Aligning Procurement and Warehouse Master Data for Seamless Operations
If there is one element that drives success and trust in SAP, it is the reliance on a single source of truth. And that begins with accurate master data. If the data does not truly reflect the behavior or process, then manual intervention is typically needed. The result, inevitably, is inefficiencies and an environment where a firefighter who jumps in to handle disruptions is rewarded.
Warehouse Management (WM) master data begins and ends within the four walls of a warehouse. This data controls the strategies and material flow which automate behavior based on the set rules. The workflow and tasks for the warehouse are then governed by SAP’s additional core supply chain modules such as Materials Management (MM), Production Planning (PP), and Sales and Distribution (SD).
Unfortunately, warehouse materials are too often received in a consistent or predictive pattern and then —without notice or communication—the pattern changes. The warehouse receiving staff usually has a good sense of when the material comes in, how many boxes or pallets have arrived, and where it is located. But they may not know with certainty whether these materials have a fixed bin assignment tailored to their exact size. That subtle consideration may not seem like a big deal, but in most cases, it triggers a chain reaction of inefficiencies and frustration. And, it exemplifies what can happen when integration is broken across the supply chain.
The behavior and pattern of supplying materials into the warehouse is controlled by procurement/materials management. The warehouse team relies on master data settings that control material flow and stocking strategies, but buyers and planners may very well depend on their own master data tabs to control the procurement pattern. Although these are separate supply chain areas, it is crucial to break down silos and to align these two worlds since one has a major impact on setting up the success of the other.
How Master Data Impacts Warehouse Workflows
A key consideration in these integration meetings must be aligning the materials procurement settings Material Requirements Planning (MRP) type and lot size data (MRP 1 tab) to the warehouse settings in stock placement (WM 1 Tab) and palletization data (WM 2 tab).
The MRP type controls the planning process and functions, including material set to forecast, reorder point, and carrying of safety stock. The lot size represents the order frequency/quantity. From the warehouse perspective, the stock placement controls the inbound material flow and determines which bin to place the material in accordance with other rules. The palletization data represents the quantity/units that are on a pallet or unit of measure.
An example of effectively utilizing the procurement rules in the warehouse would be if a material had a reorder point MRP type and a fixed lot size of 1,000 units. In this case, the warehouse can utilize a near picking bin stock strategy and set the fixed bin to a maximum of 1,000units. Additionally, the palletization data can be aligned to the lot size (1,000 units) so the material would not require being broken down or split onto multiple pallets.
Based on the changes of these master data settings, the material would now be received into the warehouse in a quantity of 1,000. If the fixed bin had an existing quantity in it at the time of receipt, SAP would search for the nearest available empty bin to not exceed the maximum of 1,000 units. And, it would keep the lot size/palletization data intact, not breaking up the 1,000 units. If the fixed bin were empty at the time of receipt it would create a true dock-to-stock scenario flowing straight to the fixed bin.
In summary, to be a world-class supply chain, continuous collaboration and communication must exist between the various integration points. Also crucial to success is a clear understanding of the impacts from master data changes and how they may not only affect your area, but also up and downstream supply chan partners.
The faster your organization is educated, the sooner these numerous automation and efficiency opportunities can be unleashed. The opportunities affect not only procurement to the warehouse, but all integration points in SAP.
Take a deeper dive in to this topic by reading our white paper, "Identifying Constraints By Maximizing Production Throughput to Improve Market Shares."
