Every warehouse employee is familiar with the frustrating scenario: Suddenly, goods have disappeared from the warehouse, and no one knows where they ended up. The search begins, costing valuable time and resources. That’s why efficient warehouse management is crucial in today’s globalized economy to meet the increasing demands of the supply chain. Companies face the challenge of optimally managing their inventory, seamlessly coordinating inbound and outbound shipments, all while controlling costs. This is where SAP Warehouse Management (SAP WM) or Stock Room Management (SRM) comes into play.
SAP Warehouse Management is a powerful solution that assists companies in optimizing their warehouse processes and increasing efficiency. With a wide range of features, it provides comprehensive control over the entire inventory and enables precise tracking of materials, batches, and serial numbers. SAP WM is included as standard in SAP ECC. Therefore, the issue arises in advance that SAP ECC and consequently the WM contained therein will only be supported until 2027.
Under S/4 HANA, SAP WM continues as Stock Room Management. SAP Stock Room Management is part of the S/4HANA core and is specifically offered by SAP to existing customers who were using SAP Warehouse Management previously. The advantage here is that Stock Room Management does not require additional licensing, as it corresponds to the ECC Warehouse Management component (LE-WM).
Since the functioning of SAP Stock Room Management and Warehouse Management does not fundamentally differ, I will describe them to you in this blog article using WM as an example. Any differences between the systems will be explained accordingly.
Functions of SAP WM/SRM
SAP WM/SRM offers various functions to optimize your warehouse processes and work more efficiently:
- Storage Space Management: The storage space management in the Warehouse Management System allows the representation of various storage facilities such as automated storage, high-bay storage, block storage, or fixed bin storage. Material stocks are managed at the storage bin level and can be defined according to individual requirements. Each storage bin is depicted in the system, enabling precise tracking of all inventory movements.
- Goods Movements: All goods movements in the warehouse are processed through the WMS. This includes goods receipts, goods issues, transfers, material staging for production, automatic replenishment, hazardous materials management, and handling of inventory discrepancies. The WMS optimizes warehouse capacities and material flows through customizable putaway and picking strategies as well as the use of storage units
- Planning and Monitoring: The system provides a comprehensive overview of all goods movements and inventory levels. It assists in planning, monitoring, and optimizing workflow processes. For instance, the system enables proactive workload consideration for upcoming days and allows early intervention in critical warehouse operations to ensure on-time inventory movements. The RF monitor provides a real-time snapshot of all activities in the warehouse, allowing you to control actual warehouse operations.
- Wireless Data Connectivity: To enhance efficiency and cost-effectiveness, you can manage the tasks of warehouse personnel easily and clearly through mobile wireless terminals. Mobile data collection via radio frequency (RF) connectivity enables fast and error-free data transmission. RF devices receive data directly from the SAP system and transmit information back. By using barcodes, you can capture and verify information to maintain a high-quality standard in the warehouse.
- Warehouse Control: The WMS has an interface to external systems. This allows you to integrate automated storage and retrieval systems or forklift control systems into the warehouse management system. This integration is achieved through the Application Link Enabling (ALE) interface, enabling seamless communication between different systems.
Extended Functionality of WM
SAP WM offers extended functionality, which is no longer available under S/4 HANA and therefore not in Stock Room Management. These components include:
- Task & Resource Management (WM-TRM)
- Warehouse Control Unit interface (WM-LSR)
- Value Added Service (WM-VAS)
- Yard Management (WM-YM)
- Cross-Docking (WM-CD)
- Wave Management (WM-TFM-CP)
- Decentralized WM (WM-DWM)
For existing SAP WM customers, it should be examined in advance to what extent these components impact warehouse processes and whether they are still required.
Documents in WM/SRM
When using SAP WM, users create various documents to ensure complete traceability of processes and material flows. The following documents serve process control:
- Transport Requirement: A transport requirement is a request to move material from one location to another within the warehouse. It is typically triggered by a business activity like goods receipt, transfer, or goods issue. The transport requirement contains information such as the material to be transported, quantity, source location, and destination.
- Transport Order: A transport order is an instruction to execute the transport requirement. It includes detailed information about the transport, such as the transport order type, status, timing, and priority. The order is usually automatically generated once a transport requirement is created.
The process generally unfolds as follows: A transport requirement is triggered when material needs to be moved from one location to another. An order is automatically generated to fulfill the transport requirement. The order is then assigned to a warehouse worker who physically moves the material by selecting the relevant quants (specific quantity of material at a specific storage bin) and transporting them to the destination. The progress of the order and material movements are tracked in the system and can be monitored.
The following is an example process:
Benefits and Advantages of SAP WM/SRM
SAP Warehouse Management offers numerous advantages for businesses aiming to optimize their warehouse operations.
One significant benefit is enhanced efficiency. Through process automation and the integration of various warehouse functions, SAP WM enables faster and more accurate order processing. This leads to reduced errors and delays, resulting in increased customer satisfaction.
Another advantage is improved inventory control. With SAP Warehouse Management, companies can monitor and track inventory in real-time. This allows for precise inventory planning and control, helping to avoid overstocking or shortages. By optimizing inventory control, businesses can lower their warehouse costs while ensuring they always have sufficient products in stock to meet demand.
Integration with other SAP modules is another benefit. Companies already using SAP software can seamlessly integrate their warehouse management into their existing business processes. This facilitates data exchange and collaboration between different departments, enabling more efficient utilization of available resources.
Warehouse Management in SAP S/4HANA
As mentioned above, according to the latest information from SAP SE, the current Warehouse Management will only be supported until December 31, 2027, or 2030 (with additional fees). Initially, existing customers will have Warehouse Management included in SAP S/4HANA as a Compatibility Package. Another alternative to Stock Room Management is the option to transition to Extended Warehouse Management (EWM).
What is EWM?
Extended Warehouse Management (EWM) was introduced by SAP in 2005 and serves as the successor to SAP WM. Unlike WM, it is not a module but an independent system. It offers significantly more functionalities to support warehouse processes than WM and can be used as either an embedded solution within S/4HANA or as a decentralized system on a NetWeaver Server. Some of the extended functionalities include:
- Yard Management
- Cross Docking Value
- Added Services
- Warehouse Billing
- Optimization of Goods Receipt and Goods Issue processes Inventory optimization Material Flow Control However, it’s important to note that these features are not included in the licensing model of the S/4HANA Business Suite and need to be activated separately if required.
However, it’s important to note that these features are not included in the licensing model of the S/4HANA Business Suite and need to be activated separately if required.
Who is Stock Room Management suitable for, and who is EWM suitable for?
Stock Room Management is particularly suitable for companies that don’t see immediate benefits from migrating to an embedded or decentralized EWM. Additionally, it’s suitable for companies with low to moderate complexity in their warehouse management. For such customers, SAP EWM’s extensive features might not generate added value. Moreover, Stock Room Management can also be interesting and advantageous for companies that have employed numerous custom developments or highly individualized processes under SAP ERP and wish to continue using them under SAP S/4HANA, with the base functionalities of Stock Room Management being sufficient.
On the other hand, SAP EWM is suitable for larger companies with complex warehouse structures where the basic functions of Stock Room Management are insufficient, and a strong emphasis is placed on automating warehouse processes. EWM is often implemented when companies are preparing for Industry 4.0. It’s also an option for existing WM customers, as data and processes can be migrated to an EWM system. However, since EWM is not included in the standard SAP license, the resulting costs should be considered.
As with any system implementation, whether it’s Extended Warehouse Management or Stock Room Management, it’s important to define the system requirements and warehouse processes precisely beforehand. After all, the specific needs of your company should be accurately reflected. Due to the complexity of the system, it’s recommended to seek experienced consultants to provide support during the implementation.
In conclusion, SAP WM or SRM represents a powerful software solution for optimizing warehouse processes and enhancing efficiency. Through its diverse range of functions, the system streamlines operations and enables the traceability of all goods movements within a warehouse. The automation of warehouse processes helps reduce sources of errors while simultaneously cutting costs. Improved inventory control allows companies to monitor their stock levels in real-time and respond promptly to changes. SAP WM and SRM enable businesses to meet the growing demands of the supply chain while saving costs and resources.
Whether a transition to SAP S/4HANA involves adopting Stock Room Management or EWM depends on companies’ individual needs, following a thorough analysis of requirements. However, it’s evident that the transition to S/4HANA is nearly unavoidable and should be well-planned in advance.
Do you have further questions about Stock Room Management or Warehouse Management in SAP?