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1、SAPIMvs.WM:HowtoChoose,Use,andOptimize,GavinKlausCatalystInternational,Inc.,SAPIMvs.WM:HowtoChoose,Use,and,What Well Cover ,Understanding the difference between WM and IMChoosing between WM and IMOptimizing and overcoming limitations with IM and WM,What Well Cover Understandin,Inventory Management (
2、IM),Key features/strengthsInventory management by quantityVisibility of on-hand quantity by storage locationManagement of special stocksEntry and documentation of all material movementsReal-time updates of inventoryDocumentation of all receipts, issues and transfersPhysical inventoryCarry out physic
3、al inventory at the material levelPerform inventory adjustments,Inventory Management (IM)Key f,R/3 Inventory Management (IM) (cont.),Key features/strengths (cont.):Inventory management by valuePostings update account assignments for cost accountingUpdates G/L account for financial accounting Key int
4、egration pointsIntegrates directly with MRP, purchasing and invoice verificationProvides information for MRP, updates PO; used to check conformity during invoice verificationReal-time updatesWhen transactions are entered, the results the stock updates real time to reflect actual changes,R/3 Inventor
5、y Management (IM),SAP Organizational Structure,Organizational Structure at the IM Level,SAP Organizational StructureCo,Challenges 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 prio
6、r to actual pickingRequires manual updates when quantities differInability to assign incoming materials to outbound demand to avoid multiple material handling continued.,Challenges with Inventory Mana,Challenges with Inventory Management (cont.),Immediate update of inventory receipts and issues Syst
7、em inventory and status NOT representative of the physical processLimited visibility to locations of materialsOnly possible to assign a single fixed bin location per storage locationBin location is “text” only; no strategies are available,Challenges with Inventory Mana,Solution: R/3 Warehouse Manage
8、ment,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 material flowSimple-to-complex placement and removal strategiesAssignment of inbound orders to outbound deliveries Allocat
9、ion of storage binsProcessing of all stock movements valid for WMReceipts, issues, transfersUtilizes stock placement and removal strategiese.g. Next empty bin, addition to stock, FIFO, LG/SM qtys.,Solution: R/3 Warehouse Manage,Solution: R/3 Warehouse Management (cont.),Infancy to maturityFunctional
10、ity considerably expanded with 4.6x and higherTwo-step picking, two-step confirmation, managing multiple storage locations with a single warehouseExtension set 2.0 for Enterprise to include Cross Docking, Yard Management, Value Added Services,Solution: R/3 Warehouse Manage,WM Picks Up Where IM Leave
11、s Off,Typical assignment is one storage location to one warehouseIt is possible to have multiple storage locations managed by a single warehouse,Quant,Bin 1,Quant,Quant,Quant,Bin 2,Stor. Type 2,Stor. Type 3,Warehouse1,Stor. Location1,Stor. Type1,Warehouse 2,Stor. Location2,Plant 1,Location1,Plant 2,
12、Company,IM Level,WM Level,Stor. Type 1,WM Picks Up Where IM Leaves Of,Key WM Features,Management of materialsProvides bin-level trackingInventory management functionsVarious placement and removal strategiesValue-added servicese.g. Special handling requirements (labeling, packaging) Powerful picking
13、controlTwo-step picking, wave pickingFIFO, LIFO, large/small quantity picking strategies,Key WM FeaturesManagement of m,Key WM Features (cont.),Warehouse activity monitorsWAM, RF Monitor, outbound delivery monitor, wave picking monitor, TRM Monitor, Yard Management Cockpit, Cross- Docking MonitorCro
14、ss-dockingManagement of inbound and outbound movementsYard ManagementAppointment scheduling, check in and check out, assignment of dock doors, loading/unloading activitiesTask Resource ManagementEnhances WM by breaking work down into distinct task,Key WM Features (cont.)Warehou,Fully Integrated with
15、 the other SAP ApplicationsFeatures:Flexible Warehouse StructuresGoods MovementsControlInventory,WM Integration With Other Key R/3 Modules (cont.),Source: SAP WM LO530,Fully Integrated with the othe,WM Integration With Other Key R/3 Modules (cont.),IM-WMProcessing of all material movements Automated
16、 communication with configurable processingSD-WMTwo-step picking with SD-WM integrationWave picking opportunitiesProcessing individual deliveriesPP-WMProduction support with PP-WM integrationSupplying materials to the shop floorInternal and external automated replenishment options,WM Integration Wit
17、h Other Key,WM Integration With Other Key R/3 Modules (cont.),QM-WMHandling of inventory samplesInspection lot is maintained with the material dataHand-held terminals-WMProcessing of transfer requirementsProcessing of transfer ordersBin and material inquiries,WM Integration With Other Key,Benefits o
18、f 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 timeGartner: 16-25% Picking Productivity ImprovementBetter manage work and workforce to gain efficienciesTools
19、to balance and optimize resources Increased picking / shipping accuracy11-25% Reduction in Customer Returns,Benefits of WMBenefits,Benefits of WM (cont.),Measurable benefits16-25% Picking Productivity Improvement11-25% Reduction in Customer Returns10-25% Savings in Material Handling Labor10-40% Spac
20、e Utilization Improvement13-30% Reduction in Scrap8-15% Reduction in Carrying Costs Source: Gartner Report,Benefits of WM (cont.)Measurab,What Well Cover ,Understanding the difference between WM and IMChoosing between WM and IMOptimizing and overcoming limitations with IM and WM,What Well Cover Unde
21、rstandin,When Is Inventory Management the Answer?,IM is great when.Small facility Lower levels of inventory on handSimplistic material handling processesLower volume of activityOutsourced warehouse operationsOnly need storage location or bucket of inventory visibility,When Is Inventory Management t,
22、Key Elements With IM,Required data for IMPlant, valuation and storage location dataRelevant data for IMWork scheduling, accounting, materials planning, purchasing, classification, storage and quality managementIM menuGoods movementsMaterial documentsReservationsEnvironmentFocused on reporting, lists
23、 and LIS,Key Elements With IMRequired d,When is Warehouse Management the Answer?,WM is great whenLarger facilitiesLarge number of materials on handHigher volume or flow throughTraceability and visibility is criticalTrack material flow, status, inventory levels Complex processesAutomated systems, wid
24、e spread site,When is Warehouse Management t,Key Elements With WM,Extend material masterWarehouse management 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 Manag
25、ementDefine the WM ProcessesAutomatic, semi-automatic and manual processingTransfer order creation, confirmation, posting changes,Key Elements With WMExtend mat,Evaluating IM vs. WM,1 Define business processes2 Evaluate ROI of a WMS solution3 Consider RF functionality4 Training resources and schedul
26、e5 Focus on optimization opportunities,Evaluating IM vs. WM1 Define,Step 1 - Define Business Processes,Start with receiving, inventory and pick/ship firstCreate and evaluate process flow chartsLook at process improvement opportunitiesScore the level of complexityTarget areas for improvementReduce tr
27、avel timeInventory accuracyReduce material handlingMap improvements to IM and WM functionality,Step 1 - Define Business Proce,1 - Define Business Processes (cont.),“The level of functionality that customers need in a WMS is completely dependent upon their environment. Customers have to define their
28、needs before they can realistically look for a WMS.” Source: Integrated Solutions,1 - Define Business Processes,Step 2 - Evaluate ROI of a WMS Solution,Measure productivity and accuracy before and after the WMS installationReview and analyze picking operationsKey area of improvementReview and analyz
29、e inventory accuracyWhen supported with RF, accuracy can reach 98%,Step 2 - Evaluate ROI of a WMS,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 current operation and h
30、ow much safety stock was needed to cover daily operations.” Source: Total Supply Chain,2 - Evaluate ROI of a WMS Solu,Step 3 - Consider RF Functionality,RF supports improves warehouse bin accuracyBin accuracy 98% is possibleReduces order fill process cycle time RF projects often have a 1 year or les
31、s payback period Source: Intermec,Compare current receipt process to the time saved when the task is aided by automatic data collection (ADC),Step 3 - Consider RF Functiona,3 - Consider RF Functionality: Example,As-is1,000 pallets at five minutes / pallet = 5,000 minutesWith two minutes saved per pa
32、llet2 minutes * 1,000 pallets = 2,000 minutes 2,000 / 480 minutes worked by each receiver per day = 4.16 receivers saved from the pallet receiving process,3 - Consider RF Functionality:,Step 4 - Training Resources and Schedule,Resources to evaluate, guide and support a WM solutionA full-time, dedica
33、ted WM resource is critical This may or may not be the same IM resourceTraining scheduleA WM solution will require a certain level of IM trainingWM training will vary based on the degree of functionalitySupport resourcesConsider a single resource for IM and WM if possible,Step 4 - Training Resources
34、 an,5 - Optimization Opportunities,Picking operations and inventory accuracyWhat are your baseline requirementsWhat is the volume of activityEvaluate picking paths and demandLook at your accuracy numbers over a period of timePerhaps monthly, quarterly, annuallyMaterial handling labor costsSpace util
35、ization improvementsPacking tasksCan you benefit from packing while picking,5 - Optimization Opportunities,What is the BEST Stock Management Solution?,1 - Inventory Management2 - Lean Warehouse Management3 - Full Warehouse Management4 - Decentralized Warehouse Management,What is the BEST Stock Manag
36、em,Option #1 - Inventory Management,ProsSimplisticKey receipt, issue or transfer in a single step transactionImmediate update of inventoryRequires less training commitmentFewer transactions to document and presentTrace-ability of all material postings into SAP R/3Date, user, material, quantity, stor
37、age locationReal-time update of accounting information,Option #1 - Inventory Manageme,1 - Inventory Management (cont.),ConsDoes not handle complex warehouses operations wellUnable to monitor activitiesLacks tools to manage resources and tasksLacks functionality to optimize key processes (picking)Ina
38、ccurate system inventoryInventory updated before the physical movementRequires additional work if there are discrepanciesLimited trace-abilityOnly visibility is when the system posting took placeNo visibility to the follow on physical activities,1 - Inventory Management (cont,Option #2 - “Lean” Ware
39、house 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 applicationEvolved from SD pick listPut-away and pick from 1 or more fixed binsBin is hard assigned on material masterTOs are c
40、reated for picks and put away, and pick list is created from TOs,Option #2 - “Lean” Warehouse M,2 - “Lean” Warehouse Management (cont.),ProsRequires less configuration than full WMReduced number of steps in the processUse of transfer orders as pick listsConfirmation is not requiredAdditional process
41、ing optionsConfirm put-away, picking, over-deliveries, shortages, batchesPrint transfer ordersIntegration to HRAdditional picking functionalityWave picking is possible with Lean WM,2 - “Lean” Warehouse Managemen,2 - “Lean” Warehouse Management (cont.),ConsMust have a fixed bin assigned for all mater
42、ialsRandom storage is not possibleInventory is still under IM functionality onlyInventory options are at the storage location Stock differences can only be processed in MM-IMLacks additional optimization opportunitiesPicking, packing, bin accuracyNo strategies are usedLack of picking and put away st
43、rategies,2 - “Lean” Warehouse Managemen,Option #3 - Full Warehouse Management,ProsOptimization opportunitiesPicking - Two step pickingPacking - Pick and pack in a single stepCross-docking - Inbound, outbound, prod. materialsMonitoring and real time visibility to process statusVisual queues at the de
44、tailed stepsOpen tasks, completed tasksAdditional inventory methods (annual, zero stock)The module is FREE with the purchase of SAP,Option #3 - Full Warehouse Man,3 - Full Warehouse Management (cont.),ConsInventory counting interferes with operations without RFPrior to 4.7 extension set 2.0Initial o
45、verhead to set up depending on designMaster dataCapacity checking, control cyclesConfiguration requirementsDesigning the warehouse layout and set upPotential for additional steps to support processingConfirmationsClearing differencesProcessing posting changes,3 - Full Warehouse Management,Option #4
46、- Decentralized Warehouse Management,Use of SAP as a standalone WMSWith SAP or other ERP/host as the core systemCore system and decentralized WM run on separate machinesCommunication is through BAPIs for transactions and IDOCs for master dataGoods movements done through delivery notes to the stand-a
47、lone SAP WM system,Option #4 - Decentralized Ware,4 - Decentralized Warehouse Management (cont.),ProsOn a separate machineDecreases criticality of down time24x7 operationCan leverage newer SAP R/3 releasesEven if core system is on an older releaseCan add additional warehouses without impact to the c
48、ore systemCan communicate to multiple core ERP systems,4 - Decentralized Warehouse Ma,4 - Decentralized Warehouse Management (cont.),ConsCore system is not 24x7 operationIDOC and/or BAPI errorsIDOC failuresHuman intervention is required to work the error queueIDOC overheadIDOCs do not offer all of t
49、he available field options that a user may or may not use with the PC transactionMust modify the IDOCSAPConsole has to be set up in the decentralized system and in the core system,4 - Decentralized Warehouse Ma,Scaling the Solution,Operational Complexity,Transaction Volume,IM Only,Lean WM,WM,Decentr
50、alizedWM,TRM,Scaling the SolutionOperationa,What Well Cover ,Understanding the difference between WM and IMChoosing between WM and IMOptimizing and overcoming limitations with IM and WM,What Well Cover Understandin,Optimizing and Overcoming Limitations With IM and WM,1 - Physical Inventory tips2 - E
