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What actually changed to make any of this possible

Steve Coleman, Founder and CEO Published Updated

Every morning your warehouse is asked for a little more than it was the day before. Another client goes live, a cut-off moves forward, a customer wants proof of delivery order by order or finance wants to know what each contract earns. None of it is dramatic on its own. Added up, it never stops.

The systems that run the warehouse don't move like that. They move in steps, each time somebody signs off a change or a vendor ships a release. Between the steps, the line stays flat while the warehouse carries on climbing.

That gap has been there for as long as warehouses have run on software. What's changed is that it can now be seen and worked across without replacing anything.

The warehouse moves every day

What the business asks of the warehouse rises in small pieces: more order lines on the same trailer, a second shift for a new client, a returns process for a channel that didn't exist last year. Each one lands on the floor first, where the people work out how to handle it long before any system is changed to match.

That's why so much of a warehouse runs on things the systems don't hold. The supervisor's spreadsheet, the whiteboard by goods in and the pick order the team knows is quicker than the one the WMS hands out are all the warehouse keeping up with a business that's moved on.

The systems move in steps

A WMS has to be stable to run a warehouse. Nobody wants the software that releases the pick work changing under them in the middle of a shift, so changes are batched, tested and put live in steps. That stability is the point. It's why the system is trusted.

The cost of it is that each step is aimed at the warehouse as it was when the change was specified. By the time the step goes live, the warehouse has moved again. Each one shows a little more than the last, while the business carries on climbing, so the gap never closes.

Where the cost sits A line for what the business asks of the warehouse rises every day, with a bump for peak and short rises for a tighter cut-off and more products. Below it from the start, a stepped line for what the systems can show you rises only a little at each update: an update, a new report, an upgrade and a new module. The space between the two lines is the gap, labelled cost, risk and wasted effort. From the point marked Fettle goes on top, a hatched band labelled Fettle fills the gap: what you can see, every day, across the systems you run. THE GAP Where the cost sits Update New report Upgrade New module Each step is an update to the systems that shows a little more than before Time Fettle goes on top Tighter cut-off Peak More products What the business asks of the warehouse What the systems can show you costriskwasted effort Fettle What you can see, every day,across the systems you run Where the cost sits A line for what the business asks of the warehouse rises every day, with a bump for peak and short rises for a tighter cut-off and more products. Below it from the start, a stepped line for what the systems can show you rises only a little at each update: an update, a new report, an upgrade and a new module. The space between the two lines is the gap, labelled cost, risk and wasted effort. From the point marked Fettle goes on top, a hatched band labelled Fettle fills the gap: what you can see, every day, across the systems you run. THE GAP Where the cost sits Update Report Upgrade Fettle goes on top Peak What the business asksof the warehouse Fettle Fettle: what you can see, every day The gap: cost, risk, wasted effort The systems, update by update
The warehouse is asked for more every day, while each update to the systems shows only a little more. Fettle goes on top of what you already run and fills the gap in between.

What it costs to live in the space between

The gap shows up as work nobody planned for. Managers export from three systems to build one report, then add the caveats that make it safe to read. Supervisors keep the off-system work in their heads or on paper, so a busy shift reads as a quiet one. Decisions get made on hope, panic and gut feel, because the facts arrive too late to use.

It also shows up in paid hours. Two warehouses we've worked in read around 42 per cent labour utilisation on their systems and 65 per cent once the off-system work was counted, against a realistic 85 to 90 per cent, which is around six and a half hours of work in a 7.5-hour shift. The 20 to 25 points between 65 and that level are paid hours that could reach the work and don't, so they cost a fifth to a quarter of the labour bill.

Take a warehouse with 500 operators, each costing £32,000 a year with the employer's costs included. The labour bill is £16m a year, so the gap is worth £3.2m to £4m a year. Some of it sits where no report looks: in one warehouse we've worked in, 572 hours in a single week sat between operators clocking on and starting their first task.

Work out what the gap costs in your warehouse

Why does the gap between a warehouse and its systems never close?

Because the business changes faster than any system can. A WMS moves in releases that have to be specified, tested and put live, while what the warehouse is asked for moves every day. Replacing the system resets the line for a while, then the gap opens again. It's nobody's fault, so it's worth working across.

Our founder spent twenty-eight years as an IT Director, living with every system he bought and answering to the finance director for each one. What he took from it is that the gap isn't a failure of any vendor or any team. Business needs change faster than operations, systems or processes can, so the gap is permanent, whichever system you choose.

That changes what's worth doing about it. If the gap were a fault in one system, replacing that system would fix it. Because it isn't, the useful question is how to work across the gap every day, with the systems you already have.

The data was there all along

Everything needed to see the gap has been recorded for years: every pick and stock move in the WMS, every clock-on in the time and attendance system, every order and contract in the ERP.

Reaching it was the hard part. Every system keeps its data its own way, so joining them meant software written for that one warehouse, then kept working every time something underneath changed. That cost more than one warehouse could justify. It also needed somebody who knew which questions mattered on the floor. Our founder built his own views in Tableau from 2010 to get at it, which shows both halves: the data was there to be reached, though reaching it took an IT Director's own time.

Why couldn't we do this before?

What AI changed

AI changed both halves of that. The software that joins one system to another, standardises what comes across and checks it can now be written far faster than it used to be, so a small team that knows warehouses can build across the systems one warehouse runs in weeks. Once the data is joined, a manager can ask a question of it in plain English and get the number back with where it came from.

AI is only as good as the data going into it, which is why the checking matters more than the AI. Nothing should read the raw feed from each system. The data has to be standardised and checked against the warehouse's own rules first, such as the service level on each kind of order, how the shifts are set up and which client each piece of work belongs to. Fettle works that way, including Albie, the assistant that answers questions about your operation in plain English.

AI hasn't removed the need to know the warehouse either. It has made that knowledge go further, because what used to take a data project can now be built around the questions a manager asks.

Build across the systems rather than replace them

When the gap is permanent, replacing the system is an expensive way to reset it. A new WMS means a licence, the professional services to put it in, a long project and a go-live. Then the new system starts falling behind the business from the day it goes live, like the one before it.

Building across the systems you already run works the other way. It uses the money already spent and leaves the WMS doing the job it's good at. It also keeps working if you change any of the systems underneath later. Around 80 per cent of the value we've found early on was already inside the operation as it ran, so nothing had to be rebuilt to reach it.

Around 80%

Of the value found early was already inside the operation as it ran, so nothing had to be rebuilt to reach it

From our own work in warehouses, looking at where the early value came from

Alternatives to replacing your warehouse management system

Three questions worth taking to the board

  1. Where is the warehouse bending to fit its systems, rather than the systems fitting the warehouse? The spreadsheets, the whiteboards and the workarounds are the map.
  2. How much of your managers' week goes on collating numbers and explaining the caveats, rather than acting on them?
  3. What is the gap costing in paid hours, agency cover, missed cut-offs and margin on each contract?

What it means for the people running the warehouse

The hours that go on pulling numbers together are the first thing to go. When the facts arrive with the evidence underneath them, a manager's day moves from building the picture to deciding what to do about it: which exception matters this morning, what to change and when to change it.

That's the part no software does, which makes it the part worth measuring. Managers end up judged on the quality of their decisions rather than on how quickly they can build a report. Supervisors see the work the WMS never recorded counted for their teams. Operators are measured against people doing the same job in the same zone. At one 3PL we work with, the weekly, monthly and quarterly client packs are built by hand, which is exactly the kind of time this gives back.

The next step is the day before: bringing tomorrow's orders, the rota and the stock together early enough to act on them. That's where we're taking Fettle. It isn't something Fettle does today. What it does today is show what needs attention in the warehouse now, with the evidence underneath, leaving the decision with the people who know the floor.

See the gap in a warehouse like yours

The demo takes about an hour and is set up for the kind of warehouse you run. It starts from whichever of the four questions matters most to you and shows what your own systems have been recording.

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