During my normal day job when meeting with customers I regularly present proposals that revolve around SAP WM. More often these days we find ourselves suggesting to customers solutions that utilize SAP EWM which is delivered as a component of SAP SCM. I have gotten more questions these days around the differences and why I would recommend one solution vs. another so I thought I would write a series of posts around the offerings to better explain them. It used to be that the big question was a 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 you to the different versions of SAP WM and then provide you a simple grid you can use to assist you in making a choice. I say assist you because only a thorough evaluation of your environment and requirements will decide the best choice in your situation but at 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
Example IM structure
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 the organizational diagram above). What this means is that regardless of the amount of actual locations you might use to store your materials, SAP (without modifications) will not be able to track the stock at a lower level then the storage location. There is the capability to identify a bin per material which may provide you some flexibility but again realize that you only allowed one value per material (See the screen shot below). Of course we have in the past been asked to add the ability to track several bins per material but this is still a less then optimal solution and probably only useful in cases where WM is truly not an option.
IM level inventory detail
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 much easier then that.
When would IM be the best fit?
- Stock room environment where 1 material can only exists in 1 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 you have a 3rd party WM system
In my next post I will start to give you the run down on SAP WM.
Later
Phillip Avelar is a Managing partner at Advanced Solutions, based in Chicago. He works with SAP enterprises to optimize their supply chains, increase productivity and challenges the status quo. He shares his passion for solving customers problems in his blog posts, industry articles and conference talks.