How Utilizing WM
Will Prepare Your
Supply Chain for EWM
Warehouse Management (WM) is essential in the best of times to boost
efficiency, integrate a myriad of warehouse functions to improve service
levels and reduce operating costs. But when fluctuations and crises of
supply and demand enter into the picture, the need to improve supply
chain agility and keep customer promises takes on a whole new urgent
At a time when customers expect goods faster than ever before, periods
of disruption can become an obstacle to fulfilling world-class Available to
Promise (ATP) service levels. The disruption to warehouse efficiency can
come from many sources: demand volatility caused by a “black swan”
event like COVID-19 or a natural disaster such as a hurricane or earthquake.
Or it could flow from a new product introduction—a new iPhone model or
Fitbits, for example—or a particularly successful marketing campaign that
causes demand to surge above supply. Unexpected fluctuation, when the
supply chain is not meticulously automated and managed, has the power
to cripple warehouse material flow, both inbound and outbound.
Fortunately, there are many strategies and standard tools to help mitigate
short-term disruptions and risks to customers. Times of disruption are the
perfect opportunity to assess your supply chain traceability and visibility.
Warehouse Management offers a tremendous hidden potential to
automate and streamline processes to be prepared
for fluctuating demand, navigate rocky periods and
in the best of times, seize a leadership advantage.
Although more and more companies have been
implementing Warehouse Management in the past
decade, the adoption rate still doesn’t exceed 75%
according to Flock Freight.
Let’s start with the obvious: it doesn’t matter if you have the most
contemporary and advanced warehouse unless it is operating in the most
efficient manner. If your warehouse is experiencing misalignment between
supply and demand, diminished visibility, or lack of inventory accuracy, it
will very likely lead to higher-than-necessary operating costs, a low profit
margin, and failure to meet service levels.
With an abundance of moving pieces, Warehouse
Management SAP’s original warehouse management
system, is designed to ensure that all functions of
the warehouse are integrated by providing true
visibility. Primarily, the goal is to manage the stocks
showing available in SAP, covering all transactions
including the shifting of goods from one place to
another, and effectively introducing operational
tasks. With its pick-and-put away techniques, the flow
of material becomes very smooth. And, Warehouse
Management’s layered-down granularity fuels real
insight into inventory levels, storage and movement,
which can then be used for informed decision-making.
Warehouse Management Integration
WM helps organizations tackle
challenges related to maintaining
inventories in a systematic and
economical manner. Perhaps the
biggest reason why it succeeds is its endto-
end integration— achieved through
automated procurement with real-time
updates. For example, WM seamlessly
works with sales and distribution,
efficiently integrating sales orders. It
provides real-time updates with radio
frequency identification devices such
as scanners, barcoding, voice picking,
and check digits. It confirms quality
management inspections before
enabling the acceptance or completion
of inventory. And, for production
planning, it meets control cycles while
identifying production supplies areas
and material staging types.
By optimizing integrated operational procedures, organizations gain the
ability to stay on top of everything and ensure that everything is in its right
place. Organizations can quickly answer questions like:
• Did we plan accordingly?
• Did we prepare for a spike in a certain material?
• Was there any part of the process that is out of alignment?
• How are supply chain service levels affected by a particular
Through Warehouse Managment, organizations can readily determine
whether their inventory count is accurate. And, they can trace material
movement, maximize utilization of warehouse space, and streamline picking
and put away processes. The result is a well-oiled and seamless warehouse
system that controls every step of how a material behaves and is managed,
driving efficiencies and optimizations.
With these benefits in mind, many organizations implemented SAP’s
Warehouse Management module anticipating large efficiency gains
and inventory traceability. However, many of them eventually discover
a different reality: while inventory traceability has largely improved, the
efficiency gains are still elusive.
Gaining Efficiencies in the Warehouse
The first issue for organizations to address for optimal WM utilization is
housekeeping, housekeeping, and more housekeeping. This is not the
physical type of housekeeping (keeping your warehouse clean and
organized), this is the systematic housekeeping in ensuring the correct
warehouse structure is aligned to the rules/material master settings. Getting
this right is the most critical first step in being a world class Warehouse
Mangement warehouse in eliminating manual decisions and having SAP
working for you tailored to your business environment.
Through Warehouse Management’s warehouse activity monitor—WM’s
supply chain service level tool—late transactions and tasks related to
the warehouse are quickly displayed and broken into subcategories of
movement type and storage type (TO, TR, Deliv). The warehouse activity
monitor is typically utilized by warehouse process owners who can go in
and provide corrective action or seek additional details of the late task.
As a result, if there are discrepancies between rules (master data settings)
and behaviors, it is easy to get to the root cause and rapidly correct the
Additionally, Warehouse Management
provides warehouse-specific tools that can
help alleviate supply chain disruptions. The
Shelf Life Control List Report is a standard
tool used in warehouse environments with
expiration dates and assists with identifying
aging materials so that warehouse staff
can best manage and take action to pick
the oldest aged material before others.
After becoming adept at performing housekeeping functions such as
consistently aligning rules and behaviors, performance tuning, and deleting
what is no longer needed, the next important step for organizations is to
analyze the reality.
Warehouse Management offers
an embedded logistics
information data analysis tool that
breaks down the arterial supply
flow into buckets. As a result,
you can quickly view frequently
moved material, check out the
flow of material in a particular
month and develop a series of
time graphs that speak to time
slotting, material seasonality and
bin allocation. These insights
are crucial to driving strategic
decisions; for example, where
will an in-demand material go
next if you are over capacity in a
specific storage type?
The System Lets You
Did we have sufficient
Did we plan accordingly?
Did we prepare for
that spike in a specific
The third imperative is to effectively group and prioritize utilizing storage
sections and storage bin types and prioritizing your put away process. By
gaining control of where you want to place materials in a set of storage
bins, you can make informed decisions on how to sequence your materials
and determine which materials should go to which sections.
The benefits of grouping and prioritizing enables increased throughput and
efficiency gains. For example, a material that is assigned to the correct
storage bin type will maximize the cube of the bin or minimize disruptions.
Consider, for example, a long product that needs wide racking because it
won’t fit in a traditional bin size. And, fast moving, high velocity materials
can be assigned a storage section closest to the beginning of the picking
path to reduce the travel distance for picking.
By taking these necessary and vital core structural steps, you ready yourself
for seamless migration to Extended Warehouse Management (EWM) while
experiencing instant gains in productivity and efficiency beforehand.
EWM Continues the Journey to Enhanced Efficiency
First, let’s define what EWM does. As SAP’s
latest and most advanced WM, it possesses
all the great functionality of WM along with
flexible, automated, embedded support of all
logistics processes in customer warehouses.
Although SAP will continue to support WM until
2030, they will not be enhancing it, and all new
warehouse functionality will be included in the
Both WM and EWM assist in efficiently managing the warehouse and
enabling inventory visibility, providing a warehouse environment you can
trust. The myriad benefits of either include:
• Improved process efficiency, service, and costs with
correct or enhanced utilization of storage types, storage
bins, control cycles, and production storage areas.
• Warehouse capacity and automation improvements via
correct stock placements (put-away) and stock removal
(picking) strategies, replenishments, and capacity usages
• Seamless and automated product integration with
production planning for material staging of process/
• Improved inventory accuracy and material availability with
cycle counting, barcode scanning, and inventory method
• Enhanced visibility, service levels, and shelf lives from
managing by exception in standard SAP reports
• Faster returns processing with integration linked to sales
orders and account data ensuring that inventory, financials
and orders are all updated in real time
According to a recent
survey we conducted.
83% of respondents
are using WM
10% have evolved
7% Use another tool
In addition, both WM and EWM offer improved data to quickly identify
potential inventory issues and warehouse productivity reports—leading to
an educated and empowered warehouse management supply team.
Moving to EWM: How Is It Different?
All that is well and good. EWM takes all these benefits to a whole new robust
capabilities level, mapping an entire warehouse complex in detail down to
the storage bin areas.
EWM empowers organizations to
control and record all warehouse
movements—from goods receipt
to goods issue—while expanding
visibility and control. Additionally,
it extends the scope of S/4HANA
core processes. Fully integrated
with Fiori dashboards, operational
reporting of inbound and outbound
materials, a smart business
dashboard, real-time predictive
analytics, labor management
reporting, and a warehouse
cockpit, EWM increases efficiency
and throughput. Through EWM, it
becomes possible to evaluate or
monitor activities using defined
chart types, thereby attaining
efficiencies that were once
Among the planned innovations are these:
• User-friendly experience with simplified Fiori tile layout that
doesn’t require knowledge of menu paths
• Improvement in monitoring and tracking with new Warehouse
Monitor and Resource Management
• Optimized integration between EWM and production
• Improved yard visibility and on-time delivery performance
from the new Shipping Cockpit
• Greater labor management productivity with the ability to
track how efficient employees are without resorting to a thirdparty
• Enhanced warehouse insights through improved Fiori
In a nutshell, EWM allows you to assign resources or users to specific tasks
and orders and integrate every process from end-to-end. With advanced
warehouse functionalities that are ideal for medium to large warehouses
with medium to high complexity processes, EWM adds more refinements and
layers. The result is an astounding capability for multiple industries to handle
large volumes of transactions with the faster times required, particularly in
consumer product industries.
Preparing Your Supply Chain for EWM
First, determine what version of EWM best suits your needs by mapping out
who you want to be. Will your organization need basic or more advanced
warehousing management features? Be realistic in your goals.
Next, learn what functionality carries over from WM to EWM. With additional
features such as greater control of storage types—storage sections or
storage bin types—EWM is far more granular in enabling you to clean or
add storage sections.
Understand what the new functionality and terms really mean—and
what it can potentially mean to you. How will additional data volume,
performance and process flexibility affect your warehouse users and tasks?
How does deploying Fiori—SAP’s future-facing intuitive user interface with
data-enhancing visualizations—provide greater granularity? And how will
advanced analytics, labor management, slotting and other new advances
shift your organizational mindset from managing material stocks to controlling
Finally, make a commitment to beginning the housekeeping and resetting
now. By doing so, you position your WM to pay future dividends. As you
change and reconfigure the system, keep the end goal in mind: to migrate
to EWM with its emphasis on logistics efficiencies, services and costs.
Warehouse Management has tremendous hidden potential to automate
and streamline processes if utilized correctly and the possibilities only multiply
when moving to Extended Warehouse Management (EWM). The time
is now to carve the path forward, know what functionalities are moving,
understand what new capabilities are coming down the pipeline, and start
preparing. Through prompt action and realignment, you will be positioning
your organization’s warehouse to transform and sustain enduring supply
If you have additional questions,
please reach out to the Reveal team at:
About the Author
Is an Integration Advisor at Reveal with 10+ years of Supply Chain and Warehousing
experience with a Bachelors and MBA in Operations Management/Supply Chain.
Steven has led several domestic and global supply chain projects in a variety of industries
including automotive, chemical, distribution/wholesaling, consumer-packaged goods,
heavy industrial, and manufacturing. He specializes in warehouse design, operations,
optimizations, moves, and expansions.
Reveal helps transform SAP-centric supply chains to achieve higher levels of performance.
Our end-to-end supply chain services enable organizations to reduce costs, increase
profitability and improve service levels. Reveal focuses on challenging the traditional
thinking of the modern supply chain to ensure sustainable and successful businesses.
We change the way people think and operate by revealing the hidden value in existing
processes and deploying the smart use of SAP. Our approach is to assess the opportunity
and then to transform the people, processes and technologies that ensure a sustainable
We take a hands-on approach to understanding the root causes of barriers to effective
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already made. Success measures are mapped to KPIs, and ROI increases are both
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they trust to help drive growth.
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