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: 

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:

A additional comparison between Warehouse Management Systems and Inventory Management is displayed: 

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.

Constraints

• The implementation of Basic EWM will impact the integration of EWM and TM:
  • Basic EWM can integrate with basic TM. The benefit is that the information of the freight order (this is similar to shipments) The use of (Functionality: Advanced Shipping and Receiving)  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

Describe the impact of the decision on processes, infrastructure, other SAP modules or systems, data cleansing and migration, developments, automations, interfaces, in-flight projects, etc.

Business Rules

The decision may translate into business rules which enforce the decision and will require configuration. List these business rules here. For example, "An Outline Agreement cannot be created via the RFQ process. An awarded RFQ can only result in a Purchase Order". 

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.

1. Stock accuracy: Real time visibility on the physical locations of goods in the warehouse is required. Knowing the exact location of materials is critical.
2. 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.
3. 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.
4. 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.
5. 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: 

1. The 3PL warehouse is having their own Warehouse Management System in place. 
2. An interface can be created 

Options considered

List the options (viable options or alternatives) you considered. These often require a longer explanation with diagrams, or references to other documents (links are best, but attachments are also possible). Use enough detail to adequately explain what you considered so that a project or business stakeholder reviewing this decision will not come back and ask "did you think about...?"; this leads to loss of credibility and questioning of other decisions. This section also helps ensure that you considered enough suitable alternatives rather than just copy/pasting SAP's recommendations.

Option A: Stock Room Management

Decribe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

Option B: Basic Extended Warehouse Management 

Decribe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

Option C: Advanced Extended Warehouse Management

Decribe the option in sufficient detail for a reader familiar with the subject matter to understand it properly

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	Pro Con	Pro Pro	Pro Con
Integration	Pro Con	Con	Pro Pro
Scalability and future growth	Con	Con	Con
Implementing effort and Change Management		Con	Con

See also

Insert links and references to other documents which are relevant when trying to understand this decision and its implications. Other decisions are often impacted, so it's good to list them here with links. Attachments are also possible but dangerous as they are static documents and not updated by their authors.

KDD TM 

Change log

Workflow history