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SAP Extended Warehouse Management

This week IgniteSAP will be discussing SAP Extended Warehouse Management. We will look at the changing role of warehousing and how SAP EWM helps meet these challenges. Then we will explore how training in SAP EWM will bring increased prospects for high paying contracts, or long-term employment of SAP professionals with consultancies and industry alike.

The Changing Warehouse

One way that the Coronavirus pandemic affected the global business landscape was by disrupting supply chains. IgniteSAP has discussed some of SAP’s responses to Covid-19, including a reassessment of procurement and supply chains as part of the SAP “Procurement Reimagined” online event last year. A link in supply chains that is sometimes overlooked is warehousing, and this area of SAP’s portfolio has become increasingly important.

Even before the pandemic warehousing processes were changing along with the rest of the economy. The move to online retail is a larger trend which has seen a need for greater number of sites and volume of warehouse space but also a need for more efficient use of that space. This is because the larger volume of traffic in and out of the warehouse should not create a bottleneck in the supply chain. Covid-19 has acted as a catalyst on the rate of change. Some ways the coronavirus will continue to change warehousing include: a move from lean to higher inventory, the increased use of third-party logistics rather than in-house, an evolution from dedicated facilities to multi-user distribution centres, shorter term logistics contracts, the growth of on-demand warehousing, increased automation of warehousing facilities, and more energy efficient warehouses, among many other developments.

SAP EWM: Beyond Warehousing

SAP created the Warehouse Management solution in the 70s and have added regular updates since that time. In 2005 SAP introduced Extended Warehouse Management as a part of the Supply Chain Management package. As the name suggests EWM has a substantial number of additional functions like labour management, internal routing, task and resource management, and analytics enablement.

SAP support is expected to end for WM in the ECC environment in 2025, so many companies are currently considering migration to SAP EWM, within an S/4HANA landscape.

Core Processes in  SAP EWM

The core processes of SAP EWM can be split into three categories which correspond to the key activities of warehousing: inbound processing, storage and internal processing, and outbound processing. Here is a list of these core processes which illustrates the areas which the software covers.

  • Inbound Process are:
  • Data receiving and validating for Advanced Shipping Notifications (ASN)
  • Goods receipt and receipt optimisation
  • Direct receipt from production
  • Put away and put-away bin determination
  • Internal routing and de-consolidation
  • Returns management, also for e-commerce
  • Transportation management
  • Storage and Internal Processes are:
  • Rearrangement
  • Slotting
  • Inventory counts
  • Verification of record accuracy
  • Replenishment
  • Freight order management
  • Scrapping
  • Kitting to stock
  • Warehouse billing
  • Outbound processes are:
  • Order deployment
  • Route determination
  • Transport of unit management
  • Wave management
  • Picking bin determination
  • Warehouse order creation
  • Work assignment
  • Picking, packaging and staging
  • Loading and goods issue
  • Kitting to order
  • Direct outbound delivery
  • Production supply
  • Production staging and consumption
  • Shipping

Tcodes and the Post Processing Framework

The system uses a group of transaction codes known as Tcodes to track items and batches as well as to help with analysis. The Post Processing Framework (PPF) provides a uniform interface for condition-dependant generation and monitoring of actions such as printing delivery notes, sending notification emails, and workflows. These actions can be automatic or scheduled, but even highly automated systems require oversight and maintenance by skilled practitioners. As with other areas of SAP, careful implementation which is sympathetic to context and requirements can dramatically reduce overheads and increase profit margins.

Warehousing for the Digital Enterprise

According to SAP Extended Warehouse Management enables customers to: “Manage high-volume warehouse operations and integrate complex supply chain logistics with your warehouse and distribution processes, delivering the ultimate in visibility and control. Optimise inventory tracking, cross-docking, distribution operations, multichannel fulfilment, and more, all in real time.”

SAP EWM can is deployed on-premise or in the cloud, enables direct control of automation of warehouse equipment, and has integrated quality, production and track-and-trace processes.

The Gartner Magic Quadrant for warehouse management systems shows SAP as a leader in this market and SAP boasts having EWM customers such as Vodafone, BMW, Daimler, Danone…

Writing in Forbes magazine Öykü Ilgar of SAP described how extreme fluctuations and changes in customer demand caused companies to increasingly use pop-up warehouses close to consumers as a means to rapid order fulfilment. In the SAP supply chain podcast Richard Kirker, Global Solution Lead for Extended Warehouse Management at SAP explained the concept:

“The idea with pop-up warehouses is not just to set up temporary warehouses but permanently simple warehouses. It can be extended with as much functionality as you like with the full EWM software”

The Need for SAP EWM Professionals

So along with the increased need for warehousing there is an increase in the need for SAP professionals who are proficient in SAP Extended Warehouse Management. As we saw from the list of core processes above, modern warehousing activity is complex and constantly changing according to changes in supply and demand over the long-term and from day to day. This highly dynamic sector of industry requires careful monitoring and at the same time needs to adapt on a daily basis. Consequently SAP practitioners would see substantial demand for their skills if they are able to fluently customise SAP EWM.

Training in SAP EWM

If you are interested in extending your SAP skillset with EWM knowledge and get global certification then the best place to start is the SAP Extended Warehouse Management Learning Journey. This document lays out the courses from the SAP Training Shop which are required to get SAP Certified Application Associate Status in EWM with S/4HANA.

It is important to note here that this is an investment of time and money towards achieving qualifications that can substantially increase your earning potential or become the basis of your career as a certified SAP practitioner specialising in Extended Warehouse Management. Individual virtual classroom five day courses can be as much as 3,750.00 € (EUR) but the overall cost of courses over time is reduced by opting for a subscription to SAP Learning Hub, which also offers access to eLearnings, eBooks and assessments.

The first course in the EWM learning journey is EWM100: Processes in SAP S/4HANA Extended Warehouse Management. Completion of this course is a requirement for other EWM courses. Here is the course content which is designed to give a “solid, fundamental and comprehensive overview of SAP Extended Warehouse Management” :   

  • Warehousing Structures and Master Data
  • Differentiating the SAP Solutions for Warehouse Management
  • Organisational Structures and Master Data for SAP EWM
  • Basic Processes in SAP EWM
  • Processing Goods Received and Goods for Shipping
  • Warehouse Monitoring and processing with Mobile Devices
  • Managing the Warehouse and outlining the Radio Frequency (RF) Framework
  • Additional Functions in SAP EWM
  • Applying Storage Control
  • Employing Serial Numbers and processing Batches
  • Mapping Quality Inspection Processes and applying Value-Added Services
  • Warehouse Organisation
  • Performing Slotting, Applying Replenishment Methods
  • Performing a Physical Inventory
  • Optimisation of Resources
  • Applying Wave Management, Labor Management
  • Executing the Production Supply Process and the Expected Goods Receipts
  • Processes
  • Applying Cross Docking
  • Warehouse Extensions
  • Planning the Shipping and Receiving of Products
  • Controlling the Material Flow System (MFS)
  • SAP Best Practices
  • Combined Inbound and Outbound Processes
  • Executing an End-to-End Process with SAP EWM

After completing the EWM100 overview module, the next steps toward demonstrating competency and gaining certification include completing one or more in-depth modules and taking the three hour exam for SAP Certified Application Associate status. Successful candidates get a digital badge to demonstrate certified status when applying for contracts and employment.

The in-depth modules for EWM are: SAP EWM – Basic Customising, Resource Management in SAP S/4HANA EWM, Customising Additional Topics in EWM, Labour Management in SAP EWM, Production Integration with SAP EWM, and Quality Management in SAP EWM. These virtual classroom courses range in duration from 1-5 days. The price of each on the training shop reflects this duration. There are courses designed to stay current with EWM upgrades and also an advanced course in SAP Yard Logistics. SAP YL is incredibly rare and therefore a highly competitive skillset in the SAP employment market.

Careers in SAP EWM

As we discussed earlier, employment prospects for SAP practitioners who gain SAP Certified Application Associate status or above are increasing as the need for warehousing and pop-up warehouses becomes more urgent. Warehouses require software like EWM to run effectively and not become a bottleneck, so the need for IT professionals to implement and maintain the necessary software, and the schedule for adaptation and maintenance is more demanding in the current economic climate.

An experienced EWM Contractor/Freelancer can expect rates from €800-1200 a day. Permanent employees of Consulting/SI’s that are functional experts with 4-6 years of experience can command an annual package of €70K – €85K, project managers and architects with 6-10 years can expect between €80K – €130K. It’s worth noting that if you wish to exceed €110K you would typically be expected to bring a business case: including strong customer relationships, historic revenue generation of at least €500K, and potentially a small team o`f junior consultants.

If you are looking to optimise your ability to command higher value contracts in SAP implementation or achieve an optimum permanent package, in EWM or any other SAP solution, please reach out to IgniteSAP so we can discuss your available options, and help you present yourself as the candidate for success.