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How SAP Warehouse Solutions are Transforming Warehouse Management

By June 1, 2021September 11th, 2022Blog

As demand shoots back to pre-pandemic levels and consumer expectations hit an all-time high, warehouse management has never been more crucial to the supply chain. With service level agreements getting more complex and distribution centers turning to automation, technology that optimizes and simplifies warehouse management is the smart way forward.

SAP Extended Warehouse Management (EWM) is a leading warehouse solution, widely used to assist large and mid-sized warehouses with complex processes. This advanced solution was created to aid the legacy Logistics Execution Warehouse Management (LE-WM) mechanism by adding functionality for material flow, wave management and labor management.

The initial versions of SAP EWM were available as separate standalone applications on the SCM server until 2016. Since then, SAP has been embedding most of the EWM functionality into the SAP S/4HANA system. With each new offering, SAP has enhanced the embedded EWM features and added stock room management, a stripped-down version of EWM.

With the release of S/4HANA 1809 in 2018, SAP enhanced the EWM solution offering, enabling it to run on a separate S/4HANA server as a decentralized standalone solution.

Since the legacy LE-WM solution will be phased out by 2025, the new EWM solution from SAP comes with multiple options to deploy as per customer requirements and warehouse complexity. SAP warehouse solution offerings available to deploy on S/4HANA include:

Basic EWM – Embedded Version

The basic extended warehouse management solution runs on the common code embedded within SAP S/4HANA and contains basic warehousing features such as:

  • Inventory Management
  • Inbound Processing
  • Outbound Processing
  • Internal Warehouse Movements
  • Physical Inventory
  • Reporting

Basic EWM does not require a separate license, as these features are included in the SAP S/4HANA licensing fee. This offering is positioned to replace SAP LE-WM. It comes with functionality like layout and process-oriented warehouse storage control, resource management and reporting.

Advanced EWM – Embedded Version

Based on an enterprise’s warehouse operations needs, S/4HANA comes with additional, more advanced features, which enable the EWM implementation. This offering requires a separate license apart from the S/4HANA license and has the following features:

  • Inventory Management Optimization with Slotting
  • Inbound Process Optimization with Deconsolidation
  • Outbound Process Optimization with Wave Management
  • Material Flow Control
  • Yard Management (TU Handling, Document Appointment Scheduling)
  • Labor Management
  • Value-Added Services
  • Kitting
  • Cross-Docking
  • Warehouse Billing

With this version, these advanced features are embedded into SAP S/4HANA and can be deployed on the same S/4HANA system, removing the hassle of maintaining a separate EWM system. This offering has the following benefits:

  • Reduction in master data duplication. As there is only one centralized system, there is no need to replicate the data of business partners, material masters or batch masters. There is also no CIF interface required.
  • Transaction data from purchase orders, production orders, etc. can be directly available, eliminating the need for expected goods receipt.
  • Document removal. Since there is only one system, additional documentation traditionally used for outbound delivery requests, inbound delivery notifications or posting change requests can be eradicated.
  • Compatible with the advanced SAP Fiori app, available in the S/4HANA landscape.

Advanced EWM – Decentralized Version

To satisfy customers who need to maintain high performance and business process continuity, if faced with any downtime in the ECC or S/4HANA system, SAP has introduced a new deployment option – Decentralized EWM. As the name suggests, this is a standalone EWM solution on a separate S/4HANA server.

This deployment option allows the customer to take advantage of current and future SAP enhancements in the embedded EWM solution, and at the same time utilizes a separate ECC or S/4HANA core system. It provides continuity of operation and high performance in addition to the various benefits highlighted in the embedded version offering. This option reduces the cost of reimplementing SAP ERP or SAP S/4HANA, as the same Decentralized EWM version can be connected to multiple ERP or S/4HANA systems.

Stock Room Management

Some customers using a traditional ERP WM solution often can’t imagine the need for complex warehouse processes with the EWM solutions in S/4HANA. These apprehensions are largely due to the additional labor and cost involved during migration. This critical roadblock prevents existing SAP customers from moving to the new S/4HANA solution.

To overcome this hurdle, SAP introduced stock room management with S/4HANA 1909. It is an interim solution for customers that want to continue using SAP ERP WM rather than migrate to EWM. It has most of the WM features and can be used for smaller warehouses.

The various features in the warehouse management offering that can be utilized in stock room management are categorized under the following processes:

  • Inbound Processes
  • Outbound Processes
  • Internal Stock Movement
  • Physical Inventory
  • Reporting Stock Data

EWM Integration with SAP S/4HANA Cloud

With its S/4HANA Cloud 1805 release, SAP enabled integration of EWM on a standalone server. This gives customers the option of interfacing SAP EWM with S/4HANA Could – utilizing advanced warehousing capabilities with core functions running on the cloud.

In S/4HANA Cloud 1811, SAP brought warehouse operations into the S/4HANA Cloud system, and the current release (1902) of S/4HANA Cloud provides essential warehouse functionality, covering inbound, outbound and some internal warehouse processes.

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