By Gene Linn, AJOTImagine your warehouse serves about a dozen clients, each ordering thousands of products, some of them unique to an individual customer. Clients demand that every single product be available, even those that may not be ordered for weeks. Low-cost, same day or overnight delivery is a must to meet strong competition. And, oh yes, you want to make a profit as well. These are the daunting challenges facing Owens & Minor, a supplier of some $4 billion a year in medical equipment and products. Some of the challenges are shared by distributors of other products all over the US, and some are unique. To cope, Owens & Minor is turning to warehousing software by Descartes Systems Group Inc. that turns warehouse management into a kind of very serious computer game. Owens & Minor runs some 40 warehouses around the country, each strategically located within a two or three-hour drive of client hospitals. Each facility packs about 10,000 different items in its 100,000 or so square-foot area. Products could be anything a hospital uses aside from pharmaceuticals - from surgical instruments to baby food. Many of the items are ordered frequently by all of the clients; some are less in demand and some are used only by one hospital. That means that not everything is a hot item. “We’re not like Wal-Mart,” said Ron Smarsh, manager of process engineering for Owens & Minor. Unlike giant retailers, Owens & Minor’s warehouse cannot dump slow-moving products for more popular items. “If a hospital needs something, we stock it, even some things that are ordered only about once a month.” In addition, demand for some products wanes or even disappears as new products gain favor. Owens & Minor started putting Descartes’ DC Optimizer software into place in the last two years to help manage its massive and complex inventory more efficiently. All 40-odd distribution centers use PCs to access information about each item and track it so it can be slotted according to use. “We keep a 90-day running history,” said Smarsh. “Maybe one product will be replaced by another item and use will slowly fall off. The Descartes system will tell us to move it out of the primary pick area. That’s generally someplace close to the loading dock and on the ground floor level. Whenever another item has enough activity, it will be moved into the primary pick area. If an item has less activity, the system will suggest where to move it.” Ram Krishnan, Descartes vice president for warehousing, acknowledges there is nothing revolutionary about moving items that are in high demand to more accessible locations. “It’s not rocket science,” he said, noting that many traditional “best practices” in warehousing are still valid. The trick is knowing when to use them and on which products. To help make these decisions, Descartes offers a sort of “Gameboy meets warehousing” software program. “DC Optimizer makes a computer model of the warehouse down to the one inch level,” Krishnan said. “There are details of all the products, people and equipment, mimicking the real world. The user can play with different solutions until he finds the optimum one.” Krishnan helped develop this type of software when he ran his own company, before the company was purchased by Descartes, and before Krishnan joined Descartes. His ideas sprang from years of experience as a software engineer for major retail distribution companies. He said it was extremely difficult to get accurate information about order rates for different products and about how the rates changed over time. “It irritated me that no one could give correct information, everyone was making estimates,” Krishnan said. Lack of information was particularly costly because warehouses typically had to be built in short periods of time to meet market demands. There was not enough time to experiment with different estimates to see which was most useful. “The bottom line was that when a warehouse opened, from day one you find that this or that estimate was wrong and you have