SAP WM is a set of functionalities focused on providing inventory accuracy, optimized utilization of warehouse space, and streamlined picking and putaway. It first existed in the SAP suite in the early 1990s when it was added to the SAP R/3 solution. In 2005, the first iteration of SAP Extended Warehouse Management (SAP EWM) was released, providing additional focus on high-volume, automated, and complex warehousing tasks.
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SAP EWM organizes its functionality into three key processes.
Inbound processing refers to all of the activities involved in getting a product shipped to and then placed within a warehouse for future use. This includes receiving vendor stock, transferring stock from another facility, managing production receipts, and accepting a customer return.
Outbound processing refers to all of the activities involved in getting a product shipped out from a warehouse. Outbound processing can be broken into simple or complex outbound processes. In the former, goods are picked from storage bins and moved to a goods issue area. In the latter, the goods move through various stages such as picking, packing, staging, and loading. Only once those processes have been completed can goods issue be initiated in the SAP EWM system.
Internal processing refers to all of the activities involved in moving stock within a warehouse. This is limited to replenishment, ad hoc movements, posting changes, and stock transfer.
Within the three types of EWM processes (inbound, outbound, and internal), there are a number of subprocesses and advanced functionalities available for users.
Physical inventory is a way to keep count of physical stock in a warehouse, helping to maintain stock balance and keeping balance sheets correct.
Resource management helps ensure effective utilization of resources by dividing work packages in the form of warehouse orders into queues.
Warehouse monitoring and reporting help supervisors know the status of warehouse activities, including stock level, warehouse requests, bottleneck identification, and more.
Advanced production integration helps streamline the manufacturing process for production orders and process orders.
The radio frequency framework provides functionality to use mobile devices to perform stock movements in a warehouse.
Cross-docking involves the movement of goods through multiple locations, such as manufacturing plants, distribution centers, and warehouses.
Wave management is the process by which outbound and posting change warehouse requests in SAP EWM can be grouped based on factors such as customer, product group, and so on.
Slotting is the process of determining a more efficient storage and picking process in the warehouse. Rearrangement is the process in which stock is moved from a sub-optimal stock area to a physical stocking area based on stock velocity and business requirements.
Shipping and receiving are used to facilitate and optimize stock movements in and out of the warehouse using appropriate means of transportation.
Labor management involves mapping warehouse employees as business partners in the SAP S/4HANA system, useful for workload planning and capturing the actual executed workload.
Value-added services are those that organizations carry out on products they receive into or issue from a warehouse, such as kitting (bundling products together as a single saleable item), labeling, and packaging special orders. Other value-added services include oiling, cleaning, fuming, sterilizing, etc.
Cartonization planning is used for creating planned handling units based on information from product master data and outbound delivery orders such as weight, quantities, and volume.
Dock appointment scheduling is used to more efficiently plan for the arrival of transportation vehicles so that carriers can select open timeslots and avoid waiting in line.
The material flow system is a solution to connect SAP EWM systems to an automated warehouse with programmable logic controllers.
SAP currently maintains two expansive ERPs (oftentimes referred to as “business suites”) for its customers. Both SAP ERP and SAP S/4HANA give users the ability to perform EWM tasks. While SAP ERP will be maintained through 2027, SAP has said it will no longer offer usage rights for SAP WM at the end of 2025, and that any future warehousing implementations will need to be SAP EWM.
Prior to 2016, SAP EWM was available to customers of SAP S/4HANA in a decentralized fashion, where SAP EWM was run on a separate system and connected to SAP S/4HANA via a sidecar approach. In late 2016, however, SAP embedded EWM directly into the SAP S/4HANA suite as part of the SAP S/4HANA Supply Chain LoB.
The final option for those looking to utilize SAP EWM in their logistics stack is through stock room management, which is a warehousing landscape for companies with small, low-complexity warehouse operations. For those who were running SAP WM and not SAP EWM, this provides an opportunity to continue utilizing SAP WM while running SAP S/4HANA.
Extended warehouse management functionality fits alongside other SAP modules, LoBs, and solutions. Below is an overview of key SAP solution integrations.
SAP Business Network for Logistics is an overarching application that helps end-to-end supply chain processes with many players to control integrated supply chain processes.
SAP Manufacturing Execution is a solution that helps manufacturers combine shop floor data with ERP systems.
Transportation management (TM) operations relate to the movements of goods, for instance to a warehouse: how they occur, when they occur, and how to account for stock in transit, among others. SAP offers a robust TM solution for users that can be integrated with SAP EWM.
SAP Warehouse Robotics is a solution for integrating collaborative robots (cobots) into the landscape of SAP.
SAP Yard Logistics is a solution for managing operations in transshipment points of the supply chain.
While we’ve laid out much of the important terminology you’ll run into when performing extended warehouse management with SAP, there are a handful more concepts that will be helpful to you.
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