Is EWM Right for your Business? - SAPPHIRE NOW + ASUG Annual ...

Is EWM Right for your Business? Kristin von Hoerde-Garijo, Westernacher Consulting ASUG- Fall Focus 2013

www.westernacher.com

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In This Session we will...  Examine different SAP solutions for Warehouse Management (also referred to as WM) – From the very basic functionality embedded within SAP ERP to the more expansive SAP Extended Warehouse Management (SAP EWM)

 Compare features side-by-side, to enable you to map those capabilities to your business requirements to assess which will best meet your needs  Understand the implications of selecting the correct product

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Contents – What we will cover… SAP’s history with WM Understanding WM: What it does and why you should consider it Looking at SAP without WM or with limited WM

Exploring the three SAP solutions for WM Technical considerations for your WM solution Side-by-side comparison of the solution options Implementation considerations/lessons learned – SAP EWM

Deciding which solution is right for your requirements Wrap-up

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SAP’s History with WM

Source: SAP

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Contents – What we will cover… SAP’s history with WM Understanding WM: What it does, Why you should consider it SAP without WM or with limited WM



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Why WM? WM can provide many benefits to an organization, but in general these can broken into three high-level categories:

1. Efficiency: Ability to reduce cost to perform equivalent or improved service 2. Working Capital: Reduction in the amount of inventory required to meet or exceed customer requirements

3. Customer Service:

Availability of inventory to satisfy customer expectations

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Typical WM Value Drivers  Efficiency, Working Capital, and Customer Service are the three prime areas of value that can be gained from an effective WM solution

 The WM processes that support these are mapped below Reduce operating costs and increase efficiency

while lowering working capital…

…and improving customer service

Inbound Processes

Internal Processes

Outbound Processes

 Putaway Strategies  Advanced Shipping Notification  Goods Receipt  Cross-Docking  Yard Management

 Slotting and Rearrangement  Inventory Management  Physical Inventory  Replenishment

 Picking Strategies  Goods Issue  Proof of Delivery  Delivery Processing  Value-Added Services  Yard Management

Cross Processes  Warehousing Monitoring  Handling Unit Management Source: SAP

 RF and Barcoding  RFID

 Task Management  Resource Management 6

Contents – What we will cover… SAP’s history with WM Understanding WM: What it does and why you should consider it SAP without WM or with limited WM



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SAP Without WM WM is not a requirement for any of the SAP components and many companies operate efficiently without employing WM – using IM only  However, having all inventory managed only at a “storage location” level cannot support larger and more complex operations SAP does provide a field (storage bin) in the material master that, while basically a text field, provides some ability to separate inventory  i.e., Prints on various inventory documents

3003

Company Code

1001

Plant Storage Location

001

1002 002

001 8

SAP with Limited WM (SAP ERP) Minimal WM functionality can be achieved by setting up some basic capabilities at the “storage type” level, even providing for the automatic confirmation of the transfer orders (TOs)

 Provides separation of inventory

 Basic features can be used, such as bin determination, addition to existing stock, physical inventory, pick/putaway “tickets”

 Avoids labor and system costs involved with confirmation of transfer orders either with RF or manually

 Improves ability to locate and count inventory

 Low support and maintenance costs

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SAP Solution Offerings for WM SAP provides options for customers requiring WM, as below:

LOW

SAP ERP WM with Extensions (TRM, YM, VAS, …) Decentralized

SAP ERP WM Decentralized

SAP ERP WM Centralized

e.g. FG, MultiPurpose WH

SAP EWM Decentralized

HIGH

e.g. RAW MATERIALS

SIMPLE REQUIREMENTS

COMPLEX REQUIREMENTS 11

Warehouse Management – WM Solutions with SAP SAP ERP 6.0 WM Component

 Can run in centralized or decentralized mode – Decentralized approach provides for increased system performance, independence from SAP ERP platform and extended operating hours – Additional hardware and support costs are incurred (decentralized)

 Typically geared toward companies with less complex operating environments/processes  Incremental functionality available from Extension set 2.0 (EA-SCM) – – – – – –

Direct Store Delivery (DSD) support Planned and opportunistic cross docking RF serial number capture at delivery Value added services, yard management Dynamic cycle counting Task and Resource Management (TRM) enhancements (monitoring, capacity checking)

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Warehouse Management – WM Alternatives with SAP (CONTINUED)

SAP EWM 9.0 (SAP SCM 7.02)

   

Component of SAP Supply Chain Management (SCM) 7.02 solution set

Fully integrated with SAP TRM, SAP SCM, SAP CRM, and the SAP ERP application suite Expanded functionality beyond the SAP ERP version Connectivity/integration with other SAP platforms leverages a combination of: – qRFC (remote function call) for transactional data – Core Interface (CIF) for master data

 Supports decentralized mode  Typically geared toward companies with more complex operating environments/processes; high process automation; high transaction volumes; high number of SKUs; high product velocities; diverse product lines; high performance expectations; or complex integration requirements

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SAP Solutions for WM — SAP ERP 6.0 Landscape The simplest landscape option is the enablement of a module within a central instance of SAP ERP

 Delivered with all SAP ERP systems  SAP SCM (or other elements of the overall SAP landscape) are optional components

SAP SCM 7.02

– Integration points with limited WM

APO

ICH EM F&R CIF

Optional SCM

 SAP SCM, SAP CRM, SAP SRM can all be used

SAP ERP 6.0 MM

SD

PP

FI

WM

Etc.

SAP ECC 6.0 WM Landscape 15

SAP SCM 7.02 Decentralized option

APO ICH EM

 ALE interface to SAP ERP – Provides a level of independence from the core system and can then be optimized for the specific WM requirements – Allows enablement of the Extension set EA-SCM functions and features – Additional costs to maintain additional SAP ERP instances at the WM sites – Limited interoperability to other SAP solutions

qRFC

F&R CIF

Optional SCM

SAP Solutions for WM — SAP ERP 6.0 Landscape (Decentralized)

SAP ERP 6.0 MM

SD

PP

FI

ALE

Etc.

ALE

SAP ERP 6.0

SAP ERP 6.0

WM

One to many

WM

WM

Decentralized WM

SAP ERP 6.0 WM Landscape 16

SAP Solutions for WM — SAP EWM Landscape Use of SAP SCM to extend the WM capabilities

APO ICH EM

 Enriched features – Enhanced interoperability with other SAP solutions – All Extension set capabilities plus a lot more – Current development platform – One-to-many (decentralized or not) – Additional costs – Additional hardware, software, implementation, and system support costs

qRFC

Optional SCM

SAP SCM 7.02 F&R CIF

SAP ERP 6.0 MM

qRFC

SD

PP

CIF

SAP SCM 7.02

FI

WM

qRFC

Etc.

CIF

SAP SCM 7.02

EWM

EWM

One to many

SAP EWM 9.0 (SAP SCM 7.02) Landscape 17

Elements to Consider in the WM Selection Process

Selecting the right WM solution

 Features and capabilities – Compare features based upon value to the organization — short- and longer-term – Think longer term (e.g., “If I had better control of inventory could I reduce outside warehouse costs?”)

 Offsetting costs – Hardware, software, implementation, and support – Don’t forget the need for management of data to support the system(s)

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Comparison of WM vs. SAP EWM The next few slides compare the SAP ERP 6.0 WM with SAP EWM  The SAP ERP solution includes centralized, decentralized, and Extension set EA-SCM Neither of the solutions is, in general, dependent upon the use of SAP SCM for other capabilities  Both work with or without additional solutions from SAP (CRM, SCM – TRM, SPP,DP, PP/DS, gATP, SNP, TPM), SRM, etc… – SAP EWM does have the ability to leverage capabilities from some of these solutions and is adding more with each releases

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Warehouse Management Processes To facilitate our discussions, we will break the WM processes into 5 groupings:

4 Outbound Processes  Goods Issue  Cross-Docking  Value-Added Services  Yard Management

1 Inbound Processes  Goods Receipt  Putaway Optimization  Yard Management

4 Evaluation and Planning  Warehouse Monitor  Task and Alert Monitors  Delivery Monitor

Source: SAP

2 Warehousing and Storage  Handling Unit  RF/Barcoding/RFID  Resource Management

3 Physical Inventory  Period Inventory  Continuous Inventory  Cycle Counting 21

Inbound — Unload Provides ability to control unloading of goods from incoming means of transport SAP ERP 6.0 WM  Mobile Data Entry – Limited options for unloading – By Shipment – By Delivery – System Guided

SAP EWM 9.0 (SAP SCM 7.02)  Mobile Data Entry – Additional options – Transport unit, ASN, Handling Unit, Delivery Line Item  Visibility of truck or trailer (Transportation units) being unloaded or waiting to be unloaded  Overview information on truck or trailer and pallets  Import customs processing  Control Verification during unload – Scan destination of handling unit (License Plate) – Override destination, auto confirmation  Ability to manage when a truck or trailer is eligible to be unloaded  Interactive exception handling on RF (missing pallets, extra pallets, etc.) 22

Inbound — Goods Receipt Goods receipt of materials into the warehouse SAP ERP 6.0 WM  Inbound delivery based upon Advanced Shipping Notice (ASN)  Material can be packaged into handling units  Transfer orders are created to initiate and confirm putaways  Mobile Data Entry – Good Receipt by: – Delivery, Handling Unit, Staging Area  Mobile Data Entry – Limited options for unloading – By Shipment – By Delivery

SAP EWM 9.0 (SAP SCM 7.02)  Mobile Data Entry – Automatic goods receipt during unloading, Warehouse Tasks (WT) are created and confirmed behind the scene when scanning the Handling Unit or the material  Capability to acknowledge receipt by: – Transport unit – Advanced Shipping Notice (ASN) – Handling Unit (HU) – Delivery line item  Update scheduling agreement/ purchase order  Visibility of material across system landscape  Returns handling  Stock specific UOM

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Inbound — Deconsolidation Divide handling units across multiple putaway handling units SAP ERP 6.0 WM  Limited RF-based options for deconsolidation

SAP EWM 9.0 (SAP SCM 7.02)  Capability to build efficient and consistent units of work for putaway  Ability to direct Handling Units (HUs) to one of the many deconsolidation stations based on warehouse-specific rules and conditions – Handling Unit type – Putaway activity area of warehouse  Process-oriented as well as layout-oriented methods for storage control  Capability of handling cross-dock HU  System- or user-directed execution of deconsolidation  Ability to set limits for HUs leaving deconsolidation – Weight or number of Warehouse Tasks

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Inbound — Complex Putaway Procedures (Internal Routing) SAP ERP 6.0 WM  Mobile Data Entry – Good Receipt by: – Cluster HU – Selected by Transfer Order – System Guided – Selected By Delivery

SAP EWM 9.0 (SAP SCM 7.02)  Mobile Data Entry – Options – Using HU (Cluster HU [more than One HU]) – Using Warehouse Task – Using Stock ID/Product or Warehouse Orders  Mobile Data Entry – Additional options – Skip warehouse task during the putaway – Reverse the putaway sequence – Post putaway correction of Warehouse Task  Process-oriented storage control – Requires Handling Unit Management (HUM)  Putaway activities can be performed in one of the following ways: – Automatically at creation of the inbound delivery – Regularly at a specific time – Manually using overviews of the daily loads 25

Outbound — Wave Management Control the work released to the warehouse at a specific time SAP ERP 6.0 WM


 Waves are created as groups of deliveries and can be created online or in batch  Transfer Orders (TOs) are created per wave  The waves status can be monitored (e.g., picking and packing status)  Waves can be created based on time slot or time slot groups

 Robust Warehouse Monitor functionality to manage planning and execution of Wave Management  Greater flexibility in planning waves to a more detailed level  Enhanced tools to make changes to planned waves prior to release/execution  Flexible Warehouse Order Creation rules to create Warehouse Task (WT) bundles  Tightly integrated to allocate right amounts of picking work to each resource  Capability to take into consideration a number of factors like route during wave building  Defined process routing steps for picking, packing, staging, loading, value added services, etc.  Multiple release techniques such as manual, immediate, or automatic  Pre-defined Wave Planning templates 26

Outbound — Route Guide Engine (RGE)

SAP ERP 6.0 WM  N/A – no standard functionality exists

SAP EWM 9.0 (SAP SCM 7.02)  The Route Guide Engine (RGE) and Route Determination functionality reside in the SAP EWM  RGE determines the most optimal route and assigns it to an order document based on customer and shipping information  RGE is used by the following processes: – Wave Planning: Wave Templates – Picking: Warehouse Tasks and Warehouse Orders – Packing: Pack with/Consolidation groups – Staging/Loading: Loading by Route – Shipping: Destination Location – Cross Docking: Determines optimal cross dock route for shipment consolidation

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Outbound — Picking Warehouse order creation to pick inventory SAP ERP 6.0 WM  Transfer Orders (TOs) for picking  TOs can be split by picking area, line item, or weight/volume  Picking location is determined when TO is created  Exception handling restricted to stock discrepancies

SAP EWM 9.0 (SAP SCM 7.02)            

WM requests Activity areas Bundles/warehouse orders Pick orders Assignment of bundles Re-sequencing Initiation of replenishment during pick cycle Assignment of equipment/equipment types to queues More advanced HU assignment Positioning of HU on equipment WT bundle splitting/merging Rules-based capability to trigger inventory count

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Outbound — Picking (CONTINUED)

SAP ERP 6.0 WM  Simple HU assignment, based on movement type and storage type  No capability to indicate which packing station or staging area to put HUs/TOs  Confirmation by TO or TO line item. No mass confirmation.  Not possible to trigger counts or replenishment directly during picking  Cumbersome re-pick/denial process

SAP EWM 9.0 (SAP SCM 7.02)  Trigger emergency replenishment based on differences  Mass confirmation  Exception reporting for stock discrepancies, storage discrepancies, human-related exceptions  Determine packing/consolidation areas  Comprehensive pick-bin determination, including pick to clean, pick to fill, FIFO, LIFO, custom strategy

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Outbound — Packing Control of the process used for the pick handling units SAP ERP 6.0 WM  Capability to pack Delivery Items in Handling Units (HUs) and allocate items to several HUs  Pack across multiple deliveries only possible in Shipment Processing  Limited Staging and RF capability  Limited printing capabilities at the HU level

SAP EWM 9.0 (SAP SCM 7.02)         

  

Movement of pick HU to Pack Station (Routing) Collection of Dangerous Goods Data in EHS Execution of packing, weighing, printing Movement of pick HU to consolidation/ deconsolidation area Consolidation at weighing, printing Movement of pick HU to final staging area RF Packing functions at Pack Stations Enhanced printing capabilities by HU Enhanced Organizational Units (Work Centers and Bin Management) to represent Pack Stations Packing Activities and Status for Wave, Bundle, WT, and overall status by activity Cartonization Kit – to - Order 30

Outbound — Loading User driven loading based on stop sequencing and Transportation Unit (TU) capacity SAP ERP 6.0 WM  Limited RF loading options

SAP EWM 9.0 (SAP SCM 7.02)  Multiple RF loading options, e.g., by HU, Route, Delivery, Shipment  Functionality to incorporate stop sequencing during loading for efficient unloading  Weight and volume checks to ensure shipments are not overloaded

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Outbound — Shipping Subsequent processing of outbound deliveries and post goods issue of Transportation Unit (TU) contents SAP ERP 6.0 WM


 Creating Shipments  Warehouse Monitor to manage Wave, Bundle, – Choose deliveries according to certain WT, and overall status by activity selection criteria and then assign them to the  Shipping-specific Grouping and Assignment new shipment – Grouping of sales order lines to pending  Pick/Pack Activities shipments – Create TOs for selected deliveries – Grouping of sales order line items to – Pack HU deliveries  Loading Activities – Assignment of Sales Order lines to Doors – Change Loading Status of HU and Staging Areas – Assignment of Resources to the planned load  Communication of Transport Requirements to Service Provider – Sales Order schedule line item data and totals of the tour provided to the interface to TMS 32

Outbound — Shipping (CONTINUED) SAP ERP 6.0 WM


 Maintain Status of Shipping Document:  Loading Activities: – With VT12 (Shipment Completion List), – System Driven: The bundle of warehouse shipment completion status can be set for all orders is generated beforehand with systemselected documents guided task sequencing  Printing of Freight Documents – User Driven: Operator driven activities with – Process of printing all freight documents actions tracked in the system can be triggered automatically  Collecting/Printing/Transferring of Documents  Goods Issue  Enhanced use of the Post Processing – By Shipment Number; selects all deliveries Framework to support printing of the correct posting the Goods Issue for them paperwork – Transfer of Documents to external partners  Goods Issue – The pending deliveries and shipments are converted into executed deliveries and shipments  Shipment Interface to ECC  POD Integration 33

Outbound — Cross Docking Movement of products directly from good receipt (inbound) to goods issue (outbound) minimizing material handling costs SAP ERP 6.0 WM


 Manual process to peg inbound receipts to outbound deliveries  With Extension set EA-SCM: – Planned and Opportunistic Cross Docking

 Cross Docking – Shipments from one facility to another through one or more intermediate facilities within a network  Transportation Cross Docking – Plan and optimize material flow and transportation from source to destination via intermediate cross docking consolidation points  Push Deployment (PD) – Planning system (APO/SPP) decision to forward stock from one warehouse to another – Decision is made upon the goods receipts and based on demand forecast  Pick From Goods Receipt (PFGR): – Planning systems (APO/SPP) decision to forward stock to customer based on sales order 34

Internal — Slotting Process to optimize warehouse layout and product placement strategy improving labor costs and space utilization SAP ERP 6.0 WM  N/A – No standard slotting functionality exists

SAP EWM 9.0 (SAP SCM 7.02)  Slotting functionality to optimize material location for efficient storage and retrieval  Automatic determination of optimal storage type, storage section, and bin type, taking into account material characteristics, weights and dimensions, storage quantity, and demand  Automatic update to product master for product characteristics, replenishment information  Simulation mode (what if?) capability

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Internal — Rearrangement Process to optimize space in a warehouse by moving stock to the most optimal location/bins within a warehouse SAP ERP 6.0 WM  N/A – No standard functionality exists to automate the planning or execution

SAP EWM 9.0 (SAP SCM 7.02)  Rearrangement is based on slotting – Rearrangement capability allows you to evaluate the degree of optimality of a material in a location  Alerts provided to warn of product in too many bins, or areas that are too full  Rearrangement compares current occupied bins with the optimal bin size and area of warehouse  Automatic determination of rearrangement tasks and warehouse task (WT) creation

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Internal — Bin Replenishment Movement of material within the warehouse to restock a picking area SAP ERP 6.0 WM


 Min/Max replenishment

 Fixed and/or Dynamic Pickface

 Production planning interface into picking areas

 Proactive replenishment

– Planned replenishment (min/max) – Automatic replenishment – Order-driven replenishment  Dynamic replenishment – Exception-based replenishment

– Picker-driven replenishment

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Internal — Inventory Counting Physical inventory documents, executing the physical inventory process, reconciling the count quantity to the stock records, and posting any differences to financials SAP ERP 6.0 WM  Cycle Counting  Annual Inventory Counting

 Manual Inventory  Zero Stock Count  Inventory blocking issues

SAP EWM 9.0 (SAP SCM 7.02)  Ability to count inventory while receiving and picking the product (blocking is not required, other processes can continue)  Prioritization of count document  Recount thresholds  Approval thresholds

 Low stock count  Exception counts

 Optimized count path  Difference Analyzer

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Cross Process — Yard Management Define and manage outside the warehouse's four walls SAP ERP 6.0 WM  Without Extension set EA-SCM – no standard functionality exists within SAP ERP 6.0  With Extension set EA-SCM – similar functionality as SAP EWM

SAP EWM 9.0 (SAP SCM 7.02)  Door Appointment Scheduling  Capability to execute and record movements within yard, yard to door, and door to yard using desktop or mobile devices  Yard management/monitoring: – Managing parking spaces within yard – Warehouse door assignment – Reserve empty trucks and trailers for loading – Transportation planning – Scheduling loading/unloading activities – Visibility of empty vehicle and trailers in yard  Warehouse monitor capabilities: – Parking slot status (full and empty) – Visibility of empty vehicle and trailers – Reserve empty trucks and trailers for loading – Carrier status (check in and check out) 39

Cross Process — Value-Added Services (VAS) VAS provides functions for instructing, performing, and monitoring additional services in the warehouse

SAP ERP 6.0 WM  Without EA-SCM Extension set, no standard functionality exists within SAP ERP 6.0  With EA-SCM extension set, similar functionality as EWM

SAP EWM 9.0 (SAP SCM 7.02)  VAS are additional activities to manage special requirements (special labeling, customerspecific product assembly or packaging, postponement services)  Performed using warehouse orders  VAS orders provide information on what activity needs to be performed

 VAS orders link delivery items with packaging specification for VAS activities  Auxiliary products used for VAS can be tracked using VAS order

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Cross Process — Quality Management Quality Inspection Engine provides capability to define and map processes to validate specific quality criteria SAP ERP 6.0 WM


 N/A – No standard functionality exists within SAP ERP 6.0 at the warehouse management level  Full blown Quality Management functionality is available within SAP ERP QM at the Inventory Management level

 Quality Inspection Engine (QIE) is functionality contained within the SAP SCM application  Processing of master data (inspection rules, sample drawing instruction, and quality level)  Triggering of inspections, creation of documents  Lean Quality Management Functionality (doesn’t require inspection characteristics)  Rule Attributes: Supplier, Product  Calculation of the sample size: Percent, fixed  Usage decision of inspection  Scrap surplus/obsolete material  Can be seen in the monitor under documents as well as the workload for your inspection areas  Available interfaces with external LIMS 41

Cross Process — Labor Scheduling Track employee performance against labor standards SAP ERP 6.0 WM  N/A

SAP EWM 9.0 (SAP SCM 7.02)  Planning, simulating, and measuring employee activities, both direct and indirect labor  Immediate employee feedback of efficiency by viewing results on their RF device  Travel time measurements for both horizontal and vertical operations  Define and monitor KPIs that are established for the operations  Simulation capabilities  Integration with HCM solutions

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Cross Process — Warehouse Monitor SAP ERP 6.0 WM


 Warehouse Monitor functionality to view Wave, Transfer Orders (TOs), deliveries, and status of movements within the warehouse  View and drill down into each function and document

 Visibility Tool for monitoring and reporting of status information  Track transaction flow  Management/supervisor tool for WIP and processed data  Execution functionality and navigation capabilities  Document view: – Outbound Deliveries, Wave Status, Status of WO/WT  Real-Time Process views: – Across all functions in the warehouse  Customize Variants and Set Layout views: – Set specific selection criteria, e.g. product/customer – Ad hoc reporting

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Where Does SAP EWM Make The Difference? Personalization & Execution

   

Role-based menus & User-specific reports Powerful warehouse analytics & monitoring Flexible execution Multilingual support

Configuration

 Industry specific warehouse processes  Advanced warehouse optimization  High performance warehouse execution Integration & Extension

      

Deep integration with SAP business suite Comprehensive mobile offering for warehousing Open code for reuse & modification free extensions Documented interfaces Upgrade security or upgrade secure interfaces Flexible deployment options Integration to legacy systems and 3rd party software

10 Reasons to choose SAP EWM 1. Improved warehouse efficiency 2. Process transparency

3. Encompassing functionality 4. Flexible process modeling

5. Industry focus 6. Deployment flexibility & scalability 7. Fast implementation & integration 8. Rapid business value 9. Partner ecosystem

10. Vendor visibility & strategic investment 44

Where Does SAP EWM Make The Difference? Now fully integrated into SAP Transportation Management 9.0

Order Processing (ERP)

Transportation Planning (TM)

Sales order or

Interactive/

delivery creation (SAP ERP) Automatic transportation request creation (SAP TM) Automatic freight unit creation (SAP TM)

automatic transportation planning Carrier selection Carrier tendering Freight order creation Automatic delivery creation in ERP

Warehouse Execution (EWM)

Transport Execution (TM)

Wave creation Shipment status Picking optimization, check packing, staging Shipment and load management Value-added services Waybill print Appointment scheduling

execution monitoring and even tracking

Freight Order Settlement (TM/ERP)

Transportation charge calculation Freight invoice request creation and transfer to ERP

Integrated Outbound Process TM-ERP-EWM Source: SAP

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Implementation Considerations  Spend time upfront to decide on ‘right’ solution for your needs  Implement software w/minimal customizations – think big picture, start small  Build a solid incremental business case to perform against

 WM systems, esp. EWM require unique skill sets and expertise to implement  Leverage a pilot/template implementation approach – Implement the pilot, then incorporate lessons learned into subsequent rollouts

 Don’t underestimate the technical requirements in setting up and maintaining the environments and managing customizations

 Involve business users in every phase of the implementation

Implementing SAP SCM 7.02 means putting into operation a state-of-the-art business solution with new features, functions, integration, data, architecture, and technology 47

Implementation Considerations  Project Planning Be conservative and realistic

 Interdisciplinary Project Team Involve key stakeholders every step of the way

 Process Design Really think / ‘play’ through processes, be open to adopt new processes

 Change Management & Training Involve and train users / stakeholders early to motivate and empower users

 Build / Realization Select IT resources / programmers carefully

 Technical Architecture / Landscape Size right and test, test, test

 Integration How much, how fast?

 Reporting Focus on the necessary, not the possible

 Data Dirty data = bad blood = cardiac arrest

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WM Assessment Framework  Create a framework to capture and contrast differences in the solutions  The illustration below highlights an example of the evaluation criteria that’s been defined as part of the assessment framework Assessment Criteria

ERP 6.0

ERP 6.0 ERP 6.0 ERP 6.0 Third WM d/WM EWM Party

Business Drivers Operations Facility Operations Support Standard hours of operation (8-12 hrs) Support Extended hours of operation (12-20 hrs) Support 24 hours operations (24x5, x6, x7) Support across multiple time zones Independence from ERP platform Transaction Volumes Process Functionality Integration Technical Architecture

The ‘one size fits all’ approach may not work best when evaluating business needs across the overall distribution network 50

High-Level Cost — Benefit Analysis

Benefits  Efficiency – Inbound – Outbound – Internal – Avoidance (e.g., Cross docking)  Inventory Reduction – By process – Total without redundancy

Costs  Software – SAP and other  Hardware – Systems – Handhelds  Support – Will be different – Formal and informal  Implementation – Internal and external

Balancing benefits vs. costs is always an important aspect in selecting the right solution 51

Some Examples of Successes from our Customers that switched to EWM

25% 15% 25% 25% 40% Plus…

…decrease in receiving and deconsolidation time

…reduction of dock unload times

…increase in receipts handling with same staff levels

…load time reduction in 3 of 4 warehouses

…reduction of pick time for production kits

 Reduction of time to handle quantity (or any type of) discrepancies  ‘Seamless’ automation equipment integration via MFS, cutting out 3rd party solution and costs associated w/additional hardware and data maintenance

 Higher fulfillment / lower back order rates due to optimized Cross-Docking 52




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Resources

SCM Portal: Here you can find detailed literature on all of the SCM products (http://service.sap.com/scm *)

SAP Help  WM http://help.sap.com/saphelp_erp60_sp/helpdata/en/cb/973735ec50d33de10000009b38f8 89/frameset.htm  EWM 9.0 http://help.sap.com/saphelp_ewm900/helpdata/en/f0/123302094d473ba4f517670e8a93c 9/frameset.htm  TM 9.0 http://help.sap.com/saphelp_tm90/helpdata/en/3E/3AAE424F7D4A998FF8F79B38C962C C/frameset.htm

* Requires login credentials to the SAP Service Marketplace

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7 Key Points to Take Home 1. Assess your needs based upon Business Requirements and Business Benefits – now and into the future (0-5 years out) 2. Create and gain agreement on an assessment framework that will be used to evaluate the proposed solution 3. Multiple solutions can be used simultaneously, don’t install the most complex solution to solve simple business needs 4. Consider the impact of data within the solution proposed 5. Involve Business and legacy teams early in the decision process

6. Avoid “interesting” features that do not add business benefit 7. Don’t underestimate the costs to maintain sophisticated systems such as SAP EWM

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Westernacher Contact

Kristin von Hoerde-Garijo

Westernacher & Partner Consulting, Inc. 8 Grove Street, Suite 200 Wellesley, MA 02482 USA Tel +1 (781) 283-5777 x303 Cell +1 (203) 919-3457

[email protected] www.westernacher.com

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