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. 

• 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 won't always required a warehouse management solution in the Syensqo system.
  These decisions will be taken during detailed design based on the business rules described in this document.
  
  

• • These functionalities are not in place anyIt is assumed that the standard functionalities currently in use at Syensqo in SAP WM are also available in Stock Room Management in S/4 HANA.
  • This is based on a high level AS IS analysis. 
    To be sure about this, SAP note 2882809 can be implemented. This provides a Scope Compliance Check for Stock Room Management.

• 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

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.
  *Note: These criteria will also be used for spare parts warehouses and R&I centers. These criteria are not relevant for all 3PL warehouses. 

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.

• There are guidelines on how to manage 3PL warehouses.
  
  For 3PL warehouses handling the execution of the warehouse processes and having their own WMS,
  stock can be handled on higher level in the Syenqo system using Inventory Mangement.
  This means no setup of Warehouse Management is required.
  To optimize efficiency and stock accuracy, updates of stock levels and other registrations are posted automatically using an interface. 
  
  However, reasons can be identified to manage stock in 3PL warehouses on Warehouse Management level.
  Some valid reasons are: 
  
  • Syensqo is handling the execution of the processes internally in the 3PL warehouses. 
  • Syensqo requires more visibility of 3PL stock in the Syensqo system. 
  • There is no interface created with the 3PL warehouses.
    The 3PL is expected to do double registration; registration in their own WMS and directly in the Syensqo system.
    
    These are some of the reasons no interface is created with 3PL warehouses:
    • Maturity/ Capabilities of 3PL sites. 
    • Term of agreement with 3PL. 
    • Volume processed by 3PL. 
    • Type of activities performed by 3PL.

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

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.

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. 

	Option A: SRM	Option B: Basic EWM	Option C: Advanced EWM
Functionalities	Functionalities currently in use in standard SAP WM at Syensqo are also available in SRM (see assumptions). Not on the future roadmap of SAP. No more improvements.	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

KDD TM 

Change log

Workflow history