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Matsushita Electric of Canada Ltd.: Wireless System Boosts Warehouse Volume to a Higher Level

In warehouse management, shutting down operations to conduct inventory has always been a fact of life - until now. With a wireless warehouse management system, Matsushita Electric of Canada Ltd. has swept aside month-end physical inventory to make room for more sales.

Application: Automating Every Stage of Warehouse Management and Inventory Control
Matsushita's system consists of a wireless network and warehouse management system operating in an IBM AS/400 minicomputer environment. Workers in four industrial and consumer warehouses use a total of 56 wireless hand-held computers with integrated bar code scanners, controllers, and access points.

Through an electronic data interchange, or EDI, system, Matsushita factories send advanced shipping notices, or ASNs, to Matsushita warehouses on-line. When truckloads or containers arrive at a warehouse, workers scan bar codes on the products to acknowledge receipt and to collect information including product type, the count, the date and time of receipt, and the vessel the products arrived in. The warehouse management system then generates a "license plate," or bar code sticker, that a worker applies to a group of products. When the worker scans the license plate, the system acknowledges receipt. Later, another worker scans the license plate again, and the system specifies a putaway location; on putaway, it automatically updates inventory records.

Because the system updates inventory within 15 minutes of a shipment's arrival at a warehouse, products often are cross-docked, going directly from receiving to picking without going through the regular putaway process.

When an order arrives at a warehouse - on-line, if the customer is set up on Matsushita's EDI system - it goes into a job planning queue for sorting. (Matsushita primarily sorts by carrier or geographic area, but the system also lets it sort by customer, priority, or other categories.) Then a message on the screen of a picker's hand-held computer dispatches the picker to a product location. For each product model, the picker scans a bar code at the product location and another bar code on the product itself to verify that each is correct, and then he or she enters the amount picked. A message on the computer directs the picker to the next pick.

When the picking is finished, the picker presses a key that indicates he or she is taking the picks to the shipping dock. At the dock, a worker applies a picking license plate that the system generates, scans the license plate, and verifies that the order is complete before it's shipped.

Once a carrier signs off on a load, a warehouse worker scans it to confirm the order and instantly route it to accounts receivable. The warehouse management system generates an invoice and mails it to the customer - or sends an ASN, completing the process of ordering and shipping entirely on-line.

Benefits: Time Saved, Service Improved, Volume and Productivity Multiplied
Time Saved from Beginning to End: By putting warehouse management on-line and connecting it to wireless computers, Matsushita shrank the turnaround for moving products from receiving to picking from overnight to just 15 minutes. And because the system tracks picking status on the floor, the person running the shipping and picking area can tell who on the floor will be next in line to take another assignment. That means pickers spend a minimum of time waiting for assignments, and it increases picking capacity.

Efficiency on the dock has skyrocketed too. Says William Austin, logistics manager for Matsushita: "We figure our efficiency on the dock alone has gone up by at least 50 percent. There is no paper, there are no mistakes, there is no manual input, and we don't have to have someone keying in confirmations all day."

Automatic routing of orders to accounts receivable makes the warehouses still more efficient. Automatic inventory control has made possible another cost saver: bypassing or minimizing the time spent on putaway. "We're even nearing the point where we can cross-dock back orders, putting them away in an area close to the shipping dock."

"Completely automating our inventory system has translated into a gain of more than $12 million a year," says Austin, by eliminating month-end close-down and giving Matsushita one more selling day per month.

Customers Made Happier: The wireless system makes customers happier, too, with just about any order shipped the same day - or ready for pickup in just 10 to 15 minutes.

Freight consolidation is another of the wireless system's benefits. Before, warehouses had no way of knowing when they were releasing two orders to a customer on the same day. More than likely, the customer would receive two separate shipments and have to pay twice. Now Matsushita can consolidate shipments and save customers both time and money.

Since the wireless system was installed, shipping errors - which had been a fact of life since Matsushita opened its first warehouse 26 years before - have virtually disappeared. "Now everything ships correctly - no model mixes, no product mixes, no incorrect amounts, no incorrect colors."

More Productive Warehouses: Although Matsushita hasn't expanded any facilities or added employees, it has multiplied warehouse volume by up to 15 to 20 times, and increased accuracy at every stage to boot.

The success of Matsushita's wireless warehouses has attracted worldwide attention. According to Austin, "Matsushita seems to have become a model for businesses that want to improve their warehouse management and inventory control."

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