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How automation impacts inventory management

09 Jun, 2022 | Inventory Management

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The complexity of inventory flows and visibility in a modern fulfillment center is a far cry from the mainly manual distribution centers of the not-so-distant past. Where one forward picking area often served the whole operation, today’s fulfillment centers have multiple automation zones with subsystems like automated storage and robotic goods-to-person (GTP) systems or retrieval (AS/RS) solutions.

Additionally, they may have software managing some aspects of inventory and bin location and storage functions. As a result, the coordination of subsystems and warehouse management systems (WMS) for real-time inventory allocation and timely replenishment of SKUs has changed the functional needs in the WMS market.

Metering the flow of goods around order release is a part of the value proposition for WES (Warehouse Execution System) software. It’s a category of software that sits between the warehouse management system (WMS) and automation and is offered by a mix of vendors, including WMS providers.

Learn more about how to integrate automation into inventory management.


Inventory flow and WES

The primary use of WES is managing order release to systems and processes on the floor, as well as creating a level flow of work that optimizes robotics and machinery. The WES market has many players, including integrators with WMS and WES vendors that have built up WES capabilities.

Most warehouse automation vendors also provide software at the WES and WMS levels. As the WMS remains the system of record for the inventory data, WES functionality increasingly gets deployed for smart order release and real-time monitoring of inventory levels.

WMS software is still the transactional foundation of the warehouse and is essential to control inventory as part of processes like receiving, cross-docking, putaway, or pack out and shipping workflows.

The beauty of WES lies in leveling loads and pulling work through a warehouse that triggers inventory allocation and replenishment activity. It looks at the whole flow of work and inventory more holistically – not just what one goods-to-person does, but all the other manual and automated systems too.

WES shines at the orchestration role and examines the order pool, looking at resource and inventory availability, releasing work, and triggering needed inventory allocations. Thus, the DC operations see maximum throughput in any given time interval with the least number of SKUs and inventory replenishments.

WES capability also helps in dynamically changing work routing decisions. For instance, a WES can sense congestion at a put-wall system and temporarily reroute work through an alternative method, like a cart-pick process. While congestion at the put-wall system clears, the WES starts releasing work back to the put-wall system.

Read about: How can Your SME Benefit from Cloud-Based Software?


Constant coordination

With more automation in warehouses, major vendors have started building out their WES capabilities and communicating on a near-constant basis with automation systems during order release and inventory disposition decisions.

WMS tracks and manages inventory at an aggregate level in the distribution center, helping determine when to dispatch, what to dispatch, and when to replenish. The aggregate inventory view becomes a critical component of how a WMS fosters execution optimization.

The WES capability knows the automation status and current inventory levels and has protocols and logic to prioritize what system is assigned work. Near constant communication with automation systems via application programming interfaces (APIs) allow a WES/WMS solution to know the current inventory in multiple systems. However, it’s up to the WES logic to make the inventory allocation decisions and smartest order release.


Division of duties

Some automation solutions are configured for WMS, WES, or other host systems to control their inventory, while others have their inventory software. It may trigger inventory replenishment requests in some cases.

When a host system manages to replenish for a GTP or AS/RS, it’s mainly the software at the automation level that controls bin positions to control fleet management over the robots or carriers.

It’s a division of duties, with WMS/WES capability doing the broader orchestration and leaving the automation software platform to manage the actual movement of carriers with particulars of bin storage.

It’s always good to have one higher-level system to manage inventory and other releases. It must ideally involve granular, two-way communication, with the GTP solution having purview over movements and bin manipulation to report inventory consumption as it happens.

The host-level system coordinates all the work that needs to happen and gives the parameters of the machine about when the work must happen, so the system is prepared to move efficiently. The host system gives it some flexibility in how it completes the tasks.

All GTP systems or system deployments are not implemented in the same way. Still, a WES, WMS, or other host system oversees inventory levels and replenishment for a GTP solution.

It can run the gamut from the system entirely dependent on the host system (for inventory management). Some versions of them work together through the process.

With older WMS or host systems, the architecture is such that API-based, continuous inventory reconciliations are hard to achieve. However, newer web services APIs from main WMS providers make the integration between host systems and AS/RS highly effective.

Over the years, it has gotten better as more open platforms accept what are known as “REST APIs.” They are like a common dialogue for disparate systems to work in tandem more easily.

A WES or WMS functions as the overall inventory management system. The host system would view an AS/RS in many deployments like “virtual location or bin.” The host is interested to know how much inventory is in the bin but may not care exactly where it’s stored at the moment.

Monitoring minimum inventory levels triggers replenishment, but mainly, the WMS tracks minimum SKU levels and takes care of the replenishment process.

It is easy to achieve effective two-way integration, but the area needing improvement is that organizations wanting to leverage AS/RS must have processes in place to capture precise data on item weights and dimensions.

Having accurate dimensional data and weight at the WMS level ensures the AS/RS solution can use it to manage storage. If there is accurate weight and dimensional data, one can maximize the cube utilization potential of the system.

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Smarter coordination

WMS is the key system for inventory management in most distribution centers. With more DCs becoming fulfillment centers with automated zones holding inventory, that’s where WES comes in. WES smartly coordinates with each decision point and subsystem. It makes decisions in real-time and allows for optimization and intervention throughout the fulfillment process.

WES helps with last-minute decisions to increase order fulfillment efficiency in the warehouse. WMS and WES are tightly integrated to play to the strengths of both systems.

WMS helps plan the order fulfillment, and WES executes it while adjusting to various inventory exceptions in a warehouse daily.

WES doesn’t manage all inventory details at the automation level and functions as a near real-time intermediary regarding inventory. It constantly exchanges data with multiple automation systems and communicates with supply chain level systems that management replenishes from suppliers.

Industry focus recently is on integrating various systems together. It opens real-time communication of data and reduces the unknowns. It offers enough information to efficiently fill orders without having WES control the inventory in each facility zone.

Read about: Order to Cash Process – All You Need to know


DEAR Systems inventory management system

WES talks to many automation systems to interchange information required to orchestrate order fulfillment intelligently and offer a high-level inventory snapshot to WMS to communicate with the upstream systems.

A fully integrated WES and WMS, like DEAR Systems, enables as much or as little automation. It allows for scalability as the warehouse grows. Such a level of integration would ensure the systems are in sync irrespective of who is managing the inventory.

Are you looking for the best inventory management software for your business? If so, book your 14 day free trial now.


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