- SAP Managed Tags
Welcome to our blog post for the SAP EWM Podcast Episode 02 – Integrated or Decentralized Warehouse Management with SAP EWM - What Should I Do?
You can listen to the podcast episode in English and in German on Spotify, Amazon Music, Apple Podcasts or Sway! Enjoy!
Embedded vs. decentralized EWM
Embedded EWM is part of SAP S/4HANA and can only be used with an existing S/4 installation. It is the EWM that is fully integrated into SAP S/4HANA and ist is used in the same system like other logistic applications MM, SD, LE etc.. There are benefits of an embedded EWM for example here is no master data distribution from the ERP module and embedded EWM supports synchronous postings.
Decentralized EWM means a separate installation that is supplied with the necessary data via native SAP to SAP interfaces, but on the other hand can work completely autonomously.
Decision Criteria
There are functional, operational, and strategic aspects that should be considered when you have to take a decision.
1) Functional decision criteria
The first thing to consider when making this decision is the functional differences between the two options: To make an example: If you want to connect several ERP clients or ERP systems to an EWM, you cannot use an embedded EWM for this but only a decentralized EWM. Beyond that capability there are rather soft functional criteria such as synchronous production integration in embedded EWM, which of course provides real added value especially for production-related warehouses. Soft criteria however means also that the processes are supported in embedded EWM as well as in decentralized EWM. Often the differences are rather technical - from an end-user perspective there is normally no differences.
The functional differences are described for each release in the corresponding release notes. There is also an PDF attachment to the notes which shows the differences in transparent table format:
SAP Note 3376455 - Release information and restrictions of Decentralized EWM on SAP S/4HANA 2023 FPS...
SAP Note 3376453 - SAP S/4HANA 2023 FPS00, FPS01 and FPS02: Release information and restrictions for...
2) Operational decision criteria
Operational decision criteria assess the influence of a deployment on the operation of the solution. The independence of warehouse management from the ERP system for example is one of the major operational aspects. Independence can mean different things: For example the fact that if there is a downtime in the ERP, the warehouse can continue to work for the time being. Purchase orders that have already been distributed can be received and distributed outbound deliveries can be picked and shipped. The standard integration of both systems ensures that everything is posted correctly after the connection is restored.
This is ensured by the native SAP to SAP integration between EWM and ERP which uses qRFCs (queued remote function calls) for the exchange of transactional data which offer an error-tolerant integration close to real time. This native integration supports for example the distribution of purchase orders or late changes of customer orders and outbound deliveries on ERP side with automatic updates on EWM side.
Another operational aspect is the performance and latency of the EWM systems. It can make sense or it can be necessary to operate EWM system close to the warehouses. This does not mean that the systems have to be at the warehouse location, this is in general not necessary. But it could be required that the data center of a hypersaler is at least in the same region than the warehouse for example in Europe, Americas or in Asia. In this case a decentralized EWM is necessary if there is a single ERP system hosted for example in Europe.
A decentralized EWM also gives more independence when it comes to maintenance and release cycles. Embedded EWM implementations must be upgraded together with the SAP S/4HANA ERP system. This can lead to bottlenecks in project and test capacities or you simply don't want to take the risk of a joint upgrade for all divisions and all warehouses.
Technical dependency can also play a role. In a decentralized EWM landscape customers do not have to coordinate with the entire SAP S/4HANA system when importing process changes. This can definitely increase the flexibility of logistics and IT departments. And finally customers have to check whether their SAP S/4HANA system has sufficient resources to operate the entire warehouse management - it's about HANA memory, application servers and so on.
There are technical capabilities for 'embedded' EWM to get the technical infrastructure level more similar to the 'decentralized' EWM in which a whole ABAP system is dedicated for EWM for example by the placement of the EWM table group to a dedicated HANA DB scale-out node or by using dedicated application servers only for EWM users. Please check the following SAP notes for more details:
1423066 - Optimization of the performance in EWM
2950948 - EWM table group for placement on HANA DB scale-out node
To clarify system performance aspect a greenfield system sizing should also be made as part of the deployment decision. Especially for high-volume and high performance warehouses with a lot of warehouse automation the sizing is a decisive point. The topic of automation is also always an important point: With EWM the whole material flow can be control with the integrated material flow system (EWM-MFS). External material flow systems are no longer required and EWM communicates directly with the PLCs.
Warehouse automation is a strong argument for the decentralized approach - but not one that excludes the embedded EWM option. You really have to check the specific requirements. There are SAP EWM customers who control their automated warehouses directly with embedded EWM. This can also work without any problems. A sizing you is highly recommended when automation is used.
Please check the following links to get more information about sizing for EWM:
SAP Sizing - HANA based Quicksizer
SAP Note 1896197 - Sizing of Extended Warehouse Management - Best Practices
2) Strategic decision criteria
The central question when it comes to strategic decision criteria is “how will my business and my logistics develop in the future?". Answers to questions like "Do we expect strong growth", "do we have an automation strategy" or "will we have many new logistics sites" influence the decision and can rather speak for a decentralized approach - to ensure independence and performance.
It is also conceivable to start the S/4HANA journey with a decentralized EWM on S/4HANA: We call this "logistics first approach". Customers can thus reduce the complexity of a transformation, as they only have to deal with warehouse logistics in the first step. Later the other SAP modules follow. The integration of the decentralized EWM on S/4HANA is then only be switched from ECC to S/4HANA. Thanks to the same technical integration the complexity of switching is low and the effort is manageable.
Hybrid approaches are also possible and on the roadmap of many SAP customers. This means that embedded EWM is for example used for smaller sales warehouses or production-related warehouses and decentralized EWM is used for the large distribution centers. The big advantage is that customers can rely on one single solution for their whole intralogistics - in production and distribution - since the source code and the application is the same. Even re-use of customer specific EWM extensions is in a hybrid landscape possible.
Summary
The answer to the question "embedded or decentralized EWM - what should I do?" depends on many aspects. In addition it is not simply possible to switch between the deployment options just by configuration. It is possible due to the fact that there is only one EWM allowing both options but the switch is always a migration project. In order to come to a good decision, it is required that customers do an individual assessment of the criteria mentioned above. Assessment tools like a utility analysis, decision trees other methods can support this process.
Helpful Links:
SAP Note 1606493 - SAP EWM Deployment Options Best Practices
Please visit our SAP EWM Podcast Landing Page with all Episodes, Blog Posts and Podcast Notes!
| User | Count |
|---|---|
| 5 | |
| 3 | |
| 3 | |
| 2 | |
| 2 | |
| 1 | |
| 1 | |
| 1 | |
| 1 | |
| 1 |
