SCM EWM: Applying Extended

Warehouse Management to the

Wholesale Distribution Industry
Gavin Klaus and Ed Pettit, EY

SESSION CODE: WD635

Agenda

 Introduction
 EWM Update
 EWM for Wholesale
 Applying Best Practices with your organization
EY has strong SAP advisory capabilities across the
world

50+ countries | 4,400+ professionals

Globally Advisory Assurance Tax Transaction

EMEA
1,300
specialists

Top six sectors for

SAP practice
Americas 1Manufacturing
1,900
specialists
2Life Sciences
Asia-Pac 3Finance & Insurance
1,200 4Consumer Goods
specialists
5Power & Utilities
6Communications
EY SAP supply chain practice
Supply Chain Execution Supply Chain Planning
► Largest EWM practice in the Americas ► End to end supply chain planning
► Most experienced SAP EWM consulting capabilities
team ► On premise and cloud based services
► Highest success rate ► Industry leaders in planning process
► EWM accelerators improvement and transformation
► SAP Transportation Management ► Advanced Planning and Optimization
► Warehouse optimization through Process ► Sales and Operations Planning
improvement ► Integrated Business Planning

EY SAP Practice
►Global SAP capabilities practice and Global Talent Hub (GTH)
►World class :
►Program management organization, methodologies and tools
►Analytics and big data
►People and organizational change
Our service offering for process improvement supply
chain execution

Distribution and logistics

Logistics network Logistics network Strategic direction setting

► End-to-end network optimization ► Corporate/SCM strategy alignment
► Transport vs. inventory cost evaluation ► Business case evaluation
► Cost benchmarking ► Outsourcing strategy logistics planning:
► Network simulation distribution/fulfillment strategy

Transportation
Performance improvement

Process modularization and standardization

Transportation ► Cost to serve, cost reduction vs. service
► Multi-modal transport optimization improvement
► Transport planning ► Logistic balance scorecard
► Freight cost optimization ► Supply chain KPI systems

Supply chain visibility

Site logistics

Tracking and tracing

► Carrier selection and tendering ► Logistics intelligence
► Customs clearance, compliance Security and risk management
► Third-party contract risk reviews
Site logistics ► SC security reviews
► Private freight traffic Warehouse Production ► FIDS/ABAC assessments
► Gate/slot management logistics logistics ► Quality, anti-counterfeit
► Commercial handling
Technology enablement
► Site security and safety
► Transport/WM mgt systems
► SAP/EWM/TM/LES/GTS
Warehouse and production Strategic direction setting
► Auto-ID/barcode/RFID
► Efficient materials handling Security and risk ► Labelling and GS1 standards
► Lean logistics
Performance management People and organization
► Production supply and production
logistics Technology enablement ► Logistics restructuring and change
► Value-added services People and organization ► Training and coaching
► Resource management
 EWM Market Update

Source: SAP
Key Learnings

 The Wholesale Distribution industry has some of the

most advance distribution operations and processes.
Learn how SAP EWM facilitates best practices in the
Wholesale Industry
 Learn how many of these best practices are cross-
industry and the key features that can lead to key
performance gains within your operation.
SCM EWM Update

 SCM EWM offers significant functionality above and

beyond ERP WM offering functional parity with Best
of Breed WMS solutions including:
 Labor Management
 Slotting
 Material Flow Systems
 RF Wizard
 Quality Inspection Engine
 Resource Management
 Cross-Docking
 Value Added Services and Kitting
 Yard Management
 SCM EWM Update

 The SAP EWM solution was introduced to compete

with best of breed solutions. Now on its fourth
release, EWM is gaining traction in the market, offers
the features and functions you would expect in a
robust solution, and offers distinctive value
propositions not offered by other leading suppliers.

 So is SAP EWM a rival to best of breeds? Yes they

are.

Source: ARC Advisory Group, “SAP EWM: A Rival to Best of Breed Solutions?“, October 2010
SCM EWM Update

 EWM has been implemented globally in a wide

variety of industries:
 Third Party Logistics
 Wholesale Distribution
 Food and Beverage
 Automotive
 Retail
 Life Sciences
 Industrial Manufacturing
 Aerospace
Wholesale Distribution Requirements

 Multiple vendors  Multiple Transportation

 Multiple customers methods, will call, customer
pay, company pay, parcel,
 High number of SKU’s
LTL, Courier, Milk run, own
 High service level fleet
 Small orders  Value added services
 Parcel shipping  Order flexibility
 Low eaches per line
 Short order cycle time and
late cut offs
Wholesale Distribution Industries

 Retail/CPG (Food, Beverage/Spirits, Sundries)

 Hi Tech (Consumer and B2B)
 Pharmaceutical/Medical Supply
 Automotive
 Building and Industrial Supply
Batch Picking

 In batch picking, groups of orders are picked at the

same time to minimize repeat visits to the same
product bin location. The WMS can arrange a group
of orders in the most efficient picking sequence.

 Relevant for operations with:

 Multiple each or overpack items to a shipping case or tote
 Multiple cases or large eaches to a pallet

 Industry relevance – All

Batch Picking

 Warehouse Task (WT)

 Task creation functionality is embedded in SAP EWM
 In addition to picking execution, WT is used for actual or logical
goods movement such as packing, staging and loading
 The warehouse task contains the following information;
 The product to be moved
 Quantity
 Source and Destination location information
 A WT can be a Product WT (material, quantity) or HU WT
(containing HU).
Batch Picking

 Warehouse Order (WO)

 SAP TRM functionality is inherited in SAP EWM that allows
Logical grouping of WTs into warehouse order for efficient
processing – a work package
 It is at the warehouse order level that resources are assigned to
execute the work.
Batch Picking

 Additional Batch Picking Applications

 Replenishment
 Putaway
Deconsolidation

 Deconsolidation is the process of dividing a mixed

receipt into putaway zones or groups based on your
facility layout. (aka fanning, zoning)
 Typically leveraged for operations with high volumes
of parcel receipts, mixed containers, and mixed
pallets
 Reduces travel time by grouping putaway tasks
 SCM EWM provides a system directed solution to
allow for confirmation of each process via RF or GUI
 Industry relevance – Retail, CPG, AMP,
Manufacturing
Deconsolidation

 Deconsolidation
 Deconsolidation provides ability to regroup contents of an
HU and putaway separately
 EWM utilizes consolidation groups to determine if
products can be putaway together
 Deconsolidation is relevant if:
 The Activity Areas of the products within an HU are
different
 The Activity Areas of the products within and HU are the
same but the consolidation groups are different
 The AA and consolidation groups are the same but the
maximum number of warehouse tasks for the HU has been
exceeded
 Deconsolidation

 All tasks are managed

within EWM and can be
executed on GUI or RF
 In addition to
Deconsolidation,
Process Oriented
Storage Control allows
for system directed
work, supporting
multiple processes

Source: SAP Extended Warehouse Management: Processes, Functionality, and

Configuration by SAP Press

20
Wave Planning

 The process of grouping multiple orders to be picked at one time

 In a WMS, you can create order waves to see how much labor you'll need to
allocate and how much time it will take to complete each wave. As the wave
works its way through the DC, you'll be better able to allocate how many
downstream operators you'll need once the picking process is completed.

 Key objectives

 Grouping of orders to control the flow of work to the warehouse floor

 Ability to control the volume or work effort to create manageable units of work
 Allow for a well orchestrated replenishment process
 Industry Relevance – All, Retail, CPG, AMP
 Wave Management

 Wave Management

 Outbound Delivery Order (ODO) items can be independently

assigned to wave
 ERP WM requires entire delivery to be assigned to a wave
 Items grouped based on a common attribute
 Picking Area,
 Method of Picking
 Product Attributes

22

From SAP Extended Warehouse Management:

Processes, Functionality, and Configuration by SAP
Press
Wave Management

 Wave Template

 Wave Templates are used to manage the automatic assignment

of warehouse request items to waves
 Waves can be managed through the Wave Monitor

 Manual Release
 Assignment or un-assignment of request items
 Block/Unblock
 Split/Merge/Delete

23
 Labor Management

 Labor Management Basics

 Better scheduling and planning

 Reduction of hours (OT, VTO, staffing levels, temp)
 The Management Team can leverage the tool to drive hours out of the facility
 Increased utilization of the workforce
 Employees respond to the Management Team’s expectations
 Management is given visibility into the distribution operation at the task level
 Employees are measured against the SOP
 Associate pace and skill improvement (setting the right expectation)
 Improved processes (reduced steps)
 Shortened learning curve for new associates

 Industry Relevance – Any operation can leverage an LMS with reasonable expectancies.
Due to the effort to develop ELS, typically a 25 person operation will justify
Labor Management

 Labor Management program savings are significant

Quality of Supervision
Level of Measurement Poor Average Good
Norms (no Labor Mng.
-60% -40% -30%
System)
LMS w/ Historical Rates -40% -30% -20%
LMS w/ Reasonable
-30% -20% -10%
Expectancies
LMS w/ Engineered Standards -15% -5% +5%
LMS w/ ELS and Incentives -10% +10% +25%
Stock Specific Unit of Measure
 Ability to manage multiple Stocking UoM
for the same SKU (a 6 pack and an 8 pack)

 Inbound Process
 Apply alternative UoM from ERP delivery
 Propose preferred UoM Pallet
 Change of UoM at different steps
 Putaway strategy via UoM/quantity
classifier
 Internal Process
 Physical Inventory
 Monitoring
 Outbound Process
 Small/Large quantity picking (w/o
packaging specification)
 Send UoM information to ERP
 Key Learnings

 SCM EWM is a robust WMS solution offering full

capabilities known to be in a state of the art WMS
 SCM EWM is credited for being able to
accommodate some of the most complex
requirements of a wholesale distribution operation
and many of these can be applied across many
industries
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SESSION CODE: WD635
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