1、SAP IM vs.WM:How to Choose,Use,and OptimizeGavin KlausCatalyst International,Inc.What Well Cover Understanding the difference between WM and IMChoosing between WM and IMOptimizing and overcoming limitations with IM and WMInventory Management(IM)Key features/strengthsInventory management by quantity
2、Visibility 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 ad
3、justments 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 Provid
4、es information 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 Struct
5、ure at the IM LevelChallenges with Inventory ManagementLack 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 differInability to assign incoming materials t
6、o outbound 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 processLimited visibility to locations of materialsOnly possible to assign a sin
7、gle fixed bin location per storage locationBin location is“text”only;no strategies are availableSolution:R/3 Warehouse ManagementInitially 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 an
8、d material flowSimple-to-complex placement and removal strategiesAssignment of inbound orders to outbound deliveries Allocation of storage binsProcessing 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 FeaturesManagement of materialsProvides bin-level trackingInventory management functionsVarious placement and removal strategiesValue-added servicese.g.Special handling requirements(labeling,packaging)Powerful picking controlTwo-st
12、ep 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 movementsYar
13、d 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 MovementsControlInven
14、toryWM 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 processingSD-WMTwo-step picking with SD-WM integrationWave picking opportunitiesProcessing indivi
15、dual deliveriesPP-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 termin
16、als-WMProcessing of transfer requirementsProcessing of transfer ordersBin and material inquiriesBenefits of WMBenefitsBetter control of inventory More accurate inventory Able to maintain lower inventory levelsBetter control of information Visibility to picking and put away statusReduced cycle time G
17、artner: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%Reduct
18、ion 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 IMChoosing between WM and IMOptimizing and overcoming limitation
19、s 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 IMRequi
20、red data for IMPlant,valuation and storage location dataRelevant data for IMWork scheduling,accounting,materials planning,purchasing,classification,storage and quality managementIM menuGoods movementsMaterial documentsReservationsEnvironment Focused on reporting,lists and LISWhen is Warehouse Manage
21、ment 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 WMExtend material masterWarehouse m
22、anagement viewNo required dataDefine warehouse structureMinimize the number of storage types Define based on similar and different rules for storing materialsMixed stock,Storage or Handling Unit ManagementDefine the WM ProcessesAutomatic,semi-automatic and manual processing Transfer order creation,c
23、onfirmation,posting changesEvaluating IM vs.WM1 Define business processes2 Evaluate ROI of a WMS solution3 Consider RF functionality4 Training resources and schedule5 Focus on optimization opportunitiesStep 1-Define Business ProcessesStart with receiving,inventory and pick/ship firstCreate and evalu
24、ate process flow chartsLook at process improvement opportunitiesScore the level of complexityTarget areas for improvementReduce travel timeInventory accuracyReduce material handlingMap improvements to IM and WM functionality1-Define Business Processes(cont.)“The level of functionality that customers
25、 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 SolutionMeasure productivity and accuracy before and after the WMS installationReview and analyze p
26、icking operationsKey area of improvementReview 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 inefficiencies of the curre
27、nt operation and how much safety stock was needed to cover daily operations.”Source:Total Supply ChainStep 3-Consider RF FunctionalityRF supports improves warehouse bin accuracyBin accuracy 98%is possibleReduces order fill process cycle time RF projects often have a 1 year or less payback period Sou
28、rce:IntermecCompare current receipt process to the time saved when the task is aided by automatic data collection(ADC)3-Consider RF Functionality:ExampleAs-is1,000 pallets at five minutes/pallet=5,000 minutesWith two minutes saved per pallet2 minutes*1,000 pallets=2,000 minutes 2,000/480 minutes wor
29、ked by each receiver per day=4.16 receivers saved from the pallet receiving processStep 4-Training Resources and ScheduleResources to evaluate,guide and support a WM solutionA full-time,dedicated WM resource is critical This may or may not be the same IM resourceTraining scheduleA WM solution will r
30、equire a certain level of IM trainingWM training will vary based on the degree of functionalitySupport resourcesConsider a single resource for IM and WM if possible5-Optimization Opportunities Picking operations and inventory accuracyWhat are your baseline requirementsWhat is the volume of activityE
31、valuate picking paths and demandLook at your accuracy numbers over a period of time Perhaps monthly,quarterly,annuallyMaterial handling labor costsSpace utilization improvementsPacking tasksCan you benefit from packing while pickingWhat is the BEST Stock Management Solution?1-Inventory Management2-L
32、ean Warehouse Management3-Full Warehouse Management4-Decentralized Warehouse ManagementOption#1-Inventory ManagementProsSimplistic Key receipt,issue or transfer in a single step transaction Immediate update of inventoryRequires less training commitment Fewer transactions to document and presentTrace
33、-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 manage resources and tasks Lacks functi
34、onality 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 the follow on physical activitiesOption
35、#2-“Lean”Warehouse ManagementUse 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 applicationEvolved from SD pick listPut-away and pick from 1 or more fixed binsBin is hard assigned on material mas
36、terTOs 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 requiredAdditional processing options Confirm put-
37、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 storage is not possibleInventory is still under I
38、M 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-Full Warehouse ManagementProsOptimization
39、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 inventory methods(annual,zero stock)The module is
40、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 Configuration requirementsDesigning the warehouse layou
41、t and set upPotential for additional steps to support processing Confirmations Clearing differences Processing posting changesOption#4-Decentralized Warehouse ManagementUse of SAP as a standalone WMSWith SAP or other ERP/host as the core systemCore system and decentralized WM run on separate machine
42、sCommunication is through BAPIs for transactions and IDOCs for master dataGoods 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 24x7 operationCan leverage newer SAP R/3 relea
43、ses 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 errorsIDOC failures Human intervention is require
44、d 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 the SolutionOperational ComplexityTransaction
45、VolumeIM OnlyLean WMWMDecentralizedWMTRMWhat Well Cover Understanding the difference between WM and IMChoosing between WM and IMOptimizing and overcoming limitations with IM and WMOptimizing and Overcoming Limitations With IM and WM1-Physical Inventory tips2-Enhance visibility of material flow and l
46、ocations3-Automate picking and put-away4-Automatically replenish fixed bins5-Consolidate your picking activities6-Overcome bottlenecks with RF1-Physical Inventory Tips(IM)Only possible if the storage location data has been maintainedSolution:Activate automatic storage location for movement types tha
47、t 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 Transaction code=MMSC 2-Enhance Visibility of Material Fl
48、ow and Locations(IM)Use fixed bin assignment to gain additional visibilityMaterial master storage location viewTwo-step transfers vs.one-step movementsStorage location-to-storage location(movements 313,315)Plant-to-plant(movements 303,305,351,352)Outbound delivery monitorUse to view outbound deliver
49、ies,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/small quantities included Use to facilitate larger quantit
50、y 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-Automate Picking and Put-away(WM)(cont.)Define a put away str
