Positioning Warehouse Management

Objective

After completing this lesson, you will be able to differentiate between available warehouse management solutions

Warehouse Management

Note

See the following video to learn more about the differences between Inventory Management (IM) and Warehouse Management (WM):

SAP S/4HANA Warehouse Solutions

SAP S/4HANA offers different solutions for warehouse management.

In SAP S/4HANA, LE-WM is available until the end of 2025. Stock Room Management and embedded EWM are also available within SAP S/4HANA. A decentralized EWM (on-premise) solution is also available.

SAP S/4HANA offers different solutions for warehouse management: the classic Logistics Execution Warehouse Management (LE-WM) solution (from SAP ERP) can still be used and will be supported up until 2025. SAP Extended Warehouse Management (SAP EWM) can be used either as an embedded solution or decentralized. Starting from SAP S/4HANA release 1909, there is also a basic warehouse management solution available called Stock Room Management which is very similar to the SAP ERP Warehouse Management solution (LE-WM) but much more streamlined. For example: Task and Resource Management (TRM) is not supported in Stock Room Management.

Warehouse Management LE-WM:

The classic SAP ERP solution for warehouse management LE-WM is part of SAP S/4HANA through a Compatibility Package (CP). This provides customers with a limited use right which expires on December 31, 2025. The inclusion of LE-WM in SAP S/4HANA helps customers migrating from SAP ERP to SAP S/4HANA to start using some of the advanced features of SAP S/4HANA without having to also immediately migrate their warehouse management solution at the same time. For existing customers that do not require complex warehouse processing in their SAP S/4HANA system, with release 1909 of SAP S/4HANA a basic warehouse management solution has been introduced in SAP S/4HANA called Stock Room Management.

The solution LE-WM is not the target architecture in SAP S/4HANA for Warehouse Management. The target architecture is either Stock Room Management or SAP Extended Warehouse Management (SAP EWM) depending on customer needs. For details of Compatibility Packages see SAP Note 2269324 - Compatibility Scope Matrix for SAP S/4HANA on-premise.

Stock Room Management:

Stock Room Management is a specific offering within SAP S/4HANA for installed base customers to continue running a basic warehouse management implementation in the context of SAP S/4HANA beyond 2025. The license for Stock Room Management is included in the SAP S/4HANA Enterprise Management component.

The main reason for adding Stock Room Management to SAP S/4HANA is to give existing customers of LE-WM an opportunity to keep their existing LE-WM warehouses after 2025 that do not benefit immediately from moving to (embedded) SAP EWM.

Stock Room Management is relevant for small warehouses with manual operations that manage stocks on storage bin level. LE-WM features that are not supported in Stock Room Management include:

  • Task and Resource Management (WM-TRM)
  • Warehouse Control Unit interface (WM-LSR)
  • Value Added Service (WM-VAS)
  • Yard Management (WM-YM)
  • Cross-Docking (WM-CD)
  • Wave Management (WM-TFM-CP)
  • Decentralized WM (WM-DWM)

SAP Extended Warehouse Management (SAP EWM)

SAP EWM offers flexible, automated support for processing various goods movements and for managing stocks in a warehouse complex. The system supports planned and efficient processing of all logistics processes in a warehouse.

There is a difference in terms of available functionality between Basic Warehouse Management and Advanced Warehouse Management for embedded EWM. The advanced variant supports functionality to optimize warehouse operations, like cross-docking and kitting.

SAP EWM can be installed as standalone or be connected to an SAP S/4HANA system. Embedded SAP EWM is also available. Embedded means that no separate system is required and therefore SAP EWM can be used as a direct replacement for LE-WM. EWM is in such a set-up completely embedded within the SAP S/4HANA system.

When they are using embedded SAP EWM in SAP S/4HANA, customers can choose to implement the solution in a basic way or more extensive for each individual warehouse, depending on their local needs.

For details about the differentiation between Basic and Advanced Warehouse Management as well as for the difference between embedded and decentralized SAP EWM, see for example SAP Note 3376453 - SAP S/4HANA 2023 FPS00 and FPS01: Release information and restrictions for EWM in SAP S/4HANA.

SAP Extended Warehouse Management (EWM) Capabilities

SAP EWM is a comprehensive solution which offers flexible, automated support for processing various goods movements and for managing stocks in a warehouse complex. The system supports planned and efficient processing of all logistics processes in a warehouse.

SAP EWM supports inbound processing, storage and operations and outbound processing.

Inbound processing functionality includes transportation unit processing, goods receipt management and optimization, inbound quality management, and internal routing. This enables a company to accomplish the following:

  • Optimize the use of manpower (labor)

  • Facilitate cross-docking

  • Streamline receiving and dock management

  • Optimize inventory placement in the warehouse through flexible put-away strategies

  • Improve inbound inventory visibility

Storage and operations functionality includes physical inventory, slotting, replenishment and rearrangement, kit-to-stock management, value-added services, transit warehousing, and warehouse billing. This enables a company to:

  • Track every unit down to the lowest level of detail

  • Continuously manage inventory balances

  • Reduce the effort required for annual physical counts

  • Eliminate inefficient movement and redundant effort

  • Improve facility utilization

Outbound processing functionality includes outbound planning (including route, wave, and bin planning), picking optimization, packing, staging, and load management. This enables a company to do the following:

  • Improve inventory accuracy and availability

  • Reduce picking, shipping and billing errors

  • Increase customer service levels due to high efficiency and accuracy

  • Shorten order turn-around times

  • Provide value-added services quickly

  • Take advantage of cross-dock opportunities

SAP EWM offers integration to mobile devices and RFID scanners as well as to automated warehouse technologies like conveyors, picking systems and automated storage and retrieval systems.

Types of SAP EWM Warehouses

SAP EWM can be used for different types of warehouses that have different requirements.

The following types of warehouses can be supported by SAP EWM: production warehouses, service parts warehouses, distribution centers, and cross-dock or transit warehouses.

Types of warehouses and their main tasks could be:

  • Production Warehouse:

    • Raw-materials handling

    • Integration of quality management

    • Production supply

    • Receipts from production

    • Materials staging and consumption

  • Distribution Center:

    • Complex process and high volume

    • High degree of automation

    • Wave management

    • Slotting and rearrangement

    • Replenishment

  • Service Parts Warehouse:

    • Low to very high complexity

    • Kitting and value-added services

    • High volatility

    • Serial numbering

    • Heterogeneous product ranges

  • Cross-Dock or Transit Warehouse:

    • Regional hubs, gateways, and container freight stations

    • Air and ocean freight handling

    • Unit-load devices and containers handling

    • Receive from and sent to airport or seaport (drayage)

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