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Digital Supply Chain Green Thursday – SAP Extended Warehouse Management

Thank you very much for joining us in this article of the Digital Supply Chain Green Thursday blog series. Every Thursday we will together take a closer look at one of the SAP Digital Supply Chain solutions and how they contribute to sustainability in supply chains all over the world. Have fun in following the blog, we invite you to get in touch with us and feel free to share the blog posts among your peers. Here you can find last week’s article about SAP Transportation Management support sustainability in transportation processes.

Sustainable Warehousing is more than just a building

Have you ever driven on the highway and seen one of those immensely huge distribution centers, more or less well designed and asked yourself what is going on in there? How everything needs to be organized so that all the products in their different kinds, shapes and characteristics can be handled properly? Basically, it all comes down to inbound goods that are processed and stored, before they are shipped in an outbound delivery again. Of course, additionally the customer comes into play, as the aim of every company is to fulfill the customer requirements to the best extend possible – and hopefully in a sustainable manner, protecting the environment and people working in the warehouse. A huge part of the ecological impact of a warehouse is already decided when building it in the first place on a certain location and with certain building materials. Still, operating the processes in a warehouse in a sustainable way is an important challenge with a great impact as well.

Main components of Warehouse Management Systems; Source: SAP

Warehouse Management Systems support organizing the processes

One of the most valuable goods in warehouses is information. For operating a warehouse, one need to know what goods are in stock, in which place are they stored, what kind of product it is (probably with an expiration date?) and which customer wants to have it when. The employee then gets the order to get a product, knows where it is and can package it adequately to be shipped to the customer.

Warehouse Management systems help organizing all this information, aiming for a maximum of efficiency and accuracy in fulfilling customer orders. Even though warehouses can serve for replenishing production, as distribution centers or as transit warehouses and deal with products from various industries all of them fulfill the customer needs by optimizing the same resources: Physical Space, Inventory and Worker. Warehouse processes managed with SAP Extended Warehouse Management combine these resources efficiently and deliver the information needed.

Using the available Space as well as possible

In a warehouse the available physical space is the basic constraint of the warehouse capacity and how the good are distributed within this physical space has a huge impact on the routes that workers must go for picking items. SAP Extended Warehouse Management supports stock consolidation to merge partially filled stock spaces in order to free up space. The system takes weight, height, volume and specific product constraints into consideration to merge partial stock into pallets without harming any goods. The integration to SAP S/4HANA for product compliance ensures that all dangerous goods are stored and labeled appropriately to prevent accidents. Warehouse Insights which is integrated into SAP Extended Warehouse Management aims for additional route optimization efforts and minimizing empty travel distances. Heat maps of the warehouse which are calculated by Warehouse Insights lead to better understanding and monitoring of the product allocation. These insights support decisions like clustering products, which are often picked together, to minimize the ways and empty travels of employees. SAP Extended Warehouse Management also enables wave-picking, meaning that work is organized in waves to finishing activities at the appropriate time, e.g. when a route needs to be dispatched.

Heatmaps in Warehouse Insights visualize the physical goods movement in the warehouse;
Source: SAP

What is in my Warehouse?

For the best customer service, it is important to be aware of the accurate inventory levels in a warehouse all the time without having to spend valuable work time on physically counting the stocks. From a business point of view the product ID and the amount are not the only important information, especially when dealing with products that have a limited expiration date and customer requirements regarding the remaining shelve life of products in their stores. SAP Extended Warehouse Management takes therefore the expiration date into consideration when calculating on how to fulfill the customer order to minimize scrap and waste. Through the integration to Enterprise Resource Planning Systems and Manufacturing Execution Systems receiving good receipts from production can be automated as well as the conversion of sales orders or stock transfer orders into deliveries – which can even be changed after being handed over to SAP Extended Warehouse Management to react flexibly on changing customer demands. During all this time the accuracy of inventory levels is ensured by mobile transactions updating the system at the exact moment of execution.

Thanks to mobile applications transactions are booked in the Warehouse Management System in the moment physical goods are moved; Source: SAP

Supporting the Workforce with IoT

When an Outbound Delivery Order is created, it is forwarded to an employee in the warehouse to find and pick the requested products, which are then packed and shipped to the customer. Because products are not similar, SAP Extended Warehouse Management uses different Labor Activity Codes encoding the physical effort regarding a product and takes them into consideration when distributing the Outbound Delivery Orders. Additionally, the integration into Time and Attendance-systems as well as HR systems allows a real-time planning and integrated rewarding of employees. The Internet of Things also includes warehouse operations and can enhance the performance within a warehouse drastically. IoT-applications cover the use of smart-glasses or voice-recognition to support the picking of products as well as the integration of robots in the processes to minimize the physical stress of employees and enhance the worker performance. Therefore, SAP Extended Warehouse Management supports the connection of Co-Bots, robots working in cooperation with humans, that can follow the employees on their route during the warehouse, carry the physical load and bring it to the packaging zone when all orders are collected. The Fiori User Interface gives the necessary information to the employee in a clear layout to quickly apprehend the required task with a high rate of accuracy, supporting a better employee performance.


Use of robots in daily warehouse operations to enable the warehouse of the future; Source: SAP

Better utilization of Space, Inventory and better Performance of Workers with SAP Extended Warehouse Management

A main challenge when running a warehouse is about constantly optimizing physical space, inventory and workforce to fulfill customer requirements – and doing so sustainably. Even though the environmental parameters of a warehouse is already largely influenced by the place and materials used in the building, the way of operating can largely influence the sustainability impact of a warehouse, especially ensuring that employees can work safely and that the resources are used in a most effective way. SAP Extended Warehouse Management naturally integrates in the software environment and enables IoT use cases that support the daily operations – for all types of warehouses across all industries.

If you’d like additional information on how SAP Extended Warehouse Management can support your business, reach out to your SAP contact or have a look at the solution website. Additionally, you can listen to Global Solution Lead Richard Kirker on how SAP Extended Warehouse Management supports busi... or read this great blog of Lingaiah Vanam.

Start your Sustainable Warehouse today – with SAP Extended Warehouse Management

I hope you found this blog post helpful and interesting. Please make sure you follow me to not miss any future blog posts in this series and stay informed about how a Sustainable Supply Chain is supported by SAP Digital Supply Chain solutions! Please have a look at my earlier posts as well:

DSC Green Thursday: At the end of every tunnel there is a light - will it be a green one?

DSC Green Thursday: SAP S/4HANA for product compliance - “If you think compliance is expensive – try...

DSC Green Thursday: SAP Intelligent Product Design – Too many cooks spoil the broth, or not?

DSC Green Thursday: Enable customers to make informed decisions with SAP Recipe Development

DSC Green Thursday: Using SAP Product Lifecycle Costing to lift the fog of uncertainty

DSC Green Thursday: Becoming smarter through Collaboration in SAP Engineering Control Center

DSC Green Thursday: Leveraging the connection of Industry 4.0 and Sustainability with SAP Manufactur...

DSC-Green Thursday: Protecting Planet and People with SAP Environment Health and Safety Management

DSC-Green Thursday: Operate your Transportation Processes in a sustainable way with SAP Transportati...
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