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White Paper

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

meaning.

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.

@2020 SAP

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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

delay?

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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.

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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

problem.

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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

Evaluate:

Did we have sufficient

capacity?

Did we plan accordingly?

Did we prepare for

that spike in a specific

material?

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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.

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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

EWM component.

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/

production orders

• Improved inventory accuracy and material availability with

cycle counting, barcode scanning, and inventory method

strategies

• 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

to EWM

7% Use another tool

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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

warehouse management

efficiencies that were once

considered impossible.

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

processes

• 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

tool

• Enhanced warehouse insights through improved Fiori

analytical capabilities

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

processes?

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

chain improvements.

If you have additional questions,

please reach out to the Reveal team at:

Reveal USA

+1-630-571-1730

Info@revealvalue.com

About the Author

Steve Skinal

Reveal USA

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.

About Reveal

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

organization.

We take a hands-on approach to understanding the root causes of barriers to effective

digital transformation and unlock more value in the SAP investment companies have

already made. Success measures are mapped to KPIs, and ROI increases are both

tangible and sustainable. Organizations become Intelligent Enterprises driven by data

they trust to help drive growth.

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