Prepping For Supply Chain Crunches with Manhattan Associates
March 14, 2022 Alex Woodie
As the provider of the warehouse management software used by many of the top brands in the country, Manhattan Associates has a better view into the current supply chain crunch than most. That shouldn’t surprise you. But what may surprise you are the actions the company has been taking for years to prepare itself and its customers for shocks not unlike the current one.
“We’ve been really busy the last five or six years cooking up some pretty cool new things,” says Adam Kline, senior director of product management at Manhattan Associates. Kline is the product manager for WMi, the company’s flagship IBM i-based warehouse management system, as well as the newer cloud-based Manhattan Active Warehouse Management.
Some of those things – like the shift to omnichannel delivery and adoption of robotic process automation – are what you would expect a company at the cutting edge of supply chain execution to do.
But the Atlanta, Georgia, company has taken additional steps – particularly around simplifying the navigation of its application and gamifying the software for users – that have paid dividends for itself and for its customers during the current COVID-induced supply-chain and labor crunch that the country currently finds itself in.
It’s hard to believe it, but the U.S. economy in late 2021 was actually bigger than it was in early 2020.
Despite the COVID pandemic – or perhaps due to the trillions of dollars in economic stimulus pumped into the economy by the Federal Government – the volume of transactions occurring in this country is higher than it’s ever been. While this has contributed to a 40-year high in inflation (currently at 7.8 percent a year), it has also been a boon for retailers, distributors, and manufacturers in certain sectors.
For example, one of ManH’s WMS customers, Indiana-based Pet Supplies Plus (not a WMi customer) saw a massive increase in demand for its products. “The number of pets that were brought into homes over the course of that pandemic – it was a huge increase,” Kline says. “So Pet Supplies Plus saw a massive increase in in volumes–more dog food, more everything.”
Kline is seeing those types of increases across the board, from building supplies to food and grocery and more.
“I can go industry by industry by industry and show increased consumption and increased demand,” he says. “Now at the very beginning of the pandemic, I think we saw a little bit of downtrend in terms of apparel and footwear. But for some of our customers, they were seeing record volumes – and some of them still are to this day, just driving quantities that they haven’t seen before.”
One important capability that customers on all of ManH’s supported platforms are adopting is omnichannel delivery, which refers to the ability to ship product not only from distribution centers and warehouses, but directly from stores to consumers.
During the early days of COVID, when in-store shopping plummeted and e-commerce shopping skyrocketed, having an omnichannel presence was particularly important for retailers, Kline says. “We’ve seen a massive shift in terms of the line of thinking and how to go address omnichannel requirements,” he says.
Typically, customers without an omnichannel presence would start a little science experiment in the corner of their existing DC. As it grew, they would normally outsource that to a 3PL. But then as the volumes grow, it’s often more cost effective to bring that back in-house, Kline says.
“Being able to leverage a single distribution center with common real-estate, electricity, labor pool – you name it, there’s a lot of benefits to having a single distribution center managing many of those delivery channels,” he says. “Now there are times where it makes sense to split them and we have examples of that as well. But I think it’s more in vogue these days to go under a single roof.”
Automation is a hot area of investment for ManH and its customers. While the company focuses on software, it has a hardware sales division and works with hardware providers that can implement robotics in the warehouse and distribution center.
“A lot of our customers are looking at ARs, robotics, collaborative picking bots. Those allow you to augment your current workforce and make them more efficient,” Kline says. “But I’d say, if I paint with a broader brush there, it’s all about automation in general, and seeing what areas of the distribution center I can either make existing people more effective, or maybe there some processes that I can automate completely.”
As the WMS provider, ManH doesn’t actively control the robots. But it would provide the high-level management and monitoring to do that work, as well as help coordinate the share of work handled by humans and machines.
Some of its WMi customers have gone down the automation route, according to Kline. “We do have some WMi customers – not a ton – that have said, you know what, this this new cloud-based WMS – that makes sense for us moving forward. And they started down the path of moving to that applications and getting all the benefits of robotic automation,” he says. “And we have other WMi customers that have said, hey I’m happy where I’m at.”
Enabling automation through robots isn’t quick, and takes a bit of investment and lead time. Nevertheless, if Amazon’s warehouses are any indication, robotics is viewed as the future of warehousing.
“This is absolutely the new norm, and it’s where most of our customers are heading is more automation,” Kline says. “Not everybody. There’s plenty of customers that that are surviving and even thriving without automation. But I think that the vast majority see the writing on the wall that that’s going to allow them to take the next step to grow at the level and the speed that they want to.”
ManH has also been making enhancements to its core WMi, which like many IBM i applications is a green-screen application. But instead of a 5250 interface, many WMi users interact with the software via a text-based interface on an radio frequency (RF) barcode scanning gun.
The big news is that ManH now allows end users in the warehouse to use camera-enabled smartphones as they go about picking, packing, and putting away items. The company has also enabled touch-screens to be used at fixed devices, such as weight stations and pack stations, according to Kline.
The work is paying off in lowered training costs for WMi users, Kline says. “We’ve got customers that have said that software-related training has gone for weeks to hours,” he tells IT Jungle. “So the amount of investment you’re putting into a new associate has been dramatically reduced, on the order of 60 percent to 75 percent reduction in training costs.”
That cost savings is big for two reasons, he says. For starters, it helps profitability, particularly when ramping up the workforce for seasonal fluctuations. Many of ManH’s customers in the retail and apparel industries hire thousands of seasonal associates to help through peak season, and getting those customers up to speed on text-based interfaces isn’t easy.
But the lowered training cost also helps keep companies agile amid a constantly fluctuating workforce. That helps during the current labor crunch, with job openings at 10.8 million, near a record level, as millions of people have not yet rejoined the workforce following the historic shutdowns in March 2020. But enabling this level of user agility was something that ManH had been working long before that.
“There was a labor crunch before COVID,” Kline says. “Attracting good warehouse talent is not an easy thing to do. So we started to build a brand new, let’s call it a new component.”
The new component in ManH’s labor management offering essentially works to gamify employment by giving workers rewards for hitting certain numbers in their day-to-day work. If a worker picks or packs a certain number of units during a day or an hour, their supervisor can give them rewards.
Gamifying the work not only motivates employees to work harder by offering them rewards, such as a better parking spot, some extra vacation days, or just more money. But it also works by encouraging them to compete with their co-workers, Kline says.
“It’s getting visibility to the end users, so how am I doing against those challenges?” he says. “When I meet the challenges, I can get, badges, I can collect badges. I can collect points. I can see how I’m doing versus my peers in the DC. Where do I sit on that continuum?”