| Status | Approved |
| Owner | |
| Stakeholders |
Issue
Syensqo currently operates on the SAP ECC platform, utilizing the SAP Warehouse Management (WM) solution for its logistics and inventory management processes. SAP WM is serving as the backbone of their warehouse operations for packed items. This includes handling tasks such as goods receipt, putaway, picking, and inventory tracking.
However, looking at the future (transition to SAP S/4HANA), SAP WM becomes obsolete and new possibilities emerge.
Recommendation
With implementing basic SAP Extended Warehouse Management (Option B), Syensqo will have a future proof warehouse management solution in place.
Background & Context
Below an overview of the SAP Warehouse Management Systems (WMS) are displayed:
Acronym / Term | System | Definition |
SAP Warehouse Management (WM) | ECC | This is the Warehouse Management solution in ECC which is currently used by Syensqo. |
SAP Stock Room Management | S/4 HANA | This is the new name of the -older- SAP WM solution for S/4HANA. Note that this solution is no longer on the roadmap of SAP. This means that SAP won't further invest in this solutions and no more improvements are expected. |
SAP Extended Warehouse Management (EWM) | S/4 HANA | This is the new Warehouse Management Solution in S/4 HANA. |
Not all warehouses at Syensqo are required to use a Warehouse Management System. Warehouses which are not using a Warehouse Management Solution will manage stock at Inventory Management level:
Acronym / Term | System | Definition |
SAP Inventory Management (IM) | ECC and S/4 HANA | In general this means maintaining stock levels of different materials on both quantity and value level. There is no additional warehouse management layer to manage stock at specific location management and to manage warehouse activities in more detail. |
A additional comparison between Warehouse Management Systems and Inventory Management is displayed:
| Criteria | Inventory Management (IM) | Warehouse Management Systems |
|---|---|---|
| General | Focuses on overseeing and controlling inventory. | Deals with the physical aspects of storing and moving goods within a facility. |
| Stock Accuracy | Further segregation of inventory is possible on the level of:
| In addition to the levels of IM, a WMS will add the physical location component for detailed stock monitoring. |
| Warehouse Execution | Registration of goods receipts, goods issues and stock corrections. Also managing the different stock types (e.g. quality inspection stock, blocked stock). | In addition to the levels of IM, a WMS is used to manage warehouse processes in more detail. This means the system will guide the warehouse operator during picking, packing an putaway execution. |
| Real Time Visibility | Real time visibility of in and out movements. | In addition to the levels of IM, every physical movement from location A to location B in the warehouse is registered using mobility devices. This provides real time visibility on a more detailed level. |
| Type of products | Typically used to manage stock in silo's, pipelines products, bulk items. | Typically used to manage packaged products, high value items. |
Assumptions
- The SAP S/4 HANA implementation is a green field implementation. Therefore the deployment approach of warehouse management system in an S/4 HANA migration is not considered.
- To be in line with the standardization goals of Syensqo, only one of the options outlined in this document will be selected for implementation.
- Advanced warehouse management functionalities like cross docking, kit-to-order and Value Added Services (VAS) are not implemented for Syensqo in the initial implementation. The start approach is to support all basic warehouse processes. Additional complexity can be added in later phases. Note that these extra functionalities will required an extra license.
- Not every warehouse will required a Warehouse Management System. These decisions on warehouse level will be taken during detailed design based on the business rules described in this document.
Note: This also includes the warehouses which are currently using Lean Warehouse Management in WP1. This is a simplified approach for Warehouse Management which won't be used anymore in the future.
- 3PL warehouses often doesn't required a warehouse management solution. These decisions will be taken during detailed design based on the business rules described in this document.
SAP EWM offers different deployment options. Based on below explanation, decentral EWM is not further considered in this document.
- Embedded EWM: EWM is embedded within the SAP S/4HANA system. Embedded EWM is suitable for simpler warehouse processes and organizations looking for tighter integration between logistics and other business processes.
- Decentral EWM: EWM is deployed as a standalone system separate from the core SAP S/4HANA system. It provides advanced warehouse management capabilities. Decentralized EWM is advised for companies offering 3PL functionalities, integrated warehouse automations and/or high volumes. It is assumed that these functionalities are currently not required for Syensqo, nor will they be needed in the future.
- Embedded EWM: EWM is embedded within the SAP S/4HANA system. Embedded EWM is suitable for simpler warehouse processes and organizations looking for tighter integration between logistics and other business processes.
Constraints
- Descision of basic/ advanced TM will impact integration of EWM and TM:
- Basic EWM has can easily integrate with basic TM ASN; loading RF using freight order (not outbound delivery), the information of freight order is considered in the monitor e.g reporting
- Advanced TM and basic EWM; no integration.
Impacts
Business Rules
As mentioned before, a Warehouse Management System is not required in all warehouses.
- These 5 criteria will be used during detailed design to determine if a warehouse* requires a warehouse management system.
- Stock accuracy: Real time visibility on the physical locations of goods in the warehouse is required. Knowing the exact location of materials is critical.
- Warehouse execution: The warehouse operator requires guidance from the system during execution of the warehouse processes. E.g. The system will guide the operator to the area/ location in the warehouse where the goods need to be picked or putaway.
- Volume: More than X storage bins are required. The specific number of storage bins will be determined during detailed design. This can deviate between manufacturing warehouses and spare parts or R&I centers.
- Volume: More than X warehouse operators are working in the warehouse. The specific number of warehouse operators will be determined during detailed design. This can deviate between manufacturing warehouses and spare parts or R&I centers.
- Type of products: Packaged products are stored in the warehouse. Not relevant for stock in bulk and silo's.
*Note: These criteria will also be used for spare parts warehouses and R&I centers. These criteria are not relevant for all 3PL warehouses.
- These are the general guidelines on how to manage 3PL warehouses.
The preferred solution for
A 3PL warehouse should be managed on Inventory Management level for Syensqo in case:
- The 3PL warehouse is having their own Warehouse Management System in place.
- An interface can be created
Options considered
Option A: Stock Room Management
Option B: Basic Extended Warehouse Management
Option C: Advanced Extended Warehouse Management
same as embedded, using extra functionalities; VAS, kit to order, cross docking
Evaluation
Strategic Choice: Implementing SAP EWM provides a future-proof solution to support Syensqo’s warehouse management processes. Given the fact that Syensqo's strategic priorities do not center around warehouse management, it is expected that the basic functionalities of SAP EWM will be sufficient.
SAP EWM is a solution which can handle more complex warehouse management processes. However it is recommended for Syensqo to implement a limited scope. Later phases can expand functionality as needed, including advanced features.
Option A: SRM | Option B: Basic EWM | Option C: Advanced EWM | |
|---|---|---|---|
| Functionality and complexity |
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| Integration |
|  Con |
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| Scalability and future growth | Con | Con | Con |
| Implementing effort and Change Management | Con | Con |
ProSee also
KDD TM
Change log
Workflow history
| Title | Last Updated By | Updated | Status | |
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