Is Traditional Warehouse Slowing your Business? Uplift Warehouse Operations with SAP S/4HANA EWM

Ever wondered why warehouses are often seen as underutilized buffer stocking facilities, leading to increased costs? This perception stems from several factors. First, manual processes and outdated inventory management systems often lead to inefficient utilization of warehouse space. Without real-time visibility and accurate tracking of inventory, warehouses tend to accumulate excess stock as a buffer against uncertainties in demand and supply.

Moreover, in the absence of automation, the operations of your warehouse would heavily rely on manual labor for tasks such as order picking, sorting, and inventory management. This dependence on human labor introduces a higher probability of errors, slower processing times, and increased labor costs. Inefficiencies in warehouse layout and storage systems may lead to inefficient movement of goods and wasted storage capacity.

In an era of rapidly evolving technology and business models, organizations face the pressing need to enhance warehouse and distribution center operations for streamlined material flow. Today supply chains and warehousing operations need to exhibit agility and flexibility to mitigate the risks of disruptions and shortages.

Also, rapid growth in e-commerce and omnichannel fulfillment have put pressure on logistics operations to achieve faster delivery, increased flexibility, and improved efficiency. To meet these challenges head-on, an increasing number of companies are adopting advanced solutions like SAP Extended Warehouse Management (EWM) to optimize and elevate their warehouse operations. The application helps in optimizing your business, gain transparency, boost fulfillment efficiency, and embrace digitalization for improved customer service and adaptability.

Challenges of warehouse operations

1. Frequent fluctuations in inventory, including factors such as batch management, serial numbers, and handling unit management, necessitate the implementation of adaptable warehouse operations.

2. Businesses encounter challenges in effectively implementing various strategies such as LIFO (Last-In-First-Out), FIFO (First-In-First-Out), shelf life, pallet storage, bulk storage, and fixed bin strategies.

3. Seamlessly integrating legacy systems into SAP systems can present a significant challenge for businesses.

4. Integrating warehouse operations with material flow systems (MFS) is another challenge for warehouses.

5. Resource management poses challenges in warehouse management operations while businesses also grapple with delays and inaccuracies in order fulfillment.

6. Manual transactions in warehouse processes often pose persistent challenges, resulting in day-to-day operational issues.

7. Warehouses face challenges, including the lack of stock visibility due to the absence of reporting and dashboards hampering decision-making and operational efficiency.

8. In the absence of predictive analytics, it is difficult to conduct real-time stock checks or identify upcoming demands, enabling proactive planning and inventory management.

To mitigate these operational challenges in a warehouse, you require a robust solution that can seamlessly address inventory variability, implement various strategies, integrate legacy systems, optimize resource management, and eliminate manual transactions. This is where SAP Extended Warehouse Management (EWM) comes in. 

What is SAP Extended Warehouse Management (EWM)?

SAP EWM is a comprehensive warehouse management solution from SAP that ensures the efficient execution of all warehouse processes while providing robust monitoring capabilities. The platform helps businesses to manage high-volume warehouse operations and integrates complex supply chain logistics with warehouse and distribution processes with optimized inventory tracking, cross-docking, distribution operations, and multi-channel fulfillment in a real-time environment.

It empowers you with flexible and automated support for handling diverse goods movements and effectively managing inventory in your warehouse complex. Businesses can manage additional functions such as creating serial numbers, batch numbers, vendor inventory management, resource optimization, and value-added services. It is fully integrated with purchasing, production, quality & track-and-trace processes.

In this blog ahead, you will get to explore the SAP extended warehouse management processes functionality.

Explore the Power of SAP EWM

Key features of EWM for businesses  

Storage Bin Management and Optimization

With SAP EWM, you can manage and optimize storage bin operations meticulously. By mapping your storage facilities in EWM, you can set up various storage areas based on your specific requirements, such as automatic warehouses, high-rack storage areas, bulk storage areas, or fixed bin warehouses.

With EWM, you have granular control over your inventory at the storage bin level. You can define and map each storage bin in your warehouse, allowing for precise tracking of stock movements. This level of visibility enables you to easily locate any product within your warehouse.

Furthermore, SAP extended warehouse management system offers optimization features for storage bin management. The system assists in optimizing the allocation of products to the appropriate storage bins based on factors such as size and frequency of access. This ensures efficient space utilization and streamlines operations.

EWM seamlessly integrates with Inventory Management, enabling accurate inventory tracking. The system synchronizes book inventory balances in Inventory Management with the actual warehouse stock in EWM, eliminating discrepancies through physical inventory procedures and stock difference entries.

Movement of goods 

SAP EWM offers a robust functionality to manage all goods movements within your warehouse. EWM facilitates the efficient handling of a wide range of goods movements, such as receiving, issuing, transferring stock, automating replenishment, managing hazardous materials, and more. 

EWM offers optimization capabilities for warehouse capacities and material flows. You can define putaway and stock removal strategies tailored to your specific requirements. Additionally, EWM supports handling units, allowing for streamlined operations and effective goods management. 

Work Centre 

The work center feature in EWM allows you to map physical units within your warehouse, facilitating activities such as packing, deconsolidation, weighing, quality inspections, and counting. Users can personalize their work center interface to display the relevant fields and data necessary for their specific tasks. 

Physical inventory  

In EWM, the physical inventory process is executed at the Warehouse Management level, offering flexibility to conduct inventory checks based on products or storage bins. To effectively manage discrepancies, a dedicated difference monitor with configurable tolerance groups is available, allowing you to set maximum values for posting differences per user. 

Additionally, the system provides convenient features such as automatic posting based on time intervals, customizable priorities for each inventory procedure, zero stock checks, and low stock checks. The integration of radio frequency functions seamlessly supports the physical inventory process, including procedures like cycle counting, physical inventory during putaway, and physical inventory utilizing the zero stock check method. Notably, handling units are fully integrated throughout the entire physical inventory process, ensuring comprehensive control over inventory. 

Planning and monitoring 

In SAP EWM, you can access comprehensive planning and monitoring capabilities to optimize your warehouse operations. EWM gives a complete view of all goods movements and warehouse stocks that helps you plan, monitor, and optimize work processes. You can proactively manage workloads, ensure timely stock movements, and take preventive action in critical warehouse processes. With extensive monitoring functions, you have real-time visibility into all activities within the warehouse. Individual monitors enable you to control and oversee the actual work being performed. 

Radio frequency connection 

EWM offers a radio frequency connection (RF connection) to enhance efficiency and accuracy to enable clear and straightforward control of warehouse workers’ tasks through mobile radio-frequency terminals. The RF devices facilitate fast and precise data transfer between the SAP system and handheld devices. Bar code scanning allows for easy data entry and verification, ensuring a high-quality standard in your warehouse operations. 

Warehouse control 

EWM includes an interface to external systems, such as warehouse control units. This enables seamless integration of automated putaway and stock removal systems and forklift control systems, leveraging the Application Link Enabling (ALE) interface within the warehouse management system. 

With EWM’s planning and monitoring capabilities, RF connection for streamlined work processes, and integration with external systems, you can achieve greater efficiency, accuracy, and control in your warehouse operations. 

Key Features of SAP EWM:

Deployment options for SAP EWM  

SAP EWM provides you with flexibility in deployment options to suit your specific needs. You can opt for a decentralized option, suitable for large and high-volume warehousing, or choose the embedded component for smaller and midsize enterprises.

Furthermore, SAP EWM is available in a cloud deployment model, which not only reduces the total cost of ownership but also offers scalability and faster time to value.

What is SAP EWM on S/4HANA?

SAP EWM has been integrated as an embedded application in SAP S/4HANA, combining the proven capabilities of warehouse management with the advantages of the S/4HANA platform.

The integration of embedded EWM in S/4HANA is achieved by adopting a unified data model, simplifying the overall system architecture. This simplification eliminates the need for Core Interface for master data management, such as business partners, material masters, and batches. Redundant customizing tables have also been removed, streamlining the configuration process. Moreover, there is direct access to real-time data within SAP S/4HANA which eliminates the need for data replication. This includes accessing actual data for material values, accounting objects, purchase orders, production orders, and more.

The integration of SAP EWM within SAP S/4HANA enhances efficiency and provides a seamless warehouse management solution within the broader S/4HANA ecosystem.

Benefits of SAP S/4HANA EWM

What is decentralized EWM on SAP S/4HANA? 

It refers to the deployment of SAP EWM on a separate server platform, which is then connected to the SAP S/4HANA system. This deployment option allows for integration with both SAP ERP systems and SAP S/4HANA systems with ERP roles.

In the decentralized EWM setup, integration is possible with ERP storage locations of other clients or systems, but not with local ERP storage locations. It is available in a single license version.

One of the key advantages of decentralized EWM is its ability to handle high volumes of transactions. Since it operates on a separate instance, the performance of other processes is not impacted. This deployment option is particularly well-suited for material flow systems with high-performance requirements, large warehouses, and automation needs.

Decentralized SAP EWM S/4HANA ensures operational continuity during ERP system downtime, supports multiple warehouses, enhances integration with automatic warehouses (MFS and ASRS), allows independent system upgradability, and enables connection with multiple ERP systems for broader integration possibilities.

SAP EWM offers a versatile solution to address the challenges faced by businesses in warehouse operations. With various deployment options, you can find the perfect fit to optimize warehouse processes, improve efficiency, and boost profitability. SAP EWM can be your strategic partner in transforming your warehouse operations and elevating your business to new heights.

As an SAP Gold Partner, Nsight can help you modernize your warehouse operations with SAP EWM on S/4HANA. We have a team of experienced SAP professionals with the right experience and best practices to support project implementations. Connect with us to help build a resilient platform to help your business steer clear of supply chain uncertainties.

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