During my normal day job, I meet with customers regularly and present proposals that revolve around SAP WM. More often than not, we find ourselves suggesting solutions that utilize SAP EWM, which is delivered as a component of SAP SCM. Lately, I have received many questions regarding the differences and why I recommend one solution over another. I figured that I would write a series of posts around the offerings to better explain them.
It used to be that the big question was simple: IM or WM? But now with the introduction of new versions of warehouse management, the choice is not as clear. Over the next couple of posts, I will introduce to you the different versions of SAP WM, and then provide you with a simple grid to help you make your choice. I say "assist you," because only a thorough evaluation of your environment and requirements will decide the best choice for your situation. At the very least, I’ll try and provide you some guidance. If you need an evaluation, call me – shameless plug :-)
Ok, let’s start going through what’s available.
SAP Inventory Management – the foundation for stock management
Standard inventory management has the most basic functionality when it comes to detailed location management. Inventory within IM is managed at a storage location level (see organizational diagram above). This means that, regardless of several actual locations you could use to store your materials, SAP (without modifications) will not be able to track the stock at a lower level than the storage location. There is the capability to identify a bin per material which may provide you some flexibility, but again, realize that you are only allowed one value per material (see the screen shot below). Of course, in the past we have been asked to add the ability to track several bins per material, but this is still a less-than-optimal solution and probably only useful in cases where WM is truly not an option.
Note that IM is foundational. What I mean by this is that IM functionality is used regardless of whether you are using IM alone, or with the addition of any of the flavors of WM functionality. When using any of the standard SAP application - for example, MIGO for Goods receipts - the user enters a plant and storage location to perform the transaction. Can’t get any easier than that.
When would IM be the best fit?
- Stock room environment where one material can only exists in one location or at a minimum; there should be no doubt as to where the material is. This is sometimes appropriate in a "Made to Order" situation where the product is manufactured for a specific customer and then shipped.
- You maintain very little inventory and very few materials
- You need the simplest solution (there is no detailed location management to deal with)
- You either outsource your warehouse or have a 3rd party WM system
In my next post I will start to give you the run-down on SAP WM.