Core Supply Chain and Warehouse Management Technology Transformation

Our customer manages the sourcing, storage and supply of healthcare products for NHS trusts and private healthcare organisations across England and Wales. They process around 8 million orders per year delivering to over 16,000 locations. They pick and delivery over 35 million lines of goods annually from their seven depots, sourced from around 1,000 suppliers. They were refreshing their ageing core technology platform used for order processing and warehouse management with a view to provide a solid base on which to grow and improve their service for customers. 

Challenge

The technology platform in use was over 15 years old. The core ERP application used for order management and as a warehouse management solution was at significant risk of failure, with infrastructure and support knowledge and expertise becoming increasingly scarce. This presented a large risk where failure could interrupt the supply of critical, lifesaving products. In addition, this old technology prevented the ability to leverage modern solutions and processes or be flexible enough to meet the evolving demands of the healthcare sector. 

 

It was therefore increasingly critical  this system was replaced with a modern equivalent to provide a base on which to mature the service for customers. They chose to implement Oracle ERP components to manage Product Data and provide Order Management capabilities. Once this was in place, they implemented the BlueYonder Warehouse Management solution, integrating directly with Oracle ERP. The BlueYonder WMS deployment was delivered as part of the opening of a new NHS Warehouse, larger than any of the existing depots. Whilst providing the opportunity to implement on a greenfield site, this did have its own challenges in trying to join old and new technologies to provide a single continuous service across England and Wales.  

 

The challenge was to ensure a seamless transition with no impact to service.  Timely and reliable deliveries were critical to the 24-hour operation of the healthcare sector, to ensure lifesaving equipment and consumables arrived when needed.  

Approach

Order management comprised of a number of “channels” – orders supplied from internal warehouses,  directly from the supplier to customer and items from the supplier but collated within the internal warehouse and delivered by their own logistics. Those orders supplied directly from supplier to customer (eDirect) gave an opportunity for a simpler introduction of the order management technology. It meant this core capability only needed to receive, process and pass on the order to the supplier, thereby proving the basic end to end capability without the complexity of integration to warehouse and logistics systems. The challenge for order management proved to not only be the volume and timing of orders but the vast volume and complexity of customer pricing arrangements, presenting a challenge to the design. Subsequent releases then addressed the remaining channels, enhancing order management alongside the delivery of the new Warehouse Management System. 

 

The opportunity to deploy the new warehouse management solution as part of the opening of a new warehouse removed a significant risk to current operations, allowing for a slower introduction of service on this new technology, rather than needing to switch operations “Big Bang” as would be required in an operational warehouse. This could have been mitigated by moving key customers to be serviced from alternate depots, but this would put pressure on logistics and space. So, having a new warehouse and the fact that it was to replace an existing one gave significant opportunities to de-risk the move. Customers could be transitioned in groups from the old warehouse to the new and there was always an ability to fulfil from the old warehouse in the event of issues. 

 

However, this still presented some operational challenges. The warehouses in the network could not hold all the required stock for the customers it serviced due to space constraints and so inter-depot transfers of stock were required.  This movement of stock across the depot network became difficult as the old legacy systems were not integrated to the new Warehouse Management System and attempts to do this would introduce complexities across the wider legacy applications. This is where the additional space in the new larger warehouse was useful. The stock movement data was analysed, and an approach defined to hold a larger breadth of products in the new location for the customer it would service, thereby reducing the number of inter-depot movements. 

 

The warehouse management solution was delivered in a number of releases with increasing complexity in line with how operations would ramp up. The first release being inbound capability as the warehouse will first need filling with stock. Shortly after a core outbound capability was delivered and then this was enhanced with more complex capabilities. This allowed us to use the application as early as possible and resolve any non-critical issues in a subsequent release, simplifying the fix and test cycles.   

Outcome

Our customer benefitted from work undertaken in several ways.  Not only does it have a new, larger warehouse to better service it’s local customers, but it can also act as a national distribution centre due to the increased size. More importantly, across the whole business they now have improved core systems with greater flexibility on which to build capability, improve efficiency and better respond to customer needs and changing priorities. It provides a solid base on which to begin transforming the business. 

 

In the process of replacing the legacy systems we realised the opportunity to introduce a level of standardisation for some key elements, thereby enabling the reduction of complexity and cost. A single common standard also allows them to better support their customers through simpler processes and making the support of these processes simpler and thus more responsive. Similarly, the introduction of more modern systems removed the risk of failure due to declining availability of knowledgeable and skilled resources to supporting these legacy systems. 

 

Ultimately their customers, will benefit from the work undertaken as some of the known challenges being experienced can be addressed. And they will have access to a larger technical resource pool to develop and enhance its service and respond to trusts evolving needs, leveraging new technologies for efficiency and cost reduction. 

 

Our customer required the support of Project One to bring our expertise in the structuring and delivery of this complex change. We ensured the correct governance and control were in place to move the programme forward.  Our consultants have a depth and breadth of experience, often having delivered multiple, similar projects and this proved invaluable for the success of this programme.  

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