Understanding SAP S/4HANA Cloud Warehouse Management

After completing this lesson, you will be able to:

After completing this lesson, you will be able to:

  • Understand SAP S/4HANA Cloud Warehouse Management

Reasons for the Implementation of SAP S/4HANA Cloud Warehouse Management

Introduction to SAP S/4HANA Cloud - Warehouse Management

Deliver the right goods at the right time – every time

The availability of goods is essential throughout the whole supply chain. Whether it is the fulfillment of customer demands, the supply of your own production, or the processes throughout the product life-cycle, the right quantity of materials must be available, at the right point in time. Not being able to deliver your products is not a viable option.

However, you want to avoid excessively increasing the safety stock levels, which leads to increasing storage costs. To find the optimum path between high availability and low total cost of ownership (TCO), a powerful warehouse management solution is required.

SAP offers such a powerful solution, with the warehouse management features included in SAP S/4HANA Cloud. This solution enables you to move products and materials in the fastest, most efficient way possible, together with other applications of SAP supply chain logistics and order fulfillment software. It uses AI, the Internet of Things (IoT), and other technologies to digitize the end-to-end process and optimize everything from warehousing to delivery.

The reason for implementing a warehouse management system is to have the complete overview of the available stock on storage bin level.

Other activities, besides the stock visibility throughout the value chain, include the following:

  • The management of the warehouse resources (forklifts and rack feeders).
  • The management of the workforce (labor management).
  • The tasks of the resources and workforce, inventory levels, and material flows.

A typical warehouse management solution also utilizes technologies, such as, radio frequency, RDIF, voice recognition, or even augmented reality solutions, to achieve these goals.

SAP S/4HANA Cloud Warehouse Management

Some of the advantages of the warehouse management solution included in SAP S/4HANA Cloud, when compared to other warehouse management solutions, such as SAP ERP Warehouse Management, are the following:

  • Warehouse monitor as a central reporting and management tool.
  • Goods receipt optimization.
  • Removes restrictions regarding handling units.

The reasons why companies should select and implement SAP S/4HANA Cloud Warehouse Management include the following:

  • Reduced costs through better warehouse efficiency
  • Increased labor productivity, and better space utilization
  • Increased transparency in stock and processes
  • Quick on-boarding of new customers
  • Strong integration with other SAP solutions

With the implementation of SAP S/4HANA Cloud Warehouse Management you gain access to central features of the standalone SAP EWM application, providing you with the following main advantages:

  • Comprehensive warehouse management processes
  • Full process transparency
  • Flexible automated processes
  • Suitable for medium-sized warehouses (whereas you have the option to connect to the standalone SAP EWM solution for large warehouses)

With SAP S/4HANA Cloud 1811, SAP delivered a completely new application, warehouse management as an integral part of SAP S/4HANA Cloud. With every new release the innovation process continues with new and enhanced scenarios supporting even more business processes. With new apps and new best practice processes, Warehouse Management enables you to accomplish the following:

  • Manage stock on storage bin level for better visibility and control in your warehouse, with a tight integration to your business processes.
  • Map your physical warehouse structure in the system down to storage bin level.
  • Control and record all movements of goods in the warehouse, from goods receipt to goods issue.

Warehouse Management in SAP S/4HANA Cloud offers:

  • Inbound processing, internal processes, and outbound processing
  • Handling units in warehouse management and batch management
  • Data migration, master data maintenance, and output management

Furthermore, we deliver a predefined warehouse structure as a template, which you can enhance using a self-service configuration UI. Warehouse management in SAP S/4HANA Cloud is based on SAP EWM, tailored to cloud usage.

This figure shows the high-level scope of our warehouse management functionality in SAP S/4HANA Cloud. Additionally, SAP S/4HANA Cloud also offers integration capabilities in combination with external Warehouse Management Systems (WMS):

  • With third-party warehouse management systems, available since 1708
  • With SAP EWM as decentralized solution, available since 1805

SAP S/4HANA Cloud - Warehouse Management optimizes your storage and warehousing processes with a cutting-edge warehouse management system. Together with SAP EWM, as part of SAP S/4HANA on-premise, this solution can help you manage high-volume warehouses, production warehouses, transit facilities, and stockrooms across several companies in your organization.

There are several methods available for an SAP EWM implementation:

  • Public cloud or private cloud deployment
  • Comprehensive ERP integration
  • Support for IoT and connected warehouse devices
  • E-Warehouse automation and control

Using the warehouse management solution included in SAP S/4HANA Cloud Warehouse Management, together with standalone versions of SAP EWM, integrates the whole inventory and logistics processes.

Using the application results in lower operational and administrative costs, by integrating the management of all inbound and outbound freight, and warehousing processes as well as improving connectivity with warehouse automation equipment and logistics service providers.

Key Benefits
  • Reduce warehouse costs
  • Maximize the use of resources – such as equipment, space, time, and people – and realize new savings
  • Improve service
  • Reduce order cycle times and offer modern, value-added services to customers
  • Increase productivity and accuracy
  • Standardize processes and procedures, reducing error rates and increasing inventory accuracy
  • Boost transparency
  • Gain new visibility into stock, processes, and utilization
  • Ensure compliance
  • Ensure multinational regulatory compliance for international trade processing and sustainability requirements
  • Optimize warehouse operations
  • Allow mixed and layered pallet building
  • Consolidate and complete partial stock units
  • Set up labor structures and standards to support advanced tracking
  • Provide rich, extended warehouse management functionality across the freight management lifecycle

Warehouse KPIs for the warehouse clerk

SAP S/4HANA Cloud Warehouse Management offers an overview of key performance indicators (KPIs) relevant to your warehouse operations, for example, the total number of open warehouse tasks to be processed on the current date. On the overview page, you can see different types of KPI cards. As a warehouse clerk, these cards help you to better manage and process your daily tasks.

Watch the video to learn more about this feature.

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Connection to External Systems through APIs

Typically, the workers in the warehouse are mainly using external devices like scanner to carry out their daily workload and tasks. SAP EWM for S/4HANA Cloud offers APIs to connect business processes across your system landscape. This improves the efficiency of Mobile execution for Warehousing activities.

The Resource Management in Warehousing (3W0) scope item allows you to leverage interfaces (APIs) for the development of customer-specific apps for warehouse task processing on mobile devices. In addition, it enables you to manage your warehouse resources, such as a user or equipment that executes work in the warehouse. A resource is mandatory to process warehouse orders and tasks with the APIs.

  • Increase the efficiency of warehouse processes
  • Enable customers to manage warehouse resources
  • Optimize workload for a dedicated warehouse resource
  • Reduce additional work caused by paperwork
  • Use Resource Management for mobile warehouse execution
  • Integrate with mobile warehouse task processing
  • Implement customer-specific apps for mobile warehouse execution for instance via the SAP Mobile Development Kit

APIs are offered for several activities in the warehouse are as follows:

  • Process Warehouse Tasks
  • Warehouse Resources
  • Warehouse Outbound Delivery Order
  • Warehouse Physical Inventory
  • Warehouse Storage Bin
  • Warehouse

Features of SAP S/4HANA Cloud Warehouse Management

Warehouse Management provides support with and real-time transparency into managing and processing material movements flexibly in a warehouse with its own stock.

Warehouse Structure

Warehouse Management supports and enables you from the very beginning, starting with configuring your warehouse, to do the following:

  • You define the warehouse number that identifies the warehouse.
  • You define storage types based on predefined templates.
  • You define the units of measure and the number ranges to be used in the warehouse.
  • You define the tolerances for posting differences in physical inventory.
  • You can create storage bins.

Inventory Management

You can map your warehouse in the system. This gives you an overview of the total quantity of each product in the warehouse. You can also always see exactly where a specific product is, at any time, in your warehouse.

You can manage the product quantities in different stock categories on the following levels:

  • At storage bin level
  • On staging areas for receiving, shipping, and production supply
  • In handling units

You can store and manage batch-managed products in your warehouse. You can also upload your stock from a file during your warehouse set-up.

Handling Units

A handling unit is a physical unit consisting of packaging materials (load carriers or packing material) and the goods contained in it. It is always a combination of products and packaging materials. All the information contained in the product items, for example, about batches, is retained in the handling units and is available as long as it is used in the warehouse.

A handling unit has a unique identification number.

Inbound Processing

When a truck arrives at the warehouse, the driver takes the delivery note to the office. If you want to compare the delivery in the system with the delivery note and change the delivery in case of differences, you can use the Change Inbound DeliveriesSAP Fiori app. With this app, you can change the delivery quantity, delete delivery items, enter batch information, create or change handling units, and post goods receipts.

You can also add items to the delivery based on a purchase order for an open delivery, for example, if some of the goods that have been delivered belong to a different order of the following entities:

  • Vendors
  • Production
  • Other parts of your company
  • Customer returns that have been returned to another storage location

You can create and confirm putaway tasks for the putaway of the products.

You can trigger quality checks for products received from external vendors or from production during goods receipt posting.

Quality Management Integration in Warehousing

With the 1902 release, quality management is integrated into warehousing. By performing quality inspections during goods receipt, you can inspect the products which have been delivered from production or external suppliers before the putaway in the warehouse takes place. You can also record usage decisions for partial lots, when, for example, only some of the stock items in the inspection lot are of good quality.

Outbound Processing

You can pick products and send them out of your warehouse for the following scenarios:

  • Send ordered product to external customers, or internal customers, such as other plants
  • Supply products to production
  • Return products to vendors
  • Supply products to internal consumers, for example, a cost center

You can post goods issue for the delivered products.

With the Run Outbound Process SAP Fiori app, warehouse clerks can monitor the outbound process based on outbound deliveries. In the overview screen, you have all relevant information about the deliveries that are planned for one day or several days. With this information, you can create tasks to trigger the picking process. You can also post goods issue.

Output Management

Output management is an essential part of the new functionality. Warehouse management in SAP S/4HANA Cloud offers predefined print forms for handling unit labels, shipping handling unit labels, pick lists, putaway lists, warehouse task lists, and loading lists.

Internal Warehouse Management

You can plan, create and confirm tasks for moving products to different areas inside the warehouse.

You can perform ad hoc internal warehouse movements from the warehouse monitor.

You can also repack stock in the warehouse, for example, splitting a pallet into two pallets or adding a product to another pallet.

You can change stock attributes, for example, by posting free stock into quality stock or blocked stock.

Physical Inventory

You can plan, conduct and confirm regular counts of actual product quantities in the warehouse and compare the physical stock to the data in the system. For example, cycle counting or a scheduled yearly count. Following the count, you can update the data for the stock in the case of differences between the quantity of physical stock and the quantity in the system.

Warehouse Monitor

You can use the warehouse monitor to keep constantly up-to-date as to the current situation in the warehouse, and to initiate appropriate responses to situations that arise.

The warehouse management monitor gives you full transparency about the following attributes of your warehouse:

  • Warehouse activities
  • Stock and bins
  • Executed movements
  • Planned movements
  • Inbound deliveries
  • Outbound deliveries
  • Products in the warehouse

The warehouse monitor also contains alert monitoring capabilities, which highlight actual and potential, problematic situations in the warehouse.

Integration with External Warehouse Management System

SAP S/4HANA Cloud supports an integration scenario for logistics execution processes with an external warehouse management on premise system, that is, SAP Extended Warehouse Management (SAP EWM) as of Release 9.5 Feature Pack 02.

This connection offers the following key features:

Transfer of Master Data

You can use this feature to transfer warehouse-relevant master data (for example, material, customer, and supplier) from the SAP S/4HANA Cloud system to your external warehouse management system.

Integration of Inbound Processing (Goods Receipt)

This feature supports the inbound process from procurement, stock transport orders, or from customer returns. When you create a goods receipt in your external warehouse management system the data is transferred to the SAP S/4HANA Cloud system for further processing.

Integration of Outbound Processing (Goods Issue)

This feature supports the goods issue from sales process, or from stock transport order processes. You can create a delivery in your SAP S/4HANA Cloud system and transfer it to your external warehouse management system for further processing.

Integration of Production (Production Supply and Goods Receipt from Production)

This feature supports the delivery-based production process.

Production Supply

You can create an outbound delivery from production in SAP S/4HANA Cloud. The outbound delivery is transferred to your external warehouse management system for further processing.

Goods Receipt from Production

When you create a goods receipt in your external warehouse management system, the data is transferred to the SAP S/4HANA Cloud system for further processing.

Recent enhancements in SAP Cloud for Warehouse Management

Ever since the release of SAP S/4HANA Cloud 2105, the warehouse management capabilities have been improved and extended in several ways bringing the solution even more closer to the standalone SAP Extended Warehouse Management solution.

  • Enhancement of warehouse types creation and setup

    You have much more configuration options for your warehouse types similar to the configuration options in the SAP S/4HANA Private Cloud SAP Extended Warehouse Management solution.

  • Enhanced fields in storage bin

    With the new fields available in the storage bin maintenance, you achieve more flexibility in defining the warehouse layout. New attributes include storage sections, storage bin types and bin access types.

  • Staging areas

    Staging areas can now be determined for inbound and outbound processing based on your configuration.

  • Own work centers

    With the option to define work centers and apps for packing products and creating nested handling units you achieve more flexibility in the configuration of work centers and more variety of packing options

  • Serial numbers on bin level

    With the support of stock-based serial numbers throughout the whole warehouse processes you can use serial numbers for searching and selecting products in the warehouse based on the serial number.

  • Flexible putaway strategies

    With new flexible putaway strategies you can determine the most suitable storage bins during putaway. Among the new configuration options you have the possibilities to define putaway control indicators, bin sections or storage type controls.

  • Flexible stock removal strategies

    With storage type search sequences you find the best suitable bin in the warehouse for stock removal across multiple storage types.

  • Layout oriented storage control

    Layout-oriented storage control allows you to define intermediate storage bins in order to move products from a source bin to a destination bin using an intermediate location (for example, because change of equipment is required or change of carrier handling unit)

  • ABC analysis of products

    With the new app to perform ABC analysis you can categorize the importance of products based on confirmed warehouse tasks to update the putaway strategy of the affected products based on the ABC classification.

  • Enhanced Replenishment

    In addition to planned and automatic replenishment, you now also have the option to carry out order related replenishment where the system calculates replenishment quantities based on the quantity of open outbound delivery orders

  • Additional physical inventory scenarios

    In physical inventory processing you are now able to capture stock based on serial numbers (C-serial numbers). In addition, you can now carry out ad hoc counting, low stock check and putaway physical inventory processes

Capabilities of SAP S/4HANA Extended Warehouse Management

Inbound Processing Management:
  • Validate data for advanced shipping notifications
  • Receive goods and optimize receipt processes
  • Accept direct receipts from production
  • Support put-away activities and bin determination
  • Storage and internal process control
  • Multiple stock ownership
  • Physical inventory and cycle counting
  • Visibility of stock in the yard
  • Status of material handling equipment
  • Validate data for advanced shipping notifications
  • Receive goods and optimize receipt processes
  • Accept direct receipts from production
  • Support put-away activities and bin determination
  • Storage and internal process control
  • Multiple stock ownership
  • Physical inventory and cycle counting
  • Visibility of stock in the yard
  • Status of material handling equipment
Fine-tuning for Outbound Processes:
  • Schedule pick/pack/ship activities in two waves
  • Create optimized work packages
  • Stock selection according to attributes and packaging
  • Augmented reality and voice picking
Cross-functional Features:
  • Specify packaging
  • Manage batches, serial numbers, and catch weights
  • Schedule dock appointments
  • Perform cross-functional analytics, support compliance, and traceability processes
Enhanced Capabilities with SAP S/4HANA:
  • Enhance logistics with in-memory technology
  • Improve basic warehouse management processes
  • Enhance stock transparency and control, by focusing on inventory management, inbound and outbound processing, goods movement, physical inventory, and reporting

With the option to integrate the S/4HANA Cloud Warehouse Management solution in your organization landscape, running SAP EWM, you gain access to the features offered by advanced warehouse management. These include the optimization of material flow control, yard management, labor management, value-added services, kitting, and cross-docking.

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