Warehouse Management with SAP EWM

Balaji Kannapan, Hari Tripathy, Vinay Krishna

• Publisher: SAP PRESS
• Year: 2015
• ISBN:
  9781493212675
• Edition: 1
• Topic: Computer Science
• Subtopic: Computer Science General
• Index: Computer Science

Before we get into the crux of SAP Extended Warehouse Management, this introductory chapter spends some time explaining what SAP is, what SAP Supply Chain Management is, and how SAP Extended Warehouse Management fits into the overall scheme.

1Introduction to SAP Extended Warehouse Management

Instead of just another configuration guide, we want this book to be a one-stop reference for customers exploring SAP Extended Warehouse Management (SAP EWM) as their warehouse management software, for consultants practicing SAP EWM, for consultants aspiring to learn SAP EWM, and for end users getting ready to use SAP EWM. To that end, spending some time understanding how SAP EWM fits into the SAP scheme of things is worthwhile.

1.1The SAP Product Pyramid

SAP has created hundreds of enterprise application software applications, which are mostly related to each other in one way or the other. Although volumes have been written on each of them, we’ll use a simple pyramid to explain the concepts relevant to the scope of this book.

[ ! ]Caution

The SAP product pyramid concept has been created by authors of this book for readers to understand the SAP product portfolio in a simpler way. It’s not the standard way SAP represents its product portfolio.

The pyramid shown in Figure 1.1 shows how SAP products relate to one another. As you can see, the pyramid is divided into four parts, called tiers. The bottommost layer of the pyramid (Tier 1) has the largest base and area without which the tiers above it would have no platform to be based on. Tier 2 sits on top of Tier 1, Tier 3 sits on top of Tier 2, and so on. Also, as we progress from Tier 1 through Tier 4, the base and the area of the tier decrease proportionally.

Now let’s relate this pyramid to the SAP software portfolio. The bottommost layer relates to SAP Enterprise Core Component (ECC), better known as SAP ERP and historically as SAP R/3. Similar to the largest base of Tier 1 of our product pyramid, SAP ERP has the largest adoption within the SAP market. In other words, most of the customers who use SAP software have SAP ERP in their landscape and most SAP consultants around the globe are SAP ERP consultants. SAP ERP consists of various modules, including Sales and Distribution (SD), Materials Management (MM), Production Planning (PP), Warehouse Management (WM), Financials (FI), Controlling (CO), Logistics Execution (LE), and Human Capital Management (HCM). SAP ERP is self-sustained from an enterprise point of view, which means that its modules are generally sufficient to run the functions an enterprise wants from an SAP ERP package.

Figure 1.1SAP Product Pyramid

So if Tier 1 SAP ERP can do pretty much everything that an enterprise needs, you may be wondering what the other tiers are for? Well, the logic is similar to that of upgrading a car after a few years. Although the customer can still buy new accessories and upgrade his old car with them, most people generally tend to buy a new car with those same features. Similarly, after customers use a specific module of SAP ERP for some time and become stable with it, they start looking for newer features to cater to the business processes that they think need more advanced features than SAP ERP offers. This is where Tier 2 in our SAP product pyramid comes into picture.

For instance, a customer using the MM module within SAP ERP for 10 years may realize the need to have advanced contract management functionalities that aren’t contained within SAP ERP. Such customers opt for advanced solutions that fall under our Tier 2 and importantly are related to one or more SAP ERP modules contained in Tier 1. For example, the customers using the MM module within SAP ERP and looking for a legal contract management solution may opt for SAP Contract Lifecycle Management (SAP CLM) as a top up to MM, and the ones looking for advanced auctioning functionalities may opt for SAP Supplier Relationship Management (SAP SRM). Similarly, most SAP ERP modules under Tier 1 have a Tier 2 counterpart that can augment their features when implemented in conjunction with each other. It’s also important to note that one SAP ERP module may have more than one Tier 2 counterpart, and a Tier 2 solution may be a counterpart to more than one SAP ERP module. Just as Tier 2 of our pyramid sits on top of Tier 1, Tier 2 solutions work in conjunction with a module. It’s important to note that, while many Tier 2 solutions can run independently of a module, their full potential is realized only when the corresponding module is implemented as well.

[»]Example

The Tier 2 solutions SAP SRM, SAP CLM, SAP Sourcing, and SAP Supplier Lifecycle Management (SLC) each can run independently of the MM module and of course independent of one another. However, their full functionality is realized when they run in conjunction with MM.

Two or more Tier 2 solutions can also work in conjunction with each other. We’ve deliberately given an example outside of SAP EWM to drive home the point that a Tier 1 SAP ERP module can have multiple Tier 2 solutions.

Although we could write an entire book detailing this concept, in the context of this book, we’ll limit it to stating that MM, SD, LE, and WM are the SAP ERP modules for which the Tier 2 solution is SAP EWM. This implies the following:

• If you are a consultant for one or more of MM, SD, LE, or WM, SAP EWM is a logical progression for you.
• A consultant running any of these four SAP ERP modules may start looking at SAP EWM as a Tier 2 solution for respective business processes.
• You can still learn SAP EWM without being an expert on these SAP ERP modules, but it’s wise to have an overview of them.
• SAP EWM isn’t a replacement of any of these modules; instead, it’s meant to augment what they do within SAP ERP.

In the context of the pyramid, we define Tier 3 solutions as SAP industry solutions, such as SAP for Retail, SAP for Oil & Gas, and so on. SAP industry solutions are derived from various Tier 1 and Tier 2 applications with some additions to make them specific to a particular industry.

Tier 4 solutions are visibility solutions such as SAP Spend Performance Management (SAP SPM). Although Tier 3 solutions have a bit of Tier 1 and Tier 2 as relevant for that specific industry, Tier 4 solutions are specifically meant to run on Tier 1 through Tier 3 solutions and generate reports for top-level executives. The scope of this book will revolve around Tier 1 and Tier 2 solutions.

Now that you have an understanding of the concept of structuring SAP solutions by tiers, let’s take a slightly closer look at the SAP solutions relevant for the scope of this book and see where they fit into the product pyramid.

1.2Introducing SAP Business Suite

SAP bundles a set of fast-moving products together in a package called the SAP Business Suite, which includes the following:

• SAP ERP
• SAP Product Lifecycle Management (SAP PLM)
• SAP Customer Relationship Management (SAP CRM)
• SAP Supply Chain Management (SAP SCM)
• SAP Supplier Relationship Management (SAP SRM)

Other than SAP ERP, which is our Tier 1 solution, the rest of them fall into the Tier 2 of our product pyramid. They, along with the modules they are comprised of, are meant to perform specific business processes in conjunction with their respective SAP ERP counterpart module, for example, MM and SAP SRM. We’ll focus this section on SAP SCM because that is where SAP EWM resides.

The Association for Operations Management (APICS) defines su...