3.3 Warehouse Management with WM
3.3.1 Warehouse Structure and Integration
Without the use of a warehouse management system, the storage location would be the lowest level on which stock could be managed. As a rule, the storage location represents the physical location of material stock or reflects the various storage facilities of a warehouse complex. When WM is used as a warehouse management system, quantity-based inventory management is still done on the level of the storage locations. Mapping of the storage facility – the physical structure of the warehouse and the internal structures of the warehouse complex – occurs with the aid of flexible organizational structures.
Every warehouse has its own structure according to which goods are stored depending on their composition and space requirements. In automated warehouses, this structure is based on existing automation technology. In the age ofeBusiness andjust-in-timepractices, the ratio of automated warehouses is steadily increasing.
The term automation refers to machines taking on physical warehouse functions as well as warehouse control, or material flow computers performing process control and automatic control tasks.
Automated warehouses are generally either purely pallet warehouses with picking systems and material replenishment functions, or container warehouses in which picking is done on a “goods-to-person” basis. Warehouse automation is often combined with manually operated storage systems in accordance with process requirements. The organizational elements of WM enable individual mapping of the respective warehouse structures.
This book does not delve into warehouse automation technologies and their system integration into SAP Business Suite. TheMaterial Flow System(MFS) and the Radio Frequency Framework (RF Framework), both components of SAP EWM, are briefly discussed in Sect.3.4.6, “Cross-Warehouse Functions” below.
Thewarehouse numberpools all organizational and physical characteristics of a warehouse and, in practice, typically represents the actual warehouse building or building complex in which the warehouse is located. The warehouse number, as the highest organizational element, thus divides the company from the viewpoint of warehouse logistics and is the basis of various control parameters in WM (see also Fig.3.19).
A warehouse number is generally divided into several storage types. Each storage typedefines spatial or organizational circumstances – a storage section, storage equipment or a specific storage zone. In any case, the storage type describes a specific area within a warehouse that is characterized either by an identified space or organizational procedure. Storage types include one or more storage sections and form the basis for storage-type-specific control parameters that especially control putaway and picking as well as the inventory-taking procedure of the corresponding storage type. It is also possible to save storage-type-specific material data. The most common physical storage types are:
• Bulk storage
• Open storage
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• High rack storage
• Shelf storage
• Picking areas
A special kind of storage is represented byinterim storage types. The interim storage type forms the organizational interface between warehouse management and inventory management. Integration is initially based on the type of movement in inventory management, the central instrument for the control of goods movements and a corresponding reference movement type in warehouse manage- ment. Thereference movement typeor WM movement type controls the material movements from the viewpoint of warehouse management and decides on the interim storage type to be used. In the case of a goods movement for a purchase order, the system first determines the relevant inventory management movement type and then the allocated WM movement type. Updating of inventory is subse- quently done in the goods receipt area, a typical interim storage type – a storage type that is used jointly by inventory management and warehouse management.
They especially include:
• Goods receipt areas
• Goods issue zones
• Posting change zones
• Interim storage area for differences
Thepicking areais an organizational element within a storage type or section that logistically pools storage sections for the purpose of removal based on identical picking activities. Unlike the storage section that pools a logistical grouping of storage bins based on their common putaway strategy, the picking area considers the respective picking strategy. For outbound deliveries, the picking area speeds up the shipping procedure by enabling parallel picking by splitting the picking list into corresponding picking areas (see Fig.3.18).
From the viewpoint of stock placement control, thestorage sectionpools those storage bins with the same or similar characteristics. As a physical or logical subunit of a storage type, it represents the counterpart of the picking area, and serves as an organizational aid for material placement. The criteria for pooling depend on the respective characteristics of the storage bins or on the characteristics of the materials stored there. An example would be pooling based on the load transfer frequency of a material (a fast- or slow-moving item) or based on physical characteristics (such as weight or size). These storage-bin-related criteria often have to do with the distance to the load transfer point, the load capacity of the storage bin or the temperature. High rack storage, for instance, mapped as a storage type, consists of several storage bins of varying sizes. The storage bins in the lower sections are often larger to accommodate especially heavy or bulky material.
Storage bins in the upper levels are generally smaller, with the front area reserved for fast-moving items and the rear for materials with a lower transfer frequency.
Astorage binis the smallest spatial unit in WM and typically represents the physical bin to which a storage type is specifically allocated. Storage bins are specifically assigned using a coordinate system. For example, the coordinates
01-05-05 specify a storage bin in Aisle 1, Column 5 on Level 5. With the exception of a few alphanumeric characters, any letter and number combination may be used for storage bin coordinates, depending on operative needs.
From the view of the warehouse management system, storage bins represent master data to which additional characteristics can be entered. In addition to the maximum weight that a storage bin can carry, such other characteristics can include the total capacity and storage bin type. The storage bin type influences placing strategy, such as when the system searches for a storage bin based on a certain pallet type that is to be placed into a bin.
Physical loading and unloading of trucks is performed at the storage locations.
To optimize the picking and placing processes in a warehouse, these doors are situated near so-calledstaging areas. From the system view, the doors and staging areas are organizational units to which warehouse numbers are allocated. The doors are usually allocated to staging areas and configured for subsequent use for goods receipt, goods issue, cross-docking or flow-through.
Unlike the doors, through which materials enter and leave the warehouse, staging areas serve as interim storage sites for materials. Because of their vicinity to the doors, they can be configured for goods receipt or issue. In the case of goods receipt, they serve to temporarily store materials that have been taken in for goods issue and must subsequently be transported into storage. In their function for goods issue, they serve as interim storage for picked materials that must subse- quently be loaded for shipment at their assigned door.
In contrast to the physical warehouse structure that is mapped in the system with the organizational elements mentioned above, so-calledquantsare used to manage transactions of quantities on the lowest storage bin level. From a management point
Warehouse No. 1 Door 1
Door 2
Door 3 Door 4
Door 5
Door 6
Door 7
Staging Area AStaging Area B Staging Area DStaging Area C
Lagertyp A
Storage Type B Storage Type C Picking Area A Storage Type A Storage Section 1
Storage Section 2
Storage Section 4
Storage Section 4
Picking Area B
Goods-Receipt Goods-Issue
Fig. 3.18 Organizational structure of a WM warehouse
3.3 Warehouse Management with WM 133
of view, a quant is a certain quantity of materials having the same characteristics that are situated in one specific, clearly identifiable storage bin. A quant is generated by the system when materials are placed in an empty storage bin, updated through picking and placing, and automatically deleted by the system when there is no longer any stock in that particular storage bin. Materials with differing charac- teristics, such as different batches, are maintained in a single storage bin as two quants (Fig.3.31illustrates the inventory data of a quant).
Like a quant, a storage unit aids not only in the structuring of a warehouse, but also in the logistical pooling of physical material quantities within a warehouse.
WM employs itsStorage Unit Managementto manage a specific material quantity such as pallets or containers belonging together as a unit. Storage units can be composed of one or more material items, and are always identified by a specific code. Without the use of the activated Storage Unit Management on the warehouse number level, all material stock is managed as quants on the storage bin level (see Fig.3.19). Activation of Storage Unit Management causes inventory management activity on the pallet and storage unit level, whereby a storage unit may consist of one or more quants. Several storage units can be situated in a single storage bin. The activation of storage units serves to optimize storage capacity and control material flow by allowing the movement of heterogeneous pallets having more than one material as a single unit within the warehouse. One major advantage is that you can determine where each storage unit is located in the warehouse, what material quantity is stored in it, and which activities have already been completed or are planned for that storage unit (see also Fig.3.30).
WM is fully integrated in the SAP ERP system. Material movements, goods receipts, picking and shipment of materials for sales orders thus lead to physical movement in the warehouse. Most goods movements occurring in Warehouse Management are triggered inInventory Management.
Goods receipts that take place in a storage location administered by WM automatically generate a posting to the storage bin of the allocated interim storage type. The interim storage type in this case is usually the goods receipt area from which, in a second step, the goods are posted to a storage bin in the warehouse.
Picking Area A
Storage Section 1 Storage Section 2
Warehouse No.
Storage Type Storage Type
Storage Bin Storage Bin Storage Bin Storage Bin Storage Bin
Storage Unit Storage Unit
Quant Quant Quant Quant Quant Quant Quant Quant Quant Quant Quant Quant
Fig. 3.19 Structure of a WM warehouse
In the case ofgoods issueswithout an outbound delivery, the material is posted to a goods issue zone after picking. Because the posting causes a corresponding reduction in total stock in Inventory Management, posting to the storage bin of this interim storage type first triggers a quant with a negative quantity. In this case, the accounting goods issue posting is accomplished before actual goods issue in the warehouse. Adjustment of the negative quantity occurs upon physical stock removal to the goods issue zone.
The various possibilities for stock placement and removal and the available strategies will be explored in the following sections.
Storage locations can be set in the system asHU-managed. Stock situated in an HU-managed storage location is generally packed and maintained as handling units. Mixed stock composed of packed and unpacked materials is not provided for in such cases. For packing procedures, that is, the packing or unpacking of a handling unit, a second storage location, a so-calledpartner storage location, must also be indicated. The partner storage location is then used for stock transfer from a storage location with HU management to a storage location that is not HU-man- aged. Stock transfers and goods movements are therefore not possible with the indication of a handling unit. If no handling unit is indicated, the system does not generate a material document for the posting, but rather a delivery.
Figure 3.20 shows integration with Inventory Management from the view of goods movement. Stock movements are done with or without reference to an inbound or outbound delivery. Actual stock movement is controlled with the aid of transfer orders.
Purchase Order
Inbound Delivery Goods-Receipt
Material Document
Create TO Putaway-Strategy
Transfer Reqmnt.
Transfer Order
Create Transfer Requirements
Goods-Receipt for Inbound Delivery
Put-Away + Transfer Order
Post Goods- Receipt
Storage Location Warehouse Number
Goods-Receipt withour Reference
Material Document
Create TO Putaway-Strategy
Confirm-TO Transfer
Order Put-Away +
Transfer Order
Sales Order
Outbound Delivery
Material Document Storage Location Picking +
Transfer Order
Create TO Stock-Determination
Post Goods- Issue Confirm-TO
Goods-Issue for Outbound Delivery
Goods-Issue
Goods-Issue withour Reference
Create TO Stock-Determination
Picking + Transfer Order
Material Document
Fig. 3.20 Integration of transfer requirement and transfer order
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The transfer order is the central document for control of stock movement in WM. Every material movement in a warehouse requires a transfer order that contains all information required to execute the physical transportation into or out of the warehouse or from one storage bin to another. In this regard, there is no differentiation between physical movement and pure transfer postings. Transfer postings can occur when materials are transferred from a quality inspection to unrestricted-use stock.
Transfer orders contain all information needed by the Warehouse Management system to execute stock movement. In addition to the materials and quantities to be moved, such information also includes precise data indicating from where the material is to be moved (source storage bin) and to where (destination storage bin).
• Thesource storage binindicates the storage bin from where materials are taken or the goods receipt area (interim storage type) from where they are to be taken and placed into storage.
• Thedestination storage bindetermines the storage bin in which the materials are to be placed or the goods issue zone (interim storage type) via which they are to be removed.
Return storage binsare used for special situations. When an entire pallet is being removed and picking of a specific partial quantity is to take place, the return storage bin can be used to hold quantities no longer needed if the opened pallet is not to be placed back into storage. Determination of storage bins is done automatically according to the putaway and picking strategies determined by the system. The subsequent sections will focus on the basics of controlling putaway and picking.
Transfer orders for putaway or picking can be created manually as a single document or generated with reference to a preceding document. Preceding documents in such a case would either be transport demand from a previous goods movement, delivery documents, material documents or posting change notices.
Confirming a transfer order acknowledges that stock movement has taken place and the required material quantity has actually been transported from one storage bin to another. Whether or not confirmation is required depends either on the movement type used or on system settings for a particular storage type. The transfer order or individual transport order items can be canceled until confirmation has taken place. Confirming a transfer order completes the document. If the actual quantity deviates from the target quantity during confirmation, the resulting differ- ence in quantity is automatically posted to a so-called interim storage area for differences.
Confirmation of a transfer order can be either in theforegroundorbackground.
Confirmation in the foreground refers to a manual procedure in which the individual transaction steps are monitored on screen and default values can be changed.
Confirmation in the background is done automatically by the system.
Transfer requirements contain information on the planned goods movements and are used to plan or trigger subsequent stock movements. Unlike transfer orders, which contain detailed information on the stock movement to be executed, trans- port requirements do not include information on the storage type or bin related to
putaway or picking. The header and item data of a transfer requirement includes administrative, material- and quantity-specific information on the planned goods movement, as well as the date and direction (picking or putaway). Transfer requirements are the preceding documents for transfer orders and are usually automatically generated by the system based on stock postings. For goods movements that begin directly in WM, transport requirements can be manually created. The transition from a transfer requirement to a transfer order can either be performed manually or automatically in the background.