Warehousing and Storage
Purpose
You use this business process to manage materials with the warehouse environment using SAP Warehouse Management (WM). In the context of the generic business processes for Supply Chain Management (SCM), this process begins where the Inbound Process ends and ends where the Outbound Processing begins.
Warehousing and Storage processes include multiple processes throughout the warehouse from the time materials enter the warehouse via Goods Receipt until they exit with a Post Goods Issue. The Warehousing and Storage Process is one example of how materials might be effectively managed within the warehouse environment using SAP WM but is not inclusive of all warehouse functionality.
It is possible to manage materials within Inventory Management at a storage location level or within Warehouse Management at a bin location level. A bin is the smallest addressable unit in the warehouse and is associated with a material to show the physical location of where a material is stored.
With warehouse management, customers can define their physical warehouse characteristics, including separate storage areas with different strategies for storing and retrieving materials from specific bins. Also, with warehouse management, customers have more control over the warehouse processes including which materials are recommended for picking based on different strategies, or which resources are available to process which tasks within the warehouse (TRM), for example.
Once a Goods Receipt has been posted in the warehouse, there are many configurable options to define where that material will be placed in the warehouse. There are various levels of automation and many settings to consider in setting up the control of the flow of goods in the warehouse. When a goods receipt is posted in the R/3 WMS system, a Transfer Order (TO) can be created in the background or foreground as an instruction to a warehouse worker to place the materials into stock into a particular bin. The TO is the document within the warehouse that provides instruction for movement of materials from the source to a destination location.
It is optional whether the TO is created automatically immediately following the goods receipt transaction or manually at a later time. If the creation is immediate, the TO can be created in the foreground with the possibility for manual processing, or in the background based on customizing settings. Whether the TO is confirmed automatically or manually, and in one step or two steps, is also something which can be customized by storage type within the warehouse.
If the TO is confirmed in two steps, this means that there is a partial update to the goods receipt when the material is picked up in the source location and a second confirmation when the material is delivered to the destination location.
During the creation of a putaway TO, the system first determines the movement type, quantity and the source storage bin from the preceding document – for example, the material document or the inbound delivery. The system looks at the material master and gathers some data, for example, palletization data, putaway indicator, hazardous material information, and other data influential to the storage type search. The system finds the appropriate storage type using the storage type search, then, using customizing settings for the storage type, the system will determine the best destination for the materials.
At the storage type level, you can specify information unique to the putaway process. For example, you can choose from multiple standard placement strategies, or you can enable a user exit to have the system use customer-specific logic for locating an appropriate bin for putaway. You can also choose by storage type how materials are stored, for example, are they stored separately or do you allow mixed materials in a bin. There are some logical checks for the storage type customization, for example if you select ‘Fixed Bin’ as the putaway strategy, then you must also allow ‘Addition to Stock’. This means when a material exists in a bin and a new receipt is posted for the same material, the new receipt is placed into the same – or “fixed” bin. In that case, the new receipt assumes the identity of the original quantity, including goods receipt date. If FIFO or Stringent FIFO is important to the material, other placement strategies should be considered, or other solution combinations – like HU Management or Batch Management.
For more information on implementation options, see the SAP Library under SAP R/3 Enterprise ® Logistics ® Logistics Execution (LE) ® Goods Receipt Process for Inbound Deliveries ® Putaway.
A user exit (also called a Business Add In or BAdI), is a place in the code where a customer can insert their own program or code. To get a list of user exits, or to check for documentation for a specific user exit, in any R/3 system, access the transaction SMOD. Enter MWM* in the Enhancement field and choose the User Exit you are interested in. Then select Documentation and Display.
This process will assume a common placement strategy – Next Empty Bin and a common picking strategy – FIFO.
Process Flow
The Inbound and Replenishment processes are examples of processes within Warehouse Management. The Replenishment Process is optional for customers who want to resupply bins based on either a minimum quantity or a demand quantity.
For this business process, we will assume all steps are done manually. Many of these steps can be processed in the background for more efficient processing, but it is important to understand which steps are required within the entire process before you can automate the process.
Inbound Process
This business process runs in SAP R/3 Enterprise.
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1. Create purchase order.
2. Create inbound delivery.
3. Create transfer order.
A Transfer Order (TO) is the warehouse document that causes a material to be physically moved in the warehouse.
Transfer Orders can be created from multiple documents including the material document, transfer requirement or inbound delivery. TOs can be created automatically upon the goods receipt posting, or they might be created manually, depending on warehouse level customizing settings. If TOs are created manually, they might be processed in the foreground where the user can override the TO logic, or in the background, where the most optimum storage bin is selected based on customizing. It is possible to check the log during the TO creation process to see how the final destination is derived.
4. Putaway.
5. Confirm TO and post receipt.
The materials are available for further processing when the TO is confirmed. TOs can be confirmed automatically, immediately following creation, or manually and in one- or two-steps. The system can also be configured so that Post Goods Receipt occurs at the time of TO confirmation.
The TO can be confirmed in one step or two steps, depending on customizing at the warehouse level. If the TO is confirmed in one step, there is no visibility of when the move is actually in process. If radio frequency devices (RF) are not being used, it is common to confirm TOs in one step. When RF devices are in use in a warehouse, it is common to confirm TOs in two steps. This means that the worker confirms the first step of the TO at the source bin, and confirms the final step of the TO at the destination bin. This gives the warehouse manager more up to date information on where a worker is in the process, and it also frees up the source bin as available for placement of another material more quickly.
Regardless of whether you process the TO in one-step or two, the materials are not available for further processing until the confirmation is complete.
Replenishment
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This business process runs in SAP R/3 Enterprise.
1. Set up master data.
The replenishment process can be run in different ways, depending on a customer’s strategy. A customer might choose replenishment based on a threshold quantity, based on demand, or at a storage type, rather than bin level. A customer might also choose not to run replenishment at all, but simply to pick materials from their original destination. In that sense, replenishment is an optional process.
If a customer replenishes to fixed bins based on a threshold quantity with a fixed maximum limit, the planning is for a bin situation. In this case, a report is run (perhaps in the background) to determine which bins are below their minimum values. The report can create TOs (or Transfer Requirements for later conversion to TOs) that will replenish the materials up to the bin maximum in increments of the pallet quantity.
A second option would be to plan the replenishment quantity based on the demand. In this case, the customer could run a report to analyze the demand over a time period (for example one day), then replenish, again based on the pallet quantities, to cover the demand period. This method disregards the minimum and maximum bin levels, but plans in the pallet quantities.
The final option would be to plan the replenishment to the storage type level, for example in random storage areas. The customer wants to replenish to a storage type, but the bin is not fixed and the materials are directed to the optimum storage bin for a given storage type.
It is also possible to create replenishment TOs at the time of TO confirmation rather than run a batch report to determine when a replenishment TO is necessary.
For more information about replenishment, see the SAP Library under SAP R/3 Enterprise ® Logistics ® Logistics Execution (LE) ® Warehouse Management System (WMS) ® Stock Transfers and Replenishment.
2. Run replenishment report.
3. Create transfer order.
TOs for picking processes are created in much the same way as TOs for the inbound process. TOs might be created manually or automatically on the basis of outbound deliveries or transfer requirements for example.
Whether created in the background or foreground, picking TOs use logic based on customizing and master data from the material master record to determine the most optimum picking location from which a material should be picked. This might be based on FIFO (First In First Out), Partial Goods Receipt, Fixed Bin or other picking strategies.
This process will assume the FIFO picking strategy which ensures the oldest material in the warehouse will be picked first.
For more information, see the SAP Library under SAP R/3 Enterprise ® Logistics ® Logistics Execution (LE) ® Warehouse Management System (WMS).
4. Confirm transfer order.
Similar to an inbound TO, a pick TO has many options available as to how it is processed.
Just as in the case of an inbound TO, the pick TO can be confirmed automatically at the time of creation or manually based on configuration settings. The pick TO can also be confirmed in one- or two steps.
An additional option for the pick TO is for example in the case of a partial pick, it may be necessary for a full pallet or container to be removed from the bin in order to pick the materials to fulfill the TO. The system can be configured so that the source quantity is the entire quantity, the destination quantity is the required quantity, then there is a RETURN quantity for the partial remaining quantity. This quantity can be returned to the same bin, or can be returned to a designated area for partials, or can be delivered as an overage into the destination bin.
For more information on picking options, see the SAP Library under SAP R/3 Enterprise ® Logistics ® Logistics Execution (LE) ® Warehouse Management System (WMS) ® Putaway and Picking Strategies.
An enhancement to SAPConsole to support browser-capable devices exists as of the Basis 6.40 release.
Variant: Warehousing and Storage with TRM
Another option when implementing SAP WM is whether to use the Task and Resource Management functionality. If a customer has the requirement to optimize and manage their resources to the task level, then TRM may be a good option. TRM works together with LES to manage the processes in the warehouse and ensure that resources are working on the most optimum tasks at any given time. TRM keeps track of where the resources are by what they are working on, and so optimizes the next task given to the worker. TRM can manage which warehouse workers are allowed to perform which tasks. A customer can implement TRM for only one storage type/movement types, for multiple storage types/movement types, or for an entire warehouse. We recommend implementing TRM in a decentralized landscape for maximum efficiency in warehouse processes. For more information on TRM, see the SAP Library under SAP R/3 Enterprise ® Logistics ® Logistics Execution (LE) ® Task and Resource Management (LE-TRM).
Variant: Warehousing and Storage with RF
All of the Warehouse processes including putaway, picking, cycle counting, packing and loading are supported with RF. There are standard RF transactions that are delivered with SAP WM 4.6B and higher. It is also possible for a customer to compose their own RF transactions for use inside or outside of the warehouse. A common WM transaction that is written by many customers is a bin to bin transfer, for example. Various RF device types are supported in the warehouse including text-based, GUI, or browser-capable devices. SAPConsole technology allows a customer to take advantage of text-based devices. For more information on SAPConsole and RF support, see the SAP Library under SAP R/3 Enterprise ® Logistics ® Logistics Execution (LE) ® Warehouse Management System (WMS) ® Mobile Data Entry (LE-MOB) ® RF Device Support.
Optional step: Value Added Services
As of SAP R/3 Enterprise 4.70, Extension Set 2.0, Value Added Service (VAS) functionality allows customers to manage processes in the warehouse where value is added as an interim step to a putaway or picking process. This type of process might be inserting a label, or adding a tag to an item, or another operation that is performed at a work station within the warehouse. With VAS, a customer can track what work needs to be done and what has already been completed. A TO is redirected to one or multiple work centers and activities are completed at those work centers. Text instructions are given to the workers via an RF device. A monitor is provided for an overview of all VAS activities in the warehouse.
For more information on the VAS functionality, see the SAP Library under SAP R/3 Enterprise ® Logistics ® Logistics Execution (LE) ® Warehouse Management System (WMS) ® Value-Added Services (LE-WM-VAS).
Optional step: Yard Management
Yard Management functionality can be added to extend the warehouse capability beyond the traditional four walls. Yard Management functionality can be used to check trailers in and out of the yard, track trailers while they are in the yard, manage and schedule the doors of a customer’s warehouse, load and unload, seal and unseal, and many other functions. The customer now has visibility as to not only which trucks/trailers are in the yard, but also which deliveries are in the yard. There is also a Yard Monitor which exists to give the Yard Manager an overview of all activities in the yard. RF Transactions can be used to communicate with the yard personnel and make the appropriate movements from one area to another.
For more information on Yard Management, see the SAP Library under SAP R/3 Enterprise ® Logistics ® Logistics Execution (LE) ® Yard Management.
Optional step: Support for Production Supply
Support for Production Supply is also available with SAP WM. The WM-PP Interface ensures that materials are delivered from the warehouse to the production supply areas in an efficient, timely fashion. There are several options on setting up the Production Supply areas, including Kanban replenishment and material staging.
For more information on different possibilities for production supply, see the SAP Library under SAP R/3 Enterprise ® Logistics ® Logistics Execution (LE) ® Warehouse Management System (WMS) ® Interfaces.