Warehouse and DC Management (WM) SAP Best Practices for Retail
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1 Warehouse and DC Management (WM) SAP Best Practices for Retail
2 Purpose, Benefits, and Key Process Steps Purpose This scope item describes the processing procedure for retail goods in a distribution center, using a warehouse management system with inventory management at storage bin level. In this scope item, distribution center will refer to a warehouse that is supplied by vendors, that stores the merchandise and then prepares it to be shipped to customers or stores. Benefits As warehouse processes depend greatly on the amount of space available, the organization of the warehouse and the merchandise stored there, this scope item should be viewed simply as an example for implementation purposes. However, with very little effort, this example can be adapted to fit any customer-specific situation. Key Process Steps Goods Receipt Processing Return Deliveries Internal Warehouse Replenishment Goods Issue Processing Warehouse Physical Inventory Tools and Workbenches 2014 SAP SE or an SAP affiliate company. All rights reserved. 2
3 Required SAP Applications and Company Roles Required SAP Applications SAP Enhancement Package 7 for SAP ERP 6.0 Company Roles Retail Warehouse Specialist 2014 SAP SE or an SAP affiliate company. All rights reserved. 3
4 Retail Warehouse Specialist Process Flow Diagram Warehouse and DC Management (WM) Create Purchase Order for Single Article Create Purchase Order for Generic Article Create Inbound Appointmen t Planing Receipt of incoming Goods Post Rough Goods Receipt Enter an Actual Appointmen t Issuing the Article Document as Goods Issue / Receipt Slip Create a Return Search for the Article Document for Goods Receipt Log-on to the Terminal Alternative 1: Confirm without difference Alternative 1: Asynchronous Warehouse Management Put away Preparation Create a Transfer Order in the Warehouse Alternative 2: Confirm with difference Goods Collection Replenishment Planning Create a Transfer Order Confirm Transfer Order Create an Outbound Putaway Processing Ressource Planning with the RF Monitor Goods Receipt with Reference to the Rough Goods Receipt 2014 SAP SE or an SAP affiliate company. All rights reserved. 4
5 Retail Warehouse Specialist Process Flow Diagram Warehouse and DC Management (WM) Create Transfer Order as a Picking Document Alternative 1: Asynchronous Warehouse Management Alternative 1: Confirm without difference Alternative 2: Confirm with difference Resource Planning in the Monitor for Mobile Data Entry Log-on to the Terminal Monitor from Mobile Data Entry Monitor Post Goods Issue Subsequent Split Confirm Transfer Orders in Collective Processing Create Transfer Orders in Collective Processing Alternative 1: Automatic Capacity- Driven Creation of Wave Picks Creating Wave Picks Alternative 1: Manual Creation Create Deliveries with Planned Picking Time Goods Issue in Collective Processing Trigger Inventory Recount Alternative 2: Creating Wave Picks Manually Create a Physical Inventory Document Manual Entry Carry Out Inventory Recount Post Differences in Warehouse Management Post Differences in Inventory Management Difference Statistics Determine Inventory Status Wave Pick Monitor Outbound Monitor Warehouse Activity Monitor Rough Workload Estimate After Goods Issue Rough Workload Estimate After Creation of Outbound Deliveries 2014 SAP SE or an SAP affiliate company. All rights reserved. 5
6 Document Flow in the Warehouse PO Inb. Rough GR GOODS RECEIPT GR Area PUTAWAY TRANSFER ORDER WAREHOUSE GOODS ISSUE Shipping Area PICKING TRANSFER ORDER Outb. Del SAP SE or an SAP affiliate company. All rights reserved. 6
7 Inventory Management - IM vs. WM Inventory Management on article level Site Storage Location Fixed storage bin can be maintained in the article master (text field) Whse number Storage type Storage section Storage bin Inventory Management on bin level Putaway / Picking strategies are used Storage bin is master data and can be determined by strategy (other than fixed) 2014 SAP SE or an SAP affiliate company. All rights reserved. 7
8 Warehouse Structure - Warehouse PC1 Section 002 Slow moving items Gate 1 1 Gate 2 2 H01 High Rack Storage Random Storage GR-Area Section 001 Fast moving items Section 001 Total Section H01 / B01 / F01 Storage for Special Goods (depending on master data) GI-Area Section 002 Slow moving items K01 Picking storage type Fixed storage bins Section 001 Fast moving items 3 4 Gate 3 Gate SAP SE or an SAP affiliate company. All rights reserved. 8
9 Storage Bins - Warehouse PC1 Gate 1 1 Gate Aisles, 10 Stacks, 10 Levels Level Fast moving items Level Slow moving items Bins to GR-Area 5 aisles, 25 bins each All Storage bins in Total Section 21 aisles, each with 50 bins Bins Fast moving, Bins Slow moving Aisles Picking Area 001 Aisles Picking Area 002 Aisles Picking Area 003 Bins KOM to KOM Bins to GI-Area 3 4 Gate 3 Gate SAP SE or an SAP affiliate company. All rights reserved. 9
10 Putaway Post Goods Receipt Goods Receipt Movement type Article Quantity Site Stor. location WM Warehouse Quant in the GR-Area of the Warehouse Transfer Requirement 2014 SAP SE or an SAP affiliate company. All rights reserved. 10
11 Putaway Transfer Order Transfer Requirement Quant Create Transfer Order Automatical determination of storage bins Transfer Order Confirm Transfer Order Confirm storage bin and quantity 2014 SAP SE or an SAP affiliate company. All rights reserved. 11
12 Warehouse Data in the Article Master Article Master Data Warehouse Management Warehouse number Storage type Picking storage type (PC1) (K01) (K01) Storage bin (KOM ) Maximum bin quantity (50) Minimum bin quantity (10) Rounding quantity (blank) Control quantity (blank) Replenishment qty. (blank) 2014 SAP SE or an SAP affiliate company. All rights reserved. 12
13 Stock check Triggering Replenishment Stock in bin smaller than minimum quantity? Trigger replenishment Reserve storage Create Transfer Order Transfer request is generated Picking Zone Physical Goods Transport Confirm Transfer Order 2014 SAP SE or an SAP affiliate company. All rights reserved. 13
14 Picking Article Quantity Site Stor. Location Goods Issue WM Warehouse! is relevant for picking! Transfer order required 2014 SAP SE or an SAP affiliate company. All rights reserved. 14
15 Picking Transfer Order Quant Create Transfer Order Automatical determination of storage bins Picking Storage Type Picking List Transfer Order Confirm Transfer Order Confirm Picking Quantity Quant In the shipping zone 2014 SAP SE or an SAP affiliate company. All rights reserved. 15
16 Picking Goods Issue Article Quantity Site Stor. Location Goods Issue Goods Issue WM Warehouse! is relevant for picking! Picking is finished Transfer order required 2014 SAP SE or an SAP affiliate company. All rights reserved. 16
17 Mass Processing of Deliveries Group of Outbound Deliveries or Wave Pick Manual creation in the outbound delivery monitor using selection by: Shipping point Picking date Route, carrier... Free selection Automatic generation using selection by: Picking date / time Additional filter by several criteria (e.g. route, shipping point, ship-to-party...) Considering capacity restrictions: Weight, volume Maximum items on the picking list Working time SAP SE or an SAP affiliate company. All rights reserved. 17
18 Mass Processing of Deliveries Collective Follow-On-Processing: Create transfer order Confirm transfer order Post goods issue Group of Outbound Deliveries or Wave Pick 2014 SAP SE or an SAP affiliate company. All rights reserved. 18
19 Warehouse Activity Monitor List of all processes within a critical timeframe for execution: Unconfirmed transfer orders Open transfer requirements Critical deliveries... Direct follow-on-processing of the critical documents List of all critical documents 2014 SAP SE or an SAP affiliate company. All rights reserved. 19
20 Rough Workload Estimate Planned Goods Issue Calculation of workload using: Logistics Load Category Unit of Measure Whse no. / storage type Warehouse process Estimated Workload in: Quantity Weight Volume Execution time Information on: needed manpower needed transport capacity 2014 SAP SE or an SAP affiliate company. All rights reserved. 20
21 Mobile Data Entry in WM Mobile Data Entry: Mobile terminals in a radio frequency network Robust hardware made for use in the warehouse Built-in barcode scanner Touch screen for easy use Simplified SAPGui (SAPConsole) as user interface R/3 Application Online processing User interface SAPGui SAPConsole 2014 SAP SE or an SAP affiliate company. All rights reserved. 21
22 Controlling the Warehouse via RF-Monitor RF-Monitor of the warehouse manager transfer orders run into workload queues The warehouse employees are assigned these queues and thus a workload of TOs. The overload of a queue can be avoided by monitoring the displayed TOs/employee relation. Touch screen of the warehouse employee The system provides the warehouse employees with transfer orders from their queue continuously SAP SE or an SAP affiliate company. All rights reserved. 22
23 Physical Inventory with WM Create Physical Inventory Document Continuous Physical Inventory Activate Physical Inventory Document Block storage bins Print / Release Count List Count, Weigh, Measure, Estimate Record Inventory Count Results Initialize Recount Process Difference List Clear differences in Warehouse Management Inventory Difference Unblock storage bins Clear differences in Inventory Management 2014 SAP SE or an SAP affiliate company. All rights reserved. 23
24 Benefits of Continuous Physical Inventory Better distribution of workload in the warehouse The inventory can be carried out in periods with lower workload Periodic Inventories are usually time consuming and labour intensive Up-to-date information on the availability of the stock in the warehouse The cost of the inventory can be reduced by planning it carefully 2014 SAP SE or an SAP affiliate company. All rights reserved. 24
25 Processes Goods Receipt and Return Deliveries 2014 SAP SE or an SAP affiliate company. All rights reserved. 25
26 Processes Replenishment and Goods Issue 2014 SAP SE or an SAP affiliate company. All rights reserved. 26
27 Process Variant Mass Processing of Deliveries 2014 SAP SE or an SAP affiliate company. All rights reserved. 27
28 Process Warehouse Physical Inventory 2014 SAP SE or an SAP affiliate company. All rights reserved. 28
29 2014 SAP SE or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. Please see for additional trademark information and notices. Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE s or its affiliated companies strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions SAP SE or an SAP affiliate company. All rights reserved. 29
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