1、SAPIMvs.WM:HowtoChoose,Use,andOptimizeGavinKlausCatalystInternational,Inc.What Well Cover Understanding the difference between WM and IM Choosing between WM and IM Optimizing and overcoming limitations with IM and WMInventory Management(IM)Key features/strengthsInventory management by quantity Visib
2、ility of on-hand quantity by storage location Management of special stocksEntry and documentation of all material movements Real-time updates of inventory Documentation of all receipts,issues and transfersPhysical inventory Carry out physical inventory at the material level Perform inventory adjustm
3、ents R/3 Inventory Management(IM)(cont.)Key features/strengths(cont.):Inventory management by value Postings update account assignments for cost accounting Updates G/L account for financial accounting Key integration points Integrates directly with MRP,purchasing and invoice verification Provides in
4、formation for MRP,updates PO;used to check conformity during invoice verificationReal-time updates When transactions are entered,the results the stock updates real time to reflect actual changesSAP Organizational StructureCompany SLoc Company Company Client SLoc SLoc Plant Organizational Structure a
5、t the IM LevelChallenges with Inventory Management Lack of detailed visibility to material flow e.g.When the delivery pick list is generated,the deliverys“actual pick quantity”is updated prior to actual pickingRequires manual updates when quantities differ Inability to assign incoming materials to o
6、utbound demand to avoid multiple material handling continued.Challenges with Inventory Management(cont.)Immediate update of inventory receipts and issues System inventory and status NOT representative of the physical process Limited visibility to locations of materialsOnly possible to assign a singl
7、e fixed bin location per storage locationBin location is“text”only;no strategies are availableSolution:R/3 Warehouse Management Initially released with R/2 as an Extension of IMIM-WM integration is real-time and automatic Enables granular traceability and controlAbility to synchronize the system and
8、 material flowSimple-to-complex placement and removal strategiesAssignment of inbound orders to outbound deliveries Allocation of storage bins Processing of all stock movements valid for WMReceipts,issues,transfersUtilizes stock placement and removal strategies e.g.Next empty bin,addition to stock,F
9、IFO,LG/SM qtys.Solution:R/3 Warehouse Management(cont.)Infancy to maturityFunctionality considerably expanded with 4.6x and higher Two-step picking,two-step confirmation,managing multiple storage locations with a single warehouseExtension set 2.0 for Enterprise to include Cross Docking,Yard Manageme
10、nt,Value Added ServicesWM Picks Up Where IM Leaves OffTypical assignment is one storage location to one warehouseIt is possible to have multiple storage locations managed by a single warehouseQuantBin 1Quant Quant QuantBin 2Stor.Type 2Stor.Type 3Warehouse1Stor.Location1Stor.Type1Warehouse 2Stor.Loca
11、tion2Plant 1Location1Plant 2CompanyIM LevelWM LevelStor.Type 1Key WM Features Management of materialsProvides bin-level trackingInventory management functionsVarious placement and removal strategies Value-added servicese.g.Special handling requirements(labeling,packaging)Powerful picking controlTwo-
12、step picking,wave pickingFIFO,LIFO,large/small quantity picking strategiesKey WM Features(cont.)Warehouse activity monitorsWAM,RF Monitor,outbound delivery monitor,wave picking monitor,TRM Monitor,Yard Management Cockpit,Cross-Docking MonitorCross-dockingManagement of inbound and outbound movementsY
13、ard ManagementAppointment scheduling,check in and check out,assignment of dock doors,loading/unloading activitiesTask Resource ManagementEnhances WM by breaking work down into distinct taskFully Integrated with the other SAP ApplicationsFeatures:Flexible Warehouse StructuresGoods MovementsControlInv
14、entoryWM Integration With Other Key R/3 Modules(cont.)Source:SAP WM LO530WM Integration With Other Key R/3 Modules(cont.)IM-WMProcessing of all material movements Automated communication with configurable processing SD-WMTwo-step picking with SD-WM integrationWave picking opportunitiesProcessing ind
15、ividual deliveries PP-WMProduction support with PP-WM integrationSupplying materials to the shop floorInternal and external automated replenishment optionsWM Integration With Other Key R/3 Modules(cont.)QM-WMHandling of inventory samplesInspection lot is maintained with the material dataHand-held te
16、rminals-WMProcessing of transfer requirementsProcessing of transfer ordersBin and material inquiriesBenefits of WM BenefitsBetter control of inventory More accurate inventory Able to maintain lower inventory levelsBetter control of information Visibility to picking and put away statusReduced cycle t
17、ime Gartner:16-25%Picking Productivity ImprovementBetter manage work and workforce to gain efficiencies Tools to balance and optimize resources Increased picking/shipping accuracy 11-25%Reduction in Customer ReturnsBenefits of WM(cont.)Measurable benefits16-25%Picking Productivity Improvement11-25%R
18、eduction in Customer Returns10-25%Savings in Material Handling Labor10-40%Space Utilization Improvement13-30%Reduction in Scrap8-15%Reduction in Carrying Costs Source:Gartner ReportWhat Well Cover Understanding the difference between WM and IM Choosing between WM and IM Optimizing and overcoming lim
19、itations with IM and WMWhen Is Inventory Management the Answer?IM is great when.Small facility Lower levels of inventory on handSimplistic material handling processesLower volume of activityOutsourced warehouse operations Only need storage location or bucket of inventory visibilityKey Elements With
20、IM Required data for IMPlant,valuation and storage location data Relevant data for IMWork scheduling,accounting,materials planning,purchasing,classification,storage and quality management IM menuGoods movementsMaterial documentsReservationsEnvironment Focused on reporting,lists and LISWhen is Wareho
21、use Management the Answer?WM is great whenLarger facilitiesLarge number of materials on handHigher volume or flow throughTraceability and visibility is critical Track material flow,status,inventory levels Complex processes Automated systems,wide spread siteKey Elements With WM Extend material master
22、Warehouse management viewNo required data Define warehouse structureMinimize the number of storage types Define based on similar and different rules for storing materialsMixed stock,Storage or Handling Unit Management Define the WM ProcessesAutomatic,semi-automatic and manual processing Transfer ord
23、er creation,confirmation,posting changesEvaluating IM vs.WM 1 Define business processes 2 Evaluate ROI of a WMS solution 3 Consider RF functionality 4 Training resources and schedule 5 Focus on optimization opportunitiesStep 1-Define Business Processes Start with receiving,inventory and pick/ship fi
24、rstCreate and evaluate process flow chartsLook at process improvement opportunitiesScore the level of complexity Target areas for improvementReduce travel timeInventory accuracyReduce material handling Map improvements to IM and WM functionality1-Define Business Processes(cont.)“The level of functio
25、nality that customers need in a WMS is completely dependent upon their environment.Customers have to define their needs before they can realistically look for a WMS.”Source:Integrated SolutionsStep 2-Evaluate ROI of a WMS Solution Measure productivity and accuracy before and after the WMS installati
26、on Review and analyze picking operationsKey area of improvement Review and analyze inventory accuracyWhen supported with RF,accuracy can reach 98%2-Evaluate ROI of a WMS Solution(cont.)“There is no right time for paying back a WMS,but typical paybacks are within six to 18 months,depending on the ine
27、fficiencies of the current operation and how much safety stock was needed to cover daily operations.”Source:Total Supply ChainStep 3-Consider RF Functionality RF supports improves warehouse bin accuracyBin accuracy 98%is possible Reduces order fill process cycle time RF projects often have a 1 year
28、or less payback period Source:IntermecCompare current receipt process to the time saved when the task is aided by automatic data collection(ADC)3-Consider RF Functionality:Example As-is1,000 pallets at five minutes/pallet=5,000 minutes With two minutes saved per pallet2 minutes*1,000 pallets=2,000 m
29、inutes 2,000/480 minutes worked by each receiver per day=4.16 receivers saved from the pallet receiving processStep 4-Training Resources and Schedule Resources to evaluate,guide and support a WM solutionA full-time,dedicated WM resource is critical This may or may not be the same IM resource Trainin
30、g scheduleA WM solution will require a certain level of IM trainingWM training will vary based on the degree of functionality Support resourcesConsider a single resource for IM and WM if possible5-Optimization Opportunities Picking operations and inventory accuracyWhat are your baseline requirements
31、What is the volume of activityEvaluate picking paths and demandLook at your accuracy numbers over a period of time Perhaps monthly,quarterly,annually Material handling labor costs Space utilization improvements Packing tasksCan you benefit from packing while pickingWhat is the BEST Stock Management
32、Solution?1-Inventory Management 2-Lean Warehouse Management 3-Full Warehouse Management 4-Decentralized Warehouse ManagementOption#1-Inventory Management ProsSimplistic Key receipt,issue or transfer in a single step transaction Immediate update of inventoryRequires less training commitment Fewer tra
33、nsactions to document and presentTrace-ability of all material postings into SAP R/3 Date,user,material,quantity,storage locationReal-time update of accounting information1-Inventory Management(cont.)ConsDoes not handle complex warehouses operations well Unable to monitor activities Lacks tools to m
34、anage resources and tasks Lacks functionality to optimize key processes(picking)Inaccurate system inventory Inventory updated before the physical movement Requires additional work if there are discrepanciesLimited trace-ability Only visibility is when the system posting took place No visibility to t
35、he follow on physical activitiesOption#2-“Lean”Warehouse Management Use of very small portion of WM capabilitiesYou do not process goods receipts or issues as a subsequent process in WM,No storage bins are managed in the WM application Evolved from SD pick list Put-away and pick from 1 or more fixed
36、 bins Bin is hard assigned on material master TOs are created for picks and put away,and pick list is created from TOs2-“Lean”Warehouse Management(cont.)ProsRequires less configuration than full WMReduced number of steps in the process Use of transfer orders as pick lists Confirmation is not require
37、dAdditional processing options Confirm put-away,picking,over-deliveries,shortages,batches Print transfer orders Integration to HRAdditional picking functionality Wave picking is possible with Lean WM2-“Lean”Warehouse Management(cont.)ConsMust have a fixed bin assigned for all materials Random storag
38、e is not possibleInventory is still under IM functionality only Inventory options are at the storage location Stock differences can only be processed in MM-IMLacks additional optimization opportunities Picking,packing,bin accuracyNo strategies are used Lack of picking and put away strategiesOption#3
39、-Full Warehouse Management ProsOptimization opportunities Picking-Two step picking Packing-Pick and pack in a single step Cross-docking-Inbound,outbound,prod.materialsMonitoring and real time visibility to process status Visual queues at the detailed steps Open tasks,completed tasksAdditional invent
40、ory methods(annual,zero stock)The module is FREE with the purchase of SAP3-Full Warehouse Management(cont.)ConsInventory counting interferes with operations without RF Prior to 4.7 extension set 2.0Initial overhead to set up depending on design Master dataCapacity checking,control cycles Configurati
41、on requirementsDesigning the warehouse layout and set upPotential for additional steps to support processing Confirmations Clearing differences Processing posting changesOption#4-Decentralized Warehouse Management Use of SAP as a standalone WMSWith SAP or other ERP/host as the core systemCore system
42、 and decentralized WM run on separate machines Communication is through BAPIs for transactions and IDOCs for master data Goods movements done through delivery notes to the stand-alone SAP WM system4-Decentralized Warehouse Management(cont.)ProsOn a separate machine Decreases criticality of down time
43、 24x7 operationCan leverage newer SAP R/3 releases Even if core system is on an older releaseCan add additional warehouses without impact to the core systemCan communicate to multiple core ERP systems4-Decentralized Warehouse Management(cont.)ConsCore system is not 24x7 operation IDOC and/or BAPI er
44、rorsIDOC failures Human intervention is required to work the error queueIDOC overhead IDOCs do not offer all of the available field options that a user may or may not use with the PC transaction Must modify the IDOCSAPConsole has to be set up in the decentralized system and in the core systemScaling
45、 the SolutionOperational ComplexityTransaction VolumeIM OnlyLean WMWMDecentralizedWMTRMWhat Well Cover Understanding the difference between WM and IM Choosing between WM and IM Optimizing and overcoming limitations with IM and WMOptimizing and Overcoming Limitations With IM and WM 1-Physical Invento
46、ry tips 2-Enhance visibility of material flow and locations 3-Automate picking and put-away 4-Automatically replenish fixed bins 5-Consolidate your picking activities 6-Overcome bottlenecks with RF1-Physical Inventory Tips(IM)Only possible if the storage location data has been maintainedSolution:Act
47、ivate automatic storage location for movement types that receive material into the plant Avoids the need to create storage data manually For materials with multiple storage location reqmts.Use the mass creation option for entering all valid storage locations at one time into a single entry screen Tr
48、ansaction code=MMSC 2-Enhance Visibility of Material Flow and Locations(IM)Use fixed bin assignment to gain additional visibilityMaterial master storage location view Two-step transfers vs.one-step movementsStorage location-to-storage location(movements 313,315)Plant-to-plant(movements 303,305,351,3
49、52)Outbound delivery monitorUse to view outbound deliveries,shipments and loading activities3-Automate Picking and Put-away(WM)Define a picking strategy per storage typeA-Partial quantity management If picking results in partial quantities,pick from here first to avoid breaking new palletsM-Large/sm
50、all quantities included Use to facilitate larger quantity picks from bulk areas and smaller quantity picks from rack areasP-Fixed bin from material master For fast moving items,assign a dedication location toward the front of the warehouse Use replenishment to enough maintain stock for demand3-Autom
