WAREHOUSE MANAGEMENT IN SAP

Warehouse management – main risks

Enterprises with warehouses often face numerous challenges. The most common include:

• ineffective inventory management,
• inadequate data management,
• low operational efficiency,
• insufficient data protection,
• inadequate staff management,
• IT system failures and inadequately adapted technological resources,
• non-optimal management of the supply chain at its various stages.

What warehouse management tools does SAP S/4HANA offer?

SAP S/4HANA offers 3 modules for warehouse management, but the company is investing in the development of only one of them – Extended Warehouse Management. It is the solution recommended by the vendor. LE-WM and Stock Room Management are tools that are gradually being phased out by SAP. However, some companies still decide to use these functionalities, despite their gradual limitation. Depending on your company’s needs and the type of implementation or conversion, it is important to choose the right system module.

The modules available through SAP S/4HANA in this area are:

• Extended Warehouse Management

This is a warehouse management module whose development is continuously driven by SAP. It provides advanced functionality for comprehensive warehouse management. Its capabilities serve both small, basic warehouses as well as gigantic facilities. The module will be suitable for handling both simple and very advanced processes. The tool’s capabilities can be expanded as the organization using its functionality continues to grow.

• Stock Room Management (SRM)

It is a new version of LE-WM that has most of its functionality and replaces its features (LE-WM is not a module available as part of the SAP S/4HANA license). It should be noted, however, that Stock Room Management is becoming less and less up-to-date and the vendor does not intend to support the module after 2025. This is why some of its functions (Task & Resource Management, Warehouse Control Interface, Decentral WM, Wave Management, Cross Docking, Yard Management, and Value Added Services) will be disabled. Stock Room Management is for companies that are not planning a new SAP S/4HANA implementation or revolutionary changes to their warehouse management system. It is also recommended for companies that want to implement these changes slowly. According to SAP’s recommendations, if you want to develop the functionality of the module, you should transfer warehouse management to the EWM solution after the end of the vendor’s support. SAP wants to move the infrastructure of companies using the SRM module to the modern Extended Warehouse Management environment.

Advantages of Extended Warehouse Management

Considering the fact that the EWM module is constantly updated and developed by SAP, its use is the best choice from a broad perspective, because once warehouse management is transferred to this specific environment, it will remain there for a long time without the need to redesign the technological infrastructure and system architecture (as in the case of SRM once the support for this module ends). This is the most modern module of this type in SAP’s offering, meeting legal requirements and providing comprehensive support in the organization of warehouse operations.

Its main advantages include:

• uninterrupted flow of materials throughout the entire warehouse infrastructure,
• storing and providing users with accurate information about the location of items and their stock, including their actual location,
• management of key processes in the organization of warehouse operations (unloading, loading, inventory, packing, picking, and putaway),
• operation using mobile devices (RF),
• monitoring of highly advanced warehouse processes.

It should be mentioned that there are some distinctions when it comes to the Extended Warehouse Management module. There are two licensing models for SAP EWM:

• Basic Warehouse Management

It is included in standard SAP S/4HANA licenses. It has the functionality of the classic LE-WM module and is designed primarily for users whose systems do not require the extensive functions of Embedded EWM, but who want a more advanced solution. For new SAP S/4HANA implementations, it is recommended to implement Embedded EWM instead of the previous Stock Room Management.

• Advanced Warehouse Management

This version requires an additional license and is intended for users who need the advanced features not available in the basic version. Such Clients may include: large logistics operators or retail chains with large-scale distribution centers.

Benefits of warehouse management with the SAP Extended Warehouse Management module (in SAP S/4HANA)

Some of the key benefits of SAP EWM include:

• better visibility and control – the module allows you to track inventory in real time with the help of advanced analytical tools and reports, so you can respond quickly to changing conditions;
• increased operational efficiency – the module allows you to automate many warehouse tasks (receiving, storage, picking, and shipping), reducing operational time and eliminating errors, and helps you manage your resources efficiently, taking into account the work of teams (personnel, equipment, and warehouse space);
• reduction of costs associated with warehouse operations – the module enables more accurate inventory tracking and more effective demand forecasting (ability to reduce safety stocks), while the automation and optimization of warehouse processes it enables help decrease operating costs.
• increasing Customer satisfaction – faster order fulfillment achieved with the module’s functionality leads to increased Customer satisfaction, while automation and accurate inventory management help reduce order fulfillment errors,
• support for warehouse processes – the module is flexible and can be adapted to various types of warehouses, and also allows easy integration with many warehouse technologies (for example: automatic storage and retrieval systems – AS/RS or transport management systems – TMS).