Dr. Ravi Surya Subrahmanyam, PhD (Finance),
Director, SAP Practice
Ravi Shankar Bhogaraju, BE, MBA,
Director- SAP Practice & EWM Architect
May 5, 2021
Many businesses today struggle to keep up with customer demands while maintaining costs. Inventory levels should be optimized to satisfy customer orders and supply production with raw materials. By implementing a Warehouse Management System, your business can enhance inventory management by decreasing inventory levels, improving order fulfillment, and reducing order cycle time. When it comes to SAP solutions specifically engineered for the warehouse and fulfillment areas of business, SAP has two offerings:
- SAP Warehouse Management (WM)
- SAP Supply Chain Execution (SCE) Extended Warehouse Management (EWM)
SAP WM is the traditional solution that has been around since the early 90s. Organizations might choose to implement SAP WM if they have simpler operations and/or have more basic (paper-based) handling processes. However, the basic functionality of SAP WM has been expanded further with SAP EWM and it is generally a better fit for small, medium, and large enterprises requiring extensive material handling. With SAP EWM your organization can achieve comprehensive warehouse management processes, full process transparency, flexible automated processes, high-performance, and high-volume warehouse operations. SAP EWM is also suited for both medium and large-sized warehouses. Let’s review some of the benefits of SAP EWM.
Benefits of SAP Extended Warehouse Management in SAP S/4HANA
SAP EWM provides customers the option of mapping your entire warehouse in detail in the system, giving you control to optimize various processes in the warehouse. The SAP EWM solution covers complex warehouse processes across the whole supply chain by offering customizable processes and supports direct integration to fully automated warehouses.
If you are an SAP WM user, migrating to SAP EWM reduces costs through improved processes and productivity of the warehouse by added capabilities within SAP EWM. It also offers added flexibility and improved visibility to help with automated support for processing various goods movements and for managing stocks in your warehouse complex.
For example, SAP EWM enables warehouse workers to know exactly when to pick a part and how to move it to the next bin – the system can even plan exactly where to put a truck in the yard and when it is directed to the door to unload parts. SAP EWM is also now embedded in SAP S/4HANA.
This allows it to offer best-in-class warehouse management applications that provide real-time transparency for the whole supply chain. When compared to SAP WM, EWM gives customers the same functionality with additional capabilities. Here is a comprehensive list of new and improved functionality.
- Internal Routing
- Expected Goods Receipt
- Unloading of Transport units
- Labour Management
- Decentral Quality Inspection
- Warehouse Automation (MFS)
- Put Away Strategies
- Removal Strategies
- Wave Management
- Handling Unit Management
- Yard Management
- RF Technology
- Resource Management
- Value Added Services/Kitting
- Cross Docking
- Dynamic Cycle Counting
- Multi-Client Warehousing
- Flexible Process Modelling
- Layout Modelling
SAP EWM is a self-contained application, but it requires integration with an SAP ERP system to access master and transaction data. Use of some functions in SAP EWM requires an interface with SAP applications and systems such as Customer Relationship Management (CRM), Global Available to Promise (Global ATP) in an Advanced Planning Optimizer (APO).
SAP Extended Warehouse Management can also consider it as an application in the Supply Chain Management landscape (SCM) and shares the same server with the SCM applications. You can also run SAP EWM in its own SCM environment which is suitable to get improved performance.
WM Customers can enable a quick migration to EWM
You have options when it comes to migrating to SAP EWM. One option is taking SAP EWM to the next level with an embedded solution as part of SAP S/4HANA. Like SAP WM, the end-of-maintenance deadline for SAP ECC is coming up in the next few years. SAP encourages all its customers to eventually migrate over to SAP S/4HANA as part of its intelligent enterprise initiative.
If it’s not already part of your company’s business strategy for the future, the first step is to get everyone on board with the idea. SAP has not made enhancements to SAP WM in some time, and it does not plan to move forward. All future innovations will be made in SAP EWM. This might be a key reason why your organizations might want to make the move to S/4HANA.
Many of the customers using SAP WM might be interesting to move quickly and easily to take over the existing structures and settings into SAP EWM. As a first step in the warehouse number migration, it is necessary to integrate the ERP warehouse number to an EWM warehouse number. In SAP ERP, a warehouse number is used to represent the physical warehouse where all the material is stored. A warehouse number is a three- or four- character field in SAP Warehouse Management or Extended Warehouse Management respectively.
Warehouse numbers are created in the ERP system, and to activate it you use a combination of plant and storage location assigned to this plant with the respective warehouse number. You can set up the integration manually, but SAP EWM also offers a tool to automatize this integration on the SAP EWM side. When migrating an existing warehouse number to SAP EWM the storage location needs to be assigned to an availability group and some other assignments are necessary for the integration as well.
It is important to highlight the fact that functionalities like Task & Resource Management (LE-TRM), Value Added Service (LE-WM-VAS), Yard Management (LE-YM), Cross-Docking (LE-WM-CD), Wave Management (LE-WM-TFM-CP), Decentral Warehouse Management (LE-WM-DWM) and Warehouse Control Unit Interface (LSR) are not a part of Stock Room Management.
The features of SAP EWM are an essential part of SAP Digital Supply Chain Management (SAP SCM). Every organization has specific business requirements and buying a one-size-fits-all solution is not practical and will introduce risk into the ROI of your SAP landscape. It is crucial when deciding on a move from SAP WM to SAP EWM that a full review of your Warehouse Management requirements is conducted. This will help you evaluate the solutions according to your specific strategic need. Developing a robust warehouse evaluation process for a new SAP EWM solution will help you gain a better understanding to determine if SAP EWM will support your business’ growth plans, provide incremental ROI and can be implemented against required and given timeframes.
Answerthink has helped many organizations evaluate and support their SAP Warehouse Management System platform selection process, and provided input to the corresponding business case, working against key phases from preparation, discovery and evaluation, through ongoing support.
If you wish to gain access to your individual WMS Evaluation report across all discovery phases, please contact us.