SCM EWM: Applying Extended Warehouse Management to the Wholesale Distribution Industry. Gavin Klaus, LogiStar Solutions LLC

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1 [ SCM EWM: Applying Extended Warehouse Management to the Wholesale Distribution Industry Gavin Klaus, LogiStar Solutions LLC

2 [ Agenda Introduction EWM Update EWM for Wholesale Applying Best Practices with your organization

3 [ LogiStar Services Expertise Certifications Solution Focus Industry Expertise SAP Supply Chain Execution is our sole focus Average experience 10+ years with SAP 3 SAP Services Partner SAP Special Expertise Partner Pre-Release Test Partner SAP EEP Reseller Certified EWM RDS Partner SAP SCM EWM SAP LES WM Medical Devices Pharmaceuticals Food & Beverage Service Parts Wholesale Distribution Automotive Retail

4 [ SAP Supply Chain Execution Solutions RF & Barcoding Voice Picking Small Parcel Shipping Transportation Management SAP WAREHOUSE MANAGEMENT Labor Management Warehouse and Labor Analytics SAP SCE Strategy SAP Logistics Solution Architecture

5 [ 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 crossindustry and the key features that can lead to key performance gains within your operation.

6 [ 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

7 [ 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

8 [ 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 8

9 [ Wholesale Distribution Requirements 9 Multiple vendors Multiple customers High number of SKU s High service level Small orders Parcel shipping Low eaches per line Short order cycle time and late cut offs Multiple Transportation methods, will call, customer pay, company pay, parcel, LTL, Courier, Milk run, own fleet Value added services Order flexibility

10 [ Wholesale Distribution Industries Retail/CPG (Food, Beverage/Spirits, Sundries) Hi Tech (Consumer and B2B) Pharmaceutical/Medical Supply Automotive Building and Industrial Supply 10

11 [ 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

12 [ 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). 12

13 [ 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. 13

14 [ 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

15 [ 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 15

16 [ 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 16

17 [ 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

18 [ 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 18 From SAP Extended Warehouse Management: Processes, Functionality, and Configuration by SAP Press

19 [ 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 19

20 [ 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

21 [ Labor Management Labor Management program savings are significant Quality of Supervision Level of Measurement Poor Average Good Norms (no Labor Mng. System) -60% -40% -30% LMS w/ Historical Rates -40% -30% -20% LMS w/ Reasonable Expectancies -30% -20% -10% LMS w/ Engineered Standards -15% -5% +5% LMS w/ ELS and Incentives -10% +10% +25%

22 [ 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 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 Pallet 22

23 [ 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 23

24 THANK YOU FOR PARTICIPATING. SESSION CODE: 0207 Learn more year-round at

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