Smooth processes in logistics are of great importance. Process optimization in the warehouse and in the supply chain is therefore on the agenda of numerous executives. SAP EWM can help.
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What is SAP EWM?
On this page we deal in detail with all important questions concerning the SAP solution SAP EWM.
The abbreviation SAP EWM stands for SAP Extended Warehouse Management. As the name suggests, it is a warehouse management system with an extended range of functions. Essentially, the SAP EWM system supports the entire warehouse logistics, the processing of all goods movements and warehouse management. The focus is on efficient logistics and warehouse processes.
SAP has been a leading provider of warehouse logistics solutions in the past. For a long time, SAP LES Warehouse Management (SAP WM for short) was regarded as the standard for logistics and warehouse management. Since its introduction in 1993, the functionality of the module has been continuously expanded. Numerous extensions in the form of add-ons were also available. Only a few examples are integration options for further functions such as floor conveyor technology, C-parts bearings or machine controls. SAP EWM, introduced in 2005, already has most of these functions on board as standard.
In contrast to SAP WM, SAP EWM is not a module, but a completely independent system for the requirements of intralogistics. Companies therefore operate their ERP and SAP EWM on different instances. While ERP is responsible for commercial processes, logistics transactions are handled by EWM. Master data, transaction data and documents for goods receipt and goods issue are exchanged and compared via interfaces. The reason for this separation is to distribute the workload evenly.
Since the introduction of S/4HANA, "Extended Warehouse Management" has been integrated into the core of the latest Business Suite ("embedded EWM"). Furthermore, SAP EWM is part of SAP SCE, SAP's Supply Chain Execution Platform.
What are the advantages of SAP EWM?
The main advantage of SAP EWM lies in the numerous possibilities of process automation for warehouse logistics and warehouse management. For example, it is possible to map distances including steps in order to optimize material flows. The entire process of a product - from goods receipt and quality inspection to the final storage location - can be automated. In contrast to SAP WM, an unlimited number of warehouse types can also be defined with SAP EWM, which is particularly useful for large logistics structures.
It is also worth mentioning that SAP EWM is delivered with an open source code. Thus, company-specific adaptations are easily possible. In addition, a functioning SAP partner network has been established in which consulting and development companies offer a wide range of individual EWM functions.
What functions does SAP EWM offer?
The functional scope of SAP EWM goes far beyond that of the SAP WM module. SAP EWM is suitable for warehouse control even if complex scenarios with several locations are involved. The following functions are particularly noteworthy:
- Fine-grained storage location management and optimization
- Mapping of all goods movements, as well as goods receipt and goods issue
- Mapping of work centers in the warehouse
- Monitoring and planning of warehouse stocks and goods movements
- Connection of data radio (RF connection)
- Warehouse control (interfaces to automation systems)
In the following we would like to take a closer look at these functions.
Warehouse Management and Storage Bin Optimization with SAP EWM
In SAP "Extended Warehouse Management" companies have the possibility to map all warehouse facilities. These include automatic high-bay warehouses, block warehouses and fixed bin warehouses of various types. Stocks are managed in SAP EWM at storage bin level, which can be defined individually. Material flows can be tracked precisely at any time thanks to the storage location logic. The localization of individual products is also possible without any problems. SAP EWM automatically optimizes the allocation of storage bins if required. The system uses criteria such as dimensions and turnover frequency.
Goods Movements with SAP EWM
SAP EWM is responsible for processing all goods movements in the warehouse. These mainly include warning receipts, goods issues and stock transfers. In addition, the following processes are mapped using the SAP EWM software:
- Automatic replenishment
- hazardous substance management
- Warehouse control (layout- and process-oriented)
- work scheduling
- Automatic generation of picking waves
- Bundling of storage tasks via rules
- resource optimization
- Processing Stock Differences
SAP "Extended Warehouse Management" optimizes the challenges of material flows and storage capacities via adaptable storage and retrieval strategies.
Managing Work Centers with SAP EWM
Each warehouse has physical workstations for tasks such as packing, quality inspection or counting. These units can be mapped and personalized in SAP EWM. Each user only sees the tabs, fields and data necessary for his work.
Inventory with SAP EWM
Naturally, SAP EWM can also be used to carry out inventory surveys and record inventory differences. The inventory can be carried out either for a storage bin or for a product. The following features should also be mentioned:
- Difference monitor with definable tolerances
- Automatic charge-off after certain periods of time
- zero check
- low stock control
- Handling units integrated in inventory process
- Integrated radio frequency functionality (radio)
Monitoring and Planning with SAP EWM
SAP EWM not only creates transparency for inventories and goods movements. It also supports companies in planning, monitoring and optimizing logistics processes. For example, SAP SAP Extended Warehouse Management provides a preview of the capacity utilization for the coming days. Critical warehouse processes are also reported automatically. Bottlenecks or missed deadlines can be minimized with SAP EWM. Comprehensive monitoring functions, with which the operative work in the warehouse can be controlled, round off this area.
Connection of radio data transmission with SAP EWM
Mobile radio terminals have established themselves in numerous warehouses and logistics centres, as they ensure efficiency and cost savings. SAP EWM therefore has a radio frequency (RF) connection that can be used to master the challenges of mobile data entry. Communication between the SAP system and the RF devices is bidirectional and takes place in real time. Of course, data can also be verified and recorded via barcodes.
Warehouse control with SAP EWM
Today, warehouses are increasingly automated. For example, automatic storage and retrieval systems, autonomous industrial trucks or forklift guidance systems are used. SAP EWM has interfaces to numerous third-party systems of this type, enabling smooth integration.
What options does SAP EWM offer specifically for kitting processes?
Kitting, that is, assembling the components of a product or package, is supported by SAP EWM. Manufacturing companies use kit processes to shorten transportation and throughput times. There are the following scenarios that can be mapped in SAP Extended Warehouse Management:
- Kit to stock: Kits are created for stock and added to the warehouse stock.
- Kit to order: Kitting only takes place when a customer order has been received.
- Reverse Kitting: existing kits are broken down into their individual components
Where is SAP EWM used?
In principle, SAP EWM is suitable for any storage type. However, the system is particularly recommended for more complex warehouses in which automation technology is used. Since SAP EWM is part of SAP Supply Chain Management (SAP SCM), processes can also be controlled across company boundaries. The entire logistics chain can be mapped. This is a clear advantage in scenarios with complex supply chains.
Extended Warehouse Management" from SAP is also advantageous under the following circumstances:
- Several ERP systems are to be connected to a central warehouse system.
- The bearing is very large and requires highest performance.
- The warehouse activities are carried out by external service providers.
SAP EWM as Add-On for ERP
If an SAP ERP such as ECC 6.0 is in use, SAP EWM can be used as an add-on. It is therefore operated separately from the ERP system. Logistical and commercial processes are handled both physically and operationally in different instances. This requires continuous data reconciliation, which is error-prone on the one hand, and sensible and necessary on the other. A consolidation on one instance would impair the latency and load behaviour of the system too much. If, for example, the ERP system were to be heavily utilized due to activities such as annual financial statements or extensive evaluations, warehouse performance would collapse.
SAP EWM in SAP S/4HANA
In the latest SAP Suite SAP S/4HANA, SAP EWM was integrated into the digital core of the system. This is why we are also talking about "embedded EWM". This integration offers several advantages. Compared to the decentralized approach, interfaces and duplications are no longer necessary. Whereas logistics and commercial users previously had to exchange transaction and master data, they now work on a common database in SAP S/4HANA. Replication and aggregation were replaced by real-time information delivery. Performance impairments are not to be feared due to the in-memory technology. In addition, parallel bookings of several employees are now possible, which accelerates processes across the board.
When is it worth switching from SAP WM to SAP EWM?
Switching from SAP WM to SAP EWM can be useful in several scenarios. First of all, it should be noted that companies have to switch to S4/HANA at the latest by 2025. Since SAP WM is part of the discontinued SAP ERP 6.0, it will no longer be available after 2025. Those who already use S4/HANA can still use SAP WM because it is included in the compatibility package. But also this option ends with the date mentioned above. This means that the switch from SAP WM to SAP EWM is unavoidable and should be tackled at an early stage. Many companies rely on professional support from an external implementation partner.
However, there are also economic factors that speak in favour of a changeover. These include, for example:
- Rapid growth of the company and its logistics
- Obsolete, inefficient processes
- Stoppering intralogistics
If a new warehouse or distribution center is about to be built, SAP EWM should always be preferred. With the warehouse management system, companies are opting for a future-proof solution and are also avoiding a costly migration from SAP WM to SAP EWM.
What are the different types of changeover?
When switching from SAP WM to SAP EWM, there are several different scenarios:
- SAP ERP with WM on SAP S/4HANA with "Embedded EWM": standard case, mostly enables process optimizations
- SAP ERP with WM to decentralized SAP EWM: useful when logistics must be scaled very quickly
- SAP ERP with WM to decentralized SAP EWM with S/4HANA connection: Interim solution, if logistics is not to be influenced initially when switching to S/4HANA.
- Non-SAP system on SAP EWM: thanks to tools for data migration mostly possible without problems
SAP WM and SAP EWM can also be operated in parallel. The only limitation here is that each warehouse number can only be managed by one of the two solutions.
Are there any differences between the cloud and on-premise versions of SAP EWM?
In fact, there are functional differences between the two SAP EWM operating scenarios. In the cloud version, SAP EWM contains a smaller range of functions. The possibilities for adaptation are also limited. However, there are several advantages to implementing the cloud solution. In addition, hybrid use of EWM On-Premise and Cloud is also possible.
SAP EWM in practice: Warehouse lead times reduced by 30 percent
SAP "Extended Warehouse Management" has already proven its efficiency in numerous customer installations. As a reference, SAP mentions a traditional German manufacturer of bathroom fittings on its website. It operates a large logistics centre in Offenburg, where 80 percent of all goods flows converge.
The main challenges of the company were the implementation of a future-proof warehousing software as well as the realistic mapping of all logistics processes including industrial trucks and handling units. With the introduction of the strategic platform, the manufacturer achieved the following results:
- Increased efficiency in conveyor technology
- 80 percent reduction in paper-based processes
- Reduction of warehouse lead times by 30 percent
- 15 percent productivity gain
- Significant increase in transparency in intralogistics
What role does SAP Extended Warehouse Management play in relation to Logistics 4.0?
Logistics 4.0 is characterized by fully automated warehouse systems. In addition, all material and information flows must be linked across company boundaries in order to implement "smart" intralogistics. In the case of a manufacturing company, seamless networking with production must also be implemented. Last but not least, the storage system used should be able to process sensor data and control modern solutions such as transport and picking robots. As open source and future-oriented software, SAP EWM (in conjunction with SAP S4/HANA) offers the best prerequisites to meet these high requirements.
Meinolf Schäfer, Senior Director Sales & MarketingDo you have any questions? I will be glad to help you.
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