? I might want to move items from the inbound to the storage and from storage to outbound right. So, which means we first need to understand what would be the activities which happen in a warehouse. In a typical warehouse usually you have the first activity is that of receiving. So, over here that is denoted by the inbound docks over here. So, in these inbound docks inbound materials come and they are received. Once we receive the items, so these light blue colors they are representing the pallets which have been received. Once these items have been received they have to be put away for storage and where is the storage in these positions. So, these orange and green and yellow boxes that you see represent the place where storage is possible, but we need to also see whether we can store over here or not. So, this is the area where storage can be carried out alright. And the second activity, third activity after put away is actually storing. So, the main activity of the warehouse over here is we have to store. And once we have stored we cannot keep storing the item forever. So, we also need to send out the item from this warehouse otherwise we are simply holding inventory and this is a lot of capital that is you know stuck within the supply chain that is not good. So, which means we need to dispatch the materials. So, for that we need to have a picking carried out which is the activity after storage has been completed the duration of storage picking and then it is sent for dispatch in outbound. So, this is the outbound area which is going to be present. Now, these areas over here which I called as inbound and outbound we call them as DOCS. This is a standard terminology that is used in warehousing, it is also used in any kind of ports which would be there and DOCS is the place where the unloading and loading activities actually happen into the facility or into the vessel or into the you know maybe the different kinds of vehicles that we have. So, that is what we call as a DOCS. So, these are the DOCS over here. As you can see we have two inbound DOCS that is two DOCS where we can have materials being you know accepted and received and we have one outbound DOCS over here it is not necessary that this has to be the design of everywhere house, but this is just a representation of what could be possible. And you can see here in terms of storage also we have different types of storage facilities which are available. We have a storage facility which is of this nature where we have back to back pallet positions which are available to us and stack one above the other on racks. And in parallel to this we have another set of racks over here and another set of racks over here. These type of storage positions are very different from these storage positions where you can observe that we have lesser amount of storage positions, but a lot of freedom of movement as well. So, this is also quite common in warehouses. You might have you will have a mix of different types of storage layouts which could also be present within the system. And this area over here which is the wide empty space this is the open area and in this open area we have to allow for different other activities that take place outside the warehouse. So, in this specific area I have I have shown just the movement of vehicles. So, this is the movement this is the vehicle which is moving out and this is the vehicle which is moving in. So, you can understand that this vehicle which is moving out has probably come from the outbound dock. It has got the materials from outbound dock and it is now exiting the warehouse facility. And this vehicle that is coming in should be targeting to reach one of these inbound docks right. So, you can understand from the movement of the vehicle as to where it is probably going to. So, this is an idea of what we look at in a warehouse. So, what is the role of WMS over here? The WMS actually gives you a picture something like this. It is very useful in showing you a picture something like this perhaps even more detail also which can be possible here I am only showing the top view, but it can also show you other dimensional views as well and more detailed information will also be possible. But the basic idea over here is it gives you the first and foremost requirement that we have from a WMS is some kind of real time visualization that is possible. We should be able to account for the inventory which is present within the system and also provide some kind of decision support for planning. Now, as you can see over here we can see that there are some orange boxes. These orange boxes indicate that these pallet positions in the vertical position also completely filled with inventory which means these are not free to store anything else right now. Similarly over here there is no free space which is available to store anything everything is full. Over here we can see that there is one place which is completely free that is an entire vertical column within that particular space is free and over here it is partially empty which means there is a good chance that the lowest rack the pallet position would be empty because that is from where we have retrieved the material it is possible that it is empty over there or few other pallet positions may be available there. Similarly this is completely empty these two pallet positions vertically as well and here we can see that few pallet positions would be available not many. So, this is at least the visualization we are getting from the WMS, but what more can we do over here is the question. So, looking at some of the functionalities that could be provided by a WMS one is suppose you wanted to decide that you have a certain kind of product mix that the warehouse has to handle. So, this is a decision support that we are looking for from a WMS where should I be allocating these kinds of SKUs. So, an SKU represents a stock keeping unit which may be related to the type of product perhaps it is a shampoo perhaps it is detergent powder of a certain size 200 ml 5 kg so on and so forth and it may be in cartons or pallets it depends right. Now, what would be some of the parameters that could be used for making these decisions? One of the parameters could be what is the speed of movement of the inventory we might want to look at positioning faster moving goods closer to the outbound stock. So, they quickly move out of the system and slower moving goods may be somewhere positioned over here. So, this is a decision support that the WMS can provide which it can tell you that where you should be allocating space for the inventory. So, in those spaces you might want to position the inventory every time it comes in right. Now, this could be an aggregate level decision making support that you have got, but in places but in facilities such as fulfillment centers and sort centers for that matter it could be possible that it is very difficult to judge where the storage locations have to be provided and sometimes this may be randomly allocated as well because the cost of finding that out may be very expensive. Another decision you know parameter that you could take as a lever would be whether the product is very large or very small and accordingly position it at the back or in the front of the warehouse. Now, another decision support we could be interested in knowing since we are relating this WMS to the activities carried out in the warehouse we need to figure out whether the receipt of goods is completed. So, the WMS should show you whether all the materials from this vehicle have finally, been unloaded and has the goods receipt note been generated. So, this has to be recorded in the WMS. Then we have information which could be obtained from the track and trace because once you are doing the unloading you would be scanning the products and once all the scanning is done you would have figured out that all the products have been unloaded all the items or the pallets have been unloaded and this kind of information could be generated by the WMS. So, this is where we see that there is an integration possibility between the WMS and the devices that we use as well. Then another question that we might be interested in knowing is the items have been received, but where should we locate them? We already know a broad location of where certain types of products should go to, but within that also where should I locate it? Let us say this particular item is supposed to be located here right. So, we have limited space and we can fill up this position over here as well as here, but which is more preferable to us? This is a decision support that we require to be carried out. Also what we may be interested in knowing is the sequence of items to be put away. For example, if I am looking at carrying multiple products together and I have multiple let us say pallets to be carried out to be carried out for put away. So, should I visit this first and then visit this or should I visit this first and then visit this and then come back to inbound in order to pick up the items. So, how do I sequence the put away activity itself would be a decision support that I seek from the WMS. Then suppose I am looking at outbound. If I want to look at dispatch, I have already received orders and based upon these orders I need to dispatch items from inventory, but what should be the sequence in which I dispatch. So, for this we need to generate what is called as a pick list, which is similar to what we do in put away. In a pick list we want the sequence of items to be picked and accordingly we will need to also allocate pickers or that who are personnel who can help you with picking the items as well as equipment which can be used for picking the items and put in that sequence. So, that list is used for executing the activity of a picking. So, the WMS should provide you that kind of support. Otherwise you would need to manually figure this out on a regular basis and it might be very inefficient to do that. Now, once you have figured out all of this, one of the things we may be interested in knowing is fair enough we are doing all of these activities of receiving put away storage, picking, staging and you know also generating a variety of documents from all of this as well as doing the dispatch of materials. But we may also be interested in knowing how productive or how is my warehouse performing. If I need to report the warehouse performance what am I going to report. So, for this may be some daily productivity metrics of the warehouse would be required which can be measured at let us say the facility level that is what is the total throughput that we are having from this warehouse on a regular basis. How many what is the kind of empty positions that we are having that is what is the utilization level that we are having in the warehouse. What kind of utilization level is happening let us say at a zone. So, this could be a zone what is the utilization level here. What is the utilization of my equipment? How many you know how many pallets are being picked or how many items are being picked by the picker who is the person or who is the which could be the equipment itself. So, what is the productivity of these people all of this is required to be logged somewhere and you know represented. So, that we understand how well our warehouse is working. So, we would want to have that kind of information also coming from the WMS. Now, with that overview let us move to the TMS where we are talking about transportation management system. So, what I am going to do is I am going to connect the TMS to the WMS because I have mentioned earlier that there is an integration possibility. So, how can the TMS be connected to the warehouse. So, over here we were only speaking about what happens within the warehouse, but the material has to come from somewhere and go somewhere. So, one of the things we would be interested in knowing is which of these docks should be using. So, one question which could come to mind is how many docks should we be operating. So, depending upon the volume of business we might want some kind of decision support to tell us that we should operate only two docks today or we should operate only one dock today that is accept only inbound all of today or do only outbound all of today. So, that kind of decision support is something that we require on maybe a weekly or a daily basis even that the WMS should be able to support us in giving that plan. Suppose we want to know when the inbound dock will be available, then we have an idea as to what is the status of the inbound dock we know that the vehicle is over there and the amount of inventory which is being unloaded is also known to us. So, we should be able to estimate by when this particular dock will become free. So, that another vehicle can be assigned to this dock if possible. We might be interested in knowing when we should schedule the next dispatch basis the amount of time it is taking to pick the items and put the items together or there may be information which has been given to us from another facility which has requested that the dispatch has to be scheduled by 6 pm today. So, this is the information that should get reflected for the TMS as well such that we know when the vehicle should be sent out. So, this is going to come through the dock visually dock scheduling kind of functionality from the TMS this is at the facility itself. We might also be interested in knowing which docks should be allocated to which vehicle right. So, if I have two inbound docks should I allocate this particular vehicle to the first inbound dock or the second inbound dock. So, this is a question that we need to answer we need support over there. Another area where we could have the TMS implemented is in yard management. The yard refers to the space around this warehouse which is open to the elements and usually this space is used for parking vehicles and equipment. So, we would be interested in knowing questions answers to questions like where should we park the vehicles which are awaiting you know allocation to a dock right. Where should we park the equipment which is awaiting call for material handling and this equipment could be large equipment like cranes or something which cannot be stored within the premises of the warehouse. So, we need to have that kind of functionality available as well. And finally, coming to the connection of the TMS within the supply chain. So, this was connecting the TMS to the warehouse, but within the supply chain also we want to connect. So, let us look at this application. Here we are seeing that the TMS will extend beyond the specific facility. So, let us understand what could be those particular aspects in the supply chain. Let us say we have a factory and this factory is going to receive materials from a warehouse similar to this not the same warehouse, but something similar to this. It is receiving materials to carry out its process this could be a store from where it is receiving materials to carry out manufacturing. From there over a long distance the materials are actually traveling the finished goods are actually traveling and arriving at this particular warehouse. Then from this warehouse we have items being picked on a regular basis and sent out for dispatch to a specific area. Maybe this is a collection of several retail stores and delivery has to be made in these retail stores. So, for that particular day this is the kind of route which has been decided and then the vehicles have to return right. So, this could be the overall processes that are happening in transportation right. So, everywhere here we have some vehicle which is moving out. So, if this is the case then where does the TMS actually come in. So, one of the things that we would be interested in knowing is freight management where we require decision support in seeking the right mode of transport. Let us say this is a long distance journey a long hall as we call it. We may be interested in knowing whether we should take this large container movement or by road or container movement by sea. So, which of these should we choose which mode of transport should we choose. So, we should first of all understand what would be the cost of freight associated for this route for these modes of transport. We should also be able to understand whether we should be choosing one mode over the other or a mix of the modes. So, this kind of decision support is something that the TMS can provide. Then understanding or creating the necessary documentation for shipping and again as we can recall a lot of material is going to be perhaps shipped on a daily basis. So, this needs to be generated in an automated fashion quite often. So, we need that kind of support in terms of documentation creation. And suppose we want to understand at the warehouse how much material has to be unloaded how much material has to be or load has to be loaded onto a specific vehicle. Should we be having vehicle completely filled to full capacity which is what we call as full truck load completely utilizing the vehicle or should we be dispatching it in less than full truck load consignments is a decision support that we also seek where the transport management system can help us out. Another area where the transport management system can easily help us out is in creating vehicle routes. So, where can these vehicle routes actually come in. This is a very simple example that we can see should the this be the order of retail stores that the vehicles from this warehouse should actually visit and or should there be some other kind of route which should be there. We would like this planning again to be carried out in an automated fashion with a decision support system which the TMS can provide. Similarly, once the vehicle has moved through these points it is now empty it has delivered everything or maybe it is partially empty. So, what should happen to the vehicle over here where should it go should it come back to the warehouse or should it go to another location. So, this is what we call as the back hall journey that is returning back to the warehouse or perhaps going to some other place where another activity may be carried out. Now, if we look at this we can see how there are so many possibilities for integrating warehouse management systems and transportation management systems in the logistics of products movement as well as storage. But in a typical transportation management system we may just opt for the functionality of let us say just dock scheduling. That could be a functionality that is chosen because that would be perhaps of most importance to us perhaps vehicle routing is of more importance to us if we are interested in let us say doing last mile deliveries on a regular basis. So, depending upon the complexity we may choose different aspects of a TMS or a WMS for that matter. Now, again when we speak about the WMS and TMS implementations what we understand is the scale of business again just like in an ERP is going to determine what will be the modules implemented should we do it in house or should we procure it. The level of implementation you know within the organization of information systems within the organization and among the partner entities in WMS and TMS will determine how well it is going to succeed. So, questions that we need to ask is how will the WMS and TMS integrate with the ERP if this is not possible then what is the value add of all of this information and data that we have generated we have to be able to analyze it and present it and report it as well and account for it as well. So, if we cannot integrate then that is going to be a challenge. How well we can integrate the WMS of our facility with perhaps the TMS of our client or of our vendor. So, that is a question that we really need to think about. Similarly, we would be interested in knowing whether there is digital readiness among the people as it relates to certain specific activities in warehousing within transportation as well. Like I said earlier this kind of implementation is now ongoing in India to a large extent and it is getting ramped up quite a bit also thanks to the PM Gatishakti movement, but we see that digital readiness is something that is required for systems like this to succeed. How comfortable are people with devices with softwares and tools and computers is also quite important and the you know the typical traditional thought process that in a warehouse you will only have shop floor personnel who are completely unskilled in nature that thought process is not going to really help out they have to be trained in order to understand technology and not just the operational aspects as well. Then we have to also understand how well the TMS or the WMS is adapting to the business. Let us say today you have a product mix which is completely of just oil to be sold and this is let us say cooking oil to be sold and in the next week or so your product mix completely changes to cosmetics to be sold. So, let us say you are in the FMCG business and you are seeing that this product mix is really changing on a regular basis because of the nature of demand and the nature of patterns that we see. If this is the case can my WMS adapt to this kind of product mix changes because then the kind of locations and the pilot positions that are required may be very different when it comes to handing one product over the other. Similarly, there could be several demand variables which will require that only some storage positions are used and not everything else. So, how can the WMS adapt to this would be a good question to think about there could be changes in regulations with respect to taxation with respect to the pricing of products and everything. How well does the WMS and TMS consider these aspects when making decisions? There could be very complex routing requirements that need to be carried out and how well does the TMS actually adapt to all of this. This can really determine what extent to which we can scale up the business as well. If we can adapt quickly then we can also scale up quickly. So, finally, coming to the conclusion of this particular discussion we have seen what is meant by WMS and what is meant by a TMS and visually we have understood where the application potential actually lies for all of this and how well it can really automate processes and streamline processes within warehousing and within transportation. So, thank you very much for listening patiently to this lecture as well and see you soon again in another lecture. Thank you.