Materials ManagementWarehouse Management Overview

- Ramakrishna Mangena SAP CoE, Telecom TEG

April 7, 2023

Agenda

• Overview of ERP / SAP & Modules of SAP • MM Overview • MM Organization Structure • Master data

• Purchasing• Inventory Management• Invoice Verification• Concepts of Warehouse Management

– Overview

– Warehouse Management structure

– Functionalities

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Logistics Execution Overview

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Logistics Execution

Logistic Execution provides all of the functions (for the most part cross-industry) required to map the execution of logistics processes.

Logistics Execution is the link between procurement and distribution in SAP R/3,regardless of whether the processes involved are internal or relate to third-parties (vendors, customers, or service providers).

Warehouse Management

Shipping

Transportation

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The SAP Warehouse Management system (WMS) provide flexible, automated support in processing all goods movements and in managing stocks at storage bin level in highly complex storage facilities.

Warehouse Management optimizes the use of all storage bins, mix pallets belonging to several owners in randomly slotted warehouses and know exactly where a particular material is located in the warehousing complex at all times.

Warehouse Management

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Warehouse Management in SAP R/3 contains the following five basic functions:

Inventory Management exact to storage bin level

Mapping and control of all goods movements

Monitoring of the processing of these goods movements

Connection to mobile data entry as part of the integrated Radio

frequency (RF) solution

Connection to specialist external systems using an interface

Warehouse Management

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Optimizing the storage space utilization

More number of materials and more inventory transactions

Special storage conditions for certain materials

Handling Hazardous materials

Always store in specified fixed bin (Paints, glue, gas, acids etc.)

Better visibility over stocks under quality inspection

Availability of warehouse stocks near production work centers

Flexible to different shipping requirements

Integration with other Logistics modules

What SAP WM offers

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Integration with Other Modules

Inventory Management

Quality Management

Production Planning

Sales & Distribution

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Advanced features of WM

Storage Unit Management

Wave picking

Cross docking

Handling Unit Management

RFID

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Warehouse structure

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Warehouse Number

Warehouse number encompasses the organizational and physical aspects of a warehouse complex as a single concept.

SAP recommends single warehouse number for group of storage areas or buildings that are in the same geographical area.

For a given Plant & Storage location combination, you can have only one Warehouse number assigned to it.

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Storage Type

A physical or logical subdivision of a warehouse complex that is characterized by its warehouse technique, the space used, its organizational form, or its function.

Storage type has the following features:

A storage type does not have an address, but a short description.

It is possible to maintain storage-type-specific material data.

With in a storage type, inventory is executed for each storage bin.

Strategies for Putaway and Picking are maintained at storage type level.

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Storage Types

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Storage section, Picking area & Storage Bin

Storage section is an organizational subdivision of a storage type that groups together storage bins with similar features for the purpose of putting away stock. The criteria for grouping bins for example, heavy parts, bulky materials, fast-moving items, slow-moving items.

Picking area is a section within a storage type in which all picking activities are carried out in the same way.

Storage bin is the smallest available unit of space in a warehouse. Storage bin type is used to subdivide into groups for example, large bins, small bins etc.

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Storage section & Storage Bins

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Storage Bin

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Automatic creation – Storage Bins

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Sort sequence for Putaway/Picking

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Quant

Quant is the stock of any material with the same features in one storage bin. Quants can be created or deleted solely through goods movements.

The following are the criteria for the quant splitting:

Material number

Plant & Storage location

Stock category

Special stock assignment

Batch number (if applicable)

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Assignment

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Assignment

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Assignment

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Interim Storage Type

The Inventory Management (IM) application component communicates with the Warehouse Management component through interim storage types. Goods receipts and issues posted in IM are automatically updated in WM in these interim storage types.

Standard SAP interim storage types:

901 GR area for Production

902 GR area for external receipts

910 GI area general

916 Shipping area deliveries

917 Quality assurance

999 Differences

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IM – WM Interface

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Reference Movement Type

Each Inventory Management movement type that is relevant for the WM system is allocated to a reference movement type, with which the system determines the corresponding movement in the WM system.

If you do not want to connect an IM movement type to WM movement type, then assign Reference movement type 999. For example goods receipt posting for account assigned purchase order.

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WM Movement Type

The warehouse management movement type provides the following information required for stock placements and stock removals:

Interim Storage type

Coordinate of the storage bin

Confirming and printing transfer orders

Indicator for Storage type search

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WM Documents

Transfer Requirement (TR) is a base planning document records interface movement. Information captured in the Transfer requirement is taken as base for the Transfer order creation.

Posting change notice (PCN) is similar to Transfer requirement in terms of subsequent process, created for a posting change in Inventory Management.

Transfer Order (TO) is the central document in warehouse management. Every material movement in the warehouse requires a transfer order, regardless of whether the movement is real or virtual.

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IM – WM Interface

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Goods movements in WM

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Search Sequence

Storage Type search

Storage section search (optional)

Storage bin search

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Putaway

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Fixed bin - Fixed bin assignment per material

Open storage - One storage bin per storage section

Addition to existing stock - Attempt to add material to existing

stock

Empty bin - Search for next empty storage bin in the storage

section

Bulk storage - Search for bin in the bulk storage area

Putaway Strategies

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Picking

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FIFO - The system proposes the oldest quant for the stock pick

LIFO - The system proposes the most recent quant for picking

Partial quantity - Removal from partial pallets first, then standard

pallets.

Large/small - Pick proposal based on quantity

Fixed bin – Picking from the fixed bin.

Picking Strategies

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Posting changes

Stock Transfer – Physical Vs Logical

Plant to Plant Transfer

Bin to Bin - Movements

Material to Material / Batch to Batch Transfer

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Physical Vs Logical movement

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Stock transfer & Posting change

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Bin to Bin movements

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Material to Material

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Interface with Quality Management

In case of materials subjected to quality checks, after goods receipt inspection lots are generated in Quality Management module. This inspection stock of the material can be handled using any of the following four options in Warehouse Management.

Move Inspection lot stock to Interim storage type relevant for Quality

assurance (917) and the remaining to destination bin

Retain Inspection lot stock at GR area interim storage type (902) and

the remaining to destination bin

Move entire quantity to the destination bin

Retain entire receipt stock at GR area interim storage type (902)

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Interface with Production Planning

Using WM – PP interface, materials required for the production are not moved to goods issue interim storage type, instead they are sent directly to Production Supply Area (PSA).

PSA groups together Work Centers for the purpose of Materials staging from the Warehouse.

Once the production process is complete, confirm production order. The consumed components are back flushed (goods issue is posted during the confirmation) from staging area.

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Physical inventory in WM

Block Storage type for Physical Inventory – LI06

Create Physical Inventory Document – LI01N

Enter Inventory count – LI11N

Check Inventory status – LX22

Clear differences in WM – LI20

Clear difference in IM – LI21

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Warehouse activity monitor

Warehouse activity monitor is an instrument for monitoring warehouse movements. It informs you processes that have failed to run completely or have run with errors, and offers you the opportunity to create or correct missing documents. The Warehouse activity monitor contains seven objects for monitoring.

01 – Unconfirmed Transfer orders

02 – Open Transfer requirements

03 – Open Posting change notices

04 – Open Deliveries

05 – Negative stocks

06 – Interim storage stocks

07 – Critical stocks for production supply

A document or stock item is only displayed in the Warehouse activity monitor if the defined processing periods (in customizing) are exceeded.

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Thank You