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HUES Enterprise Consultants
GLOCO Warehouse Integration Proposal
Presented by:
Stephen MartinoElla BuitragoAlex Yermilov Bryan Kilpatrick
HUES Enterprise Consultants
GLOCO Warehouse Integration Proposal • Business Case and Proposed Solution – Steve• Order Fulfillment Inefficiencies As-is & Resolution To-be – Ella• Inventory Replenishment Inefficiencies As-is & Resolution To-be – Ella• Business Benefit Justification – Bryan• Financial & Success Metrics – Bryan• Short Video
Technical Specification and Prototype• Automated Material Handling Decision – Steve• Order Fulfillment Data Flow – Steve• GLOCO WMS-MHS Solution Demonstration – Alexey
Implementation Plan• Project Timeline and Governance - Bryan• Business Process Redesign - Steve• Hardware & Software Design – Steve/Alexey• Non-Functional Components - Alexey• User Enablement and Training - Ella• Risk Management - Ella• Success Metrics - Bryan
Questions
Agenda
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HUES Proposed Solution
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GLOCO Warehouse Integration ProposalBusiness Case
Business Problem:• Inefficient Use of Employee Labor (70% Warehouse Walking)• Order Fulfillment Inefficiency (Single Order Picking)• Inaccurate Order Fulfillment (95% Order Fulfillment Accuracy)• Sub-Standard Inventory Control (Customer Dissatisfaction/lost sales)
Team ONE is recommending an Automated Material Handling System that solves GLOCO’s inefficient order fulfillment and inventory replenishment processes, resulting in reduced operating and capital expenses and will realize $12.3 million dollars of additional revenue for GLOCO.
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GLOCO’s Inefficient Order Fulfillment ProcessPerson To Goods – As-Is
55 Minutes Total
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GLOCO’s Automated Order Fulfillment System – Goods To Person – To-Be
22 Minutes Total
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GLOCO’s Inefficient Inventory Replenishment System - As-is
130 Minutes Total
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GLOCO’s Automated Inventory Replenishment System – To-be
25 Minutes Total
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Business Benefit JustificationCustomer Order Fulfillment - Automation Business Benefits:
• Customer order processing will increase by 4x.
• Decrease average order-to-ship time by 1 day.
• Customer satisfaction will improve with GLOCO’s fast order-to-ship times.
• The profit margin per customer order will increase by 2% as a result of a higher fulfillment rate.
• The Material Handling System will cut the order fulfillment time by 5 minutes per order.
• New automation will reduce employee payroll by 60%.
• New efficiencies with the automated fulfillment system will eliminate capital designated for new warehouse construction.
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Business Benefit JustificationInventory Replenishment - Automation Business Benefits for GLOCO:
• Customer Sales revenue will increase though improved In-Stock Inventory accuracy.
• A 5.4% increase in cash flow will be realized as a result of improving inventory management. • Inventory will be replenished faster resulting in reduced out-of-stock items by 5%.
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Financial MetricsWarehouse Capital and Operating Summary
Capital Expenditures & Operating Costs 3 Year Comparison
Description QTY Yearly Cost 3 Year Total Old System
3 Year Total Automated System
Warehouse employees payroll (Total Number of employees)
100/40
$4,000,000/ $1,600,000
$12,000,000 $4,800,000
Land Purchase/Lease –Each Site 2 $1,000,000 $2,000,000 $0 New Construction / Each Warehouse 2 $1,000,000 $2,000,000 $0 Warehouse Operating Equipment 2 $500,000 $1,000,000 $2,025,000 Operating Expenses less Labor – Each Warehouse
2 $133,333 $800,000 $1,858,500
Total Warehouse Expenditures $17,800,000 $8,683,500
Total Operating Savings Old System New System
* Old warehouse yearly operating costs = $12,800,000
Savings of
$9,116,500
over 3 Years
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Financial MetricsFINAL Capital, Operating and Revenue Benefits
Description Estimated Benefits
Total Capital & Operating Costs Savings (3 Year) - $9,116,500 Total Revenue Benefits (3 Year) $3,204,730
Total realized financial benefit from new solution $12,321,230
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Success MetricsGLOCO Metrics GLOCO Goals
Increased Revenue Customer order processing will increase by 4 times.
Increased Revenue Increase order fulfillment accuracy from 94% to 99.9%.
Improved Customer Experience Decrease average order-to-ship time by 1 day.
Cash Flow Increase GLOCO’s cash flow by 5.4%.
Inventory Accuracy Increase the inventory accuracy from 94% to 99.9%.
Order Fulfillment Picking Rates Increase GLOCO’s Order Fulfillment rate by 5.4%.
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Video if time permits: Kiva Systems
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Technical Specification and Prototype
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• Automated Material Handling Decision – Steve
• Order Fulfillment Data Flow - Steve
• GLOCO WMS-MHS Solution Demonstration – Alexey
Agenda
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After an extensive RFP process of Automated Material Handling Systems (MHS) and in-depth
analysis of GLOCO’s order fulfillment and inventory replenishment business requirements,
GLOCO and HUES Enterprise Consultants have chosen Kiva Systems as its Automated MHS.
GLOCO’s Automated Material Handling System Decision
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Customer Places Order on GLOCO Order
Fulfillment Web Portal
GLOCO Order Fulfillment Technology & Data Flow
01
Customer OrderStored on Amazon
Simple Storage Service
Amazon Messaging Service Alerts GLOCO ERP Of New Customer
Order
GLOCO ERP REST ScriptRetrieves
GLOCO XML Order
GLOCO ERP SoftwareUpdates
ERP Databases
GLOCO ERP SoftwareUpdates
WMS Module DatabasesGLOCO WMS Module Software Updates Kiva
MHS Databases
GLOCO ERP must be able to save the Customer’s order form (Web interface and API).
Required Functionality
MHS must be able to import and periodically update by request from ERP/WMS core data GLOCO ERP modules must support the import of XML documents by request.MHS should start to process new orders less than 30 sec after notification. MHS must notify WMS/ERP about order completion/inventory/shipping changes/events
Robots begin the picking process.
Kiva MHS Updates GLOCO WMS Module &
ERP Databases
Customer Order Event Message Sent To
Amazon Messaging Service
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GLOCO WMS-MHS Solution Demonstrationhttp://hues.gloco.ermilov.com
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Implementation Plan
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Complete Project Timeline
GO LIVE!10/4/2013
20 Weeks
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Project Governance: Communications Dashboard
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Project Team
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Stakeholders
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Business Process RedesignManual Process Automated Process
Customer Order Entry Customer Order Entry Web Portal
Sales Order Entry Sales Order Entry Web Portal (Medical Devices Only)
Inventory Replenishment Database Stock Received Automated Inventory Database Update Upon Scanning
Customer Order Items Shipped Database Updates Automated Items Shipped Database Updates
Customer Order Pick and Pack Robotic Goods To Person and Pack
Sales Order databases updated with Customer Order dataCustomer Order Data will update from the MHS to the ERP Sales Order Database automatically.
Purchase Order databases updated with vendor received data
Purchase order received data will update from the MHS to the ERP Purchase Order database automatically
Calculation of and Reporting on order lines picked Automated order lines picked report
Responsible: HUES Business Analyst
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Hardware Design
Hardware Design• Design Kiva Pod Layout• Robot Pathways• 2D Bar Code Sticker Layout• Wireless Access Layout
Responsible: Hardware Architect
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Software Design
Tasks
Mapping of ERP Database fields to MHS Databases
Map ERP database fields to XML Order Document | Inventory Document
ERP Scripts Designed to reflect Database Mappings
Customer Web Portal Code Updated To Output XML
Sales Web Portal Code Updated to Output XML
Update Screen Interfaces for Medical Line
Order Lines Picked and Inventory Replenish reports
Involves designing an XML formatted “Customer Order Fulfillment Document” and an “Inventory Replenishment Purchase Order Document” that map to GLOCO’s ERP Database fields
Responsible: Data and Software Architect
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Hardware and Software InstallationHardware• Installation of 2D Bar Code Sticker Grid• Kiva Pods• Picking and Replenishment Stations• Wireless Infrastructure• Move Inventory to Kiva Pods
Software• Install Kiva Material Handling Software (MHS)• Import Inventory Data to MHS from ERP/WMS• Install and Test MHS <-> ERP/WMS Integration
ScriptsResponsible: Kiva Engineer Responsible: Software Architect & Engineer
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User Enablement and Training
As part of the professional services engagement HUES –KIVA will be responsible for:
• Standard Operating Procedure Training• Virtual Test System Training• Software and Hardware Initial Training• Consultative services after client “Go Live” events to
validate the training effectiveness
Responsible: HUES & Kiva Trainers
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User Enablement and Training
The training methods included in the plan are:
• Individual hands-on instructor training • Hands-On in classroom training Web Seminar • Computer Based training • Book Based
Responsible: HUES Business Analyst & Project Manager
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Supporting Non Functional Components
Background Processes Health MonitoringScripts have been implemented to synchronize XML data between ERP and Amazon S3. Amazon’s Simple Queue Service (SQS) will provide the functionality to connect Amazon services to GLOCO’s IBM Tivoli Live Monitoring Service.
Responsible: All Roles On-Call
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Project Governance: Risk ManagementArea Risk Description Likelihood Impact Management Strategy
Plan and Control Project progress not monitored adequately Low High
Consistent use of the project status dashboard on a weekly basis
RequirementsSystem Requirements not correctly identified Low High
Requirement checkpoints throughout the requirement gathering phase
Organization
Change in organizational environment during the project Medium Medium
Add enough buffer time in the project plan to allow for variability of project execution
User User Resistance to Change High HighStakeholder sponsorship , user training and enablement during all phases of project plan.
CloudNetwork Connectivity to AWS failure Low High
Specific network connectivity test will be performed during the system testing phase
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Success Metrics
GLOCO Metric GLOCO Goal
Increased Revenue 2%-3%.
Cost ReductionIncrease Order Fulfillment rate by 5.4% - realized efficiencies.
Improved Cash FlowIncrease cash flow by 5.4% - by reducing inventory on hand.
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Thank you Very Much!
Questions???