Warehouse Management with SAP S/4HANA

Embedded and Decentralized EWM

Namita Sachan, Aman Jain

• Publisher: SAP PRESS
• Year: 2020
• ISBN:
  9781493219162
• Edition: 2
• Topic: Informatica
• Subtopic: Informatica generale

1 Warehouse Management in SAP

Warehouse management is a key component in supply chain management. In this chapter, we review SAP’s warehouse management solutions and their benefits, deployment options, and available features.

As supply chains expand globally, they put operational and cost pressures on companies to maintain visibility into their inventory and shipping processes via tracking. For more than 40 years, SAP has been working with thousands of customers to resolve complex IT challenges. SAP has launched many packaged applications, such as SAP ERP, and integration solutions, such as SAP Supplier Relationship Management (SAP SRM) and SAP Customer Relationship Management (SAP CRM), to cater to various business processes. SAP S/4HANA brings these applications together on a single platform and database, resulting in a massive reduction in costs. All this helps to simplify business processes by providing seamless integration with various application areas.

In this introduction to warehouse management, we first outline in Section 1.1 the process of warehouse management and the warehousing challenges faced by businesses today. Section 1.2 then describes the SAP warehouse management solutions, including the evolution of warehousing solutions offered by SAP over time and the various deployment options available. Section 1.3 covers the various migration scenarios that may precede business planning to migrate to embedded Extended Warehouse Management (EWM) in SAP S/4HANA (embedded EWM) and how they can be handled. In Section 1.4, we’ll cover the deployment options available: embedded EWM, decentralized Extended Warehouse Management on SAP S/4HANA (decentralized EWM), and stock room management. Section 1.5 covers a key feature in embedded EWM: division of available functionalities among end users based on business requirements and licensing mechanisms.

1.1 What Is Warehouse Management?

A warehouse management system (WMS) is a software application that a company uses to manage its day-to-day warehousing operations. This includes stock monitoring, managing incoming and outgoing stock, and performing maintenance work on stock in the warehouse. A clear overview of stock and open requirements enables businesses to manage staffing and utilization of available resources, produce more efficient material requirements planning (MRP), and keep an optimum stock level in the warehouse.

A WMS can be a standalone application or a built-in application within the company’s enterprise resource planning (ERP) system. A company’s requirements for a WMS can vary depending on the scale of business and the complexity of business processes. The underlying functionality of a WMS is to receive orders and help execute picking or stock putaway. WMSs have evolved over time to cater to changing, complex, and data-intensive business requirements. The functions of a WMS not only carry out day-to-day warehouse operations but also help carry out these operations faster and better. These systems are adopting next-generation technologies such as pick by voice and the Internet of Things (IoT) to improve warehousing operations.

The warehouse management process itself incorporates controlling the storage and movement of goods in the warehouse and processing related transactions, such as picking, putaway, and internal warehouse movements. In the multi-echelon model for distribution, there may be multiple levels of warehouses, including a central warehouse, a regional warehouse (serviced by the central warehouse), and sometimes retail warehouses (serviced by the regional warehouses). Complex warehouse management also uses automatic identification and data-capture technology, such as barcode scanners, mobile computers, wireless local area networks (LANs), and potentially radio-frequency identification (RFID) to monitor the flow of products efficiently.

Because we operate in a world of increasing complexity and constant change, warehouse management faces a host of challenges. Expanding omnichannel markets are forcing manufacturers and distributors to change how they sell to consumers. Customers today demand perfect orders. Failure to meet service levels leads not only to fines and chargebacks from powerful retail customers but also costs incurred to correct the imperfect orders.

Another challenge companies are facing is that the value of the order (order size) is decreasing while the number of orders continues to increase. This puts pressure on the company’s logistical capabilities because it still needs its available-to-promise (ATP) inventory, but all at a larger order-volume level. Companies need to automate repetitive tasks to save time spent on individual orders.

Figure 1.1 shows some of the challenges in warehouse management in the real world. Given these factors, manufacturers and distributors are faced with escalating costs and complexity that drive demands for grea...