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Martin Murray
Materials Management in SAP ERP: Functionality and
Technical Configuration, 3rd Edition
2011, 666 pp., hardcover
978-1-59229-358-2
Brian Carter et. al.
SAP Extended Warehouse Management: Processes, Functionality,
and Configuration
2010, 847 pp., hardcover
978-1-59229-304-9
Martin Murray
Maximize Your Warehouse Management Operations with SAP ERP
2010, 300 pp., hardcover
978-1-59229-309-4
Othmar Gau
Transportation Management with SAP LES
2008, 574 pp., hardcover
978-1-59229-169-4
Martin Murray
Warehouse Management with SAP® ERP:
Functionality and Technical Configuration
Bonn 폷 Boston
Dear Reader,
If you currently use Warehouse Management in SAP ERP or need to get up to speed
on it, this is your updated and comprehensive guide. In this second edition of one
of our best-selling books, Martin Murray will help you master warehouse management techniques, everything from stock replenishment to picking and putaway
strategies to storage unit management. Each chapter provides practical explanations, business processes, useful screenshots, and practical tips to help you understand and master warehouse management.
Working with Martin on this project was a pleasure, as usual. Martin’s sense of
humor and ability to make me sweat the deadlines are like no other author I’ve
worked with before. Yet, as always, I’m honored to witness such expertise and proficiency, and I’m confident that you will find this new edition with SAP PRESS up to
the same high standard as his previous books.
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The Library of Congress has cataloged the printed edition as follows:
Murray, Martin, 1964Warehouse management with SAP ERP : functionality and
Technical configuration / Martin Murray. -- 2nd ed.
p. cm.
Includes bibliographical references.
ISBN 978-1-59229-409-1 -- ISBN 1-59229-409-X
1. Inventory control--Computer programs. 2. Business
logistics--Computer programs. 3. Material accountabilityComputer programs. 4. SAP ERP. I. Title.
TS161.M85 2012
658.7’87--dc23
2011045055
ISBN 978-1-59229-409-1 (print)
ISBN 978-1-59229-813-6 (e-book)
ISBN 978-1-59229-814-3 (print and e-book)
© 2012 by Galileo Press Inc., Boston (MA)
2nd edition 2012
Contents
Preface .............................................................................................................
1
Introduction to Warehouse Management ................................. 27
1.1
1.2
1.3
2
21
Introduction to Warehousing ..........................................................
1.1.1 Earliest Examples of Warehousing ......................................
1.1.2 Tobacco Warehouses in the United States ..........................
1.1.3 Bonded Warehouses ..........................................................
1.1.4 20th Century Port Warehousing .........................................
1.1.5 Warehousing as Part of Physical Distribution ......................
1.1.6 Warehousing and Distribution Centers ...............................
1.1.7 Public Warehousing ...........................................................
History of Warehouse Management Systems (WMSs) .....................
1.2.1 Early Warehouse Management Systems .............................
1.2.2 The Rise of Enterprise Resource Planning (ERP) ..................
Summary ........................................................................................
27
27
28
28
29
30
31
32
33
33
34
35
Basic Warehouse Functions ....................................................... 37
2.1
2.2
2.3
2.4
Warehouse Structure ......................................................................
2.1.1 Configuring a Warehouse ...................................................
2.1.2 Assignment of the Warehouse ...........................................
2.1.3 Warehouse Control Parameters ..........................................
Storage Type ..................................................................................
2.2.1 Warehouse Layout .............................................................
2.2.2 Configuration of a Storage Type .........................................
2.2.3 Data Entry for a Storage Type .............................................
Storage Sections .............................................................................
Storage Bins ...................................................................................
2.4.1 Storage Bin Types ..............................................................
2.4.2 Define Storage Bin Structure ..............................................
2.4.3 Creating a Storage Bin Manually ........................................
2.4.4 Creating a Storage Bin Automatically ..................................
2.4.5 Block Storage Bins .............................................................
2.4.6 Creating Blocking Reasons .................................................
37
38
40
41
46
46
48
49
56
58
58
59
65
66
67
69
7
Contents
2.5
2.6
2.7
3
70
71
73
74
74
75
75
76
78
79
80
Stock Management .................................................................... 81
3.1
3.2
3.3
3.4
3.5
3.6
8
2.4.7 List of Empty Storage Bins ..................................................
2.4.8 Bin Status Report ...............................................................
Quants ...........................................................................................
2.5.1 Quant Record ....................................................................
2.5.2 Display a Quant .................................................................
Business Examples—Basic Warehouse Functions .............................
2.6.1 Warehouse Structure .........................................................
2.6.2 Storage Types ....................................................................
2.6.3 Storage Bins .......................................................................
2.6.4 Quants ...............................................................................
Summary ........................................................................................
Warehouse Management Data in the Material Master ....................
3.1.1 Creating the Material Master .............................................
3.1.2 Entering Data into WM Screens .........................................
Types of Warehouse Stock ..............................................................
3.2.1 Stock Categories ................................................................
3.2.2 Status of Warehouse Stock .................................................
3.2.3 Special Stock ......................................................................
Batch Management in Warehouse Management .............................
3.3.1 Batch Definition .................................................................
3.3.2 Batch Level ........................................................................
3.3.3 Batch Number Assignment .................................................
3.3.4 Creating a Batch Record .....................................................
3.3.5 Batch Determination ..........................................................
Shelf Life Functionality ...................................................................
3.4.1 Shelf Life and the Material Master .....................................
3.4.2 Production Date Entry .......................................................
3.4.3 SLED Control List ...............................................................
Business Examples—Stock Management .........................................
3.5.1 Types of Warehouse Stock .................................................
3.5.2 Batch Management ............................................................
3.5.3 Shelf Life Functionality .......................................................
Summary ........................................................................................
81
82
87
94
94
98
100
104
105
105
106
107
109
116
116
118
119
121
121
122
122
123
Contents
4
Warehouse Movements ............................................................. 125
4.1
4.2
4.3
4.4
4.5
5
WM Movement Types ....................................................................
4.1.1 Movement Types in IM ......................................................
4.1.2 WM Reference Movement Types .......................................
4.1.3 Creating WM Movement Types .........................................
4.1.4 Assigning Warehouse Management Movement Types ........
Transfer Requirements ....................................................................
4.2.1 Automatic Transfer Requirements ......................................
4.2.2 Create a Manual Transfer Requirement ..............................
4.2.3 Create a Transfer Requirement for Replenishment of
a Fixed Bin .........................................................................
4.2.4 Display a Transfer Requirement for a Material ....................
4.2.5 Display a Transfer Requirement for a Single Item ...............
4.2.6 Display a Transfer Requirement for a Storage Type .............
4.2.7 Deleting a Transfer Requirement ........................................
Transfer Orders ...............................................................................
4.3.1 Creating a Transfer Order with Reference to a
Transfer Requirement .........................................................
4.3.2 Creating a Transfer Order Without a Reference ..................
4.3.3 Cancel a Transfer Order ......................................................
4.3.4 Confirm a Transfer Order ....................................................
4.3.5 Print a Transfer Order ........................................................
Business Examples—Warehouse Movements ..................................
4.4.1 Warehouse Movements .....................................................
4.4.2 Transfer Requirements .......................................................
4.4.3 Transfer Orders ..................................................................
Summary ........................................................................................
125
126
127
128
138
141
142
143
145
149
152
152
154
156
157
162
164
166
171
174
174
175
176
178
Goods Receipts ........................................................................... 179
5.1
5.2
Goods Receipt with Inbound Delivery ............................................
5.1.1 Inbound Delivery Overview ...............................................
5.1.2 Creating an Inbound Delivery .............................................
5.1.3 Creating a Transfer Order for an Inbound Delivery .............
5.1.4 Using the Inbound Delivery Monitor ..................................
Goods Receipt Without an Inbound Delivery ..................................
5.2.1 Goods Receipt in IM ..........................................................
5.2.2 Reviewing the Material Documents ....................................
179
180
180
182
183
187
187
188
9
Contents
5.3
5.4
5.5
6
190
191
194
196
196
198
198
201
201
202
203
204
Goods Issues .............................................................................. 205
6.1
6.2
6.3
6.4
10
5.2.3 Reviewing Stock Levels after Goods Receipt .......................
5.2.4 Displaying the Transfer Requirement ..................................
5.2.5 Displaying the Transfer Order .............................................
Goods Receipt Without Inventory Management .............................
5.3.1 Creating the Transfer Order for the Goods Receipt .............
5.3.2 Displaying Transfer Order for the Goods Receipt ................
5.3.3 Displaying the Stock Levels ................................................
Business Examples—Goods Receipts ...............................................
5.4.1 Goods Receipt with Inbound Delivery ................................
5.4.2 Goods Receipt Without an Inbound Delivery .....................
5.4.3 Goods Receipt Without Inventory Management ................
Summary ........................................................................................
Goods Issue with Outbound Delivery .............................................
6.1.1 Displaying the Sales Order .................................................
6.1.2 Creating the Outbound Delivery ........................................
6.1.3 Outbound Delivery Status ..................................................
6.1.4 Creating the Transfer Order ................................................
6.1.5 Confirming the Transfer Order ...........................................
6.1.6 Posting the Goods Issue for Outbound Delivery .................
6.1.7 Reviewing Material Documents ..........................................
Goods Issue Without an Outbound Delivery ...................................
6.2.1 Goods Issue in IM ..............................................................
6.2.2 Negative Balance in the Warehouse ...................................
6.2.3 Creating a Transfer Order ...................................................
Multiple Processing Using Groups ..................................................
6.3.1 Definition of a Group .........................................................
6.3.2 Creating a Group for Transfer Requirements .......................
6.3.3 Creating Transfer Orders for a Group of Transfer
Requirements ....................................................................
6.3.4 Definition of a Wave Pick ...................................................
6.3.5 Creating a Group for Outbound Deliveries .........................
6.3.6 Creating the Wave from the Outbound Delivery Monitor ...
6.3.7 Using the Wave Monitor ....................................................
6.3.8 Results of the Pick Wave Monitor ......................................
Picking and Packing ........................................................................
6.4.1 Picking Schemes ................................................................
205
206
207
209
213
219
220
221
222
222
224
225
228
228
229
231
233
233
233
234
238
241
241
Contents
6.5
6.6
7
243
244
244
245
245
247
Stock Replenishment ................................................................. 249
7.1
7.2
7.3
7.4
7.5
8
6.4.2 Packing ..............................................................................
Business Examples—Goods Issue ....................................................
6.5.1 Goods Issue with Outbound Delivery .................................
6.5.2 Goods Issue Without an Outbound Delivery ......................
6.5.3 Picking and Packing ...........................................................
Summary ........................................................................................
Internal Stock Transfers ..................................................................
7.1.1 Keeping the Warehouse Running .......................................
7.1.2 Checking Empty Bins ..........................................................
7.1.3 Moving Material Between Storage Bins ..............................
7.1.4 Confirming the Stock Transfer ............................................
7.1.5 Configuring the Difference Indicator ..................................
Fixed Bin Replenishment ................................................................
7.2.1 Replenishment and the Material Master .............................
7.2.2 Configuration for Replenishment ........................................
7.2.3 Creating the Replenishment ...............................................
7.2.4 Displaying the Transfer Requirement ..................................
7.2.5 Creating the Transfer Order ................................................
7.2.6 Confirming the Transfer Order ............................................
7.2.7 Reviewing the Stock Overview ...........................................
Posting Changes .............................................................................
7.3.1 Posting Change for a Release from
Quality Inspection Stock ....................................................
7.3.2 Posting Change from Material Number to
Material Number ...............................................................
7.3.3 Dividing Batches Among Other Batches .............................
Business Examples—Stock Replenishment ......................................
7.4.1 Internal Stock Transfers ......................................................
7.4.2 Fixed Bin Replenishment ....................................................
7.4.3 Posting Changes .................................................................
Summary ........................................................................................
249
249
250
252
255
256
258
258
260
260
262
263
264
266
267
267
272
275
277
277
278
278
279
Picking Strategies ...................................................................... 281
8.1
Storage Type Indicator .................................................................... 282
11
Contents
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
8.10
9
284
284
286
287
288
288
289
292
292
293
294
294
296
297
299
299
300
301
303
304
304
305
306
306
308
309
309
310
311
312
312
Putaway Strategies .................................................................... 315
9.1
12
Storage Type Search .......................................................................
8.2.1 Configuring the Storage Type Search ..................................
8.2.2 Configuring Storage Section Search ....................................
FIFO (First In, First Out) ..................................................................
8.3.1 Configuring the FIFO Picking Strategy ................................
8.3.2 Stock Removal Control Indicators ......................................
8.3.3 Example of FIFO Picking Strategy .......................................
LIFO (Last In, First Out) ..................................................................
8.4.1 Configuring the LIFO Picking Strategy ................................
8.4.2 Example of LIFO Picking Strategy .......................................
Fixed Storage Bin ............................................................................
8.5.1 Fixed Storage Bin in Material Master ..................................
8.5.2 Configuring the Fixed Bin Picking Strategy .........................
8.5.3 Example of Fixed Bin Picking Strategy ................................
Shelf Life Expiration ........................................................................
8.6.1 SLED Picking and the Material Master ...............................
8.6.2 Configuring Shelf Life Expiration Picking Strategy ...............
8.6.3 Displaying SLED Stock .......................................................
8.6.4 Example of Shelf Life Expiration Picking Strategy ................
Partial Quantities ............................................................................
8.7.1 Configuring Partial Quantities Picking Strategy ...................
8.7.2 Using the Partial Quantities Picking Strategy ......................
Quantity-Relevant Picking ..............................................................
8.8.1 Configuring the Quantity Relevant Picking Strategy ............
8.8.2 Quantity-Relevant Picking and the
Material Master Record .....................................................
Business Examples—Picking Strategies ............................................
8.9.1 Storage Type Search ...........................................................
8.9.2 First In, First Out (FIFO) .....................................................
8.9.3 Fixed Bin ............................................................................
8.9.4 Shelf Life Expiration Date (SLED) ........................................
Summary ........................................................................................
Fixed Bin Storage ............................................................................ 316
9.1.1 Fixed Storage Bin in the Material Master ............................ 316
9.1.2 Configuring the Fixed Bin Storage Putaway Strategy ........... 317
Contents
9.2
9.3
9.4
9.5
9.6
9.7
9.1.3
Stock Placement Control Indicators ...................................
9.1.4
Example of Fixed Bin Storage Putaway Strategy .................
Open Storage .................................................................................
9.2.1
Configuring the Open Storage Putaway Strategy ...............
9.2.2
Example of Open Storage Putaway Strategy ......................
Next Empty Bin ..............................................................................
9.3.1
Configuring the Next Empty Bin Putaway Strategy ............
9.3.2
Displaying Empty Bins .......................................................
9.3.3
Example of Next Empty Bin Putaway Strategy ...................
9.3.4
Cross-Line Stock Putaway .................................................
Bulk Storage ...................................................................................
Near Picking Bin .............................................................................
9.5.1
Storage Type Control Definition ........................................
9.5.2
Search per Level Definition ...............................................
Business Examples—Putaway Strategies ..........................................
9.6.1
Fixed Bin Storage ..............................................................
9.6.2
Open Storage ....................................................................
9.6.3
Next Empty Bin .................................................................
Summary ........................................................................................
317
320
322
322
323
326
326
327
328
330
332
334
336
337
338
338
339
340
340
10 Inventory Procedures ................................................................. 343
10.1
10.2
Annual Physical Inventory ...............................................................
10.1.1 Before the Count ..............................................................
10.1.2 Configuring Annual Inventory ...........................................
10.1.3 Processing Open Transfer Orders ......................................
10.1.4 Blocking the Storage Type .................................................
10.1.5 Creating Annual Inventory Documents ..............................
10.1.6 Displaying the Count Documents ......................................
10.1.7 Entering the Inventory Count ............................................
10.1.8 Count Differences .............................................................
10.1.9 Entering a Recount ...........................................................
10.1.10 Clearing Differences ..........................................................
Continuous Inventory .....................................................................
10.2.1 Configuring Continuous Inventory .....................................
10.2.2 Creating a Continuous Inventory Count Document ...........
10.2.3 Printing a Continuous Inventory Count Document ............
10.2.4 Entering the Count Results ................................................
343
343
344
348
350
350
353
354
356
357
358
360
360
361
363
364
13
Contents
10.3
10.4
10.5
10.6
Cycle Counting ...............................................................................
10.3.1 Benefits of Cycle Counting .................................................
10.3.2 Materials Management Configuration Steps with
Cycle Counting ...................................................................
10.3.3 Using the ABC Analysis ......................................................
10.3.4 ABC Indicator and Material Master ....................................
10.3.5 Cycle Counting Configuration for Storage Type ..................
10.3.6 Creating a Cycle Count Document ......................................
10.3.7 Printing the Cycle Count Document ...................................
10.3.8 Entering the Cycle Count ...................................................
Zero Stock Check ............................................................................
10.4.1 Configuring Zero Stock Check ............................................
10.4.2 Performing an Automatic Zero Stock Check .......................
10.4.3 Performing a Manual Zero Stock Check ..............................
Business Examples—Inventory Procedures ......................................
10.5.1 Annual Physical Inventory ..................................................
10.5.2 Continuous Inventory ........................................................
10.5.3 Cycle Counting ...................................................................
Summary ........................................................................................
366
366
366
367
369
369
370
372
372
373
374
375
378
380
380
381
382
383
11 Storage Unit Management ........................................................ 385
11.1
11.2
11.3
11.4
14
Introduction to Storage Unit Management .....................................
11.1.1 Activating Storage Unit Management .................................
11.1.2 Defining Storage Unit Number Ranges ...............................
11.1.3 Defining Storage Type Control ...........................................
11.1.4 Defining the Storage Unit Type ..........................................
Storage Unit Record .......................................................................
11.2.1 Creating a Storage Unit Record by Transfer Order ..............
11.2.2 Displaying a Storage Unit ...................................................
Planning Storage Units ...................................................................
11.3.1 Planning Storage Units by Transfer Order ...........................
11.3.2 Receiving Planned Storage Units ........................................
11.3.3 Recording Differences in Planned Storage Units .................
Storage Unit Documentation ..........................................................
11.4.1 Transfer Order Document ..................................................
11.4.2 Storage Unit Contents Document .......................................
11.4.3 Storage Unit Document .....................................................
11.4.4 Storage Unit Transfer Order Document ..............................
386
386
387
388
389
390
390
393
393
394
396
397
398
398
400
400
401
Contents
11.5
11.6
11.7
11.8
Putaway with Storage Unit Management ........................................
11.5.1 Creating a Storage Unit ......................................................
11.5.2 Storage Unit—Single Material ............................................
11.5.3 Storage Unit—Multiple Materials .......................................
11.5.4 Storage Unit—Add to Existing Stock ..................................
Picking with Storage Unit Management ..........................................
11.6.1 Complete Stock Pick ..........................................................
11.6.2 Partial Stock Pick ...............................................................
11.6.3 Complete Stock Pick with Return to Same Bin ....................
11.6.4 Partial Stock Removal Using a Pick Point ............................
Business Examples—Storage Unit Management ..............................
11.7.1 Planning Storage Units .......................................................
11.7.2 Putaway with Storage Units ...............................................
11.7.3 Picking with Storage Units .................................................
Summary ........................................................................................
402
402
402
404
405
407
407
408
408
409
410
410
411
411
412
12 Hazardous Materials Management ............................................ 413
12.1
12.2
12.3
12.4
12.5
Introduction to Hazardous Materials ...............................................
12.1.1 Classification of Hazardous Materials ..................................
12.1.2 Master Data Configuration for Hazardous Materials ...........
12.1.3 Configuring Hazardous Material Management ....................
Hazardous Material Record .............................................................
12.2.1 Creating a Hazardous Material Record ...............................
12.2.2 Assigning the Hazardous Material to a
Material Master Record .....................................................
Hazardous Material Functionality ....................................................
12.3.1 List of Hazardous Materials ................................................
12.3.2 Fire Department Inventory List ..........................................
12.3.3 Check Goods Storage .........................................................
12.3.4 Hazardous Substance List ...................................................
Business Examples—Hazardous Materials Management ..................
12.4.1 Storing Hazardous Material ................................................
12.4.2 Hazardous Material Functionality .......................................
Summary ........................................................................................
414
414
415
420
425
425
426
427
427
428
429
431
431
432
432
433
15
Contents
13 Electronic Data Interchange (EDI) ............................................. 435
13.1
13.2
13.3
13.4
Introduction to EDI ........................................................................
13.1.1 Advantages of Using EDI ....................................................
13.1.2 Types of EDI ......................................................................
13.1.3 EDI and IDOCS ..................................................................
Using EDI in Warehouse Management ............................................
13.2.1 Inbound Processing ............................................................
13.2.2 Outbound Processing .........................................................
Business Examples—EDI .................................................................
Summary ........................................................................................
435
435
436
438
440
440
441
441
442
14 Mobile Data Entry ...................................................................... 443
14.1
14.2
14.3
14.4
14.5
14.6
16
Introduction to RF Devices .............................................................
14.1.1 Graphical User Interface Devices ........................................
14.1.2 Character-Based Devices ....................................................
14.1.3 SAPConsole .......................................................................
14.1.4 Functionality Available with SAPConsole ............................
Bar Code Functionality ...................................................................
14.2.1 UPC Bar Code Format ........................................................
14.2.2 UPC and EAN .....................................................................
14.2.3 Bar Code Structure .............................................................
14.2.4 Bar Code Readers ...............................................................
14.2.5 Bar Code Reader Technologies ...........................................
14.2.6 Bar Code Support in SAP Systems ......................................
14.2.7 Configuration for Bar Codes ...............................................
Radio Frequency—Supported Processes in SAP WM .......................
14.3.1 Defining the Radio Frequency Queue .................................
14.3.2 Adding a User for Mobile Data Entry ..................................
14.3.3 Logging on for Mobile Data Entry ......................................
14.3.4 RF Menus and WM Processes ............................................
Radio Frequency Monitor ...............................................................
14.4.1 Accessing the RF Monitor ..................................................
14.4.2 Using the Radio Frequency Monitor ...................................
Business Examples—Mobile Data Entry ..........................................
14.5.1 Bar Code Functionality .......................................................
14.5.2 RF Functionality .................................................................
Summary ........................................................................................
444
444
445
445
446
446
447
448
448
449
450
451
452
456
456
457
458
459
462
462
463
463
463
464
465
Contents
15 Radio Frequency Identification Technology .............................. 467
15.1
15.2
15.3
15.4
15.5
15.6
Introduction to Radio Frequency Identification ...............................
15.1.1 Mechanism of RFID ...........................................................
15.1.2 Electronic Product Code .....................................................
15.1.3 The Wal-Mart RFID Mandate .............................................
15.1.4 RFID Benefits .....................................................................
15.1.5 RFID vs. Bar Codes .............................................................
Types of RFID Tags .........................................................................
15.2.1 Tag Classes .........................................................................
15.2.2 Active and Passive Tags ......................................................
Current Uses of RFID ......................................................................
15.3.1 Electronic Payments ...........................................................
15.3.2 Retail Stores .......................................................................
15.3.3 Individual Product Tagging .................................................
15.3.4 Parts Tracking ....................................................................
RFID and SAP .................................................................................
15.4.1 Supported Functions in SAP AII .........................................
15.4.2 Outbound Processing (Slap and Ship) .................................
15.4.3 Flexible Delivery Processing ...............................................
15.4.4 Generation of Pedigree Notifications ..................................
15.4.5 Returnable Transport Item Processing ................................
Business Examples—RFID ...............................................................
Summary ........................................................................................
468
468
468
469
470
470
472
472
473
474
474
474
475
475
476
476
476
477
477
478
479
480
16 Cross-Docking ............................................................................ 481
16.1
16.2
16.3
Planned Cross-Docking ...................................................................
16.1.1 Types of Cross-Docking ......................................................
16.1.2 Types of Material Suitable for Cross-Docking .....................
16.1.3 Planned Cross-Docking in SAP ...........................................
16.1.4 Configuration for Cross-Docking ........................................
16.1.5 Cross-Docking Decisions ....................................................
Cross-Docking Movements .............................................................
16.2.1 One-Step Cross-Docking ....................................................
16.2.2 Two-Step Cross-Docking ....................................................
Cross-Docking Monitor ..................................................................
16.3.1 Accessing the Cross-Docking Monitor ................................
16.3.2 Cross-Docking Alert Monitor .............................................
482
482
483
483
484
486
486
486
489
492
493
494
17
Contents
16.4
16.5
Business Examples—Cross-Docking ................................................
16.4.1 Planned Cross-Docking ......................................................
16.4.2 Cross-Docking Movements ................................................
Summary ........................................................................................
496
496
497
498
17 Yard Management ...................................................................... 499
17.1
17.2
17.3
17.4
Introduction to YM ........................................................................
17.1.1 Yard Management Configuration .......................................
17.1.2 Yard Management Structure ..............................................
Yard Management Processes ..........................................................
Business Examples—Yard Management ..........................................
Summary ........................................................................................
499
499
507
510
517
518
18 Developments in Warehouse Management .............................. 519
18.1
18.2
18.3
Task and Resource Management .....................................................
18.1.1 Definitions in Task and Resource Management ..................
18.1.2 Resource Management ......................................................
18.1.3 Request Management ........................................................
18.1.4 Task Management ..............................................................
18.1.5 Route Management ...........................................................
18.1.6 Bin Management ...............................................................
18.1.7 TRM Monitor .....................................................................
Value-Added Services .....................................................................
18.2.1 Configuring VAS .................................................................
18.2.2 Creating the VAS Template ................................................
18.2.3 Creating a VAS Order .........................................................
18.2.4 VAS Monitor ......................................................................
18.2.5 VAS Alert Monitor .............................................................
18.2.6 VAS and TRM ....................................................................
Summary ........................................................................................
520
520
529
533
533
534
536
537
538
538
542
543
545
545
546
546
19 SAP Extended Warehouse Management ................................... 547
19.1
19.2
18
Introduction to SAP Extended Warehouse Management .................
19.1.1 History of EWM .................................................................
19.1.2 Integrating SAP EWM and WM ..........................................
Organizational Structure .................................................................
19.2.1 Activity Areas .....................................................................
547
547
548
548
548
Contents
19.3
19.4
19.5
19.2.2 Product Master ..................................................................
19.2.3 Transportation Data ...........................................................
19.2.4 Resources ..........................................................................
Documents in SAP EWM ................................................................
19.3.1 Warehouse Tasks ...............................................................
19.3.2 Warehouse Orders .............................................................
19.3.3 Inbound Delivery Notification ............................................
19.3.4 Outbound Delivery Request ...............................................
Processes in SAP EWM ...................................................................
19.4.1 Inbound Processing ............................................................
19.4.2 Outbound Processing .........................................................
19.4.3 Internal Warehouse Movements ........................................
Summary ........................................................................................
548
548
549
550
550
550
550
550
551
551
551
552
553
20 Conclusion .................................................................................. 555
20.1
20.2
Lessons Learned ............................................................................. 555
Future Directions ............................................................................ 557
Appendices ....................................................................................... 559
A
B
C
Bibliography .............................................................................................. 561
Glossary .................................................................................................... 563
The Author ............................................................................................... 569
Index ................................................................................................................ 571
Service Pages .............................................................................................
Legal Notes ...............................................................................................
I
III
19
Preface
This book is a comprehensive review of the warehouse management functionality
in SAP ERP (which we’ll refer to as SAP WM or simply WM) as it functions in the
latest version of SAP ERP, which at the time of writing is SAP ERP Central Component 6.0 (SAP ECC 6.0). We will also discuss warehouse functionality outside
of SAP ECC 6.0, which can be found in SAP Supply Chain Management (SCM),
currently in release SAP SCM 5.0.
Who This Book Is For
The subject matter in this book is not of interest just to those who work directly
with SAP WM, but also for those who work in related application areas such as
materials management (MM), production planning (PP), and sales and distribution
(SD). The subject matter should also interest warehouse managers and distribution managers who want to understand more of the functionality that they have
implemented and functionality they may be considering, such as task and resource management and storage unit management.
For those involved in SAP MM, this book will help them understand more of the
functions that occur when material has been moved to a storage location where
WM is active. A general knowledge of warehouse functionality with regard to the
way material is stored and moved in the warehouse is of great benefit.
Those working with SAP SD will benefit from a greater understanding of the outbound side of warehouse management, how material is picked for customer sales
orders, and the movement of the material for outbound deliveries.
SAP PP staff will benefit from gaining familiarity with the way material is
received from production and the picking of material for production orders.
Staff working with other SAP functionalities such as quality management (QM)
and plant maintenance (PM) will gain from a greater understanding of the general
topics addressed in WM.
21
Preface
How This Book Is Organized
This book is structured to serve the purposes of the various individuals that work
in the SAP WM environment, be they SAP configuration experts or users who
have been tasked to use SAP WM as part of their everyday work and want to gain
more understanding of the functionality.
Each chapter focuses on a specific SAP WM function, exploring the different facets of the function and providing examples. The book starts by examining the SAP
WM functionality: from the basic key elements through standard SAP WM functions such as stock placement and stock removal, to more advanced technology
such as RFID, and the more recent developments in warehouse management,
such as Value Added Services and Extended Warehouse Management. We briefly
describe each chapter now:
왘
Chapter 1
Chapter 1 provides a brief history of warehousing and the development of
warehouse management systems (WMS) over time. It helps set modern warehouse management in context with its past.
왘
Chapter 2
Chapter 2 describes some of the basic warehouse functionalities in SAP WM.
These provide the basis for setting up a warehouse in an SAP system and are
key to understanding the makeup of a warehouse, a storage type, a storage section, a storage bin, and a quant. The chapter will take you though these key elements, showing key configuration and examples.
왘
Chapter 3
The content in Chapter 3 will be familiar to readers who have SAP MM backgrounds. The chapter builds on the key elements described in Chapter 2 and
explores the warehouse data required in the material master, batch management, and the important functionality concerning shelf-life expiration.
왘
Chapter 4
Chapter 4 uses the data that is part of the material master to describe the basic
movements inside the warehouse using the transfer requirement and the transfer order. These drive all movements in the warehouse, and it is important to
understand how these functions are processed.
왘
Chapter 5
Chapter 5 takes the transfer requirement and transfer order further to describe
how they are used in the goods receipt process. This chapter will be of interest
22
© 2014 by Galileo Press Inc., Boston (MA)
Preface
to those involved in SAP MM, because it examines the integration of SAP WM
with SAP MM for inbound deliveries.
왘
Chapter 6
Chapter 6 describes the goods issue process and outbound delivery. Those
with SAP SD backgrounds will find the examination of the integration of SAP
WM and SAP SD of great benefit.
왘
Chapter 7
Chapter 7 explores the functions of the transfer requirement and transfer order
and describes how these are used in replenishment of stock to areas within the
warehouse, focusing on fixed bin replenishment.
왘
Chapter 8
Chapter 8 takes the elements examined in previous chapters and uses them to
describe the stock removal or picking function in the warehouse. The chapter
describes the various picking strategies that warehouse management can adopt
for a variety of materials and situations. It is useful to understand why these
strategies are in place and why they are used for certain materials.
왘
Chapter 9
Chapter 9 looks at the other side of the picking functionality and describes the
stock placement of putaway functions in the warehouse. The development of
the putaway strategies is a key to making warehouses more efficient.
왘
Chapter 10
Chapter 10 examines the methods used to count the material in the warehouse
once it is fully stocked. This is of particular interest to those with financial
experience, as it is an important part of a company’s financial health. This
chapter introduces the importance of accurate and regular counts.
The functionality examined in the first 10 chapters involves basic warehouse
management, which is implemented in almost all SAP WM implementations.
Chapter 11 and the subsequent chapters focus on functionality that is available
for warehouse management implementations but is not mandatory. It is up to the
individual warehouse manager or supply chain management to investigate and
then make a decision on implementation. Readers can learn about the functionality and use that knowledge to advise the warehouse owner about what is available and how it can be successfully used.
23
Preface
왘
Chapter 11
Chapter 11 focuses on Storage Unit Management (SUM), which can be used in
warehouses that move material in the warehouse by a container that they wish
to track. SUM was originally designed for warehouse management before the
idea was expanded for SAP MM, where it is called Handling Unit (HU) Management. The functionality is similar but not identical. This chapter highlights
some of the differences.
왘
Chapter 12
Chapter 12 examines the warehouse functionality of hazardous materials. Every
warehouse has some kind of hazardous material, and many warehouses have
to use the hazardous material functions to document and manage the dangerous materials stored. This will be of interest to anyone familiar with the SAP
Environmental Health and Safety functions.
왘
Chapter 13
Chapter 13 examines the use of Electronic Data Interchange (EDI) in the warehouse. EDI offers cost-saving benefits as well as greater efficiencies across the
enterprise. This chapter describes several EDI transactions that are used in WM
for both inbound and outbound processes that assist in creating a more efficient warehouse.
왘
Chapter 14
Chapter 14 examines one aspect of the technological advances that have been
adopted in the warehouse. The mobile data entry functionality in SAP WM
harnesses the advantages of bar codes and radio frequency readers to provide
accurate and efficient data entry from the warehouse floor. The chapter also
introduces the RF Monitor, which is the key function to managing mobile data
entry in the warehouse.
왘
Chapter 15
Chapter 15 moves forward with the latest technological advances in data entry
in the warehouse and gives the reader an examination of radio frequency identification (RFID) functionality in the warehouse. The chapter discusses the
RFID technology and the SAP solution that integrates RFID into the standard
warehouse functionality.
왘
Chapter 16
Chapter 16 discusses the function of cross-docking. Not all industries and
warehouses are suitable for cross-docking, but it is a key element in making
retail and grocery warehousing more efficient and cost effective. The scope of
24
© 2014 by Galileo Press Inc., Boston (MA)
Preface
cross-docking implementation may be limited, but some industries can adopt
the functionality to improve delivery times for certain materials. Understanding the principles and mechanism of cross-docking will help readers give
knowledgeable advice to their warehouse management.
왘
Chapter 17
Chapter 17 describes the functionality found in yard management. The functionality is useful for some companies that need to efficiently deal with a large
number of vehicles moving into and out of the yard before they reach the
warehouse. This chapter describes the processes involved in yard management
and how it interfaces with WM.
왘
Chapter 18
Chapter 18 briefly introduces readers to some of the new developments in
warehouse management. Task and Resource Management (TRM) is the software that takes the warehouse and warehouse resources to a new level, where
the efficiency of the warehouse is constantly improved by managing the
resources and the tasks. The chapter is only an introduction to this powerful
tool.
왘
Chapter 19
Chapter 19 introduces the Extended Warehouse Management (EWM) function
provides warehouse functionality. EWM can be implemented without SAP
WM, and can be used as a standalone operation interfaced with SAP ECC 6.0.
The discussion of EWM is focused enough for the reader to become aware the
basic functionality of EWM.
왘
Chapter 20
We conclude the book with a final chapter that briefly recaps the book, while
sharing lessons learned, and gives you some direction for the future. This
should help you keep track of what you’ve discovered in this book.
Summary
Please use this preface as a guide. Now that you have an idea of what this book is
about and what it covers, you can either jump ahead to specific chapters or proceed to read it chapter by chapter.
We hope that after reading this book, you will find that it has met its objectives of
delivering a comprehensive review of SAP WM and exploring topics that will
reinforce your current knowledge or help you develop your skills in unfamiliar
25
Preface
areas. We hope you find yourself using this book as a key reference in your current and future SAP WM experiences. Now let’s proceed to Chapter 1, in which
we introduce you to SAP WM.
26
© 2014 by Galileo Press Inc., Boston (MA)
Warehousing has evolved from early man’s need to store food in a safe
environment for future use to become an integral part of the supply chain
of almost every company on the planet.
1
Introduction to Warehouse Management
Warehouses have been around ever since humans decided to store excess food
from their harvests. Today, the warehouse is a key component of the supply
chain. Technological advances in computerized warehouse management systems
have meant that the warehouse can operate at maximum efficiency, thus reducing
delivery times to the customer, minimizing the cost of the warehouse operation,
and maximizing company profits.
1.1
Introduction to Warehousing
The history of warehouses goes back thousands of years. The earliest evidence of
warehouses was found in areas where some cultures’ cities used buildings to
store food for their inhabitants to use.
1.1.1
Earliest Examples of Warehousing
In 1955, an archaeological study was performed in the current day Indian state of
Gujarat. In that area, the study found the city of Lothal, which was part of the
Indus valley civilization dating back to around 2400 BC. As part of the study,
archaeologists found the earliest known example of a dock. It was discovered that
the dock was used to load and unload vessels traveling from the Arabian Sea, as
Lothal became a major trade center in West Asia and Africa.
The dock was connected to a warehouse by a direct ramp to facilitate loading. The
warehouse was central to the prosperity of the city and was originally built on a
3.5-meter-high (11.5 ft) mud-brick podium. The pedestal was high enough to provide maximum protection from floodwaters.
27
1
Introduction to Warehouse Management
Example
We can see many other examples of early warehouses based on trade between different
cultures. In the Henan Province of China, many examples have been found of warehouses of the Eastern Han Dynasty (15–100 AD), where warehouses of 180 by 30
meters (600 by 100 ft) in size have been found. These are situated in areas along the
“Silk Road,” a route that developed from Chang’an through Xianjiang and Central Asia
to the Mediterranean. Trading between the Eastern Han Dynasty and other empires
such as the Roman and the Kushan Empire in India has been documented.
1.1.2
Tobacco Warehouses in the United States
Many examples of warehouses in the United States and Europe have been found
that stem from the introduction of tobacco into European society. In 1580, cultivation of tobacco started in Cuba, along with the storing of tobacco before its
shipment to Spain, which led to building of the first tobacco warehouses. In
1612, John Rolfe grew the first commercial tobacco crop in Virginia that led to
the trade between Virginia and England.
As the number of tobacco farmers grew in Virginia, warehouses were created
where farmers could store their tobacco crop before shipment to England. In
1730, tobacco notes became legal tender in Virginia. Tobacco notes attested to the
quality and quantity of a farmer’s tobacco kept in public warehouses. Soon after,
inspection warehouses were created to verify weight and kind of tobacco to prevent the export of trash tobacco: shipments diluted with leaves and household
sweepings, which were debasing the value of Virginia tobacco.
Examples of the early Virginia tobacco warehouses, such as the 1788 Mecklenburg Tobacco Warehouse in Shepherdstown, West Virginia, can still be found in
much of the eastern United States.
1.1.3
Bonded Warehouses
In 1733 in England, Sir Robert Walpole, considered the first prime minister of
Great Britain, proposed a warehouse excise scheme for items that required a duty
to be paid on them, such as tobacco and wine.
At the time of Walpole’s suggestion, the payment of duties on imported goods
had to be made at the time of their arrival at the port, or a bond with security had
to be issued for future payment of the duty. There were a number of issues with
28
© 2014 by Galileo Press Inc., Boston (MA)
Introduction to Warehousing
the duty system at that time, as it was not always possible for the importer to find
the money for the duty, and it was often necessary to make an immediate sale of
the goods to raise the duty. Walpole saw the hindrance this was causing to commerce and proposed the bonded warehouse. Using an act of Parliament, Walpole
created a law that required imported goods to be placed in warehouses approved
by the customs authorities, and importers were to give bonds for payment of
duties when the goods were removed. This is where these warehouses received
the name of bonded or bonding.
The system of bonded warehousing was of great advantage to the importers and
purchasers of goods because the payment of the duty was deferred until the
goods were required, and the title-deeds, or warrants, were transferable by
endorsement.
The bonded warehouse system is still in operation today. In many countries,
companies can provide added services or operations to the material in a bonded
warehouse. While the goods are in the warehouse, the owner can rack, vat, mix,
and bottle wines and spirits; roast coffee and manufacture certain kinds of
tobacco. Certain specific allowances are made for waste or byproducts resulting
from such processes.
1.1.4
20th Century Port Warehousing
In the early 20th century, warehouses were often large, mostly bonded, and
found at big ports. In 1901 in England, the world’s largest brick warehouse was
built in Liverpool. The Stanley Dock Tobacco Warehouse was built to accommodate the increasing ocean traffic into Liverpool and the barges from the Leeds and
Liverpool Canal.
In Los Angeles, the port’s only bonded warehouse was built in 1917. It still exists
today and still is used for its original function in spite of the revolution of cargo
containerization. From the time of its completion in 1917, Warehouse No. 1 at
the Port of Los Angeles was the critical site for the growth of Los Angeles as a
commercial center. It allowed train access directly to the warehouse, ensuring the
least possible time between ship and final destination. The warehouse is six stories high, with a capacity of a half-million square feet. In the early 20th century,
it housed the majority of nonpetroleum goods shipped into and out of the Southern California markets.
29
1.1
1
Introduction to Warehouse Management
The port warehouses of that time operated a break-bulk cargo system. This
required a series of labor- and space-intensive operations. Cargo loading was
labor-intensive and extremely time-consuming. Longshoremen had to load and
unload the cargo, such as drums, boxes, bags, and crates, as individual pieces.
This was known as break-bulk, and material was brought to the ports by train and
unloaded into warehouses or buildings that lined the wharf, called transit sheds.
Cargo was stored in warehouses until a ship was ready to receive it. When a ship
was ready, cargo was transported to the transit sheds, where it was sorted and
organized for loading. The cargo was stowed by longshoremen.
Break-bulk cargo workers operated in three areas on a ship. First, the deck men
drove the winches. Hold men stowed and unstowed the cargo hold of the ship,
and the front men affixed and released the sling loads on the deck. In addition to
the ship gangs, dock men physically transferred the cargo to and from the ships.
Warehousemen moved the cargo into and out of the warehouse building on carts
known as 4-wheelers.
For the Port of Los Angeles and many other ports with large warehouses, factors
in the commerce of the early 1900s created a need for long-term warehousing.
First, the shipping schedules of the day were erratic, and distributors would want
their goods at the port ready for shipment when a ship bound for the desired destination arrived. It was therefore more economical to store their goods at a warehouse at the port than at their own site.
Second, distributors would accumulate goods at the port warehouses as they
were available or produced and then arrange for shipment when enough goods
had accumulated to make shipping economically worthwhile. This allowed for
the most economical use of cargo space on the outbound ship or inbound train.
1.1.5
Warehousing as Part of Physical Distribution
Prior to World War II, commerce in the industrialized nations was primarily concerned with the production and sales of goods, with the accounting function joining the two and directing the future of the business.
However, the wartime period focused many industrialists on how goods needed
to be stored and distributed to arrive at their final destination as soon as possible.
Military logistics functions organized the distribution and transportation of military hardware separate from its production. This helped business understand that
30
© 2014 by Galileo Press Inc., Boston (MA)
Introduction to Warehousing
physical distribution was a separate function that could provide significant leverage if successfully implemented.
In postwar America, the increase in consumer purchasing combined with increasingly efficient production systems and improved advertising techniques gave
companies an opportunity to serve greater geographic areas. The downside of
this expansion was that the physical distribution methods had not kept up.
U.S. businesses that wanted to become national brands had different distribution
issues than companies in Europe. For example, a business that was a national
brand in England had a much smaller geographic area to distribute to than a company in the United States.
The idea of regional warehouse and distribution centers was one that large corporations could afford to implement. A successful local family company did not
often have the funds to compete in areas outside of their hometown or state.
As companies sold their products nationally, they created regional distribution
centers with large warehouses that stored the companies’ products to be sold
within the area serviced by that distribution center. The warehouses were
sourced from the company’s domestic and overseas manufacturing plants.
As national companies became international companies, the distribution centers
spread across the world to service the local markets in their respective areas.
1.1.6
Warehousing and Distribution Centers
In today’s business environment, distribution centers are associated specifically
with retailing.
The warehouse of a retail distribution center can contain tens of thousands of
items from thousands of vendors. Each vendor supplies the distribution center,
which in turn distributes to many retail outlets.
In the United States, a large retail company like Wal-Mart has more than 3,800
retail operations with more than 300 regional distribution centers. In the United
States alone, Wal-Mart has 61,000 vendors.
In Oldham, England, the national distribution center of the Littlewoods homeshopping catalog is Europe’s largest warehouse distribution center, covering
23 acres and containing 1 million square feet of products. The one site has a
31
1.1
1
Introduction to Warehouse Management
workforce of close to 700. Goods are received from thousands of vendors, stored,
and packed and sent to customers within the same storage facility.
These vast warehouse and distribution centers rely wholly on state-of-the-art
computer warehouse management systems (WMSs) to operate at maximum efficiency. Before the advent of the computer-based WMS, the operation of the warehouse was a manual paper-based system that was prone to errors and relied upon
the knowledge of warehouse staff for the warehouse to operate successfully.
1.1.7
Public Warehousing
A public warehouse is a warehouse that performs warehouse services for many
companies. In a public warehouse, the company running the warehouse does not
own the goods but performs goods receiving, storing, shipping, and other warehouse functions. The company owning the warehouse charges companies a fee
for using the warehouse and the facilities.
There are many reasons why a company would use a public warehouse instead of
or in addition to, its own warehouse facilities. Let’s take a look at these.
Cost of Warehousing
A company may decide to use a public warehouse if it does not have the space or
the capital to invest in building a purpose-built warehouse and the staff to run the
facility. A public warehouse has trained staff and is able to perform the warehouse functions immediately.
Seasonal Warehousing Requirements
If a company has warehousing requirements that are seasonal and would not provide the need for year-round warehousing, a public warehouse is an ideal solution.
Overflow Warehousing
Some companies may have seasonal requirements that their warehouse facilities
cannot cope with. For example, in the beverage industry, seasonal fluctuations of
consumer purchasing and sales drives may require a company to use public ware-
32
© 2014 by Galileo Press Inc., Boston (MA)
History of Warehouse Management Systems (WMSs)
housing for stock that has been produced and cannot be stored in the company’s
warehouse because of lack of space.
1.2
History of Warehouse Management Systems (WMSs)
The warehouse of today no longer runs on a paper-based system. The advances of
computer-based WMSs, computer-enabled warehouse equipment, radio frequency (RF), and radio frequency identification (RFID) have transformed the
warehouse into a technological entity.
Not all warehouses require a WMS. As we will discuss later, there are often decisions to be made about whether in an SAP environment, a warehouse should run
the warehouse management functionality in SAP ERP (which we’ll refer to moving forward SAP WM or simply WM) or run as a storage location in SAP Materials
Management (SAP MM). Some warehouses have operations that are simple and
require limited data collection. In these cases, it would be unwise to implement a
system that would hinder the operation of the warehouse.
1.2.1
Early Warehouse Management Systems
The first warehouse management systems carried out simple warehouse tasks.
The systems were designed to control the movement and storage of items within
the warehouse. These systems operated on algorithms that used information on
the item, location, quantity, unit of measure, and order data to determine where
to place and pick items and the particular sequence required to correctly perform
the operations.
In the 1960s, many of the systems implemented in company warehouses were
nothing more than data-processing programs. The terminals in the warehouse
were connected to card-punch machines or magnetic-tape writers. Data was
entered into the terminals from paper documents relating to the inbound and
outbound shipments.
The cards or tape would be run on a leased or company mainframe computer,
where the data-processing systems were stored. The implemented systems in the
warehouse were controlled mostly by the accounting departments and provided
data on inventory levels for accounting purposes. These systems did not help the
warehouse staff run the warehouse more efficiently, and in fact they caused more
33
1.2
1
Introduction to Warehouse Management
work and increased warehouse costs. This downside was overshadowed by the
accounting accuracies the systems provided.
In the 1970s, warehouse systems were often custom-built software efforts that
companies decided to develop themselves rather than implement partial-fit systems offered by large computer companies.
In the 1980s, with the advent of the IBM PC, software companies developed software packages that ran standalone from other company systems. These PC-based
systems were often as simple as locator programs but did allow more control on
the warehouse floor.
1.2.2
The Rise of Enterprise Resource Planning (ERP)
In the late 1980s, when the mainframe version of SAP ERP (SAP R/2) was becoming popular in Europe, many companies decided to implement systems that were
fully integrated; that is, ERP systems.
For the first time, businesses had all of their main functionality on a single platform under a single suite of programs. Companies implementing SAP R/2 implemented the core functionality of their business: accounting, production, sales,
and materials management. In many cases these companies kept their existing
systems for human resources, plant maintenance, and warehouse management.
Often, these legacy systems were interfaced into the R/2 system to provide batch
or real-time updates.
When the client/server version of SAP ERP (SAP R/3) was introduced in 1992, the
software became a phenomenal success in Europe and in the United States. With
the ability to use SAP on a growing number of platforms, including Microsoft NT,
the number of integrated WMS offerings also grew. Even with the presence of
SAP R/3 Warehouse Management (SAP WM), companies could also use external
WMSs that offered more specialized functionality than the early versions of SAP
WM.
In the 1990s, specialized WMS software companies, such as Manhattan Associates, EXE Technologies, and Catalyst International, developed WMS software that
contained much of the core functionality of the SAP WM software with extended
transportation and distribution capabilities. Many companies bought and implemented these standalone systems prior to implementing of SAP R/3. Quite often,
34
© 2014 by Galileo Press Inc., Boston (MA)
Summary
the WMS remained as the legacy system until the businesses decided it was economically favorable to move from the legacy WMS packages to native SAP WM.
As SAP released new versions of R/3, the functionality of SAP WM grew to become more effective than many standalone packages. By the release of SAP R/3
4.6, many companies included the conversion to SAP WM as part of their upgrade strategies. The functionality of SAP WM has expanded further as part of the
latest version, SAP ECC 6.0.
Many of the WMS software companies have diversified their portfolios to include
the wider SCM functionality, SAP WM data interfacing, and SAP WM consulting
and specialist functions such as RFID.
1.3
Summary
In this chapter, we have shown that warehousing is something that mankind has
used for thousands of years. Although the primitive warehouses of the Indus Valley
civilization and the tobacco warehouses of 18th century America cannot be compared to the technological spectacles of warehouses in the 21st century, the
underlying principles remain. Goods are received, stored, picked, and removed
from the warehouse. Today’s technology allows that to occur in the most efficient
and cost-effective manner.
In Chapter 2, we discuss some of the basic warehouse functionality in SAP WM
with regard to the components that make up a warehouse.
35
1.3
© 2014 by Galileo Press Inc., Boston (MA)
In the warehouse management functionality in SAP ERP, the warehouse is
divided into several components. The storage type, storage section, and
storage bin together describe a unique space where a material has been
stored, and these coordinates allow that material to be located.
2
Basic Warehouse Functions
Before any implementation of the warehouse management functionality in SAP
ERP (which we’ll refer to as SAP WM or simply WM) at a company, the physical
warehouse layout normally exists; that is, the warehouse is operating and contains materials. Therefore, defining the warehouse in terms of warehouse management components is an exercise in transposing the physical warehouse into
the terms defined by SAP. In some instances, simple warehouses can be defined
as storage locations within the inventory management functionality of SAP ERP
(SAP IM or simply IM). However, storage locations do not offer any of the functionality required to operate a modern warehouse.
It is important to realize that the warehouse management functionality allows us
to replicate the warehouse within the SAP system and provides the necessary
management of materials.
2.1
Warehouse Structure
The warehouse we define by configuring SAP WM relates directly to the storage
location or locations in the materials management functionality of SAP ERP (SAP
MM or MM). We can create a warehouse during configuration, but no physical
address is attached to the warehouse when configuration takes place. The warehouse only relates to a physical entity when it is assigned to a storage location.
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2.1.1
Configuring a Warehouse
In the SAP Customizing Implementation Guide (IMG), the WM configuration is
part of the Logistics Execution area in SAP, which incorporates other functions
such as shipping, transportation, and direct store deliveries.
The warehouse is defined in the IMG. You can find the transaction for creating a
warehouse via the menu path IMG 폷 Enterprise Structure 폷 Definition 폷 Logistics
Execution 폷 Define, Copy, Delete, Check Warehouse Number.
You can use this transaction to create a warehouse number from scratch or to create a warehouse number by copying the information from another warehouse, as
shown in Figure 2.1. The option to create a warehouse by copying is particularly
useful when you need to create many warehouses with the same name.
Figure 2.1 Define Warehouse Transaction: Initial Selection Screen
Selecting the Define Warehouse Number option, as shown in Figure 2.1, displays
a list of existing warehouses, as shown in Figure 2.2.
To enter the information to create a new warehouse, click the New Entries button, as shown in Figure 2.2.
The New Entries screen can be accessed in two other ways, either by pressing the
(F5) function key or by selecting Edit 폷 New Entries from the header menu.
The warehouse number to be added can only be three characters in length, as
shown in Figure 2.3. The number can be alphanumeric, and the numbering
scheme often depends on existing warehouse numbering or on recommendations
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Warehouse Structure
from a data governance (DG) group at your client. The DG group administers the
overall management of the availability, usability, integrity, and security of the
data used in an enterprise, which includes an SAP implementation. The DG program often includes a governing body or council, an agreed-upon set of procedures, and a plan to execute those procedures.
Figure 2.2 Existing Warehouses Displayed When Defining a New Warehouse Number
Figure 2.3 New Warehouse Details Added to “New Entries” Screen
The description for the new warehouse can be up to 25 characters in length. You
can use a standard description template, so check the existing description or
check with the DG group.
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After you save the warehouse number and description, the next stage is to assign
the warehouse to a plant and storage location. The warehouse needs to be linked
to a storage location so that the interaction between SAP IM and SAP WM can be
applied. For example, when a goods receipt is posted to a storage location in SAP
IM, the goods will be received at the warehouse if that warehouse is assigned to
the storage location.
2.1.2
Assignment of the Warehouse
A warehouse has to be assigned to a physical location in SAP MM. This includes
one or more storage locations. The warehouse configuration often refers to just
one storage location, but—depending on how the storage locations have been
defined in MM—the warehouse may have to be assigned to more than one storage location.
You can find the transaction for assigning a warehouse to a plant/storage location
combination by following the menu path IMG 폷 Enterprise Structure 폷 Assignment 폷 Logistics Execution 폷 Assign warehouse Number to Plant/Storage Location.
The warehouse can be assigned to a plant/storage location combination or to several plant/storage location combinations. Figure 2.4 shows several warehouses
assigned to more than one storage location within a plant.
Figure 2.4 View of the Transaction Assigning a Warehouse to
a Plant/Storage Location Combination
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Warehouse Structure
To enter the information to create a new warehouse, click the New Entries button, as shown in Figure 2.4. You can access the New Entries screen either by
pressing the (F5) function key or by selecting Edit 폷 New Entries from the header
menu.
Figure 2.5 shows just one plant/storage location combination for the warehouse,
but more assignments can be made on this same screen. When assignments are
completed, the data can be saved.
Figure 2.5 Adding Warehouse Assignment Details for the Warehouse
and Plant/Storage Location to the “New Entries” Screen
2.1.3
Warehouse Control Parameters
After defining and assigning the warehouse, you can configure the control parameters, which are required for the warehouse to operate within certain constraints.
If the warehouse uses kilograms instead of pounds for the unit of measure of
weight, you need to configure this parameter. To find the transaction for configuring the control parameters for the warehouse, follow the menu path IMG 폷
Logistics Execution 폷 Warehouse Management 폷 Master Data 폷 Define Control
Parameters for Warehouse Number.
The initial screen, displayed in Figure 2.6, shows all the warehouses that have
been defined in the configuration. If, as in our example above, you have created
a warehouse, a blank control record is written in table T3000, and you can modify the control parameters of that record with this transaction.
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To change the parameters of the warehouse, the relevant warehouse must be
selected, as shown in Figure 2.6. To reach the detail screen, select the Details
icon or press the function keys (Ctrl)+(Shift)+(F2), can be used. The method used
in Figure 2.6 is to use header menu: GoTo 폷 Details.
Figure 2.6 Control Parameters for “Warehouse: Initial” Screen
The detail screen, seen in Figure 2.7, shows the parameters relevant for the warehouse that can be entered.
Figure 2.7 Configuration of Control Parameters for “Warehouse: Detail” Screen
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Warehouse Structure
Weight Unit
If a weight unit such as kilograms or pounds is entered in this field, then all units
of weight, both gross and net, will be in this defined unit. Depending on the unit
of weight given, errors—including mathematical rounding errors—can occur if
the unit is too small or too large. A weight unit must be entered before you can
create any storage bins.
Volume Unit
Similar to the weight unit, the volume unit defined the unit of volume for the
warehouse (for example, cubic meters or cubic yards).
First Default Unit of Measure
The material master record can contain several units of measures for different
functions such as sales, purchasing, Materials Requirements Planning (MRP), and
so on. If the material master record does not contain a unit of measure for warehousing, this parameter can be used as a default. However, this default can only
be used if the material is defined in the unit of measure for another function.
For example, if there is no warehouse unit of measure for material XYZ, the system will select the first default unit of measure defined. If that unit of measure is
kilograms, the system will check the material master to find if the material had
been defined in any other unit of measure than kilograms. If the system finds that
the unit of measure for purchasing is kilograms, then the first default unit of measure will be used.
Second Default Unit of Measure
If the first default unit of measure has not been defined on the material master for
any other function, the system performs the same check for the second default
unit of measure defined in the warehouse control parameter screen. If this unit of
measure has been used on the material master, it will be used as a default. If the
second unit of measure has not been used on the material master, then the material’s unit of measure will be used as the warehouse unit of measure.
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Time Unit/Performance Data
On this screen, you can define the unit of measure for time for the warehouse.
This time unit, if defined, will be used in any time information and for any processing time and performance data.
Blocking Logic—Method
This is a particularly important parameter because it determines the level of users’
simultaneous access to materials in the warehouse. For normal warehouse operations, the blocking logic is set to ensure that when a user is creating a transfer
order, the material numbers being processed are blocked for the entire warehouse and the storage bins in the transfer order are temporarily blocked. The
field is left blank for this level of blocking.
For blocking that allows more than one user to access the same material, but not
the same bin, the parameter should be set to A. Warehouses where there are few
material numbers—such as a manufacturer that makes one or two products—can
use this blocking logic. When the blocking logic is set to B, more than one user
can access the same bin.
Multiple Processing—Partial Picking
In multiple processing, several transfer requirements (TRs) are grouped together.
However, if there is a shortage of material, this parameter defines how the system
deals with the shortage. The parameter selection has four options:
왘
1
Partial picking for multiple processing for delivery is allowed.
왘
2
Partial picking for multiple processing for TR is allowed.
왘
3
Partial picking for multiple processing for TR and delivery is allowed.
왘
Blank
Partial picking for multiple processing for TR and delivery is not allowed.
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Warehouse Structure
Notifications and Messages—Capacity Check
This field controls the type of message displayed for the warehouse when a capacity check cannot be completed because of missing data on the material master
records. Warehouse management can choose no message, warning message, or
error message.
Notifications and Messages—Batch Missing (Transfer Requirement)
If the material on the transfer requirement is a batch-managed material, the user
creating the TR should enter a batch number. However, this parameter allows the
configuration to display an error message, warning message, or no message when
a batch number is expected but not entered.
Notifications and Messages—Activity Data
The activity data describes the planned times for activities on the transfer order.
If there is an error in this data, the message display can be defined as an error
message, warning message, or no message.
R/2 Link Active
This checkbox is selected if the warehouse in the SAP WM system is being used as
a decentralized warehouse management system with SAP R/2.
Storage Unit Management Active
This checkbox should be selected if you are implementing the storage unit management functionality (SUM) at the warehouse. More information on storage unit
management can be found in Chapter 11.
After you enter the relevant parameters for the warehouse, save by clicking the
Save icon, pressing (Ctrl)+(S), or using the header menu and selecting Table
View 폷 Save. Now we can proceed to learning about storage types in a warehouse.
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2.2
Storage Type
Several areas can be defined within the warehouse. The defined areas of storage
in SAP are called storage types. When a warehouse is initially designed, its layout
is analyzed based on a number of objectives, including the following:
왘
Provide the most efficient handling of the stored material
왘
Provide the maximum flexibility to meet any changes in warehousing that the
company may require
왘
Use the space inside the warehouse to a maximum
왘
Provide the most economic warehousing procedures based on layout
The layout of the warehouse is divided into storage types, and these defined areas
relate directly to the requirements of the materials to be stored in the warehouse.
2.2.1
Warehouse Layout
Storage types need to be defined because of the nature of the material being
stored or the environment a material must be stored in. Let’s explore this idea
further.
Fast-Moving Materials
A company will have a number of materials that are defined as fast-moving; that
is, they are shipped quickly once they are received at the warehouse. Therefore,
these materials need to be stored in a manner that allows for optimum handling.
In a normal warehouse, this area for the fast-moving materials should be situated
along the quickest path from goods receiving to shipping. That location depends
on how that material is shipped. If the material is received in large amounts but
shipped in small amounts, the fast-moving materials storage type should be
placed close to the shipping area. This reduces the duration of each trip between
storage type and shipping. If the material is received in small amounts and
shipped in large quantities, then the storage type needs to be close to goods
receiving to reduce the length of the frequent trips from goods receiving to storage type.
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Storage Type
Rack Storage
There are a number of reasons a material should use the rack storage type. Sometimes the material is not shaped in a manner suitable for any other storage. Other
materials are fragile and cannot be stacked. Some rack storage is used close to
shipping to allow picking of materials that are small; a limited supply is located in
the order-picking racks and replenished from bulk storage.
Bulk Pallet Storage
The majority of bulk products are stored on pallets, and the pallets are stacked.
This is a good use of space in the warehouse and reduces the need for and cost of
racking. Some materials can only be stacked a limited number of pallets high.
Slow-Moving Materials
Although every company tries to reduce, if not eliminate, materials that are sold
infrequently, slow-moving materials are a feature of a company’s inventory.
Many companies use the theory that in general, the slowest-moving 80% of materials represent only 20% of sales volume.
Slow-moving materials make up inventory that has had some movement but less
than one and a half turns a year. Slow-moving items are similar to dead stock
items, but they have experienced some customer demand during the past 12
months. These items may be suitable for being discontinued.
However, if the item falls into one of the following categories it may not be suitable for being discontinued and will need to be stored in the warehouse:
왘
If it is expected that demand for this material will continue or increase during
the next twelve months
왘
If customers expect to always have the material available for immediate delivery
왘
If the material is inexpensive and does not require a costly investment in
inventory
Slow-moving material is often stored at the furthest location from the shipping
area, as it is not accessed often.
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Special Storage
Some companies have special needs for the storage of their materials. These may
involve hazardous materials, which are discussed in Chapter 12.
Refrigeration and climate control are some other special needs for storage. Many
retail companies need to have part of the warehouse refrigerated for perishable
materials. Other companies may need to define certain warm areas for chemicals
that need to be stored at a certain temperature. All of these can be defined as storage types within a warehouse.
2.2.2
Configuration of a Storage Type
You can find the transaction for creating a storage type by following the menu
path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Master Data 폷
Define Storage Type.
The transaction shows the storage types that have been previously created for
warehouses, as shown in Figure 2.8. To create the new storage type, click the
New Entries button.
Figure 2.8 Create Storage Type, Showing Existing Storage Types
Figure 2.9 shows the data entry screen for the storage type. This screen requires
decisions about the content of several fields. The parameters for the storage type
relate to stock placement and stock removal. This content of the fields determines
how material is placed and removed from this particular storage type.
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Storage Type
Figure 2.9 Create Storage Type Transaction: Initial Data Entry Screen
In the following subsections, we will describe the fields on the storage type data
entry screen.
2.2.3
Data Entry for a Storage Type
Let’s explore in detail the fields shown in Figure 2.9.
Storage Unit Management Active
This checkbox, SU Mgmt Active, is selected if the storage type allows the management of storage unit management (SUM). A storage unit (SU) is a group of one or
more amounts of material that can be managed in the warehouse as a distinct
unit. If the checkbox is set for the storage type, you can assume that all material
in the storage type is part of a storage unit.
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Storage Type Is an ID Point
If the Stor.type Is ID Pnt checkbox is selected, the storage type is an identification
point for goods movements. An identification point is a location in an automated
warehouse where the incoming goods are identified. You can configure identification points in the IMG via the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Storage Units 폷 Activities 폷 DefineID Point Transactions.
Storage Type Is a Picking Point
If the Stor.type Is Pck Pnt checkbox is selected, the storage type is a picking point
for another storage type. For example, if there is a packaging storage type in the
warehouse, material for the packaging storage type may be picked from a storage
type called fast-moving goods. The Stor.type Is Pck Pnt checkbox would be set on
the fast-moving goods storage type.
Putaway Strategy
The stock putaway strategy is a procedure that can be defined for each storage
type. It operates during stock placement of material in which the SAP system
automatically searches within a storage type for a suitable storage bin for the
material to be placed into storage. This strategy will be discussed in more detail in
Chapter 9.
Stock Placement Requires Confirmation
Selecting this checkbox requires that all stock placements into bins within this
storage type be confirmed. This means that before any material is available, all
the relevant transfer orders must be confirmed.
Destination Storage Bin Changed During Confirmation
The Dst Bin Ch. During Confirmation field can be set to allow the destination
storage bin to be changed on a transfer order when the transfer order is being
confirmed for this storage type. The field must be set to 1 to allow this. If the field
remains blank, you cannot change the destination storage bin on a transfer order
for this storage type.
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Storage Type
Mixed Storage
This field determines how different materials are stored in this storage type. If the
field is left blank, the storage type does not allow any mixed storage. Mixed storage refers to different materials or different batches of material being located in
one storage bin.
However, if the storage type does allow for mixed storage, you can set several
parameters to reflect how mixed storage can be used, as shown in Figure 2.10.
Figure 2.10 Display of Mixed Storage Parameters that Can Be Selected
Addition to Stock
This field can be configured to allow a quant of a material with a certain batch
number to be added to a storage bin with the same material and the same batch
as the material being added.
Note
A quant is a uniquely defined object in SAP systems. It is a quantity of material with the
same material number and the same batch number—if the material is batch managed—
in a single storage bin. A quant has a quant number to identify it.
If the field is left blank, then the addition to stock is not allowed. If the field is
marked with an X, then the addition to stock is allowed.
Mail Control
This field is only used for the production planning material staging functionality
of SAP ERP (SAP PP or PP). If any of the background processes for automatic
creation of transfer orders for PP material staging fail, this field defines which
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user is to be informed of the error. The user for the mail notification can be found
in table T333M.
Capacity Check Method
This checkbox can be configured to check if one of the six SAP WM capacity
checks can be carried out for the storage bins in this storage type. Figure 2.11
shows the six types of capacity checks that are available to be configured for the
storage type.
Figure 2.11 WM Capacity Checks Available for Storage Type
Active Capacity Check
If this checkbox is selected, an active capacity check is executed when goods are
placed into stock. The check ensures that a capacity check is made when material
is moved into a storage bin. If the capacity of the bin is exceeded, the material
cannot be moved into the bin.
Storage Unit Management Check Active
This checkbox is selected if the storage unit type check for stock placement is
active. If this checkbox is selected, the storage unit type needs to be specified for
stock placements.
Storage Section Check Active
When this checkbox is selected, the SAP system searches for storage bins in storage areas defined in the storage area check table.
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Storage Type
Block Upon Stock Placement
With this checkbox selected, the quant and the storage bin can be blocked during
stock placement. The following two options are available in configuration:
왘
Block the storage bin during stock placement
왘
Block only the quant during stock placement
ID Point for a Storage Type
This field, Assigned ID Point Stor. Type, allows the configuration of the identification (ID) point for the storage type. Any goods movement that does not have a
specific storage bin in this storage type as its destination is initially directed to the
ID point.
User Exit Active
Select this checkbox if a stock placement strategy for this storage type will be
accessed via a user exit. The checkbox informs the system that instead of using a
stock placement strategy defined in configuration, the system must use the userdefined placement strategy that has been coded outside of the SAP system and
access it via a user exit.
Stock Removal Strategy
The stock removal or picking strategy is a procedure that can be defined for each
storage type. This procedure operates during stock removal of material so that the
SAP system automatically searches within a storage type for a suitable storage bin
for the material to be removed.
A more detailed discussion of picking strategies can be found in Chapter 8. Figure
2.12 shows the standard picking strategies that are available for assignment in the
storage type configuration.
Stock Removal Requires Confirmation
This checkbox must be selected if there is a requirement for the confirmation of
a stock removal. This requires a transfer to be confirmed for every stock removal
that takes place with relation to the storage type.
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Figure 2.12 Stock Removal or Picking Strategies Defined in Standard SAP Systems
Allow Negative Stock
If this checkbox is selected, a negative figure can exist for quants in the storage
type. This is not commonly configured for storage types that are not interim storage types. SAP defines interim storage types as storage types that are used for
posting goods receipts, goods issues, and differences that may occur. Interim storage types are defined with numbers between 900 and 999.
Full Stock Removal Required
This checkbox can be selected if the warehouse needs to ensure that all quants are
removed if a complete stock removal is required. A complete stock removal is a
component of SUT and requires all storage units to be removed, but quants that
are not part of an SU can remain. If this checkbox is selected, then all quants are
removed.
Execute Zero Stock Check
If this checkbox is selected, a zero stock check must be carried out if a storage bin
becomes empty after a stock removal.
Round off Quantity
You can select the checkbox to round off a requested quantity for stock removal
when rounding is required for transfer-order items. This checkbox sets rounding
for the total storage type. It may be more appropriate to set the rounding quantity
in the material master record at the storage-type level.
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Storage Type
Rounding is useful in picking when the picking is easier in certain amounts, for
example, in pallets or boxes. Rounding the quantity to those values can save time
in filling orders.
Handling Unit Picking Control
This field is the control for the handling unit (HU), or storage unit picking. We
will prove more information about storage units in Chapter 11. Figure 2.13
shows the options that are available for this field
Figure 2.13 Options for Control of Handling Unit During Picking
Propose Posting Change at Storage Bin
You can select this checkbox to ensure that if a posting change is made for a material, the transaction is posted and the materials are left in the same storage bin. If
the checkbox is not selected, then the material can be moved to a different storage bin as part of the posting change.
Block Upon Stock Removal
This checkbox makes it possible for the quant and the storage bin to be blocked
during stock removal. The following two options are available in configuration:
왘
Block the storage bin during stock removal
왘
Block only the quant during stock removal
Assigned Pick Point for Storage Type
In SUT, if complete removal of storage units is required and the Full Stk Rmvl
Reqmt Act checkbox is not selected, the quants that are not removed should be
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taken to a pick point. The pick point is a storage type and is configured in this
field.
Return Storage Type
Similar to the pick point, this field can be configured to set the storage type where
material is returned after events such as a stock removal or over-delivery.
User Exit Active
This field is similar to the field in stock placement. If this field is selected, a stock
removal strategy for this storage type will be accessed via a user exit.
This section has explained the characteristics of storage types. The next section
looks at the division of the storage type into storage sections.
2.3
Storage Sections
The storage type can be divided into several areas, which are called storage sections. A storage section contains the storage bins where the material is stored.
Many storage types have only one storage section because there is no requirement to break the storage type into further distinct areas. At least one storage section must be defined for each storage type. In some warehouses, storage sections
are important in the stock removal process.
Example
The storage type for high racking can be divided into several storage sections. The storage sections could refer to the levels of racks in the storage type. The first rack level
could be one storage section, the second level another storage section, and so on.
You can find the transaction for creating a storage section by following the menu
path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Master Data 폷
Define Storage Sections.
The initial screen for the configuration of the storage sections shows the storage
sections already created, as shown in Figure 2.14. To create a new storage section,
click the New Entries button. You can also reach the configuration screen by
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Storage Sections
selecting Edit 폷 New Entries from the header menu or by pressing the (F5) function key.
Figure 2.14 Initial Screen for Configuration of a Storage Section
The new storage section must be assigned to both a warehouse number and a
storage type. Figure 2.15 shows the warehouse and storage type created in this
chapter. Three storage sections are assigned to storage type 892. The storage section is a three-character field and normally is configured as 001 if only one storage section is to be used.
Figure 2.15 Configuration Screen for Creating New Storage Sections
The storage section name field is 25 characters in length and should describe the
use of the storage section. For example, if a storage section is for unboxed items
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on a single rack, the name may be “Level One—Unboxed.” After the storage section is configured, the storage bins can be created.
2.4
Storage Bins
The storage bin is the smallest unit of storage in the warehouse. There is no set
size for a storage bin, and its size can vary between companies, warehouses, and
even within the same storage type.
A storage bin can be a location on a shelf, a location on a carousel, or a plastic tub
in a rack. A storage bin can have many physical appearances, but as defined logically in SAP WM it is the location where a quant of material is stored.
Several steps need to be completed in the IMG before storage bins can be created.
These steps are described in more detail in the following subsections.
2.4.1
Storage Bin Types
The storage bin type is a grouping that can be assigned to storage bins of a similar
nature. For example, a storage bin type could be created called Bin Height One
Meter. This grouping could then be assigned to bins in the warehouse that are
one meter in height.
You can configure the storage bin type in the IMG. The transaction for creating a
storage bin type can be found by following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Master Data 폷 Storage Bins 폷 Define Storage
Bin Types.
Figure 2.16 shows the initial screen for the configuration of storage bin types,
with the existing configuration shown. Click the New Entries button to create a
new storage bin type. You can also reach the configuration screen by selecting
Edit 폷 New Entries in the header menu or by pressing the (F5) function key.
Figure 2.17 shows the addition of a storage bin type for the warehouse in our previous examples. The storage bin type field is limited to two characters. The
description of the storage bin type is 20 characters.
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Storage Bins
Figure 2.16 Initial Screen for Configuration of Storage Bin Types
Figure 2.17 Configuration Screen for Creating New Storage Bin Types
2.4.2
Define Storage Bin Structure
Assigning the storage bin structure is a transaction that can be configured to contain the templates and structures of the storage bin numbering schema activated
when automatic storage bin creation is triggered.
The transaction to define the storage bin structure is Transaction LS10. This can
be found in two areas. In the IMG, follow the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Master Data 폷 Storage Bins 폷 Define Storage
Bin Structures.
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You can also find Transaction LS10 in the application area, by following the menu
path SAP 폷 Logistics 폷 Logistics Execution 폷 Master Data 폷 Warehouse 폷 Storage
Bin 폷 Create 폷 Automatically.
Figure 2.18 shows the various structures for automatic creation of storage bins.
The structure is defined for each warehouse/storage type combination. The third
field on this screen, SqN, is the sequence number that will be followed in the creation of storage bins for the warehouse/storage type combination.
Figure 2.18 Storage Bin Structure Configuration Screen: Transaction LS10
Template
In Figure 2.18, the template is shown as a field with 10 characters. These characters represent numeric and alphabetical character ranges. This template determines the structure of the storage bin when it is created automatically.
왘
N
This represents a numeric character between zero and nine.
왘
A
This represents an alphabetical character.
왘
C
This represents a character that is common across the bins.
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Storage Bins
Structure
This field defines the structure of the storage bin number. Figure 2.18 shows the
structure field as AA or AA BB CC. This structure defines how the number
appears, as we can easily understand by using Figure 2.18 as an example.
Review the second line of the figure, Warehouse 108, Storage Type 002, and
Sequence Number 001. The template for this entry is Number, Number, Common Character, Number, Number, Common Character, Number, Number, Common Character, and finally another Common Character.
The structure defined for that record is AA BB CC. Therefore, using the structure
with the template, the storage bin number could be 11 – 03 – 05, assuming the
common character between the numbers is a dash and the last two common characters are spaces. The definition of the common characters is shown in the next
fields.
Start Value
This field is the storage bin starting value for the particular warehouse/storage
bin/sequence number combination. This value is the starting value for the automatic creation of storage bins. The value entered has to adhere to the template
and structure defined for the combination. Taking the example above, the starting value of 03 – 01 – 01 follows both the template and structure and now
includes the common characters of a dash between the numbers and spaces after
the last set of numbers.
End Value
The entry for the particular warehouse/storage bin/sequence number combination is the end value for the automatic creation of storage bins for that sequence.
The end value must follow the same format as the starting value.
Increment
This figure determines the addition to the numbering and is calculated during the
automatic generation of storage bins. In our continuing example, the increment
for the automatic generation of storage bins has been entered as 01 – 01 – 01,
which implies that each set of numbers will increase by one until the end value
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has been reached. In this example, the start value was 03 – 01 – 01 and the end
value was 03 – 10 – 10; therefore, during the automatic creation of bins, the increment only refers to the second and third sets of numbers because the first set of
numbers is always 03 and does not change.
During the automatic storage bin creation in this example, the starting bin location would be 03 – 01 – 01, the next bin to be automatically generated would be
03 – 01 – 02, the next 03 – 01 – 03, and so on. The last storage bin created for this
location would be 03 – 10 – 10.
Enter a New Bin Structure
To enter a new storage bin structure, click the New Entries button, shown in Figure 2.18. You can also reach the entry screen by going to the header menu and
selecting Edit 폷 New Entries or by pressing the (F5) function key.
The configuration screen, shown in Figure 2.19, requires the entry of the template, structure, start and end values, and increment. Additional data fields can be
entered for the storage bin structure.
Figure 2.19 Configuration Screen for Entering New Storage Bin Structure: Transaction LS10
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Storage Bins
Storage Section
If the bin structure is only relevant for a certain storage section, that section
should be entered on this screen, shown in Figure 2.19. This may be the case if
the template that is being configured is only relevant for a certain storage section,
for example, for high-racking or open storage. The start and end values for the bin
number range may only relate to a single storage section.
Picking Area
A picking area is similar to a storage section in that it groups a certain number of
storage bins. The difference between a storage section and a picking area is that
the group of bins for a picking area relates to the picking process and removal
strategies. For example, a picking area may include storage bins from several storage sections—that is, different sizes—because they all contain material that is relevant for a certain removal strategy.
You can configure a picking area in the IMG by following the menu path IMG 폷
Logistics Execution 폷 Warehouse Management 폷 Master Data 폷 Define Picking
Areas.
Figure 2.20 shows the data entry required to configure a picking area. The Picking area field allows you to enter a three-character alphanumeric ID. The picking
area name can have a maximum of 25 characters. Once the name is entered, the
picking area can be added to the storage bin information.
Figure 2.20 Configuration Screen for Creating a New Picking Area
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Storage Bin Type
A storage bin type can be added to the entry of the bin structure that will be a
default for the bins created. This is useful if the bins are all of the same kind. The
storage bin type is a way to identify different types of storage bins; for example,
one type of storage bin may be one meter high, while another type represents
tank containers for fluids.
Maximum Weight
You can fill in this field if you know the maximum weight of the material that can
be stored in the bin. This weight value is used during any capacity check that may
be activated. If the weight of the material to be added into the storage bin will
cause the weight of material in that bin to exceed the maximum weight allowed,
then the system will not permit the placement.
Total Capacity
You can fill in this field if you know the total capacity of the storage bins to be created. This is important if the material to be stored in some bins can easily exceed
the capacity of the bin. This is especially useful in warehouses with large or heavy
materials.
Fire-Containment Section
You can fill in this field if the fire-containment section needs to be added for the
storage bins to be created. The fire-containment sections are defined as part of the
hazardous materials configuration for warehouse management. More information on hazardous materials can be found in Chapter 12.
You configure the fire-containment section in the IMG via the menu path IMG 폷
Logistics Execution 폷 Warehouse Management 폷 Hazardous Materials 폷 Master
Data 폷 Define Fire-Containment Sections.
The new fire-containment sections can be added to a warehouse in the IMG, as
shown in Figure 2.21. The fire-containment field can be two characters in length,
whereas the name of the fire-containment section can be up to 20 characters long.
Once the fire-containment section is configured, it can be entered into the storage
bin structure.
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Storage Bins
Figure 2.21 Configuration Entry Screen to Create Fire-Containment Sections
in IMG Hazardous Material Area
2.4.3
Creating a Storage Bin Manually
You can manually create a storage bin using Transaction LS01N. This can be
found by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Warehouse Management 폷 Master Data 폷 Storage Bin 폷 Create 폷 Manually.
To create the storage bin, enter the warehouse number, storage type, and the
storage bin number, as shown in Figure 2.22. Once these fields are filled in, you
have to enter a storage section number to create the storage bin. The other fields
on the entry screen, such as Picking Area and Fire-cont. Sect, are optional.
Figure 2.22 Data-Entry Screen for Creating a Storage Bin: Transaction LS01N
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2.4.4
Creating a Storage Bin Automatically
Storage bins can be created automatically using the storage bin structure transaction we previously discussed previously: Transaction LS10. Once the template,
structure, start and end values, and intervals are entered into the transaction, the
storage bins can be created automatically.
You can find Transaction LS10 by following the menu path SAP 폷 Logistics 폷
Logistics Execution 폷 Master Data 폷 Warehouse 폷 Storage Bin 폷 Create 폷 Automatically.
After you select the relevant warehouse, storage type, and sequence number, the
bins can be automatically created. From the header menu select Environment 폷
Create Bins, as shown in Figure 2.23. The process then calculates the number of
bins to be created and returns the information to the screen, as shown in Figure
2.24.
Figure 2.23 Automatically Creating Storage Bins—Transaction LS10
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Storage Bins
Figure 2.24 Information Screen During Automatic Creation of Storage Bins:
Transaction LS10
2.4.5
Block Storage Bins
During normal warehouse operations, you may need to block storage bins or a
range of storage bins. This may occur because of damage to the bins or normal
warehouse maintenance, which can include cleaning bins and racks, as well as
replacing racking shelves. It is possible to block a single storage bin or a range of
storage bins.
The transaction to perform this is Transaction LS08, which you can find by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Master Data 폷
Warehouse 폷 Storage Bin 폷 Block 폷 Range of Bins.
To block a range of bins, the initial screen, shown in Figure 2.25, requires the
entry of the warehouse number and the storage type. At this point, you can enter
a range of storage bins, if required. If no selection is made, then all of the valid
storage bins for the particular warehouse/storage type combination will be
selected for blocking.
The selection screen, shown in Figure 2.26, shows the number of bins that can be
selected for blocking. In this example, the bins can be blocked. However, you
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have the option of unblocking them. The screen shows clearly that none of the
bins are blocked for putaway and none are blocked for stock removal.
Figure 2.25 Initial Entry Screen to Block a Range of Storage Bins: Transaction LS08
Figure 2.26 Selection of Storage Bins that Can Be Blocked: Transaction LS08
To block the bins, select the locked padlock icon. You can also press the (F5) function key or select Edit 폷 Block from the header menu to block the storage bins.
When blocking the storage bins, you need to choose the type of block assigned to
the bins. Figure 2.27 shows the choices: a block to be made for putaway or for
stock removal. In addition, you can add a blocking reason if any have been configured. The configuration steps to create blocking reasons are described in the
next section.
When the block for putaway is selected, the bins are blocked for any stock placement transactions, but stock removal can still take place. The resulting situation is
shown in Figure 2.28.
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Storage Bins
Figure 2.27 Option to Select Type of Block Allocated to Selected Bins: Transaction LS08
Figure 2.28 Screen Showing Number of Bins Blocked for Putaway: Transaction LS08
2.4.6
Creating Blocking Reasons
The reasons for blocking storage bins can also be applied to storage units, quants,
and storage types. The blocking reasons are created at the warehouse level. To
configure blocking reasons, in the IMG, follow the menu path IMG 폷 Logistics
Execution 폷 Warehouse Management 폷 Master Data 폷 Storage Bins 폷 Define
Blocking Reasons.
You can add the blocking reasons at the warehouse level. In the entry screen,
shown in Figure 2.29, it is possible to add several blocking reasons at once. The
blocking reason is a single character, but some non-alphanumeric characters, for
example, # and @, can be selected to increase the number of blocking reasons for
each warehouse.
You should add a description of the blocking reason. This is limited to 20 characters in length.
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Figure 2.29 Configuration Screen for Creating Blocking
Reasons at the Warehouse Level
2.4.7
List of Empty Storage Bins
This list is a key report used by warehouse managers, as it is informs them immediately what empty bins are available. When the warehouse is short of space and
has to unload trailers, having a list of empty bins is critical.
The transaction for this report is Transaction LX01, which you can find via the
menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Master Data 폷 Warehouse 폷
Storage Bin 폷 Evaluations 폷 List of Empty Storage Bins.
You can add several parameters to reduce the scope of the search for empty bins.
As Figure 2.30 shows, you can choose to show the empty bins at the warehouse
level or by a selecting the storage type or range of bins.
Figure 2.30 Initial Screen to Enter Parameters for List of
Empty Storage Bins: Transaction LX01
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Storage Bins
You also can choose to show empty bins that are unblocked and those with no
inventory count. This is important, as it is often necessary to find empty bins that
can be used, especially if warehouse space is short. The resulting report, shown in
Figure 2.31, shows the list of empty bins for the parameters entered in Figure
2.30.
Figure 2.31 List of Empty Storage Bins Created by Transaction LX01
2.4.8
Bin Status Report
The bin status report is crucial to a successful warehouse operation. This report
shows the contents of storage bins for a specified search. The transaction for this
report is Transaction LX03, which you can find by following the menu path SAP 폷
Logistics 폷 Logistics Execution 폷 Master Data 폷 Warehouse 폷 Storage Bin 폷 Evaluations 폷 Bin Status Report.
The report can be made to specify a certain warehouse, range of storage types, or
range of bins, as shown in Figure 2.32. In addition, there are several parameters
that can be entered to return specific bins.
Inventory Method
You can restrict the results of the bin status report to materials that have been
counted by a certain inventory method. The inventory methods can be entered
into this screen.
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Figure 2.32 Initial Screen for Bin Status Report: Transaction LX03
Stock Category
The stock category restricts the bin status. The stock categories include the following:
왘
Q
Stock in quality control
왘
R
Return stock
왘
S
Blocked stock
왘
Blank
All available stock
Special Stock Checkbox
The special stock checkbox identifies special materials that need to be managed
separately. Examples include project stock and return packaging.
Special Stock Number
This number is assigned to a quantity of material that is flagged by a special stock
checkbox. The special stock checkboxes include Q for project stock and E for sales
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Quants
order stock. To identify a specific quantity of special stock, a special stock number
is allocated to that unique quantity.
Days Since Putaway
You can restrict the bin status search to materials that have been in stock for a certain number of days since the putaway date.
The results screen for the bin status report is shown in Figure 2.33. The screen
shows the results for the warehouse. It identifies the storage type, storage bin,
material in the bin, plant, and the length of days in the bin (TiL).
Figure 2.33 Results Screen for Bin Status Report: Transaction LX03
The storage bin is the smallest location in the warehouse, but now we will look at
the units of material contained in the storage bin, which are the quants.
2.5
Quants
A quant is a quantity of material with the same material number and the same
batch number (if the material is batch managed) in a single storage bin. The total
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quantity of material in a quant can be increased or decreased through the addition or removal of material for the storage bin. The quant can only change in
quantity through a goods movement.
2.5.1
Quant Record
The SAP system automatically creates a quant when the same material of the same
batch is placed in a storage bin that does not contain material of the same number
or batch. The SAP system assigns a quant number to the material. When all of the
quant is removed from the storage bin, the system automatically deletes the
quant. The record created for the quant includes the following data:
왘
Quant identification
왘
Plant
왘
Material number
왘
Batch number
왘
Stock category
왘
Special stock checkbox and number
2.5.2
Display a Quant
One method of displaying a quant is to view the details of a storage bin. One
report that displays information on the contents of a storage bin is the bin status
report (Transaction LX03) discussed earlier in this chapter.
Figure 2.33 shows the details of material in the storage bins in a warehouse.
Clicking on the line required and then selecting the magnifying glass icon displays
the details of the storage bin/material combination, which triggers Transaction
LS23. The function keys—(Ctrl)+(Shift)+(F3)—can also be used to display the
details. If the quant number is known, then Transaction LS23 can be used
directly.
Figure 2.34 shows that the information on the quant is not just related to the
quantity and location, but includes data on the goods receipt (GR Number), last
movement date, and the document number.
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Business Examples—Basic Warehouse Functions
Figure 2.34 Details of a Quant in a Storage Bin: Transaction LS23
2.6
Business Examples—Basic Warehouse Functions
This chapter describes the basic structure of a warehouse as it is configured in
WM. The implementation of the WM is not always required, and many SAP customers operate very successfully using only the functions of IM. However, if SAP
WM is to be implemented, it is important that the customer understand how
their warehouse operations need to be configured in the system.
2.6.1
Warehouse Structure
The warehouse is the highest level of the warehouse management structure and
relates directly to storage location or storage locations in SAP MM. The warehouse only relates to a physical entity when it is assigned to a storage location. It
is important for customers to understand that a warehouse can be assigned to one
or more storage locations.
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Example
A manufacturer of small hand tools in Bangor, Maine, had implemented SAP ERP
five years before they purchased the tool business from a Vermont-based company that had declared Chapter 11 bankruptcy. The existing Bangor location used
SAP IM to operate the warehouse at several storage locations. The new business
line in Vermont had been using their parent company’s SAP ECC 6.0 system, and
they had implemented the SAP WM functionality to run the warehouse facility.
When the company made plans to bring the new Vermont facility onto their
existing SAP system, they were undecided as to continue using WM for the new
facility, or to just use IM to run both the Bangor and Vermont warehouse facilities.
The company hired a consulting firm to review how each warehouse operated,
including warehouse size, the number of employees, the number and types of
materials stored, and the number of transactions processed each day. The company was surprised to find that though the Vermont facility they had just purchased was smaller than their existing Bangor facility, operated with fewer
employers, and stored a similar number of materials, it processed almost 40%
more transactions per day. Upon reviewing the data, the company concluded that
they should implement SAP WM at both locations, not only to ensure that the
same processes would be used across the company, but also to take advantage of
the benefits that were evident in the new warehouse.
The implementation to bring the Vermont warehouse onto the existing SAP system and introduce SAP WM to the existing Bangor warehouse took the company
less than four months. Several issues occurred during the project, including creating the data for the existing materials in the existing warehouse and training the
Bangor employees to use the new SAP WM functionality.
2.6.2
Storage Types
Different areas can be defined within a warehouse, and these are referred to as
storage types. Each company defines their warehouse slightly differently. Warehouses can contain racking, open areas, refrigerated rooms, hot rooms, and so on.
Each of these can be defined as storage types within the warehouse.
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Example
After 11 years of using an SAP system, a British automotive parts manufacturer
lost its contract with a major automotive parts store. To replace the loss of the
majority of its sales, the company bid for and won several smaller contracts with
customers operating automotive parts stores in Europe, Russia, and South America.
The manufacturer had been producing only 60 parts for their major customer, so
warehouse operations had been relatively simple, with four racks for finished
goods and a single rack for raw materials, each of which was designated as a storage type. Because of the small number of finished goods that they stored and
shipped, warehouse staff knew where the parts were located, so inventory accuracy was very high and the warehouse processed outbound deliveries with minimum delays.
Once the manufacturer started work on the new contracts, the number of finished goods they produced exceeded 500. Correspondingly, the raw materials
required increased, and warehouse supervisors informed management that the
area designated for the raw materials was exhausted and that warehouse operators had to store finished goods outside of the racking area due to size limitations.
A review of the warehouse layout was quickly performed, and it was found that
the existing racking systems were not sufficient to handle the increase in raw
materials and finished goods. The review also proposed changes to the way the
warehouse was described in SAP WM, including increasing the number of storage types to reflect the changes in the warehouse.
Based on the review, the manufacturer changed the racking system to accommodate larger items, increased the size of the raw material area, and rented a smaller
warehouse facility close to the airport so that deliveries ready to ship were not
taking up room in the main warehouse. The warehouse structure in the SAP system was changed so that there were different storage types for categories of parts
they were manufacturing. The changes to the warehouse layout brought inventory accuracy back to an acceptable level; with the changes to storage types and
the corresponding removal strategies, delays in processing deliveries were
reduced.
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2.6.3
Storage Bins
The storage bin is the smallest unit of storage in the warehouse. There is no set
size for a storage bin, and its size can vary between companies, warehouses, and
even within the same storage type. A storage bin can be a location on a shelf, a
location on a carousel, or a plastic tub on a rack.
Example
Due to the economic downturn in the United States, a Canadian distributor of
electrical components purchased the inventory of several failed companies in the
United States, Canada, and Mexico. As the inventory was shipped to the company’s main facility in Windsor, Ontario, the items were identified, material master records created in the SAP system, labels produced, and the items stored in
the warehouse.
The warehouse staff had not been given detailed instructions about where to
store the incoming items, and they were told to just store them where there was
space, make a note of where they had stored them, and then give the information
to the warehouse clerk. The information was then supposed to be entered into
the SAP system so that the items could be available for deliveries. Since the warehouse operated three shifts, the staff on the third shift performed most of the putaway of the new items in the warehouse. The information was not entered into
the system SAP immediately because a warehouse clerk was on site only during
the first and second shifts. When the clerks arrived, there were often dozens of
pieces of paper with incomplete information about the items and their locations.
After a monthly physical inventory, the warehouse was found to have below 70%
accuracy. The company immediately halted the putaway of incoming items until
the problem was fixed. The inventory count indicated that some storage bins closest to the area where the incoming inventory was stored contained over 50 different materials, some of which had no inventory entered into the SAP system.
The company reviewed their warehouse layout and found that many storage bins
were too large, storing more items than expected. The existing bins had been
used to allow large quantities of the same part to be stored in one location. The
company changed the size of bins, creating almost a third more storage bins, and
transferred items from congested bin locations to new bins. Another inventory
count was performed after the new bins were created, and inventory accuracy
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had improved to over 90%. In addition, the company introduced a more stringent
process of placing new stock into the warehouse to avoid the situation occurring
again.
2.6.4
Quants
A quant is a quantity of material with the same material number and the same
batch number (if the material is batch managed) located in a single storage bin.
The total quantity of material in a quant can be increased or decreased through
the addition or removal of material from the storage bin.
Example
A German manufacturer and distributor of electronic components had been an
SAP customer for almost 15 years and was operating an ECC 6.0 system using
WM. The warehouse in its Hamburg location primarily contained parts used in
consumer products such as laptop computers, MP3 players, and smartphones. As
well as manufacturing custom electronic components, the company imported
items from manufacturers in Japan, South Korea, China, and Malaysia. The company would purchase an item from vendors in more than one country, and these
were stored in the warehouse in the same storage bin. When a sales order was
picked, the warehouse staff would take parts from the storage bin without knowing the origin of the item.
This process had been in place for many years; often the item did not indicate
where it had been manufactured. Unfortunately, the company began to receive
requests from its customers to indicate where the items were manufactured, and
in many cases, the customers would not accept materials made in certain countries.
This trend caused the manufacturer to change its processes for imported materials. The first change was to ensure that its vendors label each part with their batch
number and the country of manufacture and to check that the country of manufacture was consistent for the items they were sending. The next step was to manage all materials in the warehouse batch and, as a delivery arrives from a vendor,
create a batch record using the vendor’s batch number. The batch record was
updated with the region or country of origin. After putaway, it was then possible
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to identify the country of manufacturer for each quant so that when staff picked
material for a delivery, the correct quant would be pulled.
2.7
Summary
In this chapter, we have discussed the overall warehouse structure with regard to
the physical layout of the warehouse. Configuration of the warehouse, its assignment to a storage location, and storage type setup are all parts of the initial warehouse design.
The importance of this initial design work cannot be stressed enough. The physical warehouse has to be represented in the SAP system, and it is the job of the
WM consultant to understand the needs of the warehouse staff and day-to-day
warehouse operations. Observation is the key to acquiring this knowledge.
Forcing the warehouse to fit into a theoretical design in the SAP system that does
not reflect the operations of the existing warehouse can cause significant problems for shipping and receiving. If the warehouse cannot ship products, or
production cannot manufacture products because stock is not available in the
warehouse, the company loses money.
In Chapter 3, we will discuss the stock management aspects of WM and its integration with the material master.
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Stock management is an important aspect of warehouse management.
This chapter takes into account not just the SAP WM material master
data, but also how stock is categorized in the warehouse, including batch
and shelf life expiration functionality.
3
Stock Management
In this chapter, we will discuss the stock management aspects of material stored
in warehouse management locations. Material that is stored in SAP WM–managed locations requires additional data entry to exploit the functionality of the
warehouse. A material that is stored only in a storage location and not in a warehouse does not require information on the material master other than that relating to the storage location.
A material that is stored in a warehouse needs the material master to be extended
for the specific warehouses and storage types in which it is stored. You may need
to enter hazardous material information in the warehouse section of the material
master if the material can be hazardous.
This chapter covers stock management in detail, as it relates to SAP WM.
3.1
Warehouse Management Data in the Material Master
Each material that is stored in a warehouse-managed storage location needs to
have that information entered in the warehouse management area of the material
master. Without that data, the material cannot be stored in a storage bin in the
warehouse.
Note
The material master screens and fields we are about to discuss relate to SAP ECC 6.0.
Please be aware that other versions of SAP ECC may have a different number of screens
for WM, and different fields may be displayed.
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Let’s now take an in-depth look at the material master, starting with its creation.
3.1.1
Creating the Material Master
You create a material is created in an SAP system using Transaction MM01 or via
the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Warehouse Management 폷
Master Data 폷 Material 폷 Create.
You can create the material with the SAP system automatically, assigning the next
available material number based on the internal number ranges configured in the
IMG: Transaction MMNR. The material can also be created with the material
number provided for data entry. The data governance (DG) team maintains external numbering.
Figure 3.1 shows that the initial screen for entering a material master requires the
entry of an industry sector and a material type.
Figure 3.1 Create Material Master for Warehouse-Relevant Material: Transaction MM01
Industry Sector
You must assign the industry sector for each material master record added. In
general, SAP customers use just one industry sector for all their material master
records, but this is not mandatory.
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To configure the industry sectors, use Transaction OMS3 or the menu path IMG 폷
Logistics — General 폷 Material Master 폷 Field Selection 폷 Define Industry Sectors and Industry Sector-Specific Screen Selection.
The SAP ECC 6.0 system has several predefined industry sectors, including:
왘
Pharmaceutical industry
왘
Chemical industry
왘
Mechanical engineering
왘
Automotive industry
Defining a new industry sector requires the choice of a single character for the
industry sector and a description. The new industry sector must be linked to a
field reference. You define this field reference in Transaction OMS9 or via the
menu path IMG 폷 Logistics — General 폷 Material Master 폷 Field Selection 폷
Maintain Field Selection for Data Screens
The field reference comprises a list of material master fields and determines
whether the individual field is hidden, displayed, optional entry, or required
entry. You should consider carefully when configuring a new field reference.
Note
If materials that are pharmaceuticals are entered into the material master, it may be necessary for those materials to have the EAN (European Article Numbering) category
entered. In the configuration, you need to make the field mandatory for pharmaceuticals but not for other industries.
Material Type
A material type is a group of materials with similar attributes. The material type
enables management of different materials in a uniform manner. SAP is delivered
with several standard material types:
왘
CONT—kanban container
SAP delivers this material type for creating kanban containers. These materials
only have the basic data view.
왘
DIEN—services
Services are either internally supplied or externally supplied by a vendor. Service
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material master records do not have storage information. The services can
involve activities such as consulting, garbage collection, and legal services.
왘
ERSA—spare parts
Spare parts are materials used for equipment maintenance in the plant. The
material is purchased and stored like any other purchased item, but a spare
part is not sold and therefore does not contain sales information. If a maintenance item is sold, this should use a different material type, such as a trading
good.
왘
FERT—finished good
A finished good is a material that has been manufactured by some form of production from items such as raw materials. The finished good is not purchased,
so it does not contain any purchasing information.
왘
FHMI—production resources/tools (PRTs)
PRTs are purchased and used by the plant maintenance department. This material type is assigned to items used in the maintenance of plant equipment, such
as test machines, drill bits, and calibrating tools. The material type for PRTs
does not contain sales information, because the PRTs are not purchased to sell.
In addition, PRTs are only managed on a quantity basis.
왘
HALB—semi-finished goods
Semi-finished products are often purchased and then completed and sold as
finished goods. The semi-finished products can come from another part of the
company or from a vendor. The semi-finished material type allows for purchasing and work scheduling, but not for sales.
왘
HAWA—trading goods
Trading goods are generally materials purchased from vendors and sold. This
type of material type only allows purchasing and sales information, as no internal operations are carried out on these materials.
왘
HERS—manufacturer parts
Manufacturer parts are materials that can be supplied by different vendors
who use different part numbers to identify the material.
왘
HIBE—operating supplies
Operating supplies are vendor-purchased and used in the production process.
This HIBE material type can contain purchasing data but not sales information.
This type of product includes lubricants, compressed air, and solder.
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왘
IBAU—maintenance assembly
Maintenance assembly is not an individual object but a set of logical elements
to separate technical objects into clearly defined units for plant maintenance.
For example, a car can be a technical object; the engine, transmission, axles,
and other components are the maintenance assemblies. An IBAU material type
contains basic data and classification data.
왘
KMAT—configurable material
Configurable materials form the basis for variant configuration. The KMAT
material type is used for all variant configuration materials. A material of this
type can have variables that the user determines during the sales process. For
example, automotive equipment may have variable attributes that each car
manufacturer needs to be different for each car, such as length of chain or
height of belt.
왘
LEER—empties
Empties are materials consisting of returnable transport packaging and can be
subject to a nominal deposit fee paid to the owner of the pallet by the company
renting them. Empties are usually sent to a company by their vendors. Empties
can be made from several materials, grouped together in a bill of material
assigned to a finished material. An example of an empty is a crate, drum, bottle, or pallet.
왘
LEIH—returnable packaging
Reusable packaging material is used to pack finished goods to send to the customer. When the finished good is unpacked, the customer is obliged to return
the returnable packaging material to the vendor. This material type is used in
the sales process, where the material type for empties (LEER) usually refers to
the packaging your company gets from its vendors.
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NLAG—nonstock material
The nonstock material type is used for materials that are not held in stock and
not inventoried. These materials can be called consumables and include maintenance gloves, safety glasses, and grease. Items like these are purchased when
needed.
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PIPE—pipeline material
The pipeline material type is assigned to materials that are brought into the
production facility by pipeline. Materials like this are not planned for because
they are always at hand. This material type is used, for example, for oil, water,
electricity, or natural gas.
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ROH—raw materials
Raw material is purchased material that is fed into the production process and
may result in a finished good. There is no sales data for a raw material, as it is
not sold. If the company wants to classify a material that would normally be
treated as a raw material, then it should be classified as a trading good.
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UNBW—non-valuated material
The non-valuated material type is similar to the NLAG (non-stock material)
type, except that the non-valuated material is held by quantity and not by
value. This is often seen in plant maintenance, where there are materials that
are extremely important to the plant equipment but of little or no other value.
Therefore, the plant maintenance department monitors inventory to allow for
planned purchases.
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VERP—packaging material
Unlike LEER (empties), the packaging material type applies to materials that
are packaging but are free of charge to the customer in the delivery process.
This does not mean that the packaging material has no value; often, the packaging material has a value, and a physical inventory is recorded.
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WETT—competitive products
The sales department uses this material type to monitor competitors’ goods.
The material type is used to identify these types of products. Only basic data is
held for these materials.
If one of the standard material types is not appropriate for the SAP client, then a
new material type can be configured in Transaction OMS2 using the menu path
IMG 폷 Logistics — General 폷 Material Master 폷 Basic Settings 폷 Material Types 폷
Define Attributes for Material Type.
You create a new material type by selecting an existing material type and copying
to a new one. Copying from an existing material type reduces the amount of configuration required. The four-character material type should always start with a Z
for a user-defined material type.
Organizational Levels
Any material that is to be used in the warehouse must have the correct organizational level data entered. For warehouse materials, these are plant, warehouse
number, and storage type. Once this data is entered, the material master record
can be created and the correct level of data expected.
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3.1.2
Entering Data into WM Screens
In SAP ECC 6.0, there are two WM data entry screens for the material master. In
other versions, there may only be one. Please use this section as a guide.
Note
You may not see all the data fields in this section in your version of SAP ECC.
Other data is entered into the SAP system before data is entered into the WM
screens. Basic data such as material description, unit of measure, purchasing
information, and so on will have been entered.
In Figure 3.2, the system has assigned the material a number, and a description
and base unit of measure have been added for the new material. Other data relevant for warehouse management can be added to this screen.
Figure 3.2 First WM Screens for Entering WM Data into the
Material Master: Transaction MM01
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WM Unit of Measure
Like the other units of measure, this WM unit is the unit of measure defined for
the material as it moves through the warehouse. For example, a material such as
a can of soda may be sold in single units, but in the warehouse the material is
moved in crates of 24 cans for ease of movement.
Unit of Issue
This Unit of Issue field allows the warehouse department to define a different
unit of measure for items issued from the warehouse, as an alternative to the base
unit of measure.
Proposed Unit of Measure from Material
This field defines how the warehouse unit of measure was derived. The options
for this field are to allow the unit of measure to be the base unit of measure for
the material, where this field is left blank. The other options are as follows:
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A
WM unit of measure to be the same as the issue unit of measure
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B
WM unit of measure to be the same as the ordering unit of measure
WM Unit of Measure Used in the Warehouse Picking Storage Type
The picking storage type is used by planning as the storage type that will contain
material used in rough-cut planning. For example, in the production planning
procedure, the high level of planning—called rough-cut planning—uses the material levels from this defined storage type for creating production plans.
Batch Management
The Batch Management checkbox configures the material to allow batches to be
created for the material. This checkbox is found in several other screens on the
material master—such as purchasing, plant/storage, and MRP—and might already
be activated. If other staff members are authorized to enter material master information, the batch management checkbox may be selected and will appear on the
warehouse screen as already highlighted.
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Hazardous Material Number
A hazardous material number can be assigned to the material at the client level.
This links the material number with the hazardous material information defined
for that hazardous material number, such as water pollutant, hazardous storage
class, or warnings. The hazardous material is defined not in configuration, but in
the logistics execution functionality. You can create a hazardous material with
Transaction VM01 or via the menu path SAP Menu 폷 Logistics 폷 Logistics Execution 폷 Master Data 폷 Hazardous Material 폷 Create.
Gross Weight
The gross weight of one unit of the material should be added to this screen, with
the correct unit of measure for the weight, to ensure that any limitation on bin
storage is calculated correctly.
Volume
The Volume and volume unit of measure of the material also are critical to ensuring that the material is correctly stored in the warehouse. Any incorrect data
entry on the material master can cause problems during putaway.
Stock Removal Field
The Stock Removal field enables users to enter the storage type checkbox that
defines the sequence in which storage types are searched in order to pick the
material in the warehouse. The storage type checkbox can be defined in Transaction OMLY. The menu navigation is IMG 폷 Logistics Execution 폷 Warehouse
Management 폷 Strategies 폷 Activate Storage Type Search.
Storage Section Checkbox
The storage section search is a more specific strategy for stock placement, as it
defines one level below the storage type search for stock placement. The storage
section checkbox (Storage Section Ind.) must be defined for each warehouse and
storage type. The strategy allows up to 10 storage sections to be defined in
sequence for the placement strategy. The configuration can be found in Transaction OMLZ or the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Activate Storage Section Search.
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Special Movement Checkbox
The Special Movement checkbox allows the material to be identified as requiring
a special goods movement. The checkbox is configured in SAP WM to allow
special processing for a group of materials. You can find the configuration by following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷
Master Data 폷 Material 폷 Define Special Movement Indicators.
Once the special movement checkbox has been defined, it can be used in the LEWM interface to inventory management, where the configuration determines the
warehouse management movement type. The special movement checkbox can
allow certain materials assigned with that checkbox to behave differently during
goods movements. You can access the configuration for the warehouse goods
movements via the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Interfaces 폷 Inventory Management 폷 Define Movement Types.
Two-Step Picking
In WM, you can choose between one-step and two-step picking for materials. If
the materials are large and bulky, one-step removal is optimal. However, if the
materials to be picked are small and numerous, then one-step picking may not be
an efficient use of warehouse resources.
Therefore, two-step picking is used to minimize workload. The two-step process
defines an interim storage type (normally 200) to which items are picked and
transferred; from there, the final pick takes place. The menu path for the configuration for two-step picking is IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Interfaces 폷 Shipping 폷 Define 2-Step Picking.
Stock Placement Field
The Stock Placement field acts in a manner similar to the stock removal field,
except that the strategy defined in the storage type search is for a placement strategy rather than a removal strategy.
Bulk Storage Checkbox
Within the placement strategies, it is possible to define how bulk materials
should be placed in stock. You can use the Bulk Storage checkbox if the bulk
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storage placement strategy has been activated in WM. The bulk storage checkbox
can indicate the height or width of a particular storage type. Use Transaction
OMM4 for this configuration or follow the menu path IMG 폷 Logistics Execution 폷
Warehouse Management 폷 Strategies 폷 Putaway Strategies 폷 Define Strategy
for Bulk Storage.
Message to Inventory Management
The Message to IM field is used if the warehouse management system is decentralized. If the checkbox is selected, it allows the warehouse management information for this material to be sent to IM immediately.
Tip
If your company uses Extended Warehouse Management (EWM) on a separate server,
then the communication between the regular SAP system and EWM may require that
this checkbox be selected.
Allow Addition to Stock
Selecting the Allow Addn to Stock checkbox allows the system to add material
to the existing stock of the same material in the same storage bin. This is only true
if the characteristics of the two quantities of material are the same. If the storage
type table does not allow additions to existing stock for this storage type, the
checkbox is redundant.
Figure 3.3 shows the second screen for WM data entry for a material. The organizational level for this screen is the storage type level. The data on this screen
relates to the storage type displayed.
Palletization Data
Palletization is used in storage unit handling within WM. The palletization process uses pallets to store and move material in the warehouse. The palletization
data determines how the material should be entered into stock. It may be possible
to place the material into storage in different ways depending on what storage
unit type is being used.
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Figure 3.3 Second WM Screen for Entering WM Data into the
Material Master: Transaction MM01
Loading Equipment Quantity
The loading equipment quantity (LE Quantity) entered here is the amount of material to be placed on the storage unit type. For example, if the quantity is to be
loaded on a standard pallet—which is a storage unit type—the quantity may be 24.
Unit of Measure
The Un field is the unit of measure for the loading equipment quantity, entered in
the previous field. For example, the quantity may be 24, and the unit of measure
can be EA, for each.
Storage Unit Type
The storage unit type (SUT) describes how the material is stored in the storage
bin. For instance, some bins may not accommodate a full pallet due to height
restrictions, but a half pallet may fit. Therefore, the warehouse can define a storage unit type that defines a half pallet and the quantity of the material that can fit
on that half pallet.
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Suppose that 30 boxes of a material are equivalent to one half pallet. The storage
unit type is configured in the IMG and has to be activated in each warehouse
before it can be used. The storage unit type for each plant is defined. You can
make the configuration by following the menu path IMG 폷 Logistics Execution 폷
Warehouse Management 폷 Master Data 폷 Material 폷 Define Storage Unit Types.
Storage Bin
The storage bin is the lowest level of storage defined in the warehouse. This field
allows the warehouse user to enter a storage bin that this material will be added
to for the plant/storage type combination. Pressing the (F4) function key makes it
possible to display the empty storage bins.
Maximum Bin Quantity
This value defines the maximum quantity of a material that can be entered into
any storage bin defined in the storage type. The quantity is defined in the base
unit of measure, not the WM unit of measure. For example, the bin quantity may
be 300 units of material, but this may be equivalent to a partial quantity in WM
units—for example, 7.45—so the base unit of measure is used for capacity calculations.
Minimum Bin Quantity
This field allows the warehouse users to define a minimum quantity that can be
stored in the bin locations for this storage type. This results in efficient use of
storage bins. For example, if the material is small, the maximum bin quantity is
high, and no minimum quantity is set. As a result, there could be many bins containing small amounts of stock. Entering a minimum bin quantity allows the bin
to be used efficiently and minimizes picking. Like the other quantities, the minimum bin quantity is recorded in the base quantity unit.
Rounding Quantity
This quantity is used if the material is subject to the quantity-dependent picking
strategy. The rounding quantity is the figure that the picking quantities are
rounded down to for this material/storage type combination. This quantity is also
defined in the base unit of measure.
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Picking Area
A picking area is a group of warehouse management storage bins that are used for
picking. The picking area is similar to the definition of storage section. You can
configure the picking area by following the menu path IMG 폷 Logistics Execution 폷
Warehouse Management 폷 Master Data 폷 Define Picking Areas.
Control Quantity
The control quantity defines for a particular storage type the amount of material
that reaches the level where stock removal can take place. Similar to the maximum bin quantity, the control quantity is in the material base unit of measure.
Replenishment Quantity
The replenishment quantity defines the quantity that should be placed in the storage bin. Similar to other quantities, the replenishment quantity is recorded in the
base quantity unit of measure.
This section has discussed the warehouse management data found in the material
master record for a material. In the next section, we will discuss the types of stock
that are found in the warehouse.
3.2
Types of Warehouse Stock
The warehouse contains different types of stock: available, unavailable, and so
on. There are also special stocks, such as project stock and consignment stock,
which need to be managed separately from other stock. In this section, we will
discuss the different types of stock found in the warehouse.
3.2.1
Stock Categories
Although the warehouse staff can physically see the stock in the storage bins, the
WM system determines that the stock has a particular category that determines
what can happen to it.
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Available Stock
This is unrestricted stock. It is not subject to any restrictions on its use. The material can be picked, put away, and transferred between bins. Figure 3.4 displays a
detail screen from the warehouse stock overview (Transaction LS26) and shows
the available stock for a material in a warehouse. You can find Transaction LS26
by following the menu path SAP Menu 폷 Logistics 폷 Logistics Execution 폷 Master
Data 폷 Material 폷 Stock 폷 Stock Overview.
Figure 3.4 Detail Screen from the Warehouse Stock Overview: Transaction LS26
The material illustrated in Figure 3.4 is in two storage types:
왘
High-rack storage
왘
Shelf storage
All the material is in available stock.
Inspection Stock
This stock carries the stock category Q to indicate that it is undergoing quality
inspection. Stock in quality inspection has been valuated but does not count as
unrestricted use stock.
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The inspection data in the Quality Management (QM) view of the material master
determines whether a percentage of stock is to be designated as inspection stock
when it is received in the warehouse. After the stock has been inspected and a
usage decision has been made, the warehouse user can make a transfer posting in
IM and a subsequent posting change in WM to remove the category Q to convert
it back to available stock.
In Figure 3.5, you can see there has been a goods receipt of material into the storage location and it has been moved to the shelf storage, storage type 022. Some of
the material has been put on a quality inspection hold and some has not. Figure
3.5 displays the stock overview screen of Transaction LS26, which shows that the
material in quality inspection has a Q checkbox on the detail line. Those materials
not in quality inspection do not have this checkbox.
Figure 3.5 Detail Screen from Warehouse Stock Overview: Transaction LS26
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Blocked Stock
When goods arrive damaged or unusable at the loading dock, IM provides a function that allows the goods receipt of material to be treated as blocked stock. This
stock is displayed in WM with a stock category of S. This stock is processed in
exactly the same manner as inspection stock.
The screen displayed in Figure 3.6 shows that there has been a goods receipt of
material into the storage location and it has been moved to the shelf storage,
storage type 022. This material has been moved into blocked stock. Figure 3.6
displays the stock overview screen of Transaction LS26, which shows that the
blocked material has the S checkbox on the detail line.
Figure 3.6 Detail Screen from Warehouse Stock Overview: Transaction LS26
(Material Designated as Blocked Stock)
Blocked Stock Returns
When goods are returned from the customer to the warehouse, they are received
using the IM movement type 451. In the warehouse management stock overview
report LS26, the stock is shown with a stock category of R. This stock is not valuated, and it should not be considered to be available stock. Therefore, it is very
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important to ensure that this material is kept separate from the available material.
Many companies maintain a special area for customer returns or ensure that
returns are labeled clearly to prevent the stock from being used.
In Figure 3.7, you can see that there has been a goods receipt for a customer
return of material into the storage location, and it has been automatically
assigned to storage type 904 for returns. Figure 3.7 displays the stock overview
screen of report LS26, which shows that the material in returns has the R checkbox on the detail line.
Figure 3.7 Detail Screen from Warehouse Stock Overview: Transaction LS26
3.2.2
Status of Warehouse Stock
As goods arrive at the warehouse, they are moved from the arriving trailers on
the loading dock or from the production area to an area where they are officially
received. This is usually called the goods receipt area (GR area) and is either near
the receiving dock or close to the end of the production line. Once the material
has arrived and is received, it is transferred using a transfer order to another storage area within the warehouse.
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When the transfer orders are created, they can be confirmed or not confirmed. If
they are not confirmed, a period of time elapses between the creation of transfer
orders and the movement of material to the final storage bin. The stock that has
not been moved thus has two availability statuses: material to be picked and
material to be placed. Using the warehouse stock overview Transaction LS26, the
system displays the following three headers.
Available Stock
This header defines the total quantity of material quants stored in the warehouse,
not including quantities for planned putaway or picks. The display of materials in
a bin also shows the total quantity in each storage bin.
Stock for Putaway
This header defines the total material intended for putaway that currently is in
nonconfirmed transfer orders, for example, transfer of material from the goods
receipt area to available stock. Figure 3.8 shows the amount for storage type 022.
Figure 3.8 Detail Screen from Warehouse Stock Overview:
Transaction LS26 (Material in Stock for Putaway Column)
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Pick Quantity
The Pick Qty field defines the total material for picking that is currently in nonconfirmed transfer orders, for example, transfer of material from the available
stock area to the shipping area. Figure 3.9 shows the pick quantity amount for
storage type 001.
Figure 3.9 Detail Screen from Warehouse Stock Overview:
Transaction LS26 (Material in Pick Quantity Column)
3.2.3
Special Stock
Special stock is material that is managed separately from regular stock. These
materials are processed differently because they may be owned by a third party
or be project stock.
Each category of special stock has its own checkbox, which allows it to be identified on warehouse stock reports. If the special stock is assigned during goods
movement transactions, these are shown on the warehouse management stock
screens—for example, Transaction LX03—and used in warehouse movement processing.
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Sales Order Stock
Individual customer stock is managed with a special stock number and the special
stock indicator E. The special stock number is 16 characters long and is a combination of the sales order number, which has 10 characters, and the sales order
item, which has 6 characters.
When the system makes inventory movement to goods-receipt a material into a
storage location that has a special stock indicator (E), the material is subsequently
goods-receipted into an interim storage type in the warehouse. From there, the
material is moved via a transfer order to a storage location in the warehouse.
Transaction LX03—bin status report—shows the quant in a storage bin with the
special stock indicator and the special stock number.
You can find Transaction LX03 by following the menu path SAP Menu 폷 Logistics 폷
Logistics Execution 폷 Master Data 폷 Storage Bin 폷 Evaluations 폷 Bin Status
Report.
Figure 3.10 shows the initial selection screen for Transaction LX03. Users can
select the warehouse number, storage type, and storage bin combination. They
also can use the inventory method, special stock indicator, and other criteria to
narrow the selection.
Figure 3.10 Initial Screen for Bin Status Report: Transaction LX03
Figure 3.11 shows the sales order stock with checkbox E and the special stock
number, derived from the sales order number and the sales order item number.
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Figure 3.11 Results Screen for Bin Status Report: Transaction LX03
(Sales Order Stock with Checkbox E)
Consignment Stock
Consignment stock is material owned by a vendor but stored at a customer’s premises. It is used by the customer in production orders or transferred to the customer’s stock, at which time ownership of the material transfers from the vendor
to the customer.
The system identifies consignment material in the customer’s warehouse by using
a special stock indicator, K. This can be seen in the bin status report (Transaction
LX03). The special stock number for the vendor’s consignment stock is the same
as the vendor number.
The vendor’s consignment stock is goods-receipted into the warehouse using
inventory management transactions for goods receipt; for example, Transaction
MB1C. Figure 3.12 shows the vendor consignment stock in storage bin PROD1320. The system used vendor number 1000 for the special stock number.
Project Stock
Project stock is material that is being stored in the warehouse for a project per a
work breakdown structure (WBS) element, defined in the Project Systems
module (SAP PS). The material is moved into a storage location by an inventory
management transaction, such as MB1C. It can be seen in the bin status report,
identified by the special stock indicator Q.
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Figure 3.12 Results Screen for Bin Status Report: Transaction LX03
(Vendor Consignment Stock with Checkbox K)
Figure 3.13 shows the project stock in storage bin 05 – 02 – 01. The special stock
number for the project stock is the same as the WBS element that was entered in
the inventory movement transaction for the goods receipt.
Figure 3.13 Results Screen for Bin Status Report: Transaction LX03
(Project Stock with Checkbox Q)
Returnable Transport Packaging
With returnable transport packaging (RTF), materials may be delivered to the warehouse on, or in, returnable transport packaging, such as pallets or containers. The
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delivered materials can be removed from the packaging or remain with the packaging in the warehouse. If the returnable packaging is not immediately returned
to the vendor, it can be stored in the warehouse. The returnable materials are the
property of the vendor and do not become part of the customer’s valuated stock.
The returnable transport packaging is identified in the customer’s warehouse by
using a special stock indicator, M. This can be seen in the bin status report (Transaction LX03). Figure 3.14 shows the project stock in storage bin 05 – 05 – 01. The
special stock number for the returnable transport packaging stock is the same as
the number of the vendor that supplied the packaging material.
Figure 3.14 Results Screen for the Bin Status Report: Transaction LX03
(Returnable Transport Packaging with Checkbox M)
This section described the types of stock that can be found in the warehouse.
Next, we will discuss the role of batch management in the warehouse.
3.3
Batch Management in Warehouse Management
SAP WM users can configure created materials to be batch managed. This
requires that for each movement or processing of the material, the quantity of
material associated with that movement or process be identified by one or many
unique batch numbers.
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3.3.1
Batch Definition
A batch is a quantity of material grouped for various reasons. The materials often
have the same characteristics and values. For instance, in the chemical industry a
certain number of containers of a certain product may be considered a batch
because they were produced at the same time and have the same physical and
chemical characteristics. These characteristics may differ from those of another
batch of material produced on the same day.
Note
The pharmaceutical industry is one sector where material batches are extremely important. Each batch of material is recorded throughout the product and distribution process. In case of a product recall, the batch number stamped on the pack or bottle of
material provides the needed identification.
To understand how important batch recording has become, consider the regulations in the European Union (EU). The EU requires that each batch of pharmaceutical material imported into the EU must be accompanied by a batch certificate.
This must specify the testing specifications of the product, analytical methods and
test results, and statements that indicate that it conforms to current Good Manufacturing Procedures (cGMP) and has been signed off by a company official.
3.3.2
Batch Level
The batch number can be determined at different levels. You need to make this
determination early in any implementation project. Batches can be determined at
the client level, plant level, and material level.
Client Level
If the batch level is configured at the client level, the batch number can only be
assigned once throughout the SAP client. One batch number exists for one batch
regardless of material or location. This poses no problem when batches are
moved from plant to plant, as the batch number does not exist in the receiving
plant. This is a level where, in some countries, batch numbers are unique to a
company and not to a material.
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Plant Level
Batch level at the plant level is the SAP default. This means the batch is unique to
a plant and material but is not applicable across the company. Therefore, a batch
of material at a different plant within the company can have the same batch number as another batch with different characteristics. When batch material is transferred from one plant to another, the batch information is not transferred, and
the batch information needs to be re-entered at the receiving plant.
Material Level
Batch level at the material level means the batch number is unique to a material
across all plants. Therefore, if a batch of material is transferred to another plant,
the batch information will be adopted in the new plant without re-entering the
batch information. This is because that batch number cannot have been duplicated for that material in the receiving plant.
3.3.3
Batch Number Assignment
The batch number range is predefined in SAP systems. The predefined range 01 is
defined as 0000000001 to 9999999999. The number range object for this is
BATCH_CLT. You can change this in configuration with Transaction OMAD or via
the menu path IMG 폷 Logistics — General 폷 Batch Management 폷 Batch Number
Assignment 폷 Maintain Internal Batch Number Assignment Range.
Two configuration steps can be carried out if the customer requires batch number
assignment:
1. Assign the batch number internally using the internal number range. To configure this use Transaction OMCZ or follow the menu path IMG 폷 Logistics —
General 폷 Batch Management 폷 Batch Number Assignment 폷 Activate Internal Batch Number Assignment 폷 Activate Batch Number Assignment.
2. Configure the system to allow the automatic numbering of batches on a goods
receipt with account assignment. Follow the menu path IMG 폷 Logistics — General 폷 Batch Management 폷 Batch Number Assignment 폷 Activate Internal
Batch Number Assignment 폷 Internal Batch Number Assignment for
Assigned Goods Receipt.
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3.3.4
Creating a Batch Record
The batch record can be created manually through the SAP menu with Transaction MSC1N. The menu path is SAP Menu 폷 Logistics 폷 Materials Management 폷
Material Master 폷 Batch 폷 Create.
To create a batch number for a material, you may need to fill in several key fields
such as material number, plant number, and storage location. Other information
can be used to describe the batch, such as production date, vendor batch number,
last goods receipt date, and so on, as shown in Figure 3.15. The batch number
assignment can be configured in the number range transactions in the IMG, as
described in Section 3.3.3.
Figure 3.15 Initial Entry Screen for Batch Record Creation: Transaction MSC1N
Production Date
The WM user can enter the date when the batch was produced in this field. In
some industries, this field is also used as the date the material was tested or
retested. If a material is found to be still useable after the shelf life date has
expired, the material can be retested, and the date of the retest is entered in this
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field, in addition to a new shelf life expiration date. Check with your clients to see
how they need to use this field.
Shelf Life Expiration Date
This shelf life expiration date (SLED) is the date on which the shelf life of a batch
expires. The shelf life of a product can vary between plants. The expiration date
can be used in the sales process, when customers have set a requirement on the
number of days of shelf life remaining for a batch to be acceptable. Some companies use this field to indicate the date on which a batch needs to be retested.
Available From
This field indicates when the batch will be available. For example, if a material
needs to remain in the quality inspection process for a certain number of days
after testing, then the quality assurance department can enter a date to inform
other departments when to expect the batch to be available.
Batch Status
The batch status checkbox allows the batch to be classified as having restricted or
unrestricted use. If the unrestricted radio button is selected, then no restriction is
placed on the batch’s use. If the Batch restr. radio button is selected, the batch is
treated like blocked stock in planning, but can be selected by batch determination
if the search includes restricted use batches.
The batch status can be changed from unrestricted to restricted by changing the
checkbox in the batch record. The system posts a material document that shows
the movement of stock between the two statuses.
Next Inspection
This date field enables the quality assurance department to enter the date of the
next quality inspection of the batch, if applicable to this material.
Vendor Batch
If the material is purchased, then you can add the batch number assigned by the
vendor to the batch record. Notation of the vendor batch number is important to
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any product recall procedure. The vendor batch number field allows a 15-character string to be entered.
3.3.5
Batch Determination
Batch determination in SAP WM uses strategy types, search strategies, and search
procedures for identifying a batch in the WM transaction.
The batch determination process uses the same type of selection protocol as
found in purchasing pricing conditions; that is, it uses condition tables and access
sequences.
Condition Tables
The batch determination condition table consists of fields that are selected and
records that are created to assign values to those fields. The WM condition tables
can be created in Transaction OMK4, which you can find by following the menu
path IMG 폷 Logistics — General 폷 Batch Management 폷 Batch Determination
and Batch Check 폷 Condition Tables 폷 Define Warehouse Management Condition Tables.
Figure 3.16 shows the field where you enter a new condition table. You also can
create a new table by copying the conditions from an existing condition table. In
the figure, the search for condition tables has returned five tables that can be copied.
If the condition table is not copied from an existing table, you can assign the
fields to the condition table from the field catalog. Figure 3.17 shows that for the
new WM condition table, three fields have been selected. Once the condition
table is complete, it should then be generated by selecting Condition 폷 Generate
from the menu or by pressing the (Shift)+(F4) function key combination.
Access Sequence
For each batch strategy type, there is a batch determination access sequence. This
allows the batch strategy type to access the condition tables in the correct
sequence. We will describe the strategy type in the next section. Before configuring the access sequences, note that these access sequences are cross-client. Any
changes in one client will affect all clients.
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Figure 3.16 Create Warehouse Management Condition Tables
for Batch Determination: Transaction OMK4
Figure 3.17 Assign Selected Fields for New Warehouse Management
Condition Table: Transaction OMK4
You can complete the configuration by following the menu path IMG 폷 Logistics
— General 폷 Batch Management 폷 Batch Determination and Batch Check 폷
Access Sequences 폷 Define Warehouse Management Access Sequences.
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Figure 3.18 shows the access sequence WM02. The access sequence uses condition table 11, and the sequence of the access is defined by the two condition
fields. If a new access sequence needs to be created, it should begin with the letter
Z to indicate a customer-defined access sequence.
Figure 3.18 Create Access Sequence for Batch Determination
Batch Strategy Type
The batch strategy type is the specification that tells the system what type of criteria to use during the batch determination process. You can configure the batch
strategy type by following the menu path IMG 폷 Logistics — General 폷 Batch
Management 폷 Batch Determination and Batch Check 폷 Strategy Types 폷 Define
Warehouse Management Strategy Types.
Figure 3.19 shows the strategy type for WM02. The strategy type is defined by a
class and its relevant characteristics that define how the strategy works. We
define a strategy type so that different scenarios can be used when finding
batches. In Figure 3.19, the strategy type is configured with a class, SHELF_LIFE_
SEL, which searches for batches in the warehouse that have a certain shelf life.
Figure 3.20 shows the class and the characteristics that are defined.
Other strategy types may include a strategy to find batches with a certain shelf life
date in the warehouse or a strategy to find batches with a certain production date.
The classification data, class, and characteristics can be defined for the required
strategy.
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Figure 3.19 Create a Strategy Type for Batch Determination
The selection class function of the strategy type lets you define how batches are
sorted when they are located. For example, if the strategy type is to locate certain
batches by goods-receipt date, then the class can define how these are displayed.
They can be shown either ascending or descending, based on the characteristic
criteria in the sort rule.
You can define the selection class in the IMG by using Transaction CU71 or following the menu path IMG 폷 Logistics — General 폷 Batch Management 폷 Batch
Determination and Batch Check 폷 Define Selection Classes.
In Figure 3.20, the classification data, class, and characteristics that are defined
for the batch strategy type show that there are three characteristics. Therefore,
the strategy for selecting batches in the warehouse can be defined accurately
based on three criteria, which are shown in Figure 3.20:
왘
Remaining shelf life for batch
왘
Batch determined delivery date
왘
Expiration date, shelf life
The characteristics can be given values so that the selection of the batch falls into
the range defined by these three characteristics. Batch strategy types can have
classes with more or fewer characteristics, to increase or decrease the specificity
of the search for batches.
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Figure 3.20 Classification Data for Strategy Type for Batch Determination
Batch Search Procedure
You define the batch search procedure to allow the combination of a single or a
group of batch strategy types. The procedure is allocated to a warehouse or material movement, where it is used to determine the correct batches for the selection.
To configure the batch search procedure, use Transaction OMKV or follow the
menu path IMG 폷 Logistics — General 폷 Batch Management 폷 Batch Determination and Batch Check 폷 Batch Search Procedure Definition 폷 Define Warehouse
Management Search Procedure.
Figure 3.21 shows the batch search procedure ZWM001, which uses the three
batch strategy types (Ctyp), ZWM1, ZW03, and ZWM2, to find relevant batches
based upon the criteria within those strategy types. Several search procedures
may be required, depending on the batches you need to locate within the warehouse.
Example
When material is removed from a warehouse that has racks, the search procedure may
require the shelf life to be the determining factor, whereas determining batches for outside warehouses may require that the batch be determined by the goods-receipt date.
The search procedure can be assigned to various warehouses or warehouse/movement
type combinations, based on the needs of the supply chain.
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Figure 3.21 Batch Search Procedure with Associated Strategy Types: Transaction OMKV
Batch Search Procedure Assignment
After creating the warehouse search procedures, you can assign them for batch
determination based on the warehouse or the warehouse/movement type combination.
You can configure the batch search procedure assignment with Transaction
OMK1 or by following the menu path IMG 폷 Logistics — General 폷 Batch Management 폷 Batch Determination and Batch Check 폷 Batch Search Procedure
Allocation and Check Activation 폷 Assign WM Search Procedure.
The transaction allows assignment of the batch search procedure to either a warehouse or a warehouse/movement type combination. Figure 3.22 shows the
assignment for a warehouse.
The batch search procedure can be assigned to a warehouse, as shown in Figure
3.22. The procedure determines how batches are determined for the warehouse.
Select the Batches in Bulk Stge checkbox if you plan to ignore search strategy for
the bulk area storage. In bulk area storage, the batches are mixed and the strategy
will not pick out individual batches. Selecting this checkbox ensures that the total
stock is included in the batch determination, even though it is batch-neutral.
Figure 3.23 shows the assignment of the batch search procedure to the warehouse/movement type combination. With this part of the transaction, the specific
movement type that is used at the warehouse is given a batch search procedure.
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Figure 3.22 Batch Search Procedure Assigned to Warehouse:
Transaction OMK1
Figure 3.23 Batch Search Procedure Assigned to Warehouse/
Movement Type Combination: Transaction OMK1
Select the checkbox shown in Figure 3.23, Status “Restricted” AI., if the batches
defined as blocked need to be included in the batch determination in the warehouse. Normally, restricted batches are not included in batch determination.
Figure 3.24 shows more details of the assignment of the batch search procedure
assigned to the warehouse/movement type combination. To access this screen,
select Goto 폷 Details or press (Ctrl)+(Shift)+(F2).
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Figure 3.24 Detail Screen of Batch Search Procedure Assigned to
Warehouse/Movement Type Combination: Transaction OMK1
This section described the functionality of the batch and functionality such as
batch search procedures in the warehouse. Next, we will discuss the important
topic of shelf life functionality.
3.4
Shelf Life Functionality
In many industries, such as the grocery and pharmaceutical industries, the shelf
life of materials is a very important characteristic, both for sales and for production. It is important that the warehouse management review the shelf life expiration date (SLED) to ensure that material does not expire and have to be scrapped.
3.4.1
Shelf Life and the Material Master
When material is created using the material master record transaction, MM01,
you can enter information regarding the shelf life characteristics on the plant storage view.
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Figure 3.25 shows the shelf life data that can be added to the material. This data
is used in calculating the shelf life expiration date in batch determination. Let’s
take a quick look at the fields in this figure.
Figure 3.25 Shelf Life Expiration Data Entry on Material Master Record Plant Data Screen
Max Storage Period
This field is for information only and does not have any functionality. Users can
define the maximum storage period for a material before it expires. This field can
be used for reporting.
Time Unit
This is the unit of measure of the maximum storage period in days, months, and
years.
Minimum Remaining Shelf Life
The minimum remaining shelf life field determines whether a material can be
received via goods receipt based on the remaining shelf life of the material. If this
field has the value 100 days, and the material to be goods-receipted has only 80
days of shelf life left, then the system will not accept the goods receipt. The minimum remaining shelf life field works at the client level and is the same for the
material across all plants.
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Total Shelf Life
The total shelf life figure is at the client level and does not vary by plant. The total
shelf life is the amount of time the materials will be kept, from the production
date to the shelf life expiration date. The shelf life is only checked if the expiration
date check has been activated. The activation is configured at plant level or movement type level in Transaction OMJ5 or via the menu path IMG 폷 Logistics —
General 폷 Batch Management 폷 Shelf Life Expiration Date (SLED) 폷 Set Expiration Date Check.
Period Checkbox for Shelf Life Expiration Date
This period field is defined for the shelf life expiration date (SLED) fields used in
this material master screen. The period can be defined as months, days, and so
on. You can configure the period checkbox in Transaction O02K or via the menu
path IMG 폷 Logistics — General 폷 Batch Management 폷 Shelf Life Expiration
Date (SLED) 폷 Maintain Period Indicator.
Rounding Rule SLED
The rounding rule allows the SLED to be rounded up to the nearest unit of the
time defined in the period checkbox. For example, if the period checkbox is set to
months, then the rounding rule is either the first day of the month or the last day
of the month, or there is no change if there is no rounding rule. The rounding
rule is for calculated dates rather than dates entered into the record.
3.4.2
Production Date Entry
To ensure that the shelf life expiration date functionality produces the correct
results, it is important that the manufacturing date for a batch is entered at the
time of goods receipt.
Figure 3.26 shows the goods receipt of a batch of material. The goods receipt
requires that a manufacturing date of the batch be entered. This date is used to
determine the start date for the calculation of shelf life.
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Figure 3.26 Goods Receipt Entry with Batch Production and Best-Before Dates
3.4.3
SLED Control List
The shelf life expiration date control list shows batches in the warehouse that are
actively monitored for shelf life. To run the SLED control list, use Transaction
LX27 or follow the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Warehouse
Management 폷 Master Data 폷 Material 폷 Evaluations 폷 SLED Control List.
Remaining Shelf Life
The remaining shelf life field (RemSL) restricts the results of the report. This field
is the upper limit for the remaining shelf lives of all materials that are to be
selected. It can be used in the shelf life calculation in two ways depending on
what checkbox is selected. It can refer to either the total remaining shelf life or
the remaining shelf life in the warehouse.
Figure 3.27 shows the selection criteria that can be entered for the shelf life expiration date control list. The report shows the batches of product in the warehouse
that is active for SLED, which is shown in Figure 3.28.
The report shows whether the batch is in exception; that is, if the shelf life is
below the minimum stated on the material master. The remaining shelf life is
shown in column RemSL, as well as the expiration date, storage location, storage
type, and amount of stock in the bin.
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Figure 3.27 Initial Date Entry Screen for Shelf Life Expiration Date Control List: Transaction LX27
Figure 3.28 Results Screen for Shelf Life Expiration Date Control List: Transaction LX27
This report is provided to ensure that the warehouse management knows the
stock that is soon to expire and to inform sales management if action needs to be
taken to discount the expiring stock for sale. Having expired stock in the warehouse is not a desirable situation. Because that stock takes up warehouse space
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with material that cannot be sold, it incurs a financial loss to the company and
may create an additional cost for disposing of the expired material or reworking it.
3.5
Business Examples—Stock Management
Each material that is stored in a warehouse managed storage location needs to
have warehouse information entered in the warehouse management area of the
material master. Without that data, the material cannot be stored in a storage bin
in the warehouse.
3.5.1
Types of Warehouse Stock
A warehouse can contain types of stock that are identified in different ways.
Items that are free to be used are referred to as unrestricted, whereas other stock
can be waiting for inspection by the quality control department and cannot be
used. Other types of stock that need to be identified in the warehouse include
consignment stock, which belongs to a vendor but is stored in the warehouse,
and project stock that is available only for a specific project.
Example
A manufacturer of paint additives in Alabama had used the same raw materials
purchased from the same local vendor for over a decade. The vendor delivered
the materials to the warehouse on the day (or the day before) they were to be
used in production. A Chinese company purchased the local vendor, and some of
the product lines used in the production of the additives were no longer made in
the United States. The paint additives company was then forced to find other vendors to supply several the raw materials they needed. Fortunately other local vendors could supply three of the four critical raw materials, but one item was only
available from a vendor in Ohio. The first several purchase orders with the Ohio
vendor were delivered on time to the facility in Alabama, but the next few deliveries were late, forcing changes in the production schedule.
Even after another search, the company could not find a suitable vendor who
could provide the material on the schedule they required, so they negotiated with
the Ohio vendor to keep product in the warehouse on consignment and purchase
the raw material when they required it. The company assigned an area in their
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warehouse for the consigned raw material, and the material was transferred from
consignment stock to the production order when it was required.
3.5.2
Batch Management
Items in the warehouse can be batch managed, but it is not mandatory. A batch is
a quantity of material that is grouped for one or more reasons. The items often
have the same characteristics and values. The batch is identified with a batch
number.
Example
A beverage manufacturer based in Spain was operating a number of disparate systems for its manufacturing and warehouse functions. The company printed a lot
number on each bottle and can that was produced, but their warehouse management system could not manage inventory by batch. To keep items with the same
batch number together, pallets were stored together in the warehouse and the
batch number was attached. The issue was that the number of pallets varied for
each batch and the warehouse could not have any fixed sized areas. The company
decided to implement an SAP system but decided against using WM. The system
went live with the company managing the warehouse with IM and interfacing to
their existing warehouse management system.
After three months of operating the warehouse with the existing system interfacing with the SAP system, the company decided to decommission the old warehouse management system and implement SAP WM. The warehouse layout was
reconfigured to allow the introduction of racking systems for pallets to replace
the open storage area. The batch number of the product coming off the production line was entered into the SAP system at goods receipt, and the pallets were
stored in the warehouse based on the configured stock placement strategy.
Because batches no longer had to be stored together, the change in the warehouse
layout meant the capacity of the warehouse increased by over 120%.
3.5.3
Shelf Life Functionality
The shelf life of a material is an important characteristic. In a production facility
it is vital to know that raw materials going into making a finished item have not
passed their shelf life. Equally, for sales functions, customers require the materials
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Summary
they purchase to be in date, so it is important to know which batches in the warehouse are within their shelf life tolerance and how many days of shelf life they
have before their shelf life expiration date (SLED).
Example
A Mexican manufacturer of metal cans and drums had been using the same process since the 1970s. The company provided aluminum cans to the beverage
industry and tin-plated steel cans for food products. Items in the warehouse were
supposed to be sold on a first-in first-out (FIFO) basis, but often warehouse staff
would select items closest to the shipping dock. This left pallets of materials
remaining in the warehouse longer than expected.
When customers received cans that were older than normal, some of those customers rejected the whole delivery if the cans had any blemishes or signs of corrosion. After several customer returns the company decided to identify the date
on which the cans were manufactured. In the SAP system the date of manufacture
was entered into the relevant batch number. The stock removal strategy was then
changed so that the quants selected for outbound deliveries were chosen by the
number of days of shelf life remaining.
The company also gave their customers the option to ask for cans based on shelf
life. Several manufacturers of premium beverages required that the newest cans
be selected for their deliveries, whereas other customers did not have that
requirement.
3.6
Summary
In this chapter, we discussed the stock management aspects of warehouse management. You need to understand several subjects before entering warehouse
information in the material master. It is important that the correct information be
entered at the time of material creation. It is often difficult to add or change data
in the material master once it released and in use. Stock categories and stock types
are primarily issues for materials management, but the warehouse consultant
must understand how and why stock is categorized.
Batch management and shelf life expiration dates (SLED) are important for the
warehouse. Batch management plays an important role in many industries, as
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does SLED. Incorrect identification of batches can be costly for the client in monetary terms and in customer confidence. More and more products are being
labeled with expiration dates, so this is becoming a more important aspect of
warehouse management.
In Chapter 4, we will discuss the movements that can occur in the warehouse,
including transfer requirements and transfer orders.
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Movements inside the warehouse determine where material goes, how it
gets there, how it is stored, and how it is retrieved. The transfer requirement and the transfer order are the processes that move the material, and
it is important to know how these processes work.
4
Warehouse Movements
In this chapter, we will discuss the movements that occur in the warehouse.
Material moves into the warehouse, around the warehouse, and ultimately out of
the warehouse. We will identify and review the mechanism of material movements and what triggers these movements. Two types of movements are relevant
for the warehouse:
왘
Warehouse movements triggered by another SAP functionality, such as IM and
shipping, that result in picking, packing, and warehouse-to-warehouse transfer.
왘
Warehouse movements internal to the warehouse, such as bin-to-bin transfers
or posting changes. The goods movements inside the warehouse do not affect
the total stock position, and no information is passed to the IM function.
Let’s now venture deeper into this chapter, starting with movement types.
4.1
WM Movement Types
Within the WM functionality, there are goods movements that are movements
inside a plant that can change stock levels in the storage locations designated to
that plant. The movement of stock is either inbound from a vendor, outbound to
a customer, a stock transfer between plants, or an internal transfer within a plant.
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4.1.1
Movement Types in IM
A movement type is a three-character field used to describe the type of material
movement that needs to be performed. The movement type is used for all type of
movements: receipts, issues, transfers, and reversals.
The SAP system is delivered with predefined movement types between 100 and
899, for example, movement type 201, for moving warehouse material to a cost
center. Movement types 900 and beyond can be used for customized movement
types.
Note
You may need to change some standard movement types to accommodate warehouse
processes. The standard movement type can be copied to a new movement type in the
900 range to be modified.
To create a movement type, use Transaction OMJJ or follow the menu path IMG 폷
Materials Management 폷 Inventory Management and Physical Inventory 폷
Movement Types 폷 Copy, Change Movement Types.
Figure 4.1 shows the initial screen of Transaction OMJJ. The dialog structure in Figure 4.1 shows several configuration steps for each movement type.
Figure 4.1 Initial Screen for Configuring Inventory Management
Movement Types: Transaction OMJJ
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WM Movement Types
The movement type is a key to the inventory management process because it controls the updating of the quantity of the stock, determines what fields are displayed and required for entry, and can update the account information.
When a movement type is used in IM goods movement with respect to a storage
location that is warehouse managed, a corresponding movement in the warehouse is driven by a WM movement type. In the following subsections we will
explain the connection between the IM movement types and the movement
types in the warehouse.
4.1.2
WM Reference Movement Types
The IM movement type is linked to a warehouse movement type. The linkage is
not direct but is made through a reference movement type, which is a key that
can be assigned to an IM movement type. One reference movement type can be
associated with several IM movement types.
You can assign the reference movement type to the IM movement type via the
menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Interfaces 폷
Inventory Management 폷 Define Movement Types.
Figure 4.2 shows the following three configuration steps that are defined for this
transaction:
Figure 4.2 Initial Screen for WM Movement Type Definition
1. Add the reference movement type to the IM movement type.
2. Configure the links between WM and IM.
3. Check the consistency of the configuration.
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Figure 4.3 shows several IM movement types that have been assigned a reference
movement type. The screen shows the IM movement type field, Mvt, and the
WM reference movement type field, Reference.
Figure 4.3 Assign Reference WM Movement Type to IM Movement Type
Each IM movement type is unique and depends on the movement checkbox, special stock indicator, and special movement checkbox. Each of the combinations is
assigned a reference movement type.
In Figure 4.3, only two reference movement types are noted: 101 and 999. Reference movement type 999 indicates that for that particular IM movement type
there is no corresponding WM movement type, and the IM movement has no
effect on the warehouse. Reference movement type 101 is a valid reference
movement type and will be linked to a WM movement type.
4.1.3
Creating WM Movement Types
The WM movement type contains information the system needs to determine
stock placement and removal. The system is delivered with several predefined
WM movement types. The movement type—such as 801, which represents goods
receipt from production to the warehouse—contains information about what
interim storage type is used, the coordinates for the interim storage bin, and control checkboxes for confirmations.
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WM Movement Types
A WM movement type can be created via the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Activities 폷 Transfers 폷 Define Movement Types.
Figure 4.4 shows the initial screen for creating the WM movement types. The
transaction requires that a movement type be associated with a particular warehouse. A movement type may have to function differently in different warehouses.
Figure 4.4 Initial Screen for WM Movement Types
You can find detailed information about the warehouse/movement type combination by selecting Goto 폷 Details. The detail screen can also be accessed by
pressing (Ctrl)+(Shift)+(F2).
Figure 4.5 illustrates the detailed information available concerning the WM
movement type. In configuring the source, destination, and return data, you
should consider several scenarios:
왘
If no storage type or storage bin has been specified for either the source, destination, or return fields, then the system tries to determine the storage type and
bin to assist in creating a transfer order.
왘
If the storage type is defined, the system searches for a storage bin for that storage type.
왘
If the storage type and bin are entered for a movement type, then the data is
transposed into the transfer order and cannot be changed in the created transfer order.
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Figure 4.5 Detail Screen for WM Movement Type
The fields shown in Figure 4.5 are described in the following subsections.
Source Storage Type
This field (Scr — Cat) is the source storage type. This storage type is the location
from which the material is sourced for stock removal. For example, when this
movement type is used for the transfer order, the transfer order processing uses
this storage type as the location where the material is sourced.
Source Storage Bin
This field (Scr — Stor. Bin) is the source storage bin for the source-storage type
entered. So when this movement type is used, the transfer order uses this storage
bin, located in the configured storage type, to indicate where the material will be
sourced.
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WM Movement Types
Source Fixed Bin Checkbox
This checkbox (Scr — FxdBn) identifies that a fixed storage bin is used as the
interim storage bin for the relevant storage type. The fixed bin is assigned to a
material for that particular storage type. It is where material is located and is used
mostly in the picking process. If this checkbox is selected, then the source storage
bin must be left blank.
Source Dynamic Storage Bin Checkbox
This field (Scr — Scr) is the dynamic storage bin checkbox, which when selected
indicates that the source storage bin is created dynamically. In a movement type
where the interim bin is flagged as having a dynamic location, this signals that the
bin will have the reference from the document corresponding with the movement, that is, a cost center or a purchase order number.
Destination Storage Type
This field (Dest — Cat) is the destination storage type. This storage type is the
location where the material will undergo putaway. For example, when this movement type is used for the transfer order, the transfer order processing uses this
storage type as the location where the material will be moved.
Destination Storage Bin
This field (Dest — Stor. Bn) is the storage bin where the material is placed for the
destination storage type entered. For example, when this movement type is used
for the transfer order, the transfer order processing uses this storage bin, located
in the configured storage type, to indicate where the material will be moved.
Destination Fixed Bin Checkbox
This field (Dest — FxdBn) indicates that a fixed storage bin is used as the interim
storage bin for the relevant storage type. The fixed bin is assigned to a material
for that particular storage type. If this checkbox is selected, then the destination
storage bin must be left blank.
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Destination Dynamic Storage Bin Checkbox
If this field (Dest-Scr) is selected, then the destination storage bin is determined
dynamically. In a movement type where the interim bin is flagged as having a
dynamic location, this indicates that the bin has the reference from the document
corresponding with the movement, that is, a cost center or a purchase order number.
Return Storage Type
This field (Ret-Cat) is the return storage type used when a quantity is left over
from a complete stock removal. This is performed when the complete quantity is
removed from the bin whether or not the total amount is needed. Therefore,
there is a remainder quantity that has to be returned to stock.
Return Storage Bin
This field (Ret — Stor. Bn) is the return storage bin where the remaining quantity
is moved if the warehouse needs a complete stock removal from the storage bin.
This occurs when a quantity of material is removed from the source storage bin
and sent to the destination bin, but not all the quantity is required. When this
field is not configured, the remaining material goes back to the source storage
bin. When this is configured, the remainder material goes to this return storage
bin. This function is used when the warehouse cannot return the material to the
source storage bin because of material specifications.
Screen Control—Transfer Order Creation
This field can be configured to determine whether to create transfer orders using
a dialog screen. There are three options:
왘
1
Preparation screen for material putaway. This allows the amount of material to
be put away to be divided between multiple storage bins.
왘
2
Preparation screen for material picking. This allows the total amount of the
material to be picked to be searched for in the warehouse.
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왘
3
Preparation screen for each individual line item for material putaway and
material picking
Screen Control—Transfer Order Confirmation
This field can be set either to display the amount to be confirmed for the putaway
or picking or to display a screen with no input values. The options are:
왘
1
Produces a screen with no input values
왘
2
Produces a screen with putaway values for input
왘
3
Produces a screen with picking values for input
Screen Control—Transfer Order Display
This field dictates which of the standard views is displayed in the foreground.
There are three options:
왘
1: Source Data View
For this view, the source data and the transfer order items appear in the foreground. The source data includes the quantity to be removed from the bin and
any relevant batch numbers.
왘
2: Destination View
For this view, the destination data is for the transfer order.
왘
3: General View
For this view, the system displays data about the transfer order that does not
appear in other views. This includes special stock type, stock category, goodsreceipt date, and confirmation date.
Shipment Type
The shipment type classifies the movement types in the warehouse. The options
that can be chosen include:
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왘
A
Stock removal
왘
E
Stock placement
왘
U
Posting change
Requirement Type
The requirement type refers to the origin type, for example, a goods receipt for a
purchase order. The requirements number that can be entered at the same time is
the originating document, which can be an item such as a purchase order.
Options that can be selected include:
왘
A
Asset
왘
B
Purchase order
왘
D
Storage bin
왘
K
Cost center
왘
L
Sales document
왘
V
Sales order
Transfer Requirements—Manual Transfer Order Creation Not Allowed
If the Manual TO Creation Not Allowed checkbox is selected, then the transfer
orders for this movement type cannot be created manually, but must be created
with reference to another relevant document such as a transfer requirement.
Transfer Requirements—Manual Transfer Requirement Creation Allowed
If the Manual TR Creation Allowed checkbox is selected, then a transfer
requirement can be created manually when this movement type is used. For
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example, if movement type 801—goods receipt from production—must be used,
then a transfer requirement can be manually created for the movement type, providing this checkbox is selected.
Transfer Requirements—Transfer Priority
The transfer priority entered in the movement type determines which transfer
requirements are to be processed. The smaller the transfer priority value, the
higher the priority will be.
Control—Goods Receipt Data in Quant
Selecting the GR Data in Quant checkbox ensures that the goods receipt date and
number will be reset and automatically assigned in the quant as part of the transaction using this movement type.
Control—Manual Storage Bin Input
Select the Manual Storage Bin Input checkbox if you need to manually enter the
storage bins when this movement type is used. The checkbox tells the system to
ignore any strategy to automatically find a storage bin, so the storage bin can be
entered manually.
Control—Consider Preallocation Stock
If the Consider Pre-Alloc. Stock checkbox is select, the system checks to see if
the material is preallocated. This check occurs during the stock putaway procedure. If the stock is preallocated, the system displays a message informing the
user of the preallocation.
Control—Overdeliveries
Selecting the Overdeliveries checkbox forces the system to assign complete
quants to be removed during picking. If the checkbox is selected and whole
quants are removed, overdeliveries may occur even if the storage type does not
require removal of all stock from the bin.
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Control—Foreground/Background
The Foreground/Background field determines whether the system controls the
transaction in the background or foreground. If the checkbox is left blank, then
the system has control of the transaction. The other options include D for background processing and H for foreground processing.
Control—Handling Unit Picking Control
The HU Picking Control field defines what happens in the system during the
confirmation of a complete stock removal of the handling unit. You have three
options:
왘
1
On the confirmation screen, the issuing-handling unit is proposed as the destination storage unit during confirmation of the transfer order item and the handling-unit copy checkbox is selected.
왘
3
On the confirmation screen, the first pick handling unit assigned to the transfer
order is proposed as the destination storage unit. The HU Copy checkbox is not
selected.
왘
Blank
On the confirmation screen, the first pick handling unit assigned to the transfer
order is proposed as the destination storage unit, and the HU Copy checkbox is
selected.
Print Code
The Print Code field defines the print format of the transfer order, the sort
sequence, and the printer to be used. Each movement type can use a different
print code.
To define the print code, use Transaction OMLV or follow the menu path IMG 폷
Logistics Execution 폷 Activities 폷 Define Print Control 폷 Print Code.
Automatic Transfer Order
The Automatic TO field controls whether the system automatically creates a
transfer order in the background for a transfer requirement or a posting change
notice.
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Settings for this field are automatically proposed when a transfer requirement or
a posting change notice is created from the movement type. The transfer orders
are created by batch input using report RLAUTA10 for transfer requirements and
report RLAUTA11 for posting change notices.
To configure this field, use Transaction OMKZ or follow the menu path IMG 폷
Logistics Execution 폷 Activities 폷 Set Up Automatic TO Creation for TRs/Posting Change Notices.
Transfer Order Can Be Confirmed Immediately
The TO Item Can Be Confimd Immed. checkbox allows the transfer order to be
confirmed immediately during the transfer order creation process. The transfer
order is normally confirmed when the material is moved to the destination
storage bin. However, if the material is moved and the transfer order is created
afterward, this checkbox allows the transfer order to be completed immediately
during the creation process for this movement type.
Propose Confirmation
Select the Propose Confirmation checkbox when the confirmation is to be
allowed during the creation of the transfer order item. For example, when a
transfer order is being created, you can propose the confirmation; that is, enter
the confirmation information, but not actually confirm the transfer order.
Post to Same Bin
When the Post to Same Bin checkbox is selected for the movement type, the
posting change does not result in a transfer; instead, the material is relabeled in
the storage bin. Therefore, if the material is assigned as special stock—such as
consignment stock—a posting change can convert that material to unrestricted
stock. Instead of moving the material out of the bin and to a storage type for posting changes, this checkbox allows the posting change to occur in the storage bin
where the material is located.
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Reference Storage Type Search
The Ref. Stor. Type Search field refers to the movement type during the storage
type search. The movement type can influence the storage type search. For each
movement type you can set up certain storage types to be proposed. The necessary reference movement types must be set up for the movement types concerned. You must take these reference movement types into account in the
storage type search function.
4.1.4
Assigning Warehouse Management Movement Types
After each IM movement type has been assigned, you can establish a WM reference movement type, the link between the IM reference movement type and the
WM movement type.
A WM reference movement type doesn’t directly correlate with a WM movement
type. The limiting factor is the warehouse in which the movement takes place.
The combination of the warehouse number and the WM reference movement
type determines what WM movement type is assigned.
Therefore, WM reference movement type 101 may refer to WM movement type
101 in warehouse 100 but refer to WM movement type 103 in warehouse 200.
Figure 4.6 shows the warehouse number and reference movement type and the
corresponding warehouse movement type. For example, reference movement
type 503 in warehouse 104 corresponds to WM movement type 505 in Figure
4.6. The other fields on this screen are explained next.
왘
Warehouse number
This field (WNo) is the number of the warehouse where the reference movement type is relevant. Entering “***” in this column indicates that the reference
movement type is valid for all warehouses.
왘
Reference movement type
This field (Ref) is the reference movement type that links the IM movement
type to the WM movement type.
왘
Special stock
This field (SpStl) is the special stock indicator that allows the goods movement
transaction to process differently from normal stock. In this instance, it is referenced from the IM movement type to aid in the identification of the correct
WM movement type.
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Figure 4.6 Assign WM Movement Type Based on Warehouse
Number and WM Reference Movement Type
왘
Movement
This field (Mov) specifies what type of document is the basis for the IM goods
movement.
왘
Special stock type
This field (Sp) identifies what type of stock is being moved, for example,
project stock or consignment stock.
왘
Special movement
This field (SpM) separates special posting procedures for the Materials Management (MM) documents for the standard processing method. The system uses
this information to determine the WM movement type. Different movement
types in the warehouse can be assigned to one IM movement type.
왘
Storage location reference
Depending on the storage location, this field (Stor) influences the storage type
search within the transfer order as well as the interim storage type search in
the IM posting.
The storage location reference indicator is created in configuration via the
menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Interfaces 폷
Inventory Management 폷 Define Storage Location Control.
Figure 4.7 shows the storage location reference indicator being created for the
Z99 warehouse. The storage location reference field is two characters long.
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Figure 4.7 Creation of Storage Location Reference Indicator for Warehouse Z99
Continuing with the description of the fields in Figure 4.6, the next field after
Stor is the movement type.
왘
Movement type
Each movement that occurs in the warehouse requires a WM movement type,
which affects the creation of the transfer order.
왘
Creation and cancellation of transfer requirement
You use the TF indicator to create or cancel a transfer requirement.
왘
X
This entry means a transfer requirement will be created for the material
document item.
왘
1
With this entry, the system will try to cancel any existing transfer requirement.
왘
Creation of posting change notice
This field (Cre) specifies the creation of a posting change notice (PCN). A PCN
is created for each material document item.
왘
Create transfer order immediately
This field (Imm. TO) triggers the creation of a transfer order immediately when
the IM movement is processed. Two indicators can be used.
왘
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A
The system creates a transfer order automatically when a material document is posted in IM.
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왘
X
The system calls up the Create Transfer Order transaction when you post
an IM material document.
왘
Mail control
Created in the background, this field (Mail) controls who should be contacted
in case of errors.
왘
Delivery type
Depending on the delivery type (specified in the Del.Type field), the system
determines which screens to display and which data has to be entered.
To configure the delivery type, follow the menu path IMG 폷 Logistics Execution 폷
Shipping 폷 Deliveries 폷 Define Delivery Types.
This concludes our discussion of the movement types used in WM. Now we’ll
focus on transfer requirements.
4.2
Transfer Requirements
The WM movement type, described in Section 4.1, determines the movement of
the material into the warehouse. Once the material is in the warehouse, it can be
moved for a pick, putaway, or transfer. The movement consists of two elements:
왘
Transfer requirement
왘
Transfer order
The transfer requirement is the phase of planning to move material from one
warehouse location to another, and a transfer order is used to perform the move
and confirm the move when it is completed.
For WM movement types, the transfer requirement is used to translate the information from the IM goods movement to a planned movement in the warehouse,
based on the configuration of the WM movement type. The transfer requirement
is automatically created so that the material can be moved into the warehouse.
The transfer requirement comprises header information and several item lines of
material for the transfer requirement. The item line includes information such as:
왘
The material to be moved within the warehouse
왘
The quantity of material to be moved
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왘
The date when the material should be moved
왘
The transfer type that is the basis of the goods movement such as a putaway,
pick, or transfer
왘
A reason why the material has to be moved; for example, it is needed to fill a
production order or a purchase order
4.2.1
Automatic Transfer Requirements
An automatic transfer requirement is created when a transaction for a goods
movement is executed and the warehouse movement type is configured for automatic creation of a transfer requirement.
You can configure the automatic creation of a transfer requirement via the menu
path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Interfaces 폷 Inventory Management 폷 Define Movement Types.
Figure 4.8 shows the configuration screen for the WM movement types. When
defining the movement types, you can decide to configure the movement to automatically create a transfer requirement for the movement or to leave the creation
as a manual process.
Figure 4.8 Configuration of Manual Transfer Requirements
in WM Movement Type Screen
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4.2.2
Create a Manual Transfer Requirement
You may need to create a transfer requirement manually for a variety of reasons.
The most common include the need to perform a goods issue to a cost center—
often done when issuing materials to a salesman for samples—and for replenishment of material in the fixed bins.
A manual transfer requirement can be created using Transaction LB01, which you
can access via the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Warehouse
Management 폷 Transfer Requirement 폷 Create 폷 Without Reference.
Figure 4.9 shows the initial data entry screen for creating a transfer requirement.
The warehouse number and the movement type must be entered. However, if the
movement type does not allow manual entry of a transfer requirement, the system will display an error message at the bottom of the screen, stating that a
manual transfer requirement is not allowed and the creation of the transfer
requirement cannot proceed.
Figure 4.9 Initial Screen for Creating Manual Transfer Requirement
You can enter the transfer requirement header data on this screen. The header
data consists of the requirement type, requirement number, planned date, and
transfer priority.
Figure 4.10 shows the detail screen for the creation of a transfer requirement.
This screen shows the information that may have been entered on the header
screen.
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Figure 4.10 Multiple-Processing Screen for Creating Transfer Requirement
Let’s take a closer look at what’s involved in the creation of transfer requirements.
왘
Automatic transfer order
In addition to the header information, you can select the Automatic TO checkbox to allow an automatic transfer order. If this is selected, transfer orders are
created by batch input using report RLAUTA10.
왘
Special stock
The Special Stock field determines what type of stock is being moved, for
example, project stock or consignment stock. The second of the two special
stock fields is for the special stock number. This identifies the material. If the
material is a consignment stock, then the consignment vendor number is used
as the special stock number. If a special stock number is entered, then a special
stock indicator must be entered also.
왘
Unloading point
You can manually enter the unloading point in the Unload Point field. This
can be a dock or a location within the warehouse where the material is
unloaded. This field accepts a value up to 25 characters long.
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왘
Stock category
Use the warehouse stock category field (Stock Categ.) if the stock is returned
or blocked. Enter “Q” if the stock is in quality control, “R” if the stock has been
returned, or “S” if it is blocked stock.
왘
Ship-to point
Enter a ship-to point to indicate the person or location to which the material
ultimately will be shipped. The Ship-To Pt field accepts a value up to 12 characters long.
왘
Items
The line item in the transfer requirement requires the material number, quantity, unit of measure, and batch number if applicable. You can add several lines
to the transfer requirement. When finished, the document can be posted, and
the system will display the transfer requirement number assigned.
4.2.3
Create a Transfer Requirement for Replenishment of a Fixed Bin
You can use a transfer requirement to add material to the stock in fixed storage
bins. The system can automatically create transfer requirements for the required
quantities. However, this process can be done manually using Transaction LP21.
Instead of the system calculating the quantity necessary for replenishment, the
warehouse staff can manually determine the level required and create a transfer
requirement for this amount.
To ensure that a manual transfer requirement can be created to replenish the
fixed bins, the storage type must be configured with the correct movement type.
The transaction to configure the movement type for the storage type is located in
the IMG. Follow the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Activities 폷 Transfers 폷 Define Stock Transfers and Replenishment
Control.
Figure 4.11 shows the configuration required to allow replenishment by entering
the relevant movement type against the required warehouse/storage type combination. In this case, storage type 100 is defined as production supply bins that
contain material used in production orders. Movement type 319 is defined for
replenishment for production and needs to be assigned to areas, which means
storage type 100, which requires ongoing replenishment.
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Figure 4.11 Configuration of Replenishment Control for Storage Types
You can create a manual transfer requirement with Transaction LP21 to replenish
the bins in the storage type for production material. You can also follow the menu
path SAP 폷 Logistics 폷 Logistics Execution 폷 Warehouse Management 폷 Transfer
Requirement 폷 Create 폷 Replenishment for Fixed Bins.
To create the transfer requirement, the warehouse user must enter the plant, storage location, warehouse number, and storage type. Figure 4.12 shows these fields
filled in as well as fields such as the requirement type and requirement number,
transfer priority, and planned date and time. The planned date should always be
in the future. The unloading point was added in this example but is an optional
field.
The transaction references the material master records of those materials in the
storage type, unless specific storage bins or materials are entered. The material
information for replenishment is reviewed against the stock in the storage bins of
the storage type. If the stock levels are below the minimum stated in the material
master, then the system displays this information in the results screen.
The material master record can contain the replenishment data for the material at
the storage type level. Figure 4.13 shows the replenishment data in the material
master.
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Figure 4.12 Selection Screen for Creating Transfer Requirement
for Fixed Bin Replenishment: Transaction LP21
Figure 4.13 Replenishment Data in Warehouse Screen of
Material Master Record
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Minimum Bin Quantity
The Minimum Bin Quantity field specifies the minimum quantity that can be
stored in the bin location of this storage type. This field is used for calculating the
replenishment of material.
Replenishment Quantity
The Replenishment Qty field specifies the quantity of material to be replenished
in the storage bin. This replenishment quantity applies only to the storage type
for which it is entered. This value can be seen when the transfer requirement is
created for the material.
After you complete the selection screen for Transaction LP21, you can executed it
by pressing the (F8) function key.
Figure 4.14 shows the results for the fixed-bin replenishment for the storage type
100 production supply. The material shown, R-F101, shows a zero stock level and
a requirement quantity of 300. To see the detailed information on the fixed bin,
select Edit 폷 Choose Detail or press the (F2) function key.
Figure 4.14 Results Screen for Fixed Bin Replenishment: Transaction LP21
Figure 4.15 shows details of the material in the storage bin for which the replenishment transfer requirement has been created. The detailed information shows
the data from the material master record, as shown earlier in Figure 4.13. For this
storage type, the maximum material in a bin is 344, the minimum quantity
allowed is 1, and the replenishment quantity is 50.
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Figure 4.15 Detailed Information on Fixed Bin Selected for Replenishment
4.2.4
Display a Transfer Requirement for a Material
Several transactions can be used to display a transfer requirement. The open
transfer requirement shown in Figure 4.15 is for material R-F101. You can find
this transfer requirement by using the system to display a transfer requirement
for a material via Transaction LB11 or the menu path SAP 폷 Logistics 폷 Logistics
Execution 폷 Warehouse Management 폷 Transfer Requirement 폷 Display 폷 For
Material.
Figure 4.16 shows the selection screen for Transaction LB11. The material and the
warehouse number are required, but the other fields are optional. Most of the
options on this screen have been described previously in this chapter.
Shipment Type
The shipment type is the type of movement required in the transfer requirement.
The movement can be stock placement, stock removal, posting change, or warehouse supervision.
Processing Complete
If the Processing Complete field is filled in, then the list that is produced will
include transfer requirements that have been completed. If the checkbox is left
blank, completed transfer requirements will not be included.
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Figure 4.16 Initial Screen for Displaying Transfer Requirement for Material:
Transaction LB11
Choosing to see all of the transfer requirements for a material enables the system
to give a complete picture of material requirements.
Figure 4.17 shows that for the material and warehouse entered there is only one
relevant transfer requirement. This is the transfer requirement that was created as
an example earlier in this chapter for the replenishment of a fixed bin.
Figure 4.17 Results Screen Displaying Transfer Requirements for Material:
Transaction LB11
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You can view the transfer requirement by double-clicking the item line you want
to review. The system processes through to Transaction LB03 to display the transfer requirement.
Figure 4.18 shows the transfer requirement for the fixed bin replenishment. The
transfer requirement shows that the checkboxes Processed and Deletion Flag
are both blank, so the transfer requirement has not been completely processed,
and the line item has not been deleted.
Figure 4.18 Display of Transfer Requirement for Line Item:
Transaction LB03
You can display the processing status of the transfer requirement by clicking the
Processing Status button, pressing (Shift)+(F5), or selecting Goto 폷 Processing
Status.
Figure 4.19 shows the processing status of the transfer requirement. The processing status screen shows that a transfer order has not been created for the transfer
requirement. This is clear because the TO Quantity field is zero and the Number
of TO Items field is also zero.
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Figure 4.19 Processing Status of a Transfer Requirement
in Display Transfer Requirement: Transaction LB03
4.2.5
Display a Transfer Requirement for a Single Item
Transaction LB03 can be used to display a transfer requirement for a single line
item. Alternatively, follow the menu path SAP 폷 Logistics 폷 Logistics Execution 폷
Warehouse Management 폷 Transfer Requirement 폷 Display 폷 Single.
Figure 4.20 shows the initial screen for Transaction LB03. The warehouse number and transfer requirement number must be entered. The system proposes the
transfer requirement number if it is not entered. The detail screen for LB03 was
shown earlier in Figure 4.18.
Figure 4.20 Initial Screen for Displaying a Transfer Requirement: Transaction LB03
4.2.6
Display a Transfer Requirement for a Storage Type
You can use Transaction LB10 to display a transfer requirement for a storage type,
or follow the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Warehouse Management 폷 Transfer Requirement 폷 Display 폷 For Storage Type.
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Figure 4.21 shows the initial screen for the display of transfer requirements for
storage types. You can choose to show the transfer requirements for the source or
destination storage types. In Figure 4.21, the destination storage type has been
entered (Dest. Storage Type), and the resulting transfer requirements will only be
relevant for that storage type.
Figure 4.21 Initial Screen for Displaying Transfer Requirements
by Storage Type: Transaction LB10
The status of movement section in Figure 4.21 indicates that the selection can be
made for combinations of open, partially delivered, or completed transfer
requirements.
Figure 4.22 shows the following transfer requirements that have been found for
the destination storage type selected in Figure 4.21:
왘
HS: Header status of transfer requirement
This is automatically derived from the system and refers to the amount of the
transfer requirement already processed by transfer orders.
왘
PR: Transfer priority
The lower the number, the higher the priority. The transfer requirements are
processed by this priority list.
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왘
S: Shipment type
This classifies the movement types in the warehouse. The options are A for
stock removal, U for posting change, and E for stock placement.
왘
R: Requirement type
This refers to the origin type, for example, a goods receipt for a purchase order.
The options include A for an asset, B for a purchase order, D for a storage bin,
K for a cost center, L for a sales document, and V for a sales order.
Figure 4.22 Display of Transfer Requirements for Selected Storage Type: Transaction LB10
From this report, a transfer requirement can be selected and processed to create
a transfer order. This report can perform this process either in the background or
in the foreground.
To create a transfer order from the selected transfer requirement in the foreground, click the checkbox on the line you require, and select Environment 폷 TO
in Foreground, or press (Ctrl)+(Shift)+(F8).
Depending on processing time and the size of the transfer requirement, you can
create a transfer order from the transfer requirement in the background by clicking the button on the screen, selecting Environment 폷 TO in Background, or
pressing (Ctrl)+(Shift)+(F9).
4.2.7
Deleting a Transfer Requirement
You may find that the transfer requirement was created unnecessarily or with an
error in the entry of the storage type. If the transfer requirement is not needed
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and you need to delete it, use Transaction LB02, which you can find by following
the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Warehouse Management 폷
Transfer Requirement 폷 Change.
The data required to change a transfer requirement is the warehouse, transfer
requirement number, and item number, as shown in Figure 4.23.
Figure 4.23 Initial Screen for Changing a Transfer Requirement: Transaction LB02
Figure 4.24 shows the line item for the transfer requirement with the deletion
flag selected. This signals that the line item will be deleted when this transfer
requirement transaction has been saved.
Figure 4.24 Transfer Requirement Line Item with Deletion Flag Selected: Transaction LB02
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Now that we have discussed the processes surrounding transfer requirements,
the next section will follow up with a discussion of transfer order functionality.
4.3
Transfer Orders
As we mentioned in Section 4.2 when describing a transfer requirement, a transfer order is used to perform a move and confirm a move when it is completed. A
transfer order can be created with reference to a source document either from
warehouse management or from another SAP functionality, such as MM. A
source document can be a transfer requirement, delivery document, material document, or a posting change notice (PCN).
The transfer order contains the information required to move materials into the
warehouse, out of the warehouse, or from one storage bin to another within the
warehouse.
The transfer order can also perform logical movements in the warehouse. This
includes movements from a blocked status to an unrestricted status or from quality control status to blocked. These movements are considered to be posting
changes and are executed with a transfer order.
The transfer order comprises a header and several item lines. The header contains
the transfer order number and the dates of creation and confirmation. If the
transfer order has been created with reference to a transfer requirement, then the
transfer requirement number is shown in the header. If the transfer order is created with reference to a delivery, then the delivery number is shown on the
header.
A transfer order can have a single or multiple line items. The transfer order is a
document that tells where the material is coming from and where it is going.
Therefore, each line item is an individual movement of a certain quantity of material from a source storage bin to a destination storage bin. The number of line
items depends on how many destination storage bins are required for the total
quantity of material.
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4.3.1
Creating a Transfer Order with Reference to a
Transfer Requirement
Many of the transfer orders created in the warehouse result from transfer
requirements. The transfer requirement is created as a plan of what needs to be
moved and when. Transfer requirements can be converted into transfer orders
for the movement of the material to be completed.
The transaction to create a transfer order from a transfer requirement is Transaction LT04, which you access via the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Warehouse Management 폷 Transfer Order 폷 Create 폷 For Transfer
Requirement.
Figure 4.25 shows the initial screen of Transaction LT04, where the transfer
requirement number and the item number are entered as the reference document
for creating a new transfer order.
Figure 4.25 Initial Screen for Creating a Transfer Order with
Reference to a Transfer Requirement: Transaction LT04
The Group field in Figure 4.25 refers to a user-defined group number that can be
used to label certain related WM documents for easy retrieval at a later date. For
example, if the documents all relate to a certain sales order, the sales order number of customer number may be used as a group number for the warehouse documents so they are easy to retrieve.
Select the Activate Item checkbox when it is necessary to select the line items in
the transfer order and enter them into the active work list. If the checkbox is not
selected, the items are not activated.
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The Foreground/Background field specifies which type of processing is used for
transfer order creation. The process can be either in the foreground, where the
processing can be seen, in the background, where it processes like a batch job, or
driven by the system.
The Close TR checkbox determines the processing that should occur with the
transfer requirement referenced in Transaction LT04 to create the transfer order.
If the checkbox is selected, the transfer requirement is closed when the transfer
order is processed. However, if the checkbox is not selected, the transfer requirement is not closed if the transfer order did not totally complete the transfer specified by the transfer requirement.
Example
If the transfer requirement shows a quantity of 10, and the transfer order is processed
with a quantity of 8, then the remaining quantity of 2 will remain open on the transfer
requirement, and a manual process will be required to complete the transfer requirement. This will not occur if the Close TR checkbox is selected, because the transfer
requirement will be closed.
After the transfer requirement details are entered into the initial screen, the detail
screen is displayed as shown in Figure 4.26. This screen shows the item information for the material to be moved.
Figure 4.26 shows the details transferred from the transfer requirement, such as
the movement type, plant, storage location, and destination storage type and
storage bin.
The storage type search shows the storage types that will be used to find material
to supply the production fixed bin, PROD-1320, for this transfer requirement.
Initially, the line items are blank. When the system searches the storage types
listed in the storage type search, the material from the source bins are noted on
the line items with the quantity they are supplying for the transfer requirement.
To create the line items for the movement of a quantity defined in the transfer
requirement, the transaction reviews the bins in the storage type search and proposes several line items for the total quantity defined by the transfer requirement.
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Figure 4.26 Detail Screen for Creating a Transfer Order from a
Transfer Requirement: Transaction LT04
You can choose to have this performed in either the foreground or background.
The reason to perform this in the background is that it allows the user to continue
with other work. If the transfer requirement has a large quantity, the process to
create the number of line items on the transfer order may take some time.
To perform the process in the foreground, select Edit 폷 Remove from Stock 폷
Foreground or press the (F5) function key.
Figure 4.27 shows the first proposed movement of material from the source storage bin to the destination storage bin. This is based on the storage type search of
storage types 001 and 002, which was proposed in Figure 4.26.
In this screen the requested quantity is copied from the transfer requirement,
along with the material number, plant, storage location, and storage unit type.
The certificate number can refer to a document that relates specifically to the
quant whose movement is being proposed. This document can be a certificate of
origin or an identification document, for example.
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Figure 4.27 Generating Line Items for a Transfer Order with
Reference to a Transfer Requirement: Transaction LT04
The Confirm checkbox allows the line item to be confirmed as soon as it is created. If the checkbox is selected, then the confirmation will occur immediately.
This may occur if the transfer order is being created after the movement has taken
place.
The Printer field is used if the transfer order line item is to be printed as used as
a picking slip. The printer number should reflect the printer used for printing
warehouse documents such as picking slips.
The GR Date field shows the goods receipt date of the movement of material. This
defaults to the current date but can be amended if the movement has already
occurred when the transfer order is created. The TO Item field is for the line item
numbering for the transfer order.
The movement data section shown in Figure 4.27 shows the source and destination storage information. The data shows the storage type, storage section, storage bin, quantity of the quant, unit of measure, storage unit (if applicable), and
quant number.
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In addition to entering information for the source and destination locations, you
can use another section to enter information for the return of any materials. If
any surplus material cannot be returned to the original storage bin, then it can be
returned to this storage destination, as defined in the Backsp fields.
You fill in the Goods Recipient field if you know the person or area that is receiving the material. The Gross Weight field shows the gross weight of the material
for this specific line item of the transfer order. This is important for warehouse
staff because the weight of the quant may require special equipment or exceed
the recommended load of a forklift or storage bin.
Figure 4.28 shows the transfer order with five line items from the total quantity
in the transfer requirement that have been proposed for movement from the
source locations to the single destination fixed bin.
Figure 4.28 Display of Transfer Order Line Items Showing
Source Storage Type and Storage Bins
The total amount of source quantity from the line items equals the required
amount from the transfer requirement. After the line items have been reviewed,
posting the transaction creates the transfer order. The warehouse user can
achieve this by selecting Transfer Order 폷 Posting or pressing (Ctrl)+(S). After
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the posting has been completed, the system displays the transfer order number
on the screen.
4.3.2
Creating a Transfer Order Without a Reference
The warehouse staff can create a transfer order manually without reference to a
transfer request, delivery, and so on. This may be required if an error has been
made or if the warehouse needs to move inventory quickly. The movement type
that is used must be configured to allow creation of a manual transfer order.
The configuration to allow a manual transfer order is on the movement type configuration for a particular warehouse. Therefore, a manual transfer order for a
movement type may not be allowed in other warehouses.
To access the configuration, follow the menu path IMG 폷 Logistics Execution 폷
Warehouse Management 폷 Activities 폷 Transfers 폷 Define Movement Types.
Select the warehouse/movement type combination that is required, and then
select Goto 폷 Details, or press (Ctrl)+(Shift)+(F2).
In Figure 4.29, in the Transfer Requirements area, the configuration for movement type 309 in warehouse 001 shows that manual transfer orders are not
allowed. Transfer orders can only be created with reference if this checkbox is not
set.
If the checkbox is not checked and a manual transfer order can be created, you
can use Transaction LT01, which you can find by following the menu path SAP 폷
Logistics 폷 Logistics Execution 폷 Warehouse Management 폷 Transfer Order 폷
Create 폷 Without Reference.
Figure 4.30 shows the initial screen for creating a manual transfer order. The
warehouse number, movement type, material number, plant, storage location,
and quantity of material to be moved should be entered.
You can include other information, such as stock category if the stock to be
moved is blocked, or use a special stock indicator if the material is project stock or
consignment.
You can enter a batch number for the stock to be moved if the material is batch
managed and if a certain batch has been identified for movement. The control
option can allow foreground, background, or system-controlled processing.
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Figure 4.29 Configuration for Manual Transfer Orders per
Warehouse/Movement Type Combination
Figure 4.30 Initial Screen to Create Transfer Order Without Reference: Transaction LT01
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Figure 4.31 shows the source storage type, storage section, and storage bin.
When these are entered, the system automatically assigns the quant. The same is
true when the destination location is entered. The system also calculates the gross
weight of the material to be moved.
Figure 4.31 Entry Screen for Data to Create a Manual
Transfer Order: Transaction LT01
When the items are complete, you can save the transfer order. After the posting
has been completed, the system displays the transfer order number on the screen.
4.3.3
Cancel a Transfer Order
After a transfer order has been created, you might need to cancel it if the material
is not to be moved or is to be moved via a different movement type. You can
cancel a transfer order by using Transaction LT15 or via the menu path SAP 폷
Logistics 폷 Logistics Execution 폷 Warehouse Management 폷 Transfer Order 폷
Cancel 폷 Transfer Order.
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Figure 4.32 shows the initial screen for canceling a transfer order. It requires
entry of the warehouse number and the transfer order number/item number. The
screen also allows the entry of a delivery number if applicable.
Figure 4.32 Initial Screen for Cancelling a Transfer Order: Transaction LT15
Figure 4.33 shows the line item of the transfer order to be cancelled. The transfer
order is cancelled when the transaction is posted. When the processing is complete, the system returns a message confirming cancellation.
Figure 4.33 Detail Screen Showing Line Items to be Cancelled: Transaction LT15
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4.3.4
Confirm a Transfer Order
When a transfer order is created, the system can confirm when the movement of
the material has been completed. However, a transfer order can be confirmed at
any time, allowing the material to be picked even though the material has not
been physically moved. This is useful for warehouse operations when a material
has arrived from a vendor in response to a purchase order and needs to be used
in production before putaway in the warehouse. You can use three transactions to
confirm a transfer order:
왘
LT11
Confirm a single item on a transfer order
왘
LT12
Confirm the transfer order
왘
LT13
Confirm by storage unit
Now we will review the confirmation of the complete transfer order using Transaction LT12, which you can find by following the menu path SAP 폷 Logistics 폷
Logistics Execution 폷 Warehouse Management 폷 Transfer Order 폷 Confirm 폷
Transfer Order.
Figure 4.34 shows the selection screen for transfer order confirmation. The selection for the transaction can include more than the just the warehouse number
and transfer order.
Open TO Items
Selecting this checkbox allows only open transfer order line items to be displayed; that is, line items that are not confirmed. This is useful when a transfer
order has many line items. If all line items are to be displayed whether they are
open or confirmed, then the checkbox should be unselected.
Subsystem Items
This checkbox refers to any external warehouse management system that is processing some element of the warehouse process. For example, the transfer order
may be passed to an external system that controls a warehouse carousel system
outside the SAP system.
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Figure 4.34 Initial Screen for Confirming a Transfer Order: Transaction LT12
If this checkbox is selected, then the display will show transfer orders that have
been passed to the external system, and these can be reprocessed. Normally,
when items are passed to an external system they are not processed further in the
SAP system. However, this depends on the interfaces between the SAP system
and the external system. Check with your data integrity team to confirm this.
Adopt Pick Quantity
This field determines the link between the picked quantity and the quantity
posted. Five options are available:
왘
1
Include picking quantity in delivery
왘
2
Include picking quantity in delivery and post goods issue
왘
3
Do not include picking quantity in delivery
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왘
4
Do not take pick quantity as the delivery quantity but post goods receipt
왘
Blank
Allow control through the movement type
The relationship between the pick quantity and the delivery quantity is more relevant in options 1 and 2. If the pick quantity is lower than the delivery quantity,
the pick quantity overwrites the delivery quantity, and it is the pick quantity that
gets posted.
Adopt Putaway Quantity
This field functions like the Adopt Pick Quantity field, except that this field
relates to the putaway quantity and not the pick quantity. There are five options
for this field as well:
왘
1
Stock placement quantity adopted into delivery as delivery quantity
왘
2
Copy stock placement quantity as delivery quantity and post goods issue
왘
3
Stock placement quantity is not adopted into delivery as delivery quantity
왘
4
Do not take putaway quantity as delivery quantity but post goods receipt
왘
Blank
Allow control through the movement type.
This field is used for the inbound delivery of material. Use option 1 or 2 if the
delivery for the transfer order is complete, even if the quantity for putaway is less
than the delivery expected. If more deliveries are expected for the transfer order,
then the fourth option is most relevant.
Pick and Transfer
Select this radio button if the confirmation is required in one step for withdrawal
of the material from the source storage bin and arrival of the material at the destination storage bin.
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Pick
Select this radio button if you only need to confirm withdrawal of the material
from the source storage bin for the transfer order items. When the material
arrives at the destination storage bin, a second confirmation step will be required.
Transfer
Select this radio button if you only need to confirm the arrival of the material at
the destination storage bin for the transfer order items.
Figure 4.35 shows the line item detail for the transfer order to be confirmed. The
option to pick before confirmation is applicable when storage units are used for
the material. This will be described in Chapter 11.
Figure 4.35 Detail Line Item Screen for Transfer Order
Confirmation: Transaction LT12
Enter Actual Data
Instead of accepting the values proposed by the transfer order, you can enter the
actual values, and a difference in quantities may arise. For example, the amount
of material in the source storage bin may be less than the amount documented on
the transfer order, or the amount counted into the destination bin may be more
than expected.
To enter the actual quantities, click the Input List button shown in Figure 4.34.
This displays a list of the actual data to be entered.
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Figure 4.36 shows that the quantities for line items 1 and 2 have been entered as
actual quantities that have produced a difference between the actual quantity and
the quantity in the transfer order. The transfer order states that for item 1, the
quantity to be received in the destination storage bin is 3, but an actual quantity
of 4 has been entered.
Figure 4.36 Active Worklist Allowing Actual Quantities for
Transfer Order Confirmation: Transaction LT12
This has caused the destination difference quantity field (Dest. Diff. Qty) to show
a quantity of 1, which is the amount of the overage. Similarly, line item 2 was
expected to show a quantity of 1, and a quantity of 3 was placed in the destination storage bin, causing a difference of 2. Posting the confirmation of the transfer order with actual data will cause a difference to be entered.
Figure 4.37 shows every difference between the transfer order quantity and the
actual quantity entered into the transfer order confirmation screen. For each line
item where there is a difference in quantities, a dialog box is displayed so that the
user confirming the transfer order can confirm each stock difference. The differences are logically stored in storage type 999, and the storage bin is named the
same as the transfer order where the differences occurred.
Once all the differences are confirmed, the transfer order is completed, and a
message is displayed with the information that the transfer order is confirmed.
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Figure 4.37 Confirmation of Quantity Differences Between Transfer
Order Quantity and Actual Entered Quantity: Transaction LT12
4.3.5
Print a Transfer Order
The transfer order can be printed and used as a picking or putaway document for
the warehouse staff. The transfer order is often printed so that each line item is a
separate document, making it easier to manage.
The transfer order can be printed using Transaction LT31 and can be accessed via
the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Warehouse Management 폷
Transfer Order 폷 Print 폷 Transfer Order.
Figure 4.38 shows the initial selection screen for the transfer order print transaction. The screen allows a single line item to be entered so the document contains
just one movement.
Print Code
The print code is a two-character field that determines the printed layout of the
transfer order. The print code is configured so that it is determined by warehouse. Therefore, a print code may be assigned for one warehouse only. One
practical reason for this is that each warehouse needs different information
printed out, such as instructions, addresses, or language.
The print code can be configured in Transaction OMLV and accessed through the
menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Activities 폷
Define Print Control.
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Figure 4.38 Selection Screen for Transfer Order Printing: Transaction LT31
Figure 4.39 shows the configuration of the print codes for the warehouse. The
print code relates to a form layout that is assigned to a warehouse. If a custom layout for a form is designed, this transaction is where you assign the form to a warehouse with a new print code. The print code can then be used in the transfer
order print transaction.
Figure 4.39 Configuration of Print Control for Transfer Order Printing: Transaction OMLV
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Printer
Figure 4.38 shows the printer designation that has been entered as the location
where the transfer order should be printed. The technical department should
help if you have any issues with the locations of printers in the warehouse.
Spool Control Data
The spool code is defined in the same transaction as the print code: Transaction
OMLV. It is a code that defines several parameters involved in printing documents. This print code is defined for each warehouse, and the configuration
includes the number of copies, the delete after print checkbox, the print immediately checkbox, the new spool request checkbox, and so on.
Figure 4.40 shows the spool code configuration for each warehouse. Each spool
code defines a set of parameters, which determine how the transfer order is
printed along with the parameters in the print code.
Figure 4.40 Configuration of Spool Control for Transfer Order
Printing: Transaction OMLV
Document Selection
You can select the document to be printed from the options on the initial screen:
transfer order, storage unit documents, labels, and so on. To print the document,
select Transfer Order 폷 Print or press (Ctrl)+(P).
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Now that we have examined the transfer order functionality, we’ll summarize the
information contained in this chapter.
4.4
Business Examples—Warehouse Movements
Material is moved into the warehouse, around the warehouse, and ultimately out
of the warehouse. Two different types of movements are relevant for the warehouse. These are warehouse movements triggered by other SAP functionalities,
such as IM, and warehouse movements internal to the warehouse, such as bin-tobin transfers or posting changes.
4.4.1
Warehouse Movements
In the warehouse there are movements of materials that relate either to a movement in the IM system, for example, a goods receipt or a goods issue, or to an
internal warehouse movement that has no corresponding movement in IM. All of
the movements that affect the warehouse need to be defined to ensure efficient
warehouse operation.
Example
Some SAP customers use the IM functionality but interface to their existing warehouse management system (WMS). For whatever reason they choose to implement this method there are sometimes issues with the two systems getting out of
sync. A manufacturer of generic pharmaceutical products implemented an SAP
system across its enterprise but kept a highly customized legacy WMS in several
of its locations. The WMS had provided the company with significant gains in
productivity and was deemed to be too valuable to be replaced. The interface
between the SAP system and the WMS was not complex but did not offer realtime processing. The interface was designed so that the WMS received information from the SAP system about the material and quality to be picked for an
outbound delivery and similar information for an inbound movement into the
warehouse. Because the SAP system did not have any information about the
structure of the warehouse, the WMS did not receive any information about
where to place or pick inventory.
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The WMS independently created the movements in the warehouse based on the
information that was received from the SAP system. This meant that the WMS
processed individual movements in isolation, so that the warehouse staff would
complete one movement and then return to the office to pick up the information
about their next movement.
The management soon saw that this disconnect between the two systems was significantly reducing efficiencies in the warehouse. Before the SAP system was
implemented, the warehouse completed over 100 movements per hour, but since
the implementation, the number of movements had fallen to below 40.
The management decided to perform a pilot SAP WM project in one warehouse
to gauge whether a full SAP WM implementation was required. After a month of
developing the warehouse functionality in the SAP system, the trial began. Immediately, the warehouse started to outperform the legacy warehouses, as the warehouse staff had the ability to review the movements required in the warehouse
and allocate them to operators, so travel time was reduced. After six weeks of the
pilot project, the warehouse that was using SAP WM was operating at over 150
movements per hour, in spite of the steep learning curve for warehouse managers
and operators. The pilot project ran for three months, and at the end of that
period, warehouse movements exceeded more than 200 per hour. Over the next
year the legacy WMS was replaced in the remaining warehouses.
4.4.2
Transfer Requirements
The transfer requirement is the phase of planning to move material from one
warehouse location to another. When an IM movement is performed for an item
located in a warehouse, a transfer requirement is generated to inform the warehouse that a corresponding movement is required in the warehouse.
Example
Occasionally, an SAP customer believes that SAP WM will be difficult to implement and that they need to automate the processes as much as possible to make
it simple for users. One chemical company in Alabama believed that to have a successful, and fast, implementation they needed to ensure that every inventory
movement would automatically generate a transfer requirement, automatically
generate a transfer order, and then immediately confirm that transfer order. They
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assumed that by doing this the warehouse could organize itself based on the confirmed transfer order.
Ignoring advice from its consulting partner, the company implemented the process so that each inbound goods receipt would automatically generate a transfer
requirement, then a transfer order, and then confirm the transfer order. The
material would immediately show as confirmed in a storage bin, even though the
product was likely still sitting on the receiving dock waiting for a warehouse
operator to move it.
As the warehouse staff was used to a legacy warehouse system that was inaccurate, they were used to spending time looking for product that was not in the
location suggested by the computer. After the SAP implementation, nothing
much changed for the warehouse staff; they spent much of the shift finding and
moving items that were confirmed in the SAP system but still located elsewhere.
Often the warehouse operators would find that the storage bin where they were
trying to place stock was already occupied by material waiting to be moved, as it
was confirmed elsewhere. The warehouse manager spent more time moving
material in the SAP system to empty bins, because movements were being performed out of sequence.
The issue came to a head after the first month end after the SAP implementation
when a physical count of the warehouse found that accuracy had fallen below
60%, compared with 71% with the old system.
The company realized that it had made some rash decisions about how the warehouse processes should have been developed, and they asked their consulting
partner for assistance. This time the processes were developed so that each movement was reviewed to see if a transfer order should be automatically created or
whether the transfer requirement should be reviewed by warehouse staff and
then a transfer order manually created. After each movement was analyzed and
reconfigured, a reimplementation of the warehouse was performed. After a few
weeks, some adjustments were made to the processes and configuration to make
the warehouse operations more efficient.
4.4.3
Transfer Orders
A transfer order can be created with reference to a source document such as a
transfer requirement, delivery document, material document, or posting change
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notice (PCN). The transfer order contains the information required to perform the
movement of materials into the warehouse, out of the warehouse, or from one
storage bin to another storage bin within the warehouse.
Example
A manufacturer of automotive spare parts in Canada had acquired a smaller company in Detroit that was producing parts solely for a foreign car manufacturer
who had several production sites in North America. The acquired company had a
small warehouse facility, as most of its product was shipped out soon after being
produced. The Canadian company had been using a leased warehouse in Michigan for parts that were shipped to customers in the United States but decided to
move their stored parts to the warehouse of the company they had just purchased
in Detroit.
The Canadian company rolled out their SAP system to the new company, and this
included WM functionality. At the same time, the contract with leased warehouse
expired, and the parts began arriving at the Detroit warehouse.
The Detroit warehouse was operating without major issues when the parts from
the leased warehouse started arriving. Almost immediately the warehouse staff
found that the parts that were arriving often would not fit in the bins that were
noted on the transfer order. The operator would then take the items to an overflow storage area, note this on the paperwork, and return it to the warehouse
office. The data entry clerk would change the storage bin on the transfer order
and hand the amended document back to the operator. The item was picked up
from the overflow area and moved to the new storage bin.
The issue arose because the bins were designed for the parts manufactured at the
site, and the new company had parts that were significantly larger and would not
fit in the existing bins. The result was that almost 40% of the transfer orders
needed to be amended. When the warehouse was busy, the operators would
place the items close to the bin noted on the transfer order and then confirm it.
Additional transfer orders were then required to move the material to a suitable
storage bin.
After almost a month of drowning in transfer orders, the company redesigned
one area of the warehouse so that larger items could be accommodated. The number of transfer orders that could not be confirmed on putaway fell to almost zero.
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However, another warehouse layout change was required six weeks later when
the last of the items arrived from the leased warehouse.
4.5
Summary
Movements of material in the warehouse are of the utmost importance in making
the warehouse work efficiently. IM passes information to the WM system about
the movements of material in and out of the warehouse and how those movements should be addressed in WM.
Movements inside the warehouse determine where that material goes, how it
gets there, how it is stored, and how it is retrieved. The transfer requirement and
the transfer order are the two documents that move material inside the warehouse. Therefore, you need to know how the processes of each work individually
and in combination.
This chapter explained the basic functionality of the transfer requirement and
transfer order. The best way to learn more about how these processes work and
how they are used in your particular industry is to practice in your sandbox
development space with test data. Develop test plans and go through different
scenarios with different materials to understand more about these important processes.
In Chapter 5, we will discuss the goods receipt process in more detail and show
you how these movements are dealt with in the warehouse.
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The warehouse receives material, and most of the material is received into
SAP IM, which creates a transfer requirement and then a transfer order
in SAP WM. It is important to ensure that the material is moved into the
warehouse stock correctly.
5
Goods Receipts
In warehouse management, a goods receipt is the movement of material into the
warehouse from an external source, which could be a production system, a vendor, and so on. The warehouse management functionality checks the goods
receipt for accuracy and then processes it, moving the material into the warehouse and increasing the stock levels of the material received. A goods receipt
into the warehouse is triggered by one of two documents, which can be either:
왘
A transfer requirement from inventory management or production
왘
An inbound delivery if handling unit management or an external system is
used
Now that we have introduced the concept of goods receipts, we can go on to discuss the goods receipt process with inbound deliveries in detail.
5.1
Goods Receipt with Inbound Delivery
An inbound delivery is a document containing all the data required for creating
and completing the inbound delivery process. This process starts on receipt of the
material at the receiving dock and ends with the putaway of the material in a storage bin in the warehouse.
This section will review goods receipts with inbound deliveries, so we will start
with an overview of the process.
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5.1.1
Inbound Delivery Overview
An inbound delivery can be created with reference to several processes:
왘
Purchase order
왘
Stock transport order
왘
Customer return
There are many reasons to create inbound deliveries. The most useful one is that
you can perform some processes in the SAP system before the material arrives
and a goods receipt is posted. The vendor can send information about the
inbound delivery, which informs the warehouse of the items being sent, the
information they contain, and the precise date and time of delivery.
5.1.2
Creating an Inbound Delivery
You can create an inbound delivery using the information from a vendor regarding a single purchase order for which it is supplying the material. The transaction
to create a manual inbound delivery is Transaction VL31N, which you can find by
following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Inbound Delivery 폷 Inbound Delivery 폷 Create 폷 Single Documents.
Figure 5.1 shows the initial screen for creating a manual inbound delivery. The
vendor number and the purchase order number are required fields. Let’s discuss
them here:
왘
Delivery date
The delivery date is the date the vendor has given for delivery of the material.
This is not necessarily the date stipulated in the purchase order to the vendor.
왘
External ID
This is the identification that the vendor has assigned to this delivery. It may be
the vendor’s outbound delivery number or any identification that it requires.
This field can be up to 35 characters long.
왘
Means of Trans.
The means of transport is the packaging material type. It can be configured
using Transaction VHAR or by following the menu path IMG 폷 Logistics Execution 폷 Shipping 폷 Packing 폷 Define Packaging Material Type. The packaging
material type defines how the materials are shipped.
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왘
Means of transport ID
The field to the right of the Means of Trans. field is the identification field,
where you can enter a reference. For example, if the means of transport is a
truck, then the means of transport ID may be the license plate of the truck or
the trailer number or the vehicle VIN number. Up to 20 characters can be
entered into this field.
Figure 5.1 Initial Screen for Manually Creating an Inbound Delivery: Transaction VL31N
Figure 5.2 Item Overview Screen for Creating an Inbound Delivery: Transaction VL31N
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Figure 5.2 shows the item overview for the inbound delivery being created. The
delivery quantity and the item number have been entered, with the purchase
order entered in the reference document field. The delivery item category field
has been filled with ELN, which is used for inbound deliveries. The system proposes this value, but you can change it. The value determines how the line item is
processed.
From this screen, the inbound delivery can be processed and an inbound delivery
number is returned to the screen after posting.
5.1.3
Creating a Transfer Order for an Inbound Delivery
Once the inbound delivery has been created, the transfer order is created with
reference to the inbound delivery document. Use Transaction LT0F to create a
transfer order for an inbound delivery. You can find the transaction by following
the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Inbound Process 폷 Goods
Receipt for Inbound Delivery 폷 Putaway 폷 Create Transfer Order 폷 For Inbound
Delivery.
Figure 5.3 Initial Screen for Creating a Transfer Order for Inbound Delivery: Transaction LT0F
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Figure 5.3 shows the initial screen of Transaction LT0F, which shows the selections you can make to aid the creation of a transfer order. You must have the
warehouse number and the inbound delivery when creating the transfer order.
The other selection fields shown in Figure 5.3 are optional.
5.1.4
Using the Inbound Delivery Monitor
If you do not know the inbound delivery when using Transaction LT0F, you can
use the Inbound Delivery Monitor to display open and completed deliveries. You
also can use the monitor to process inbound and outbound deliveries.
Figure 5.3 also shows that you can access the Inbound Delivery Monitor through
Transaction LT0F by clicking the Delivery Monitor Inb. Deliveries button on the
initial screen. Otherwise, execute the Inbound Delivery Monitor via Transaction
VL06I or by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷
Information System 폷 Goods Receipt 폷 Inbound Delivery Lists 폷 Inbound Delivery Monitor.
In Figure 5.4, the monitor offers several options. In this section, we are creating
transfer orders based on goods receipts. Therefore, you should select For Goods
Receipt on the monitor.
Figure 5.4 Initial Selection Screen for Inbound Delivery Monitor: Transaction VL06I
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Figure 5.5 shows the selection fields that can be filled in to search for particular
inbound deliveries based on the following search criteria. These are:
왘
PO Data
A range for the purchase order and purchase order item
왘
Time Data
The delivery date entered into the inbound delivery document
왘
Putaway Data
The storage location and warehouse number
Figure 5.5 Inbound Delivery Monitor for Goods Receipts Selection Screen
The other two radio buttons in this area refer to warehouse checks at the header
or item level.
If the Check at Header Level radio button is selected, then the system will only
find inbound deliveries that have warehouse numbers in the header that meet the
selection criteria.
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If the Check at Item Level radio button is selected, then all deliveries that include
at least one item that meets the warehouse number criteria are selected. Let’s take
a look at these criteria:
왘
Partner Data
The vendor number or a range of vendor numbers of the required inbound
deliveries
왘
Doc. Data
The inbound delivery number and the external delivery number
왘
Material Data
The UPC code or the vendor material number, if these are known
Once all the search criteria have been entered into the search, you can execute the
transaction by choosing Program 폷 Execute or by pressing the (F8) function key.
After the data is entered into the selection criteria, the resulting inbound deliveries, shown in Figure 5.6, are found to have met those criteria. You can create a
transfer order from a chosen inbound delivery by selecting Subsequent Functions 폷 Create Transfer Order.
Figure 5.6 Search Results for Goods Receipt for Inbound Deliveries
from Inbound Delivery Monitor
In Figure 5.7 a dialog box appears that requires you to enter parameters to create
the transfer order from the inbound delivery. In the Adopt Putaway Qty field
enter one of the options shown in Figure 5.7.
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Figure 5.7 Creating a Transfer Order from Inbound
Delivery 180000102: Adopting Putaway Quantity
Once you have selected a parameter, the process of creating a transfer order is
performed in the background. If the transfer order is created, the system will generate a message saying the transfer order has or has not been created successfully.
If the transfer order has been created, you can see the document flow for the
inbound delivery by selecting the inbound delivery from Figure 5.6 and choosing
Environment 폷 Document Flow.
Figure 5.8 shows the original inbound delivery and the handling unit associated
with it. The transfer order has been created for the inbound delivery and is
shown as an element of the document flow.
Figure 5.8 Document Flow for Inbound Delivery 180000102
Showing Created Transfer Order Number 81
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Transaction LT21 enables the display of the transfer order, noted in the document
flow for the inbound delivery.
Figure 5.9 shows the transfer order created for the inbound delivery. The system
sets the confirmation flag because the transfer order was confirmed when it was
created in the Inbound Delivery Monitor.
Figure 5.9 Display of Transfer Order Created for Inbound Delivery: Transaction LT21
Now that we have examined the goods receipt process with inbound deliveries,
let’s look at what happens when goods receipts are made without inbound deliveries.
5.2
Goods Receipt Without an Inbound Delivery
A goods receipt without an inbound delivery can occur when material arrives at
the receiving dock without reference to an inbound delivery. The goods receipt
occurs in IM, and a transfer requirement is created for the movement of the material into the warehouse.
5.2.1
Goods Receipt in IM
Goods receipts relevant to a warehouse management system can be produced by
the arrival of material at the plant from a purchase order with a vendor. A goods
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receipt can be defined as a company’s formal acceptance that materials were
received from a vendor against a purchase order. Once the material is received
and the transaction completed, the value of the material is posted to the general
ledger.
The goods receipt transaction is Transaction MIGO, which you can access via the
menu path SAP Menu 폷 Logistics 폷 Materials Management 폷 Inventory Management 폷 Goods Movement 폷 Goods Receipt 폷 For Purchase Order 폷 GR for Purchase Order.
Figure 5.10 shows the goods receipt for a purchase order of material 1157. It also
shows the quantity of material that will be receipted into plant 1000 and the GR
goods receipt type 101, which represents a goods receipt for a purchase order.
Figure 5.10 Goods Receipt for Purchase Order in IM: Transaction MIGO
5.2.2
Reviewing the Material Documents
After all the relevant details such as storage location, batch number, and so on,
have been added to the goods receipt transaction, the goods receipt can be
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posted. If the goods receipt does not return any error messages, the transaction
will post and display the number of the material document for the movement of
the material.
To view the material document, use Transaction MB03, which you can find by
following the menu path SAP Menu 폷 Logistics 폷 Materials Management 폷 Inventory Management 폷 Material Document 폷 Display. On the initial screen, enter
the material document number displayed after the goods receipt posted and the
year, as shown in Figure 5.11.
Figure 5.11 Initial Screen for Displaying a Material
Document: Transaction MB03
After the material document number and the fiscal year have been entered, the
material document can be displayed.
Figure 5.12 shows the material document that was created during the processing
of the goods receipt for a purchase order. The material document shows the material, the plant, the storage location where the material will be stored, the purchase
order number, the batch number of the material being receipted, and the movement type of the goods receipt that produced the material document.
In addition, the material document contains an option to show the accounting
documents created because the material was received at the plant and moved into
stock. The company therefore assumes financial liability for the material.
Figure 5.13 shows the accounting document relevant to the goods receipt of the
material from the purchase order. The two lines of the accounting document
show the financial liability moving from account 191100 (goods receipt account)
to account 790000, which is the finished goods inventory account.
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Figure 5.12 Display of Material Document Created by Goods Receipt
for Purchase Order
Figure 5.13 Display of Accounting Document Created as Part of Goods Receipt
of Purchase Order
5.2.3
Reviewing Stock Levels after Goods Receipt
Once the goods receipt of the purchase order into inventory is complete, you can
perform a stock overview to show the material in stock. To execute the stock
overview, use Transaction MMBE, which you can access via the menu path SAP
Menu 폷 Logistics 폷 Materials Management 폷 Inventory Management 폷 Environment 폷 Stock 폷 Stock Overview.
The stock overview screen shows the material that has been posted as a result of
the goods receipt. The information regarding material 1157 is shown on the stock
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overview, shown in Figure 5.14. It matches the information in the material document, shown in Figure 5.12.
Figure 5.14 Stock Overview of Material 1157 in All Stock
Locations: Transaction MMBE
5.2.4
Displaying the Transfer Requirement
The goods receipt of the material from the purchase order has been receipted into
stock, as shown by the material documents and the stock overview program. This
information reflects the movement into the stock location relevant to IM, but not
the movement relevant to WM.
When the movement into the storage location was made, a transfer requirement
was created, as the storage location is warehouse managed. You can find the
transfer requirement by using Transaction LB11, which allows for a search of the
transfer requirements by material number. To find this transaction, follow the
menu path SAP Menu 폷 Logistics 폷 Logistics Execution 폷 Internal Warehouse
Processes 폷 Transfer Requirement 폷 Display 폷 For Material.
Figure 5.15 shows the initial screen of Transaction LB11. To find all the transfer
requirements for the material that has been goods receipted, enter the material
number, warehouse number, and plant. You can also enter other information
such as shipment type. In this example, shipment type E has been entered,
restricting the transfer requirement search to stock placements.
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Figure 5.15 Display of Transfer Requirements for Single Material:
Transaction LB11
Figure 5.16 shows the transfer requirement found using the search criteria
entered in Figure 5.15. The transfer requirement has been created as a result of
the goods receipt for the purchase order. The line item shows the transfer
requirement number, movement type, and description that created the transfer
requirement, the purchase order number that has been receipted into stock, and
the quantity on the transfer requirement.
Figure 5.16 Display of Transfer Requirement Resulting from
Search Criteria: Transaction LB11
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Now that we have identified the transfer requirement, we can convert it to a
transfer order. As Figure 5.16 shows, there are two ways to do this. You can create a transfer order in the foreground or the background.
To convert to a transfer order in the foreground, click the TO in Foreground button or press (Ctrl)+(Shift)+(F8). You can also create the transfer order by selecting Environment 폷 TO in Foreground.
Figure 5.17 shows the first screen displayed after you click the TO in Foreground
button. You can review and change the information if necessary and then click
the Generate + Next Mat button to complete the line item.
Figure 5.17 Conversion of Transfer Requirement to Transfer Order:
Transaction LB11
Figure 5.18 shows the transfer order that has been created from the information
shown in Figure 5.17. You can post the transfer order by selecting Transfer
Order 폷 Posting or pressing (Ctrl)+(S).
Once the transfer order has been posted, the system returns to the display of
transfer requirements, as shown in Figure 5.16, and the transfer order number is
displayed at the bottom of the screen.
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Figure 5.18 Display of Transfer Order Created from Transfer Requirement
5.2.5
Displaying the Transfer Order
You can see the transfer order created by the conversion of the transfer requirement to a transfer order with Transaction LT21 if you know the transfer order
number. If just know the material, use Transaction LT24 or follow the menu path
SAP Menu 폷 Logistics 폷 Logistics Execution 폷 Internal Warehouse Processes 폷
Stock Transfer 폷 Display Transfer Order 폷 For Material.
Figure 5.19 shows the initial selection criteria screen for displaying transfer
orders. All the transfer orders can be displayed for a material in a warehouse. In
this example, the transfer order created for the goods receipt of material 1157 is
being searched for, and the selection criteria reflect this.
Figure 5.20 shows the transfer order that has been created for purchase order
4500017388 that was receipted into the plant. A transfer requirement has been
created to start the putaway in the warehouse. The conversion of the transfer
requirement to the transfer order and the confirmation of the transfer order have
moved the 100 units of material 1157 into warehouse storage bin 01 – 01 – 01 in
storage type 001.
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Figure 5.19 Initial Screen for Displaying a Transfer Order by
Material Number: Transaction LT24
Figure 5.20 Display of Transfer Orders Available from
Selection Criteria: Transaction LT24
In the last two sections, we described goods receipts with and without inbound
deliveries. Now we will examine goods receipts that do not involve inventory
management.
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5.3
Goods Receipt Without Inventory Management
At first glance, this process may appear somewhat uncharacteristic. Normally,
materials are receipted into a storage location, and that triggers a transfer requirement and a transfer order in WM. However, there are materials in the warehouse
that sometimes do not require a goods receipt in IM but are required for warehouse operations. An example of this is packaging materials, such as pallets and
crates. These are used for material storage and shipment but do not have to be
goods receipted into IM.
5.3.1
Creating the Transfer Order for the Goods Receipt
You can create the transfer order without reference to a goods receipt from IM or
a transfer requirement in WM. You can create a transfer order in Transaction
LT01 or via the menu path SAP Menu 폷 Logistics 폷 Logistics Execution 폷 Internal
Warehouse Processes 폷 Stock Transfer 폷 Create Transfer Order 폷 No Source
Object.
Figure 5.21 Initial Screen for Creating a Transfer Order Without IM:
Transaction LT01
Figure 5.21 shows the initial screen for creating the transfer order using Transaction LT01. Goods movement number 501 is used here refer to a receipt without
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a purchase order. In this scenario, a vendor may have dropped off a shipment of
100 pallets to be used in the shipment of parts. Many industries use pallets that
they lease at a very small charge per day; for example, GKN pallets.
Note
A GKN pallet is a series of blue wooden strips and blocks crafted into a square shape,
about 1.2 square meters. It is manufactured by CHEP, a division of GKN, and is rented
to companies for less than a dollar per day.
Figure 5.22 shows the detail screen for Transaction LT01. The screen shows that
the material putaway will come from source storage type 902, which is the goods
receipt area. The system will generate the destination storage type and storage
bin. To create the transfer order, press (Ctrl)+(S) or select Transfer Order 폷 Posting. Once posting is complete, the system returns to the initial screen and displays the transfer order number it has created.
Figure 5.22 Detail Screen for Creating a Transfer Order for
Material Receipt Without IM: Transaction LT01
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5.3.2
Displaying Transfer Order for the Goods Receipt
You can review the information in the transfer order by using Transaction LT21
to display the contents of the transfer order or following the menu path SAP
Menu 폷 Logistics 폷 Logistics Execution 폷 Internal Warehouse Processes 폷 Stock
Transfer 폷 Display Transfer Order 폷 Single Document. The transaction requires
that the just the warehouse number and the transfer order number be entered to
display the transfer order details.
Figure 5.23 shows the details of the line item in the transfer order created for the
goods receipt. The material has been moved from storage type 902, storage section 001, and storage bin WE-ZONE to storage type 001, storage section 001, and
storage bin 01 – 09 – 03. Note that the quantity of 100 has not been confirmed
because the system has not selected the confirmation checkbox next to the warehouse number.
Figure 5.23 Display of Transfer Order Created for Material
Goods Receipt Without IM: Transaction LT21
5.3.3
Displaying the Stock Levels
Prior to the posting of the transfer order and the receipt of the material into the
warehouse stock, you can review the stock levels for the material in the ware-
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house. To do this, use Transaction LS24 or follow the menu path SAP Menu 폷
Logistics 폷 Logistics Execution 폷 Internal Warehouse Processes 폷 Bins and
Stock 폷 Display 폷 Bin Stock per Material.
Figure 5.24 shows initial screen for Transaction LS24, which allows selections to
be made to report on the stock levels for the material required. In this example,
the display for stock levels of material 1157 is limited to warehouse number 001,
but for all storage types.
Figure 5.24 Initial Screen to Display a Transfer Order by
Material: Transaction LS24
Figure 5.25 shows the stock levels for material 1157. It shows that the material is
located in the 902 receiving area that is not yet moved to storage type 001 and
placed in bin 01 – 01 – 01. Therefore, the transfer order should be confirmed
using Transaction LT12 or by following the menu path SAP Menu 폷 Logistics 폷
Logistics Execution 폷 Internal Warehouse Processes 폷 Stock Transfer 폷 Confirm
Transfer Order 폷 Single Document 폷 In One Step.
Figure 5.26 shows the information required to confirm the transfer order and
move the material from the goods receipt area to storage bin 01 – 01 – 01 in storage type 001.
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Figure 5.25 Display of Stock Levels for Material 1157 in
Warehouse 001: Transaction LS24
Figure 5.26 Initial Screen to Confirm Transfer Order:
Transaction LT12
You can confirm the movement by checking the bin stock using Transaction LS24.
Enter the same information in the initial screen as in Figure 5.24. The resulting
screen after confirmation of the transfer order shows the material posted into the
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correct storage bin. Figure 5.27 shows the final placement of the material in the
warehouse.
Figure 5.27 Stock per Material Report Showing Movement from
WE-ZONE to Storage Bin 01 – 01 – 01
5.4
Business Examples—Goods Receipts
A goods receipt into the warehouse is a movement of material into the warehouse
from an external source, which could be a production system, a vendor, and so
on. The functionality checks the goods receipt for accuracy and then processes it,
moving the material into the warehouse and increasing the stock levels of the
material received.
5.4.1
Goods Receipt with Inbound Delivery
You can create an inbound delivery with reference to several processes, such as a
purchase order, stock transport order, or customer return. Inbound deliveries are
useful, as it is possible to perform some processes in the SAP system before the
material arrives and a goods receipt is posted.
Example
A manufacturer of elevator parts developed a goods receipt procedure for receiving raw materials used in their manufacturing process. Because the parts they
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manufactured had to pass strict quality control standards the company had a
goods receiving procedure that was equally as stringent. Each delivery of raw
material was visually examined by the receiving staff for damages to the packaging, and if they believed the item was damaged, it was rejected before any other
tests were made. If the packaging was found to be satisfactory, the raw material
was received into a blocked stock area where physical and chemical tests were
performed. If the quality department approved the items, then the goods receipt
was processed and received into the warehouse.
The process ensured that only materials meeting the specifications were received
into the warehouse, but it was a lengthy process that only verified the results
given to them by the vendor. The length of the process was a problem on occasion due to material being needed for production orders that were about to commence. The production department became concerned that time and money was
being wasted verifying the data supplied by vendors who they had been working
with for many years.
The supply chain management team reviewed the concerns of the production
department as well as the purchasing and quality teams who were equally apprehensive that items could be received that were not of sufficient quality.
The management worked with the most trusted vendors and proposed a revised
procedure. Some vendors would allow testing of the parts at their facilities on a
regular basis, and if the material was passed, inbound deliveries were created to
expedite the goods receipt into the warehouse. The creation of an inbound delivery meant that the warehouse and quality departments spent less time and
resources on receiving material that had already been tested.
5.4.2
Goods Receipt Without an Inbound Delivery
A goods receipt for a delivery that is not an inbound delivery can occur when the
material is not packed, such as when material arrives at the receiving dock from
the vendor without any containers or pallets. The goods receipt occurs in IM, and
a transfer requirement is created for the movement of the material into the warehouse.
Example
A beverage company based in Austria purchased a small Polish regional beverage
company. The Polish company operated with a variety of custom systems that
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were interfaced using overnight batch processes. The disparate systems were
often out of sync, and it was possible for items to arrive at the receiving dock
without a purchase order, and sometimes the material file was still waiting for an
update. The staff was aware of these issues, and items were received into the
warehouse due to a lack of space to hold these incoming deliveries without valid
paperwork.
After the migration to their parent company’s SAP system, the warehouse staff in
Poland was informed that they should always have an inbound delivery available
due to the real-time nature of the data. Nevertheless, the staff would still on occasion receive deliveries directly into stock without an inbound delivery. This practice was immediately halted when it was found that one vendor frequently sent
deliveries with quantities greater the order quantity, with a shorter shelf life and
no order documents.
After this situation was found, the company instituted a zero-tolerance policy,
where no delivery was accepted without an inbound delivery.
5.4.3
Goods Receipt Without Inventory Management
Sometimes there are materials in the warehouse that do not require a goods
receipt in IM but are required for warehouse operations. An example of this is
packaging materials, such as pallets and crates. These are used for material storage
and shipment but do not have to be goods-receipted into IM.
Example
A manufacturer of specialty parts for small aircraft had been supplying parts to
customers with basic packaging when they were shipped by a local freight company. Several years ago the freight company implemented increased restrictions
on shipping parts that contained fluids, such as batteries. The company was
informed that fluids would have to be placed within a leak-proof plastic container
supplied by the freight company.
Because the customer returns the damaged or worn part and the container to the
manufacturer, the container is not sold and is nonvaluated. The containers are
sent out with the part, and there is a period of time before the container is
returned. At any one time there were over a hundred containers at customer sites
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or in transit. The company required a stock of containers delivered to them at regular periods to cover this shortfall and to replace damaged containers.
Because the containers were not purchased, the shipping company delivered
them to the manufacturer when they were required. The company did not receive
the containers using a purchase order but created a transfer order for the items so
they could be stored in the warehouse.
5.5
Summary
Material is receipted into stock using purchase orders or production orders. The
material can easily be goods-receipted using inventory management, but several
steps are needed to move and store the material in SAP WM. This chapter
explained the procedures required when material is brought into the warehouse,
either as a normal receipt or as a receipt that involves handling units.
Chapter 6 will examine the opposite of goods receipt: goods issue. Moving the
material from the warehouse involves a variety of procedures that you should
understand clearly.
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The outbound delivery process can be complex and labor-intensive. You
should understand the goods issue function clearly to use more complex
strategies such as wave picking to implement a successful outbound process in the warehouse.
6
Goods Issues
In warehouse management, a goods issue is the movement of material from the
warehouse to an external source, which could be a production order or a customer. The warehouse also can use goods issue as the process for consuming
material and assigning the costs of the material consumed to a cost center.
A goods issue from the warehouse is triggered by one of two documents: a transfer requirement from inventory management or production, or an outbound
delivery if one has been created for a customer sales order.
This chapter will examine the goods issue functionality that includes outbound
deliveries, groups, and wave picks. Now let’s proceed to the next section, which
will examine the goods issue process with outbound deliveries.
6.1
Goods Issue with Outbound Delivery
An outbound delivery involves picking materials in the warehouse, reducing the
material level in the warehouse, and shipping the materials to the customer. The
goods issue is important to the customer because it creates a link between the
manufacturer and the customer. If the goods issue process does not run at optimum efficiency, delays in delivery can cause the customer financial problems and
create customer dissatisfaction.
The outbound delivery is created from a sales order that specifies an amount of
material to be delivered to a customer. The sales order is usually created by the
sales clerks or received in electronic format.
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6.1.1
Displaying the Sales Order
When the sales order has been created, the customer is given a delivery date by
which they can expect the material to arrive at their location. The sales order contains this information as well as the material details, quantity, and pricing.
If the sales order number is known, SAP WM users can view the sales order using
Transaction VA03 or by following the menu path SAP 폷 Logistics 폷 Sales and Distribution 폷 Sales 폷 Order 폷 Display.
The sales order displayed in Figure 6.1 is used to create an outbound delivery.
The sales order shows that the customer’s purchase order was placed on 11/10/
2011 and the delivery date for the material is 11/11/2011. The sales order shows
the item details, such as the material number and the quantity ordered.
Figure 6.1 Detailed Display of Sales Order: Transaction VA03
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6.1.2
Creating the Outbound Delivery
When the sales order has been placed, you can create the outbound delivery,
which can occur at a specific time before the material needs to be picked. The specific procedure from which outbound deliveries are created varies from company
to company.
Tip
Ask your sales or warehouse staff when the outbound delivery needs to be done.
To create the outbound delivery, use Transaction VL01N or follow the menu path
SAP 폷 Logistics 폷 Sales and Distribution 폷 Sales 폷 Order 폷 Subsequent Functions 폷
Outbound Delivery.
When you create outbound deliveries, the initial screen of Transaction VL01N
(shown in Figure 6.2) requires you to enter the shipping point. The shipping
point is a location from which items are shipped and is configured in the Logistics
Execution section of the IMG. The menu path is IMG 폷 Enterprise Structure 폷
Definition 폷 Logistics Execution 폷 Define, Copy, Delete, Check Shipping Point.
Figure 6.2 Initial Screen for Creating an Outbound Delivery
with Reference to a Sales Order: Transaction VL01N
The shipping point can be assigned to several plants. In large distribution or retail
operations, the loading area for vehicles may be a separate location that supports
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several locations on the company’s campus. A shipping point can be further
divided into loading points.
Figure 6.3 shows the detail screen for a shipping point. The information required
for a shipping point includes the factory calendar and country location.
Figure 6.3 Configuration Details for a Shipping Point
After entering the shipping point into the initial screen of Transaction VL01N
(Figure 6.2), you can also enter the sales data, which includes the delivery date
and the sales order number. If no other data is required, you can enter information such as the delivery date and sales order document number, and the detail
screen will be displayed.
Figure 6.4 shows the detail screen for delivery creation based on a sales order.
The information from the sales order has been entered, such as the material number, the quantity to be delivered, the date for staging the material for delivery,
and the planned goods issue date.
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Figure 6.4 Detail Screen for Delivery Creation: Transaction VL01N
If this information is correct and does not require any changes, then you can create the outbound delivery by selecting Outbound Delivery 폷 Save or by pressing
(Ctrl)+(S). Once processing is complete, the system returns you to the initial
screen for outbound delivery creation and displays the outbound delivery number on the screen.
6.1.3
Outbound Delivery Status
We can analyze the status of the elements of the outbound delivery by displaying
the status overview. Executing Transaction VL03N to display the outbound delivery displays of the status overview information. The navigation path for this
transaction is SAP 폷 Logistics 폷 Sales and Distribution 폷 Shipping and Transportation 폷 Outbound Delivery 폷 Display.
Figure 6.5 shows the status overview for the outbound delivery. The overview
reports two elements: the delivery shown in the overall status and the material
shown in the line item status. Each element has several items for which a status is
given.
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Figure 6.5 Status Overview Information from Outbound Delivery Display:
Transaction VL03N
Overall Status
This overall status line refers to the status of the delivery. Several indicators provide details of the status:
왘
OPS
This status field shows the overall status for picking the delivery. It tells
whether the delivery has been completely picked (option C), is in the process
of being picked (option B), or has not yet been processed (option A).
왘
PS
This field contains the packing status, which indicates whether there are items
that are relevant for packing. Status A is allocated when the packing has not
been processed, status B when the delivery is partially packed, and status C
when it is completely packed.
왘
WM
This field shows the overall status of warehouse management activities. The
status indicates whether a transfer order for SAP WM is required and, if
required, whether it is confirmed or still open for processing.
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왘
C
This field shows the status of picking confirmation. This confirmation status
indicates whether picking must be explicitly confirmed for the delivery or
whether picking already has been confirmed. The confirmation status is only
relevant if transfer orders are not for picking.
왘
GM
This field shows the total goods movement status. It informs you whether the
delivery has left the warehouse or is still being processed and whether processing has begun.
왘
BS
This indicator shows the billing status of the sales or delivery document. The
status describes if the document is completely billed, partly billed, or not relevant for billing.
왘
Sta
This field shows the status for intercompany billing.
왘
TS
This field indicates the transportation planning status and is set on the basis of
the leg indicator (preliminary, subsequent, direct, return) in the headers of the
shipment documents to which delivery has been assigned. The status can be:
왘
A
Not yet planned
왘
B
Partially planned
왘
C
Completely planned
왘
OvCS
This indicator is relevant for the overall status of credit checks.
왘
POD Status
This indicator is the proof of delivery (POD) status for the entire delivery. The
status informs whether the customer reported a POD for this delivery. The values can be:
왘
A
Relevant for the POD process.
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왘
B
Differences were reported.
왘
C
Quantities were verified and confirmed.
Delivery Item Status
In Figure 6.5, the delivery item status line refers to item 10. Several indicators
report on the item status:
왘
Pick St
The status message indicates whether the item is relevant for delivery. The status indicates whether picking has not yet processed (A), is partially processed
(B), or is completely processed (C). Some items are not relevant for picking and
show no indicator. These can include text or service materials.
왘
PS
This field refers to the packing status for the line item.
왘
WM Stat
This field shows the SAP WM status of the delivery item. If the delivery processing uses the WM functionality, then the status for each item in a delivery is
updated by the system.
왘
Confir.
This field shows the pick confirmation status for each delivery item. When a
delivery item is subject to pick confirmation, the item is assigned the status A
to indicate that the line is subject to confirmation but not yet confirmed. Once
the pick is confirmed, the system assigns either status B for partially confirmed
or status C if the line item is fully pick-confirmed.
왘
GS
This field is for the goods movement status. For outbound deliveries, the status
shows whether the item has left the warehouse or company premises or is still
being processed.
왘
BS
This is the billing status of delivery-related billing documents. The status line
tells you if the item is not yet billed, partly billed, completely billed, or not relevant for billing.
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왘
IBS
This indicator shows the status for the intercompany billing.
왘
POD status
This indicator is for the proof of delivery status of each item. The status value
informs the user whether the customer reported a proof of delivery for this
item. This status can have the following values:
왘
Blank
Not relevant for the POD process.
왘
A
Relevant for the POD process.
왘
B
Differences were reported.
왘
C
Quantities were verified and confirmed.
6.1.4
Creating the Transfer Order
The transfer order needs to be created for the material to be removed from its
storage bin in the warehouse and moved to the area where materials are staged
for delivery.
The transfer order is created with reference to the outbound delivery document
that has been created. You can have more than one transfer order per delivery,
but only if the configuration parameters for transfer order split have been entered
for the relevant warehouse.
Transfer Order Split Configuration
Multiple transfer orders can be created for an outbound delivery to ensure that a
single transfer order does not exceed certain limitations. Creating multiple transfer orders distributes the workload more evenly. The configuration entered determines at what point multiple transfer orders are created.
You can find the configuration for the transfer order split by following the menu
path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Activities 폷 Transfers 폷 Processing Performance Data/TO Split 폷 Define Profiles.
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Figure 6.6 shows the configuration to create the profiles used in the relevant
warehouses. Configuring the profile’s parameters at certain levels can cause transfer order splits.
Figure 6.6 Configuration for Allowing Transfer Order Splits in Outbound Delivery
For each warehouse, a series of indicators can be set to define the profile for the
transfer order split that occurs in that warehouse. The indicators are described as
follows:
왘
Split picking
Various criteria control the way a transfer order is split. When this checkbox is
selected, the transfer order will be split; that is, a new transfer order is created
when the picking area is changed.
왘
Sort
This field determines the sort profile for the transfer order. The sort profile is
used to maximize warehouse efficiency in picking transfer orders. In the sorting fields, you can enter sort criteria such as storage bin, material weight, and
so on, that are saved in the sorting profile.
왘
Time (Limit)
You can configure this field with the value that indicates the maximum limit of
processing time for a transfer order. For example, a value of 60 will be the total
processing time for a single transfer. If the processing time exceeds this value,
a new transfer order will be created. If this field is blank, there is no limit for
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processing time for a transfer order. A limit is used to ensure that the workload
is evenly spread in the warehouse.
왘
Weight (Limit)
Similar to the time limit, this field allows entry of a weight limit to control
transfer order splitting. If the weight of the transfer order exceeds the value in
this field, this triggers a new transfer order. For example, if a value of 200 is
entered into this field and a transfer order is entered with a total weight of 670,
then four transfer orders will be created. A blank field indicates that there is no
weight limit to a transfer order.
왘
Volume (Limit)
Similar to the weight and time limit fields, this field allows you to enter a volume that will trigger a new transfer order when it is exceeded.
Outbound Delivery Monitor
The Outbound Delivery Monitor is a comprehensive tool that enables the shipping department of the warehouse to view deliveries that need to be picked,
based on a variety of criteria entered into the transaction. You can use the outbound delivery monitor to create the transfer order for the delivery.
You can access the Outbound Delivery Monitor using Transaction VL06P. The
navigation path to this transaction is SAP 폷 Logistics 폷 Sales and Distribution 폷
Shipping and Transportation 폷 Picking 폷 Create Transfer Order 폷 Via Outbound
Delivery Monitor.
Figure 6.7 shows the selection criteria that can be entered into the Outbound
Delivery Monitor to select specific deliveries. In this example, the criteria have
been entered to select all applicable deliveries that are due to be shipped from
shipping point 1200 and to be picked using warehouse management between
11/02/2011 and 11/10/2011.
To execute the transaction, press the (F8) function key or select Program 폷 Execute.
Figure 6.8 shows the deliveries that fall within the criteria entered into the Outbound Delivery Monitor selection screen. These deliveries are all warehouse
management-relevant, to be picked between 11/02/2011 and 11/10/2011, and all
are to be shipped from shipping point 1200.
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Figure 6.7 Selection Screen for Outbound Delivery Monitor
Figure 6.8 List of Deliveries Based on Selection Criteria Entered
in Outbound Delivery Monitor
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You can create the SAP WM transfer order from this screen. In Figure 6.8, you
can see buttons for allowing a transfer order to be created either in the foreground or the background. You also can create a foreground transfer order by
pressing the (F8) function key and a background transfer order by pressing (F7).
After you select a delivery and start the process of creating a transfer order from
the delivery note, the Outbound Delivery Monitor transaction passes the parameters to Transaction LT03. Figure 6.9 shows the initial screen of that transaction.
At this point, you have the option of creating the transfer order in the foreground
or in the background.
Figure 6.9 Creating a Transfer Order from the Outbound
Delivery Monitor
Figure 6.10 shows the work list of delivery line items to be converted to a transfer
order. The line item shows the outbound delivery number, material, plant, storage location, and picking quantity.
You can create the transfer order by clicking the Generate TO Item button or
selecting Subsequent Functions 폷 Generate TO Item. The transaction processes
the work list information, generates a list of processed items that can be saved,
and creates a transfer order.
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Figure 6.10 Display of Delivery Line Item Used to Create a Transfer Order
Figure 6.11 shows the item that has been processed from the work list and will be
the line item in the transfer order. To complete this transaction, you must post it
by pressing (Ctrl)+(S) or selecting Transfer Order 폷 Posting. The transaction will
return to the results for the Outbound Delivery Monitor, and the transfer order
number will be displayed.
Figure 6.11 Display of Items Processed when Creating a
Transfer Order from Outbound Delivery
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6.1.5
Confirming the Transfer Order
Once the transfer order has been created, the material can be picked and moved
to the packing area or loading area, depending on the processes that need to be
carried out on the material before it leaves the warehouse. Many materials that
are shipped on pallets are shrink-wrapped in plastic before they leave the warehouse to prevent damage in transit.
You can confirm the transfer order using Transaction LT12 or via the menu path
SAP 폷 Logistics 폷 Logistics Execution 폷 Outbound Process 폷 Goods Issue for Outbound Delivery 폷 Picking 폷 Confirm Transfer Order 폷 Single Document 폷 In One
Step.
Figure 6.12 shows the initial screen for confirming the transfer order for the outbound delivery. The confirmation is performed in one step that combines a pick
and a transfer of the materials. If the pick and the transfer are to be separate processes, the confirmation radio buttons at the bottom of the screen can be changed
to reflect that.
Figure 6.12 Confirmation of Transfer Order: Transaction LT12
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Figure 6.13 shows that the material to be picked and moved is located in storage
type 005. The destination storage location is 916, which is the interim storage
type used as the shipping area.
Figure 6.13 Confirmation of Transfer Order: Transaction LT12
You can confirm the transfer order internally by clicking the button on the
screen, pressing the (F5) function key, or selecting Edit 폷 Confirm Internally.
6.1.6
Posting the Goods Issue for Outbound Delivery
After the transfer order has been confirmed and is completed, the material is
ready for delivery. The material is sitting in the delivery area, awaiting loading
onto a delivery vehicle or delivery by a third party such as UPS or FedEx. The outbound delivery document is ready to be closed, and the movement of the material out of the warehouse is completed in the system by posting the goods issue.
Figure 6.14 shows the goods movement data for the inventory management side
of the delivery. The IM movement type is 601 for a goods issue for a delivery.
You can click the Post Goods Issue button in the toolbar to post a goods issue. If
for any reason the delivery cannot be posted, an error log will be displayed to
identify the problems that are preventing goods issue for the line items on the
document. Posting the goods issue moves the material from the warehouse, and
the inventory value is removed from the plant.
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Figure 6.14 Outbound Delivery Ready for Posting of Goods Issue
6.1.7
Reviewing Material Documents
To review the movement of the outbound delivery, you can use two transactions
for reviewing the material documents, MB51 and MB03. Transaction MB51 can
be used to show all the movements of the material, either inbound or outbound.
You can find this transaction by following the menu path SAP 폷 Logistics 폷 Materials Management 폷 Inventory Management 폷 Environment 폷 List Display 폷
Material Documents.
Figure 6.15 shows the material documents created for the outbound delivery. The
material document can be viewed in detail using Transaction MB03, which can be
found using the navigation path: SAP 폷 Logistics 폷 Materials Management 폷
Inventory Management 폷 Material Document 폷 Display.
Figure 6.16 shows the material document that was produced by posting the
goods issue for the outbound delivery. The outbound delivery number is shown
in the material document as the material slip number.
Now that we have examined the goods issue process supported by outbound
delivery, we’ll review the goods issue process without outbound deliveries.
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Figure 6.15 Material Documents for a Single Material: Transaction MB51
Figure 6.16 Material Document for Outbound Delivery: Transaction MB03
6.2
Goods Issue Without an Outbound Delivery
The goods issue created without an outbound delivery starts with a goods issue
that is created in SAP IM. This may be a goods issue to a cost center, a goods issue
to a project, or several different scenarios.
6.2.1
Goods Issue in IM
The goods issue to a cost center does not require an outbound delivery and can be
performed in inventory management. This transaction is made prior to the movement of the material in the warehouse. Therefore, the accounting movement is
performed before the actual movement of the material.
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You perform the goods issue with Transaction MB1A, which you can find by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Outbound Process 폷
Goods Issue for Other Transactions 폷 Enter Goods Issue.
Figure 6.17 displays the initial screen for Transaction MB1A and shows the movement type for the goods issue as 201, which refers to a goods issue to a cost center. There are many reasons for issuing a material to a cost center. The issue to a
cost center consumes the material, and the value of the material is moved from
the inventory account to the cost center. In this case, the material will be issued
to the plant maintenance cost center for use in a repair project.
Figure 6.17 Initial Screen for Goods Issue to a Cost Center:
Transaction MB1A
Figure 6.18 shows that the cost center has been added to the detail screen. The
cost center relates to plant maintenance, and the value of the material will be
passed to the cost center.
The material and quantity are added to the detail screen, and the goods issue is
then posted. This creates a material and accounting document for the goods issue.
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Figure 6.18 Detail Screen for Goods Issue: Transaction MB1A
6.2.2
Negative Balance in the Warehouse
Since the material in question is governed by SAP WM, the goods issue creates
the need for a movement to occur in the warehouse. To initiate a transfer order to
move the material, the goods issue creates a negative balance in the goods issue
interim storage area in the relevant warehouse.
To see the negative balance for the material referred to in the goods issue, you can
use Transaction LS24 by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Warehouse Processes 폷 Bins and Stocks 폷 Display 폷 Bin Stock
per Material.
Figure 6.19 Display of Stock in Warehouse for a Specific Material: Transaction LS24
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Figure 6.19 shows that the goods issue created in SAP IM has created a negative
balance in interim storage type 911. The storage bin has been named the same as
the cost center where the material is to be consumed.
6.2.3
Creating a Transfer Order
The transfer order is created from the material document produced from the
goods issue. Normally, once the goods issue is posted, the processing automatically passes through to Transaction LT06. You can find this transaction by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Outbound Process 폷
Goods Issue for Other Transactions 폷 Picking 폷 Create Transfer Order 폷 For
Material Document.
Figure 6.20 shows the initial screen for creating the transfer order based on the
material document for the goods issue. The system needs to create the transfer
order to move the material from the warehouse to balance the negative value in
the goods issue interim storage area.
Figure 6.20 Creating a Transfer Order from a Goods Issue
Material Document: Transaction LT06
Figure 6.21 shows the requirement passed through to the transfer order from the
material document. The storage type search shows that the transfer order will fulfill the requirement from either storage type 001 or 002. The transfer order item
information is generated from this screen.
Figure 6.22 shows the item details for the transfer order. The material quantity
shown is to be removed from a source storage type and transferred to the goods
issue interim storage area to offset the negative value caused by the goods issue.
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Figure 6.21 Item Information from a Goods Issue
Material Document: Transaction LT06
Figure 6.22 Transfer Order Creation from a Goods Issue
Material Document: Transaction LT06
After the transfer order has been created in Transaction LT06, it must be confirmed. You should do this after the material has physically been moved from the
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source storage bin to the goods issue area to ensure that the correct materials are
moved and there is no damage or loss.
Tip
In many warehouses, an automatic confirmation is assumed, and the confirmation may
take place as soon as the transfer order is created. Check with the warehouse staff to see
how this is performed in their organization.
Complete the transfer order by using Transaction LT12 or by following the menu
path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Warehouse Processes 폷
Stock Transfer 폷 Confirm Transfer Order 폷 Single Document 폷 In One Step.
Transaction LT12 requires that the transfer order number and the warehouse be
entered for the confirmation. After the transfer order number and warehouse
have been entered, the detail screen for the confirmation is displayed as shown in
Figure 6.23.
Figure 6.23 Confirmation of Transfer Order: Transaction LT12
The screen shows that material 1312 has a quantity of 90 in storage bin 02 – 01 –
03 and that a quantity of 10 is required to offset the negative quant in the goods
issue storage type. The remainder of the material, a quantity of 80, is stored back
in storage bin 02 – 01 – 03. Confirm the transfer order by clicking the Confirm
Internally button.
To see the resulting stock balance in the warehouse again, use Transaction LS24.
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Figure 6.24 shows that all of the warehouse processes are now complete. The
quantity of the material, 1312, is now 80. This has been reduced because negative
quant in storage type 911, as shown in Figure 6.19, has been offset by the quantity transferred from storage type 001.
Figure 6.24 Display of Stock in Warehouse for a Specific Material: Transaction LS24
In this section, we examined the goods issue process without outbound deliveries. The next section will review multiple processing using groups.
6.3
Multiple Processing Using Groups
Multiple processing allows the SAP WM user to group transfer requirements or
outbound deliveries and process the group together. Processing a group of
requirements or deliveries, rather than converting each transfer requirement or
each outbound delivery into a transfer order, can reduce the amount of administration time taken on these tasks.
6.3.1
Definition of a Group
A group is defined as a work package containing several transfer requirements or
outbound deliveries. This work package is used for optimizing picking operations. Grouping transfer requirements together for the same movement type or
the same storage type can increase the productivity of the warehouse operation.
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6.3.2
Creating a Group for Transfer Requirements
Groups are often created for transfer requirements when many material movements in the warehouse are triggered by transfer requirements. In a distribution
warehouse, many movements are required to satisfy the deliveries to satellite
warehouses or retail establishments. If these movements are based on transfer
requirements, the use of a group enables the warehouse to reduce the number of
transfer order conversions to one per group.
Use Transaction LT41 to create a group for transfer requirements. You can find
the transaction by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷
Outbound Process 폷 Goods Issue for Other Transactions 폷 Picking 폷 Group of
Transfer Requirements 폷 Create.
Figure 6.25 shows the initial screen to search for transfer requirements that will
be combined into a single group. The shipment type shown in the screen is A,
which indicates stock removal. Other options include E for putaway and U for
posting change transfer requirements. The requirement type relates to the process of the transfer requirement.
Figure 6.25 Initial Screen for Creating a Group for Transfer Requirements: Transaction LT41
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Example
You can enter a “B” for a purchase order, “K” for cost centers, “V” for sales orders, and
so on.
The Close TR checkbox at the bottom of the screen indicates whether the transfer
requirement should be closed. If this checkbox is selected, then once the transfer
order is confirmed the transfer requirement will be considered complete and will
be closed.
Figure 6.26 shows that for the selection criteria entered in the previous screen,
four open transfer requirements for warehouse 001 refer to stock removal. Figure
6.26 shows that there are three open transfer requirements (Open TR) for movement type 201 and one open transfer requirement for movement type 231.
Figure 6.26 Creating a Group of Transfer Requirements for
Movement Types 201 and 231
These four transfer requirements can be combined into one group for processing.
To create the group, start by clicking the Assign Group button. A dialog box
appears, as shown in Figure 6.27. This dialog box requires a description for the
group and a group name. The group is created once the information is entered
into the dialog box.
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Figure 6.27 Entering the Group Description and
Group Name: Transaction LT41
6.3.3
Creating Transfer Orders for a Group of Transfer Requirements
After the group has been created, transfer orders for the items in the group can be
created when that group of transfer requirements is ready to be converted. Use
Transaction LT42 to create transfer orders for a group. You can access this transaction by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Outbound Process 폷 Goods Issue for Other Transactions 폷 Picking 폷 Create Transfer Order 폷 for Group.
Figure 6.28 shows the entry fields for the conversion of the transfer requirements
inside the group to transfer orders. The Reference Doc Cat field can be set to B
for a group of transfer requirements or L for a group of deliveries.
Figure 6.28 Creating Transfer Orders from a Group of Transfer
Requirements: Transaction LT42
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The Foreground control has been selected in Figure 6.28, but this is only advisable if there are a small number of transfer requirements in the group. If the
group contains a vast number of transfer requirements, then the Background
control is more appropriate.
After entering the necessary data, you can start the process by clicking the Start
Multiple Proc button. When the Foreground control is selected, each transfer
creation appears, and the process can be monitored.
If the material is missing from a storage bin or a storage bin cannot be found,
changes can be made during processing to ensure that transfer orders are created.
This cannot be done in background processing. Once the processing has been
completed for the group, the resulting screen will be displayed as shown in Figure 6.29.
Figure 6.29 Transfer Orders Created for a Group of
Transfer Requirements: Transaction LT42
The closing screen for the group, shown in Figure 6.29, displays the group that
was entered and the number of transfer orders and transfer order line items that
were created. In addition, the screen shows the number of the printer that will
output the transfer orders.
You can release and print the transfer orders by pressing the (F5) function key,
clicking the padlock icon on the screen, or selecting Goto 폷 Release/Print.
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6.3.4
Definition of a Wave Pick
When groups are used with outbound deliveries, we normally refer to them as
waves. A wave pick is defined as a work package, like a group, but it contains several outbound deliveries. This wave pick is created using the Wave Monitor. The
advantage of using a wave pick is that it is possible to select the outbound delivery according to time slots.
Example
If a warehouse has 2,000 outbound deliveries per shift, the wave pick can group these
deliveries for each time slot. If the shift starts at 6 a.m. and ends at 3 p.m., a wave pick
can be run for each time slot, which can be hourly, and the deliveries can be processed
in that manner.
6.3.5
Creating a Group for Outbound Deliveries
A warehouse creates a wave for outbound deliveries when many transfer orders
must be created for deliveries outside the warehouse. The outbound deliveries
are for sales orders that have been received and need to be fulfilled by the material in the warehouse.
6.3.6
Creating the Wave from the Outbound Delivery Monitor
You can create a wave pick using the Outbound Delivery Monitor (Transaction
VL06P). Enter selection criteria to display deliveries from a specific shipping
point on a certain date so that deliveries can be selected and combined in a wave
pick group.
Figure 6.30 shows the shipping point and date criteria entered to obtain all deliveries due to be shipped, so that selection can be made for a specific wave pick
group.
Figure 6.31 shows deliveries relevant for the criteria entered into the Outbound
Delivery Monitor. You can highlight the deliveries and create the wave by selecting Subsequent Functions 폷 Group 폷 Wave Pick. The processing returns to the
Outbound Delivery Monitor, and the wave number is displayed at the bottom of
the screen.
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Figure 6.30 Outbound Delivery Monitor Selection Screen for Wave Creation
Figure 6.31 Picking Workload Results from the Outbound Delivery Monitor
6.3.7
Using the Wave Monitor
The Wave Monitor allows the selection of waves for certain outbound deliveries.
You execute it via Transaction VL37 or the menu path SAP 폷 Logistics 폷 Logistics
Execution 폷 Outbound Process 폷 Goods Issue for Outbound Delivery 폷 Picking 폷
Wave Picks 폷 Monitor.
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Figure 6.32 shows the initial selection criteria screen where you can make entries
to view waves from the outbound deliveries fitting the selection. The date and
time selection allows the use of either a time slot or a time-slot group. Let’s take
a look at these now.
Figure 6.32 Wave Pick Monitor Selection Screen: Transaction VL37
Time Slot
A time slot is defined as a period of time that can be configured in the IMG. The
time slot can be defined for the warehouse where it is to be used. In many cases,
a time slot can be a one-hour time period in a warehouse shift or a whole shift.
You can configure the time slot via the menu path IMG 폷 Logistics Execution 폷
Shipping 폷 Picking 폷 Wave Picks 폷 Maintain Time Slots.
Figure 6.33 shows the configuration for a time slot. Each time slot is created with
a description and a start and finish time. The other field you must fill to configure
the time slot is the picking wave profile, which is also defined in the system configuration and sets the limits for the wave.
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Figure 6.33 Configuration of Time Slots for Wave Picking
Picking Wave Profile
The picking wave profile allows you to set limits on certain criteria when reacting
to waves during wave picking.
You can configure the picking wave profile by following the menu path IMG 폷
Logistics Execution 폷 Shipping 폷 Picking 폷 Wave Picks 폷 Maintain Wave Picks Profile.
Figure 6.34 shows the configuration for the picking wave profile used in time-slot
configuration. The picking wave profile is defined for each warehouse, and capacity limits can be configured for each time slot.
You can limit the number of items to be picked, the number of picking activities,
the maximum number of packaging materials, the maximum weight and volume,
and the maximum number of available hours for the pick wave.
Time Slot Group
In Figure 6.32 on the previous page, the other date and time selection field is the
Timeslot Group. The time-slot group is configured from several time slots. For
example, a time-slot group can contain all the time slots for a particular shift or a
particular working day.
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Figure 6.34 Configuration for a Picking Wave Profile
You can configure the time-slot group in the IMG by following the menu path
IMG 폷 Logistics Execution 폷 Shipping 폷 Picking 폷 Wave Picks 폷 Maintain Time-slot
Group for Wave Pick.
Figure 6.35 shows the time-slot group ZM01 created from the nine individual
time slots, which reflect each hour of the first warehouse shift on a Monday. Each
time slot is assigned a sequence number for the time-slot group. The start and finish times of the time slots cannot overlap.
Figure 6.35 Creating Time-Slot Groups from Individual Time Slots
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6.3.8
Results of the Pick Wave Monitor
After you have entered the selection criteria, execute the transaction by pressing
the (F8) function key. The Wave Monitor displays all waves for the relevant time
slot that was entered for the specific warehouse.
Figure 6.36 shows the wave and the deliveries within that wave for the selected
time slot. The wave shown here can be highlighted and the transfer orders created for the deliveries that make up the wave pick.
Figure 6.36 Wave Monitor Results Screen: Transaction VL37
Create the transfer order by selecting Subsequent Processing 폷 Transfer Order
or by pressing (Shift)+(F4).
Figure 6.37 shows the transfer order creation screen for wave pick group
2000000020. The reference document category is defaulted to L, which indicates
outbound deliveries. This can also be found using transaction LT42.
You can create the transfer orders by clicking the Start Multiple Proc button or
pressing the (F5) function key. Once the transfer orders have been created, they
need to be released and printed for the material to be pulled. Release and print
the wave by selecting Subsequent Processing 폷 Release/Print or by pressing
(Shift)+(F5).
Figure 6.38 shows that the wave group has been released and printed. The transfer orders are printed at the printer in the warehouse and are given to the staff so
they can pick the materials. Once the materials are picked, you can confirm the
transfer orders for the wave by using the Wave Monitor and selecting Subsequent Processing 폷 Confirm or by pressing (Shift)+(F7).
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Figure 6.37 Creating Transfer Orders for Deliveries in a Wave Pick
Figure 6.38 Pick List for Wave Group 2000000020
The transaction displays the selection screen for the transfer order confirmation,
as shown in Figure 6.39. The transfer orders that have been produced for the
wave pick can be confirmed after they are printed and the movement of the material has been completed. The confirmation screen, as shown in Figure 6.39,
allows the selection of certain transfer orders in the wave by storage type or picking area, depending on what movements have been completed in the warehouse.
If all transfer orders are ready for completion, these fields will be blank.
From the selection used in Figure 6.39, the relevant transfer orders are displayed
and ready for confirmation, as shown in Figure 6.40. You can confirm them by
selecting Transfer Order 폷 Confirm in Foreground or by pressing the (F5) function key.
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Figure 6.39 Initial Screen for Confirming Transfer Orders for a Wave Group
Figure 6.40 Transfer Orders Selected for Confirmation from the Wave Group
This section has examined multiple processing using groups. Now we’ll discuss
the processes of picking and packing in goods issue.
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6.4
Picking and Packing
Sections 6.1.3 and 6.1.5 touched on the picking process has been touched on. The
transfer orders created to remove material from the warehouse can be used as the
picking instructions. As a part of the picking process, several optional steps can be
carried out with the material.
These steps can include pricing the material with price stickers. This may involve
repricing if the material was priced at the end of the manufacturing process or
inbound delivery process and the price has since changed. In addition to the pricing process, a packing process can occur after picking and before the materials
leave the warehouse.
Picking within the warehouse can be the most costly part of the warehouse operation, with estimates suggesting that order picking can be over 50% of the total
warehouse operating expense. Order picking is the most labor-intensive operation within the warehouse and usually employs the majority of the staff. In addition, picking errors, and therefore delivery errors, are a major source of customer
dissatisfaction.
Warehouse designers try to reduce or combine several human functions in the
picking process, including:
왘
Removing items from the storage bin
왘
Traveling between the storage bins and the picking station
왘
Searching for the storage bins
왘
Sorting items for transfer orders
왘
Confirming the line item picking, using the SAP system or noting in paperwork
6.4.1
Picking Schemes
Warehouses can adopt several picking schemes to reduce the time and effort
spent by the warehouse staff picking material. Not all of these schemes are relevant for all companies. In the following subsection, we will briefly describe some
of those currently found in warehouse operations.
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Single-Order Picking
In this picking scheme, the picking staff completes one order at a time. This takes
a lot of time and effort but results in the most accurate picking. This method is
used in the majority of warehouses.
Batch Picking
The batch picking method is similar to the single-order method, except that the
picker picks a batch of orders at one time, rather than a single order. Picking
errors creep in when line items are missed, and additional time is required to sort
the items for each order when the items are returned to the picking station. The
efficiencies of this type of picking are limited and are negligible for more than
five orders in a batch pick.
Zone Picking
In this scheme, a picking operator is assigned to one zone, which can be an aisle,
a partial aisle, a carousel, and so on. For this scheme, the picker is only responsible for picking items in his zone and not responsible for all the items in the transfer order. The advantages of this method are that the picker’s travel time is
reduced because of the smaller area of operation. Pickers also become familiar
with the items they pick every day and errors are reduced. The disadvantage with
this method is that it can cause bottlenecks if pickers work at different speeds;
slower zone operators can minimize the benefits of this method.
Progressive Assembly
In the progressive assembly method, the contents of the transfer order to be
picked are moved from one zone to the next. This is also called the “pick and
pass” system. The line items of the transfer order can be moved from zone to
zone in a tote container on a conveyor belt or some other transport method.
Downstream Sortation
This method uses some aspects of progressive assembly but is used for wave picking. In a wave, many transfer orders are grouped. Downstream sortation allows
the picker to deposit all the materials listed on all transfer orders of the wave into
the tote on the conveyor. This means a significant level of sorting takes place after
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the material leaves the picking zone. This method can only be used where downstream sorting has been perfected; otherwise, shipping delays will most likely
occur.
6.4.2
Packing
We will discuss Storage Unit Management and the way packing is performed with
storage units in Chapter 11. In the warehouse, the material that has been picked
is usually packed before it is loaded onto vehicles or sent via a shipping company,
such as UPS or FedEx.
The packing area contains the packaging material used for packing the materials
to be shipped. These packaging materials can be as simple as cardboard boxes,
shipping pallets, and tape. However, there may be specialized packaging materials that are used only for a specific item. For example, a fragile item may be stored
in one container while it is in the warehouse, but for shipping it may require custom polystyrene packaging for a specific size of container.
Whichever materials are needed in the packaging area, they must be available to
the packing staff. In the same way that a production line comes to a halt if material is missing for the production order, the packaging of materials will stop if the
packaging material is missing from the packing area.
Note
Some companies spend some of their labor resources in preassembling packaging items.
If the same person has to locate a flat cardboard box, assemble it, pack it with pellets,
place the item inside, seal it, label it, and move it to the next location, this can be timeconsuming and not the best use of labor. Preassembling boxes and filling them with pellets can make the packing area more efficient.
Another labor-saving method used in warehouses is to standardize the packing
materials and packing process. Reducing the number of sizes of the materials and
formalizing a packing process that all employees follow are important ways to
save time getting product from the packing area into shipment.
This section has examined aspects of picking and packing in the goods issue process. Now we’ll look at some business examples of some of the processes discussed in this chapter.
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6.5
Business Examples—Goods Issue
A goods issue is the movement of material from the warehouse to an external
source, which could be a production order or a customer. The warehouse can use
a goods issue as the process of consuming material and assigning the costs of the
material consumed to a cost center.
6.5.1
Goods Issue with Outbound Delivery
An outbound delivery is made up of three components; picking, packing, and
goods issue. The material for the outbound delivery is picked using transfer
orders in SAP WM. If the outbound delivery process in the warehouse does not
run at optimum efficiency, delays in delivery can cause the customer financial
problems and create customer dissatisfaction.
Example
For many years a medium-sized beverage manufacturer in Austria did not use
outbound deliveries, as they manufactured only three products that were in great
demand. The finished goods were taken directly from the production line to waiting trailers, where they were sent to third-party distributors who delivered products to supermarket distribution centers across Europe. The sales orders were
rarely delivered on time due to the lack of manufacturing capacity at the company’s single facility. Because of this, the company rarely used the warehouse
facility they had except for storing empty cans and promotional materials they
used on occasion.
Three years ago the company was purchased by a private investment company
that began modernizing the manufacturing equipment and increasing capacity. In
addition, new products were introduced and more promotions were launched,
requiring different cans and special packaging.
The production process was radically improved, and the company was now producing the items for the promotional cans in advance of the promotion starting.
This change led to items being made to stock, rather than made specifically for an
order. The warehouse was now a vital part of the new strategy, and the company
realized that the warehouse was filling up and staff had to find finished goods in
the warehouse based on the promotions and shelf life date. This change required
the introduction of the outbound delivery process so that the warehouse manag-
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Business Examples—Goods Issue
ers could prioritize picking in the warehouse for orders that needed to be filled
first and ensure that the right quants were selected for the correct delivery.
6.5.2
Goods Issue Without an Outbound Delivery
The goods issue created without an outbound delivery starts with a goods issue
that is created in SAP IM. This may be a goods issue to a cost center, a goods issue
to a project, or other similar scenarios.
Example
A small manufacturer of electrical components implemented an SAP system for
human resources, finance, and materials management. The company was using
their legacy sales system, as they believed that the customization they had performed could not be replicated in the SAP system. However, they were proceeding with an implementation of WM, as their existing WMS system was running
on hardware that was no longer supported.
After the implementation of WM, the company decided to move to SAP Sales and
Distribution due to the increase in maintenance costs for their legacy systems as
well as an aging and increasingly unreliable hardware platform.
Before the SD project could be implemented, the legacy sales system failed, and
the company was unwilling to lease new hardware for a system that would be
replaced in a matter of weeks.
The company decided to use their SAP systems to record the sales to their customers in spite of no sales orders being placed on the SAP system. The company used
a PC program to enter sales but needed to reflect the movement of stock to the
customer fulfilling the sales order on the SAP system. The process they derived
was to allocate a cost center for each of their customers with an order, and the
warehouse could then post a goods issue to the customer cost center when the
product was processed for shipment. This way, the stock was reduced, and a correct financial posting would be made.
6.5.3
Picking and Packing
Transfer orders can be used as picking instructions for warehouse staff. While
picking takes place, other steps can be carried out with the material. These can
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include pricing the material with price stickers or other labeling for the customer.
Order picking is the most labor-intensive operation within the warehouse and
usually employs the majority of the staff.
Example
Some companies have very simple picking requirements and few picks per hour.
However, in a complex warehouse the picking operation can make or break a
company. A small distribution center for an automotive parts company operated
a warehouse in the south of Spain that contained fewer than two thousand parts
and mostly fulfilled online orders. The number of picks per hour was low, and
most of the warehouse staff knew what area parts were stored in, making picking
straightforward.
After some company reorganization several warehouses in Portugal and the south
of France were closed, so that the warehouse in southern Spain was now
expected to carry around 7000 parts and process orders for companies throughout southern Europe. The warehouse was expanded and the parts were delivered
from the warehouses being shuttered. When the warehouse operations began to
ramp up, it was clear that the previous method of single-order picking was not
efficient enough for the growing number of picks that would be required per
hour.
The warehouse manager decided to try other methods of picking as the warehouse became busier to see which method suited the company. Orders that
needed to be fulfilled could be from an auto parts store that required up to 100
items, from customers online who would normally order one part, or from a distribution center that would order several hundred parts. Based on analysis the
company performed, the majority of the orders were single-item orders, and
based on this, the company decided to implement a zone picking strategy. This
meant an operator would be responsible for a section of the warehouse and be
given pick tickets for that area. Picks would be performed quickly, and operators
would not be travelling all over the warehouse to get items. Several warehouse
operators were assigned solely to multiline orders so they could be assembled
quickly and shipped without delay.
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Summary
6.6
Summary
Goods issue is a labor-intensive process that has been refined to minimize waste
in picking and maximize the output of the warehouse. A company has to ship
product to make a profit, and the outbound process of the warehouse is key to
successful shipping. In this chapter, we have discussed how goods issues can be
created with outbound deliveries and without them.
We have also discussed some of the more complex scenarios for outbound shipping, for example, the use of wave picks in a busy warehouse. It is important to
realize that the outbound delivery process is twofold. First, the configuration and
the processes used by the warehouse must be suited to the warehouse operations,
because an overly complex solution will stop products from being shipped. Second, because the outbound process is labor-intensive, training staff on the warehouse solution is very important. Once these two factors have been balanced, significant productivity should flow from the SAP WM outbound process.
In Chapter 7, we’ll discuss the stock replenishment that takes place in the warehouse. Keep in mind that a warehouse is not just a place where material is stored.
Material constantly moves in the warehouse, and replenishment of fixed bins for
picking and for production supports some of this movement.
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Stock replenishment and internal movements are daily activities that support efficient warehouse operations. Posting changes occur less frequently
but must be carefully processed to ensure synergy between the warehouse
and SAP IM stock balances.
7
Stock Replenishment
Material is moved from one location to another as a part of everyday warehouse
operations. Some movements are initiated within the inventory management
process, for example, plant to plant or storage location to storage location. If the
storage location is warehouse managed, then this triggers the movement of the
material in the warehouse.
Replenishment of storage bins in the warehouse requires moving material from
one location to another. With this overview of stock replenishment in mind, we’ll
now discuss internal stock transfers.
7.1
Internal Stock Transfers
The internal stock transfer can only be triggered by a requirement to move a
material from one part of the warehouse to another, storage bin to storage bin.
There are many reasons for moving material in the warehouse, but every time a
quant is moved, a cost is incurred. Sometimes the labor cost of moving material
outweighs the need to move the material.
7.1.1
Keeping the Warehouse Running
Many warehouses have come to a complete standstill when there was no more
space in the warehouse to unload trailers at the goods receiving dock. In the
worst situation, warehouses become grid-locked because material that needs to
be shipped is sitting in trailers outside the warehouse, unable to be unloaded into
the warehouse.
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Warehouses need a certain amount of empty space where material can be
unloaded and stored. Without a working reserve of empty bins, the warehouse
can become congested, and customer orders won’t be fulfilled on time.
To keep a reserve of empty bins, a warehouse needs regular analysis of the material in the storage bins to see where combining quants can free up a bin or ensure
that the picking areas are fully supplied. The optimum amount of empty bin space
in the warehouse depends on the materials and industry involved but is usually
somewhere between 10% and 20%.
To move this material in the warehouse, a requirement must be created in SAP
WM to move the stock.
7.1.2
Checking Empty Bins
You can analyze the empty bin situation by using Transaction LS04, which displays the empty bins for a specific warehouse and storage type.
You can find the transaction by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Bins and Stock 폷 Display 폷 Empty
Storage Bins.
Figure 7.1 shows the initial screen for the list of empty bins. You must fill in the
warehouse number and storage type fields, but use of the storage section is
optional. You can enter additional selection criteria such as the storage bin—if
only one storage bin has to be reviewed—or the storage bin type, tank, bin
height, and so on. The number of storage bins reflects the number of bins
required on the report.
Note
If the warehouse staff only wants to see if there are a few empty bins in a specific storage
type, they may only want to see the first 10 and not all of the empty bins. Entering a figure in this field stops the report after the specified number of bins has been retrieved.
You can select the blocked bins and sectioned bins checkboxes if the report
should only show empty storage bins that are blocked or sectioned, rather than
all empty bins.
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Internal Stock Transfers
Figure 7.1 Initial Selection Screen for List of Empty Bins: Transaction LS04
Figure 7.2 shows the empty storage bins that were requested by the selection criteria in Figure 7.1. The display shows the storage bin, bin type, blocking indicator
for stock removal, blocking indicator for putaway, current block for removal, current block for putaway, current block due to physical inventory count, maximum
weight, and total capacity.
Figure 7.2 Display of Empty Storage Bins: Transaction LS04.
The display is useful to the warehouse staff because they can see at a glance where
the empty bins are for stock putaway.
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7.1.3
Moving Material Between Storage Bins
Movement of material between storage bins is triggered by creation of a transfer
order. If material needs to be moved from one storage bin to another storage bin,
a transfer order is required.
Transaction LT10 can produce a transfer order for a stock transfer. You can find
this transaction by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷
Internal Whse Processes 폷 Stock Transfer 폷 Create Transfer Order 폷 From
Stock List.
Figure 7.3 shows the selection screen for Transaction LT10. The Warehouse
Number and Storage Type fields must be filled in, as must the Movement Type
field in the Program Control section.
Figure 7.3 Initial Screen for Creating a Stock Transfer: Transaction LT10
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Internal Stock Transfers
The user must enter a warehouse management movement type in the Movement
Type field. This entry controls the type of internal stock transfer that will take
place.
The Stock Transfer View section allows the resulting data to be shown either in
a quant format, by storage unit, or by storage bin. The default is for the results to
be shown by quant. Execute the transaction by pressing the (F8) function key.
Figure 7.4 shows the material that is available for stock transfer. The available
quants are identified with a blank box in the Sl (Selection) field. If the quant is not
available, then the field will contain a lock.
Figure 7.4 Display of Quants Available for Stock Transfer
To select a line item for a stock transfer, check the box. The line item is then available for a stock transfer. You can create the stock transfer in the foreground by
pressing (Ctrl)+(Shift)+(F12).
Figure 7.5 shows the dialog box that is displayed when the stock transfer is created in the foreground. You must enter destination data for the stock transfer.
You can enter a print code and printer number or select the Do not Print checkbox so that the stock transfer is not printed.
After you enter the required data, the transaction uses the information to create a
transfer order. Then the results screen is redisplayed.
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Figure 7.5 Destination Data Entry Dialog Box for a Stock Transfer
Use Transaction LT21 to view the transfer order created by Transaction LT10. If
the transfer order number is not known, use Transaction LT24 to find the relevant
transfer order using the material number matchcode. You can find Transaction
LT24 by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal
Whse Processes 폷 Stock Transfer 폷 Display Transfer Order 폷 For Material.
Figure 7.6 shows the information that should be selected to find the transfer
order via the material involved in the stock transfer. The warehouse and material
entries are mandatory. This selection also includes the date of transfer order creation to narrow down the potential list.
Figure 7.6 Selection Screen to Display Transfer Orders by Material: Transaction LT24
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Internal Stock Transfers
Execute the transaction by pressing the (F8) function key or by selecting Program 폷
Execute. The display of the resulting transfer order (see Figure 7.7) shows the
information that was entered in Transaction LT10.
Figure 7.7 Detailed Display of Transfer Order Created by Stock Transfer
7.1.4
Confirming the Stock Transfer
The movement information shows the material that needs to be moved from storage bin 100 to 822 within the storage type 004. You can confirm the stock transfer in this screen by selecting Transfer Order 폷 Confirm in Foreground or by
pressing the (F8) function key.
Figure 7.8 shows the confirmation screen for the transfer order created for the
stock transfer. In the Movement Data section of this screen, the destination
information in the Destinat. area must be entered for the quantity of the material
to be transferred.
Often, when material is transferred, the quantity of material received into the
destination storage bin is not equal to the quantity removed from the storage bin.
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Figure 7.8 Confirmation Screen for Transfer Order to Move Stock from Storage Bin to Storage Bin
In these instances, it is important to enter the correct quantity in the receiving
storage bin as well as a reason for this discrepancy. Four options are available for
the confirmation checkbox:
왘
X
Target quantity is equal to the actual quantity.
왘
U
Actual quantity is the balance between the target and difference quantity.
왘
S
Difference quantity is the difference between actual and target quantity.
왘
Blank
Allows the actual and difference quantities to be entered manually.
In Figure 7.8 an X has been entered for the confirmation checkbox, which means
the target and actual quantities are equal and there are no differences.
7.1.5
Configuring the Difference Indicator
The other field on this screen you should pay attention to is Difference ind. This
field controls how the difference is managed. The field is configured via Transac-
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Internal Stock Transfers
tion OMLX in the IMG. You can find the transaction by following the menu path
IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Activities 폷 Confirmation.
The configuration of the confirmation screen, shown in Figure 7.9, defines how
the confirmation transaction deals with the difference between the source and
destination storage bins. Let’s look closely at the fields shown in Figure 7.9:
왘
Ty
This field specifies the storage type to which any differences in the source and
target quantities are posted.
왘
Diff. Bin
This should be configured if a specific storage bin must contain the stock differences.
왘
TO
If this checkbox is selected, the system creates a dynamic storage location,
which is named the same as the transfer order number, and the difference is
posted to this bin.
왘
Srce Bin
If this checkbox is selected, the quantity difference is posted to the source storage bin.
Figure 7.9 Configuration of the Difference Indicator: Transaction OMLX
This section has described the functionality of internal stock transfers. Now we’ll
examine the process of fixed bin replenishment.
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7.2
Fixed Bin Replenishment
A fixed storage bin is a storage bin in which a specific material is stored. This
material is always stored in this bin. This may be because it is a bin that has been
specifically created for the material. In many cases, it is a storage bin in the picking area, where storage bins do not need different material constantly moved in
and out.
In fixed storage bin replenishment, the storage bin in the picking area needs to be
replenished so that the outbound deliveries remain at maximum efficiency.
Example
In a warehouse that ships vacuum cleaners, each vacuum may have to be packed with
the attachments. The attachments should be stored in the picking area and in sufficient
quantity that the shipping process does not slow down due to a lack of attachments.
Fixed bin replenishment is a process that helps keep this from happening
7.2.1
Replenishment and the Material Master
The basis for the replenishment process is defined in the material master record
for the items that need to be replenished. Replenishment details for a material in
a specific fixed bin can be entered using the material master change Transaction
MM02 if the material has already been created. You can find this transaction by
following the menu path SAP 폷 Logistics 폷 Materials Management 폷 Material
Master 폷 Material 폷 Change 폷 Immediately.
You should select the WM views, although this may vary depending on the version of the SAP system.
Note
As noted in Chapter 1, this screen layout refers to SAP ECC 6.0.
The information that must be entered is located in the Warehouse Management
2 screen shown in Figure 7.10. To access this screen, you must enter the plant,
warehouse number, and storage type for the fixed bin location.
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Fixed Bin Replenishment
Figure 7.10 Replenishment Data in the Material Master Record
The information stored in the material master record for the storage bin defines
how replenishment is processed. Figure 7.10 shows the data in the storage bin
stock section in the second WM screen.
We’ll now describe the fields displayed in the Storage Bin Stock section, shown
in Figure 7.10:
왘
Storage bin
The specific bin of storage type 915 where the material is stored.
왘
Maximum bin quantity
The largest quantity that can be stored in this storage bin. This figure is used
for checking the capacity of the storage bin.
왘
Minimum bin quantity
The minimum quantity that can be stored in the storage bin. This figure is used
in calculating the bin replenishment
왘
Replenishment quantity
The quantity of material to be replenished in the storage bin.
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In addition to the information in the material master file, you need to complete
several configuration steps, which we’ll describe in the next section.
7.2.2
Configuration for Replenishment
You need to complete the warehouse management movement type configuration
for replenishment before transfer orders can be created for replenishing fixed
bins. A replenishment movement type needs to be assigned to the storage type so
that any transfer orders are created correctly.
You can access the transaction for this configuration by following the menu path
IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Activities 폷 Transfers 폷
Define Stock Transfers and Replenishment Control.
Figure 7.11 shows the configuration for the replenishment control for storage
type 915, the fixed bin picking area. A movement type has been entered that is
appropriate for fixed bin replenishment. This is normally movement type 320,
but it can be copied to a user-defined movement type that can be used for the
configuration. Replenishment of the production supply bins uses movement type
319.
Figure 7.11 Configuration for Fixed Storage Bin Replenishment
7.2.3
Creating the Replenishment
To create the transfer orders for replenishing the fixed bins, use Transaction
LP21, which you can find by following the menu path SAP 폷 Logistics 폷 Logistics
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Fixed Bin Replenishment
Execution 폷 Internal Whse Processes 폷 Stock Transfer 폷 Planning for Replenishments 폷 According to Bin Situation.
Figure 7.12 shows the selection screen for stock replenishment. The plant, storage location, warehouse number, and storage type have been entered. Because
the movement type is set for replenishing fixed bins, the requirement number is
needed.
Figure 7.12 Initial Selection Screen for Replenishment of Fixed Bins: Transaction LP21
The requirement number is prefixed by a one-character requirement type, in this
case N, representing the replenishment for fixed bins. The requirement number
entered is usually the purchase order number or sales order number. You execute
the selection screen by pressing the (F8) function key or by selecting Program 폷
Execute.
Figure 7.13 shows the storage bin selected for replenishment based on the selection criteria entered. Storage bin 915 – 01 – 001 is the storage bin entered into the
material master record for material 100-510, as shown in Figure 7.10, previously.
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Figure 7.13 Overview of Fixed Bins Subject to Replenishment
To produce the picking documents for the highlighted line on the report, save the
transaction by pressing (Ctrl)+(S). When the transaction has been executed, the
processing returns to the initial screen of Transaction LP21 as shown back in Figure 7.12.
7.2.4
Displaying the Transfer Requirement
The replenishment Transaction, LP21, created a transfer requirement that you
can display with Transaction LB11 or by following the menu path SAP 폷 Logistics 폷
Logistics Execution 폷 Internal Whse Processes 폷 Transfer Requirement 폷 Display 폷
For Material.
Figure 7.14 shows the selection screen for displaying transfer requirements for a
specific material. You must enter the warehouse number and the material number fields. If there are many transfer requirements for the material, you should
enter other selection criteria to filter the results.
Figure 7.15 shows the transfer requirements that match the criteria entered. The
transfer requirement, shown by the TR Number field in Figure 7.15, is the result
of the fixed bin replenishment. To complete the replenishment, you must convert
and then confirm the transfer requirement into a transfer order.
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Fixed Bin Replenishment
Figure 7.14 Selection Screen to Display a Transfer Requirement
Figure 7.15 Display of Transfer Requirements for Criteria
Entered in the Selection Screen
7.2.5
Creating the Transfer Order
To convert the transfer requirement to a transfer order, select the correct transfer
requirement and click the button from the application toolbar to convert in either
the background or foreground, as shown in Figure 7.15.
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Figure 7.16 shows the creation of a transfer order from the information entered
in the transfer requirement. The movement data shows the source storage bin
and the destination storage bin in the fixed bin storage type, 915. The transfer
order has a quantity of 100, which is the maximum bin location and a multiple of
the replenishment quantity for this material in storage type 915. This information
is shown back in Figure 7.10.
Figure 7.16 Creation of Transfer Order from Transfer Requirement
Once the data in the transfer order has been checked, the transfer order can be
completed. The system returns processing to the transfer requirement display, as
shown in Figure 7.15, and the transfer order number is shown at the bottom of
the screen.
7.2.6
Confirming the Transfer Order
The transfer order is the document that directs the warehouse staff to move the
material from the source to the destination storage bins. For replenishing fixed
bins, the material is moved from the source bin in the main warehouse to the
picking area.
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Fixed Bin Replenishment
The confirmation of the transfer order is Transaction LT12, which you can find by
following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse
Processes 폷 Stock Transfer 폷 Confirm Transfer Order 폷 Single Document 폷 In
One Step.
Figure 7.17 shows the initial screen for confirming the transfer order. The transfer order number and warehouse number are required. You have the option to
confirm the transfer order in the foreground or background and to select Pick,
Transfer, or Pick + Transfer.
Figure 7.17 Initial Screen for Confirming a Transfer Order: Transaction LT12
Figure 7.18 shows the line item of the transfer order that describes the movement
of material 100-510 from source bin 100-20-111 to fixed bin 915 – 01 – 001 in
the picking area. You can process the confirmation by clicking the Confirm Internally button on the application toolbar and then saving the transaction.
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Figure 7.18 Overview of Transfer Order Items for Confirmation
7.2.7
Reviewing the Stock Overview
After confirmation of the transfer order, a review of the stock in the warehouse
shows that the material is stored in the fixed storage bin in the picking area.
The transaction used to view the bin stock for a material is LS24. To access this
transaction, follow the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Bins and Stock 폷 Display 폷 Bin Stock per Material.
Figure 7.19 shows that the confirmed transfer order moved a quantity of 100 to
fixed storage bin 915 – 01 – 001.
Figure 7.19 Bin Stock Display for Material 70000003: Transaction LS24
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Posting Changes
This section has discussed the replenishment of fixed bins; the next section will
examine the process of posting changes.
7.3
Posting Changes
A posting change is a change to the stock level of a material. This can result from
a change in the status of a material in a storage bin. The material does not physically move, but the status changes. Several posting changes can be made to material in the warehouse, including:
왘
Releasing from quality inspection stock
왘
Posting change from material number to material number
왘
Dividing batches among other batches
Let’s examine these in detail now.
7.3.1
Posting Change for a Release from Quality Inspection Stock
Release of quality inspection stock occurs in both IM and WM, if applicable.
The change in status from quality inspection to unrestricted occurs in SAP IM
with a goods movement. In SAP WM, a movement type is also used in conjunction with a posting change notice. The posting change notice is created automatically in WM as a result of the posting of the transaction in IM.
To view the posting change notice for the IM movement, you must know the
material document number from the IM posting. The transaction to view the
posting change notice is LB12, which you can find by following the menu path
SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Posting
Change 폷 Via Inventory Management 폷 Posting Change Notice 폷 Display 폷 For
Material Document.
Figure 7.20 shows that to view the posting change notice created by the inventory movement, you must enter the material document from that material posting with the relevant year and warehouse number.
The posting change notice shows the information needed to change the status of
the material in a storage bin from quality inspection (Q) to unrestricted stock.
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Figure 7.20 Viewing Posting Change Notice for a Specific Material Document
Figure 7.21 shows the details for the posting change notice. The stock details
show that the material is being moved from stock category Q to blank, which represents a status change from quality inspection to unrestricted. These item details
are used to create the transfer order that will process the status change.
Figure 7.21 Display of Posting Change Notice Details
To create a transfer order from the posting change notice that references a material document, use Transaction LT06. You can find the transaction by following
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Posting Changes
the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷
Posting Change 폷 Via Inventory Management 폷 Transfer Order 폷 Create 폷 For
Material Document. The initial screen requires the material document number,
year, and warehouse.
Figure 7.22 shows the stock that is available to have its status changed from quality to unrestricted. The overview shows that there is a quantity of 195 in storage
type 002. This quantity is greater than the quantity of the status change. As a
result, processing will require manual input to determine the specific material
and in what storage bins this material is currently stored. By selecting the line
item, posting the transaction, and pressing (Ctrl)+(S), you can stop the processing and require the manual input shown in Figure 7.23.
Figure 7.22 Stock Overview for Posting Change Notice Relevant to Material Document
Manual input is required in this example because the quantity to be moved to
unrestricted could have been split over two bins or stored in one bin. In the
example shown in Figure 7.23, the quantity to be moved to unrestricted is all
stored in storage bin 900 – 01 – 01.
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Figure 7.23 Quant List for Posting Change Notice
You can now post the transaction be pressing (Ctrl)+(S), and the transfer order
will be created. If you review the material stock in the warehouse, using Transaction LS24, you will see the material that was entered into the transfer order with
the posting change notice.
Figure 7.24 shows storage bin 900 – 01 – 01 containing the quantity of 195,
which has a status of quality inspection. The transfer order created from the posting change notice, as shown in Figure 7.23, will change the status of this material
in storage bin 900 – 01 – 01 to unrestricted.
You can confirm the transfer order with Transaction LT12 or by following the
menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷
Posting Change 폷 Via Inventory Management 폷 Transfer Order 폷 Confirm 폷 In
One Step.
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Posting Changes
Figure 7.24 Stock Overview of Material in Warehouse: Transaction LS24
Figure 7.25 shows the transfer order item details for the posting change. The
material does not physically move from the storage bin but moves in the system
using interim storage type 922. The interim storage type is a logical location that
allows changes to be made to the material, even though the material does not necessarily move from the bin it is stored in. To check that the material has changed
status, use the material overview in the warehouse: Transaction LS24.
Figure 7.25 Confirmation of Transfer Order for Posting Change Notice
Figure 7.26 shows that the material in storage bin 900 – 01 – 01 does not have a
stock category of Q but is blank, showing that it is unrestricted stock.
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Figure 7.26 Stock Overview of Material in the Warehouse: Transaction LS24
7.3.2
Posting Change from Material Number to Material Number
A material number may be changed while there is still material in stock. This may
result from a duplicate part number or a business requirement.
The material number changes when a transfer posting occurs in inventory management that moves the material stock from the old material number to the new
material number.
The corresponding movement in WM occurs when a posting change notice has
been created via an IM material document, as shown in Figure 7.20 and Figure
7.21 in Section 7.3.1.
To view the posting change notice for the IM movement, you must know the
material document number from the IM posting. The transaction to view the
posting change notice is LB12 and can be found via the menu path SAP 폷 Logistics 폷
Logistics Execution 폷 Internal Whse Processes 폷 Posting Change 폷 Via Inventory
Management 폷 Posting Change Notice 폷 Display 폷 For Material Document.
Figure 7.27 shows the two material numbers for the transfer posting. The movement type for this transfer posting is 309, which is used for material to material
postings.
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Posting Changes
Figure 7.27 Display of Posting Change Notice for Transferring
Material Number to Material Number
To create a transfer order from the posting change notice, which references the
material document for the material to material transfer, use Transaction LT06,
which you can find by following the navigation path SAP 폷 Logistics 폷 Logistics
Execution 폷 Internal Whse Processes 폷 Posting Change 폷 Via Inventory Management 폷 Transfer Order 폷 Create 폷 For Material Document.
Figure 7.28 shows the details of the posting change notice where a quantity of
material SS8X20, is transferred to material ZZ8X20. The selection has been made
to transfer a quantity from storage bin 900 – 01 – 03.
You can confirm the transfer order for the material posting with Transaction LT12
or by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal
Whse Processes 폷 Posting Change 폷 Via Inventory Management 폷 Transfer
Order 폷 Confirm 폷 In One Step.
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Figure 7.28 Item Detail for a Posting Change Notice for Material to Material Transfer Posting
Figure 7.29 shows the details of the transfer order where the two materials are
shown. The new material does not remain in the same storage bin as the old
material number, and the transfer order has proposed an empty storage bin in the
same storage type in which to place the stock with the new material number.
Figure 7.29 Confirmation of a Transfer Order for a Posting Change Notice
for Material to Material Posting
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Posting Changes
To check whether the material has been transferred to the new material number,
use the material overview in the warehouse: Transaction LS24.
Figure 7.30 shows the stock with the new material number, ZZ8X20, in storage
bin 900 – 01 – 03, transferred from material SS8X20.
Figure 7.30 Stock Overview of Material in the Warehouse: Transaction LS24
7.3.3
Dividing Batches Among Other Batches
This process is similar to the material to material transfer except that the material
batch numbers are changed, and not the material number, which stays the same.
The batch number change can occur if material batches are combined or divided.
For example, if a quantity of sheet metal is stored as one batch number in a storage location, it may be divided into two storage bins, each with its own batch
number.
The transfer posting occurs in IM with movement type 309, the same as a material to material transfer, but the batch number is changed rather than the material
number.
The posting change notice created by the material document shows the batch
numbers that were entered into the inventory posting, as shown in Figure 7.31.
The posting of the posting change notice produces the transfer order, which
when confirmed will move a quantity of the material from one batch number to
another.
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Figure 7.31 Display of Posting Change Notice Details for Batch To Batch Transfer
Figure 7.32 shows details of the transfer order with the two batches for the same
material shown. The new batch does not remain in the same storage bin with the
old batch. The transfer order has proposed an empty storage bin in the same storage type in which to place the stock with the new batch number.
Figure 7.32 Transfer Order Confirmation for a Posting Change Notice
for Batch to Batch Posting
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Business Examples—Stock Replenishment
This section has examined the aspects of the posting changes process; now we
will look at some real-life business examples.
7.4
Business Examples—Stock Replenishment
Replenishment of storage bins in the warehouse requires moving material from
one location to another. The material movement can be triggered by a movement
in IM or a need within the warehouse to relocate stock; for example, replenishing
the areas used for production orders.
7.4.1
Internal Stock Transfers
The internal stock transfer can only be triggered by a requirement to move a
material from one part of the warehouse to another, storage bin to storage bin.
There are several reasons why material needs to be moved in the warehouse such
as moving older stock to racks further away from the loading docks.
Example
Making the warehouse as efficient as possible ensures that deliveries are processed on time and stock is put away so that it is available for customer orders. A
British beverage company had been running SAP WM for about four months.
Before the WM implementation, the warehouse was run as several storage locations using inventory management. Although the company had reconfigured
their warehouse for SAP WM, the warehouse managers had not really changed
the processes by which material was moved in and out of the warehouse.
After four months, analysis of the number of picks in the warehouse showed that
the throughput had fallen since the second month. The supply chain team looked
at the travel of forklift operators for a selection of transfer orders and found that
the more recent picks required 30% more travel time. The supply chain team
found that the storage bins closest to the loading dock contained material that
was in less demand or was close to its expiry date. They proposed that after the
next warehouse inventory count, the material that was more frequently picked
should be placed in bins close to the loading dock, and less frequently picked
items be moved to locations further away.
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To achieve this, the warehouse team created a series of transfer orders to move
the material to more appropriate storage bins.
7.4.2
Fixed Bin Replenishment
A fixed storage bin is a storage bin where a specific material is always stored. This
may be because it has been specifically created for the material. In fixed storage
bin replenishment, the storage bin in the picking area needs to be replenished so
that the outbound deliveries remain at maximum efficiency.
Example
As in the previous example, a British beverage company had been running SAP
WM for about four months and was previously operating the warehouse using
SAP MM. After the warehouse had fixed the issues with correct stock being closer
to the loading dock, the company began reselling an imported beverage that
required oversized crates to store the individual bottles. The pallets of the
imported beverage were too tall for the standard racks that had been used for
many years. The oversized pallets were stored in an open storage area near the
warehouse office where damaged items were usually stored.
The warehouse manager did not want to keep the oversized pallets near the
office, as it was a long way from the loading dock and they were taking up room
required for damaged goods. The warehouse team modified several storage bins
into one large storage bin closer to the loading dock so they could accommodate
pallets of the imported beverage.
To ensure that the pallets of the imported beverage were always placed in the
same storage bin, the material master record for the imported beverage was
amended so that the fixed bin was entered.
7.4.3
Posting Changes
A posting change is an adjustment to the stock level of a material. This can result
from a change in the status of a material in a storage bin. The material does not
physically move, but the status changes. Several posting changes can be made to
material in the warehouse, including release from quality inspection or dividing
batches.
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Summary
Example
A manufacturer of paint additives produced batches of material that usually filled
at least two 55-gallon drums. The batches were received into stock and placed
into a warehouse storage bin. All movements from the production line were
received into quality inspection so the quality control team could test the contents of each drum to ensure the tested values were within the allowed limits.
On occasion, the quality control team would test the contents of each drum from
a batch and find that the tested values were different. This could occur if there
were any contaminants in the drum or if there was a delay in placing the product
into the drums.
If the quality control team found that the inspected values were different from
drum to drum, then they would recommend to the warehouse manager that each
drum be stored as a separate batch. To do this, the warehouse manager would create a posting change so that the one batch was split into two, but they would
remain in the same storage bin.
7.5
Summary
In this chapter, we discussed internal transfers and stock replenishment using
internal transfers and posting changes. Material is moved around the warehouse
every day. Therefore, it is important that the system transactions are kept up to
date to ensure that the warehouse stock is in the right bin with the right quantity
and the right status.
In Chapter 8, we will discuss the different picking strategies that can be assigned,
how these are configured, and how they are used.
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Picking strategies are important to the outbound process of the warehouse. Implementing the correct strategy can vastly improve efficiency in
this critical area. Choosing a picking strategy that makes processing more
complex can severely increase picking time and hinder deliveries.
8
Picking Strategies
A picking strategy is a method that determines the way a material is chosen to be
picked.
Example
A material may be selected because of a strategy to pick materials by their remaining
shelf life or by the sequence in which they are added to stock.
When picking strategies are discussed, there is often confusion between the
method of picking the material and the strategy for which material is to be
removed. The method of picking involves how a company physically removes the
stock; for example, batch picking or wave picking.
The strategy of picking involves deciding what material is to be picked. A number
of picking strategies can be used, including the following:
왘
First in, first out (FIFO)
왘
Last in, first out (LIFO)
왘
Fixed storage bin
왘
Shelf life expiration
왘
Partial quantities
왘
Quantity relevant
The warehouse operation doesn’t need to introduce picking strategies into the
material removal process, but how material is removed from the warehouse
should be discussed and effective strategies adopted.
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Once the picking strategy has been adopted, the warehouse management system
uses the picking strategy to assign the appropriate picking location. There is a
chance to manually intervene for certain stock movements, where it is possible to
change the source and destination storage bins that the system has already proposed.
Accepting the system-generated picking location removes a responsibility from
the warehouse staff and effectively reduces picking time. Manual changes should
be kept to a minimum and reviewed periodically to ensure that the picking strategies still follow the most effective configuration.
You need to complete several steps to configure the picking strategies before the
strategy can be applied to materials. These steps begin with the storage type indicator.
8.1
Storage Type Indicator
The storage type indicator in SAP WM allows only certain materials to be picked
from storage types, and the order of picking can be defined by the storage type
search for each storage type indicator. It is not necessary to configure the storage
type indicator if all materials are picked the same way within the same storage
type.
If the storage type indicator is to be used, it needs to be configured using Transaction OMLY or following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Activate Storage Type Search.
Figure 8.1 shows the selection available for the storage type search transaction.
To configure the storage type indicator, click the Define button. If you need to
configure a storage type indicator to create a separate search for a group of materials, you can make the entry in the screen shown in Figure 8.2.
The entry for a storage type indicator is simply the warehouse number, the storage type indicator that has been chosen, and a relevant description. Figure 8.2
shows some storage type indicators and descriptions.
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Storage Type Indicator
Figure 8.1 Storage Type Search Selection Screen: Transaction OMLY
Figure 8.2 Creating a Storage Type Indicator
Figure 8.3 shows the warehouse information entered into the material master
record for item 700000031. The material has been configured with the storage
type indicator FIX for picking. This means the storage type search that contains
the storage type indictor FIX will be the only storage type search applicable for
this material.
Now that we have discussed the storage type indicator, we’ll examine the storage
type search functionality.
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Figure 8.3 Storage Type Indicator Entered into the Material Master Record
8.2
Storage Type Search
Once you have configured the storage type indicator, you can configure the storage type search. You don’t have to configure a single storage type indicator, but
you can confer with the warehouse staff to decide if the storage type search differs for certain materials or groups of materials.
8.2.1
Configuring the Storage Type Search
The creation of a storage type search begins in the selection menu in Transaction
OMLY, as shown in Figure 8.1. The storage type search is the starting point for
picking material from the warehouse. The search defines what storage type is to
be used for the picking strategy.
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Storage Type Search
Before entering the storage type search, choose the search in consultation with
the warehouse management staff that plans the layout of the material in the warehouse. How they have stored certain material and how the storage types are positioned determines the configuration of the sequence of storage types that are
searched.
Figure 8.4 shows the information entered for each storage type search. Each line
entry is relevant for a particular warehouse. The unique keys for each entry are as
follows:
왘
Warehouse
왘
Warehouse operation
왘
Storage type indicator
왘
Stock category
왘
Special stock indicator
Figure 8.4 Detail Screen for a Storage Type Search
For the warehouse indicator enter “2” for two-step picking, “A” for stock picking,
and “E” for stock putaway. The stock category and special stock indicators are
used when a different storage type search is required for materials with these special statuses.
Using the example in Figure 8.4 where the warehouse operation is A for picking
and the stock category is Q for quality inspection (QI) stock, the picking strategy
will search storage type 001, and if no appropriate material is located, then the
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search will be processed in storage type 002. If no material is found in storage
type 002, the process will require manual intervention.
A maximum of 30 storage types can be configured for each search. Depending on
the complexity of the warehouse and the location of the material, the number of
storage types entered per search will vary.
8.2.2
Configuring Storage Section Search
In addition to the storage type indicator and storage type search, there is similar
configuration and functionality for the storage section. In complex warehouses,
storage section functionality is frequently used, and searching by storage section
is a way to increase warehouse picking efficiency.
You configure the storage section indicator with Transaction OMLZ, or you can
find it by following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Activate Storage Section Search.
Figure 8.5 shows the configuration of the storage section indicator. The indicator
is configured specifically for each warehouse. It enables the definition of a group
of materials that can all be allocated to one storage section search.
Figure 8.5 Configuration of a Storage Section Indicator
Figure 8.6 shows the configuration for a storage section search if it is required.
The storage section indicator is part of the unique key along with the warehouse,
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FIFO (First In, First Out)
storage type, hazardous material storage class, and water pollution class. It is possible to configure up to 10 storage sections for each unique search.
Figure 8.6 Configuration for a Storage Section Search
This section examined the storage type search. We’ll now discuss the first in, first
out picking strategy.
8.3
FIFO (First In, First Out)
The picking strategy for first in, first out—or FIFO, as it is more commonly
known—removes the oldest quant from the storage type defined in the storage
type search. This is used in most manufacturing industries where the material
companies want to sell first is that which has been stored in the warehouse the
longest.
FIFO is a very common picking strategy. It ensures that the oldest material is
removed from the warehouse for production or sales orders. In many instances,
the warehouse layout is configured to optimize FIFO picking.
Warehouses that have deep racks make it difficult for warehouse staff to get to the
correct material. One method of ensuring that the oldest material is picked is to
use gravity flow racks for materials that are picked individually and not in boxes.
The boxes are placed at the back of the rack, and the flow racks are filled so that
the picking at the front moves material forward from the back. This is important
in picking areas.
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8.3.1
Configuring the FIFO Picking Strategy
You can define the FIFO picking strategy by following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Stock Removal Strategies 폷 Define FIFO Strategy.
Figure 8.7 shows the configuration of the stock removal strategy for warehouse
001 and storage type DRW. The stock removal strategy is F for FIFO.
Figure 8.7 Defining a Stock Removal Strategy as FIFO
8.3.2
Stock Removal Control Indicators
Figure 8.7 shows that, apart from the stock removal strategy, several other control indicators can be configured for the strategy:
왘
Stk rmvl requires confirmation
If this checkbox is selected, the picking of the entire item must be confirmed in
the destination storage type or return storage type before the quantity is made
available.
왘
Allow negative stock
Negative stock is allowed for interim storage areas. When this checkbox is
selected, the system allows the posting of negative quants in the storage type.
왘
Full stk rmvl reqmt act
Select this checkbox when the entire quant must be picked, regardless of the
quantity required for the pick.
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FIFO (First In, First Out)
왘
Return stock to same storage bin
Select this checkbox when the picked stock that was not needed has to be
returned to the same bin it was picked from.
왘
Execute zero stk check
If the warehouse needs a zero stock check when a storage bin is emptied after
a stock pick, then select this checkbox. When the zero stock check is made, the
storage bin can only be used for putaways when the zero stock check is completed and confirmed.
왘
Round off qty
This field is for rounding off the requested quantity for picking. When this
checkbox is selected, the processing uses the rounding off quantity in the warehouse screen for the storage type in the material master record.
왘
Propose post chge at storage bin
This checkbox is selected when the warehouse needs to post and leave materials in same storage bin, a key procedure in relabeling. This signals that no
transfer is to take place for a posting change.
왘
Block upon stock rmvl
This field can be filled in when the blocking checkbox has to be set when the
material is picked. The values that can be used are 1 for blocking a storage bin
and 2 for blocking the quant only.
왘
Assigned pick point stor. ty.
This field can be entered with the assigned pick point for the storage type.
왘
Return storage type
This field contains the storage type into which any remaining quantity of the
picked material to be stored.
After reviewing this list of indicators, you can move on to an example of a FIFO
picking strategy.
8.3.3
Example of FIFO Picking Strategy
The following example will show you how the FIFO configuration for a storage
type affects how the material is picked in the warehouse.
You can use Transaction LS24 to show the material stock. Figure 8.8 shows the
warehouse stock for material 100-500. The material is stored in two bins in storage type 001, but the material in storage bin 02 – 01 – 03 was received into stock
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before the material in storage bin 03-01-08. Therefore, in any FIFO picking strategy the material in storage bin 02 – 01 – 03 should be selected first.
Figure 8.8 Stock Overview for Material in a Warehouse
To display the picking strategy configuration for a storage type, follow the menu
path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Stock
Removal Strategies 폷 Define FIFO Strategy.
Figure 8.9 shows that for storage type 001, the picking strategy is FIFO, option F,
and this will be used when material is withdrawn from any storage bin in the
storage type. You can use Transaction LT01 to create a transfer order that will pick
material from the storage type 001.
Figure 8.9 FIFO Picking Strategy for Storage Type 001
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FIFO (First In, First Out)
Figure 8.10 shows the initial screen for the creation of a transfer order to pick
material from storage type 001. Movement type 201 is used because it will
remove the material and consume it at a cost center.
Figure 8.10 Creating a Transfer Order: Transaction LT01
Figure 8.11 shows the system-generated transfer order item information for
material 100-500. Based on the configuration for storage type 001, the material
that has been selected is from storage bin 02 – 01 – 03, which is the material that
was receipted into stock first.
Figure 8.11 System-Generated Source Storage Bin Based on FIFO Picking Strategy
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Now that we’ve discussed the FIFO picking strategy, let’s consider the opposite
picking strategy, which is last in, first out, or LIFO.
8.4
LIFO (Last In, First Out)
Last in, first out—or LIFO—is based on the principle that the last delivery of
material to be received is the first to be used. Many companies use LIFO for
inventory cost accounting. The value of warehouse stock impacts reported gross
profit margins. Investors tend to carefully review gross profit margins, which are
often considered a measure of the value provided to consumers. LIFO can give a
more accurate valuation of warehouse stock.
Retailers such as Walgreens and Kohl’s use LIFO picking. When LIFO picking
occurs, no value change occurs for older material when new materials are
received. Because the LIFO method is in effect, the older material is not affected
by the potentially higher prices of the new deliveries of material. If the older
material is not affected, that means it is not valuated at the new material price. If
the older material value is not increased, this prevents false valuation of current
inventory.
Picking with the LIFO method is not as common as FIFO picking. It may be used
if the financial department wants to report inventory using LIFO because it gives
a more conservative view of the cost of inventory and therefore is seen in a positive light by some financial analysts. Check with the warehouse staff and
accounting department to determine whether any storage types need to be configured for LIFO picking.
8.4.1
Configuring the LIFO Picking Strategy
You can define the LIFO picking strategy by following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Stock Removal Strategies 폷 Define LIFO Strategy. For this configuration, we are changing the picking
strategy of storage type 001 from FIFO to LIFO.
Figure 8.12 shows that for storage type 001, the picking strategy has been
changed to LIFO, option L, and this will be used when material is withdrawn
from any storage bin in the storage type.
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LIFO (Last In, First Out)
Figure 8.12 LIFO Picking Strategy for Storage Type 001
8.4.2
Example of LIFO Picking Strategy
The following example will show how the LIFO configuration for a storage type
affects the way the material is picked in the warehouse. Transaction LS24 displays
the warehouse stock for material 100-500.
Figure 8.13 shows the stock position for material 100-500 in storage type 001.
When a transfer order for this material is created, the LIFO picking strategy configured for storage type 001 should select the material in storage bin 03 – 01 – 08,
because it is the last material to be goods-receipted.
Figure 8.13 Stock Overview for Material in a Warehouse
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You can use Transaction LT01 to create a transfer order to pick material from storage type 001. Figure 8.14 shows the initial screen for creating a transfer order to
pick material from storage type 001. The movement type, 551, is used for scrapping materials. This will remove the material from the warehouse for disposal.
This is similar to consuming the material at a cost center.
Figure 8.14 Creating a Transfer Order: Transaction LT01
Figure 8.15 shows the system-generated transfer order based on the LIFO picking
strategy. In this case, the material has been removed from the storage bin where
the material has a goods receipt date later than material in the other storage bins.
Having explored the functionality of the LIFO picking strategy, we will continue
by discussing the fixed storage bin picking strategy.
8.5
Fixed Storage Bin
The picking strategy for fixed storage bins relies on the data that has been entered
into the material master record for the material to be picked.
8.5.1
Fixed Storage Bin in Material Master
The fixed storage bin is entered into the material master record in the SAP WM
screen.
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Fixed Storage Bin
Figure 8.15 System-Generated Source Storage Bin Based on LIFO Picking Strategy
Note
In SAP ECC 6.0, this is the second WM screen, but this may vary depending on the version you are using.
Figure 8.16 shows the WM screen for material 100-500. In the storage bin stock
section of the screen, the storage bin has the entry A–01. This is the storage bin
fixed for this material in this specific storage type, 005. This information is used
for the fixed bin picking strategy.
The material in storage type 005 should be stored in storage bin A –01; however,
it may have been manually moved to other bin locations if there was an overflow
of material. Transaction LS24 enables you to see the stock situation for the material.
Figure 8.17 shows that material 100-500 is in fact located in three storage bins in
storage type 005. The fixed bin picking strategy generates a transfer order that
picks material from the fixed storage bin as noted in the material master record.
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Figure 8.16 Fixed Storage Bin Information in Material Master Record: Transaction MM02
Figure 8.17 Stock Overview for Material in a Warehouse
8.5.2
Configuring the Fixed Bin Picking Strategy
You can define the fixed bin picking strategy by following the menu path IMG 폷
Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Stock Removal
Strategies 폷 Define Fixed Bin Strategy.
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Fixed Storage Bin
Figure 8.18 shows that for the storage type 005, the picking strategy has been
configured to option P, which represents fixed bin, and this strategy will be used
when material is withdrawn from any storage bin in the selected storage type.
Figure 8.18 Fixed Bin Picking Strategy for Storage Type 005
8.5.3
Example of Fixed Bin Picking Strategy
In this section, we will show you how the fixed bin picking strategy configuration
for a storage type affects how the material is picked in the warehouse. You can
use Transaction LT01 to create a transfer order to pick material from the fixed bin
defined in the material master for storage type 005.
Figure 8.19 shows the initial screen for creating a transfer order to pick material
from the fixed bin in storage type 005. The movement type, 551, is used for
scrapping materials. This will remove the material from the warehouse for disposal.
Figure 8.20 shows the system-generated transfer order based on the fixed bin
picking strategy. In this case, the material has been removed from the storage bin,
A-01, that is defined in the material master for storage type 005.
This section has described the fixed bin picking strategy. Let’s now focus on the
picking strategy that uses shelf life expiration.
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Figure 8.19 Creating a Transfer Order: Transaction LT01
Figure 8.20 System-Generated Source Storage Bin Based
on Fixed Bin Picking Strategy
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Shelf Life Expiration
8.6
Shelf Life Expiration
In many industries, especially retail and grocery, the shelf life of materials is a
very important characteristic. This can be a sale-focused shelf life, where the
material can only sit on a store shelf until its sell by date. Alternatively, it can be
production focused, as when chemicals and raw materials can be kept only for so
long and still meet tolerance limits for use in the production process. It is important that warehouse managers review shelf life expiration dates (SLEDs) to ensure
that out of date material does not have to be scrapped.
Under the shelf life expiration picking strategy, the material is picked based on
the shelf life of the quants of material in the warehouse. To ensure that this picking strategy produces the correct results, WM users must perform several configuration steps or check them for accuracy.
8.6.1
SLED Picking and the Material Master
Before using the shelf life picking strategy, check that the material to be picked
has the correct information regarding the shelf life characteristics entered on the
plant storage view. Use Transaction MM03 to display the material or Transaction
MM02 to change the material.
Figure 8.21 Shelf Life Expiration Data Entry on Plant Data Screen
of Material Master Record
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Figure 8.21 shows the shelf life data that has been entered for material 100-500.
This data is used in calculating the shelf life expiration date in batch determination and is used in the picking strategy.
8.6.2
Configuring Shelf Life Expiration Picking Strategy
You can define the fixed bin picking strategy by following the menu path IMG 폷
Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Stock Removal
Strategies 폷 Define Strategy for Expiration Date.
Unlike some other picking strategies, this configuration has two parts, as shown
in Figure 8.22. The first part of the configuration is to activate the shelf life expiration date management for the warehouse where the picking will take place. The
second part is to activate the stock removal strategy for shelf life expiration for
the warehouses that require it.
Figure 8.22 Two-Part Configuration for SLED Picking Strategy
Activate the SLED management for the warehouse by selecting the checkbox, as
shown in Figure 8.23 (001; Central Warehouse). After making this configuration, you can configure the picking strategy for the storage type, using the second
option shown in Figure 8.22.
Figure 8.24 shows that for storage type 001, the picking strategy has been configured to be shelf life expiration, which is represented by option H. This will be
used when material is withdrawn from any storage bin in the storage type.
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Figure 8.23 Configuration to Activate SLED for a Warehouse
Figure 8.24 Shelf Life Expiration Picking Strategy for Storage Type 001
8.6.3
Displaying SLED Stock
The shelf life expiration date control list shows stock in the warehouse that has an
expiration date. You can run the SLED control list with Transaction LX27 or via
the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Warehouse Management 폷
Master Data 폷 Material 폷 Evaluations 폷 SLED Control List.
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Figure 8.25 shows the entry of the material, warehouse number, plant, and storage type along with the remaining shelf life in days for the maximum storage time
allowed for a material in the warehouse.
Figure 8.25 Initial Screen for Shelf Life Expiration Date Control List: Transaction LX27
The program reviews the SLED date entered when the transfer order was created
against the current date to calculate the remaining shelf life.
Figure 8.26 shows the shelf life expiration date control list. The report shows the
quants of material 100-500 in the warehouse that are active for SLED and are
within the parameters entered in Figure 8.25.
Figure 8.26 Results Screen for Shelf Life Expiration Date Control List: Transaction LX27
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8.6.4
Example of Shelf Life Expiration Picking Strategy
In this section, we’ll explain how the shelf life expiration picking strategy configuration for a storage type affects the way material is picked in the warehouse.
You can use Transaction LT01 to create a transfer order to pick material with the
shortest shelf life defined in the material master for storage type 001.
Figure 8.27 shows the initial screen for creating a transfer order to pick material
from storage type 001. The movement type, 201, is used because it will remove
the material and consume it at a cost center.
Figure 8.27 Creating a Transfer Order: Transaction LT01
Figure 8.28 shows the system-generated transfer order based on the shelf life
expiration picking strategy. In this example, the material has been removed from
storage bin A-09 because this is the bin that contains the material with the shortest shelf life, as shown in Figure 8.26.
Now that we have reviewed the picking strategy for shelf life expiration, let’s
examine the partial quantities picking strategy.
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Figure 8.28 System-Generated Source Storage Bin Based on Shelf Life
Expiration Picking Strategy
8.7
Partial Quantities
The picking strategy for partial quantities is associated with storage unit management, which we’ll discuss in Chapter 11. A warehouse may require the partial
pick if the warehouse manager does not want to pick all the contents of a storage
unit and then have to return some to the storage bin. A partial quantity allows the
staff to remove some of the contents of a storage unit.
Members of the warehouse staff often try to reduce the number of storage units
with partial quantities, and the partial quantities picking strategy can be an appropriate way to accomplish this.
8.7.1
Configuring Partial Quantities Picking Strategy
You can define the partial quantities picking strategy by following the menu path
IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Stock
Removal Strategies 폷 Define Strategy for Partial Pallet Quantity.
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Partial Quantities
Figure 8.29 shows that for storage type 001, the picking strategy has been configured for partial pallet quantity, which is represented by option A. This will be
used when material is withdrawn from any storage bin in the storage type.
Figure 8.29 Partial Quantity Picking Strategy for Storage Type 001
8.7.2
Using the Partial Quantities Picking Strategy
When a transfer order is created for a material with the storage type configured
for partial quantities picking, transaction processing searches for a relevant quant
of material. The logic behind the picking strategy is defined as follows:
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Initially the system determines whether the quantity in the transfer order
equals or is greater than the quantity of a standard storage unit. If this is the
case, then a standard storage unit can be picked from stock. However, if no
standard storage units are available, the partial storage unit quantities in the
warehouse are used.
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If the system determines that the quantity in the transfer order is less than the
quantity of the standard storage unit, then the system initially proceeds to
remove partial storage unit quantities from the warehouse. However, if no partial storage unit quantities are available, the system needs to break down full
storage units to obtain the correct quantity for the transfer order.
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We’ll provide further information regarding storage units in Chapter 11. After
this discussion of partial quantities picking, we now turn our attention to the
quantity-relevant picking strategy.
8.8
Quantity-Relevant Picking
The quantity-relevant picking strategy is less frequently used but is useful for
companies whose warehouses store the same material in varying sizes of bins and
storage types. We find this scenario often in older warehouse buildings.
The quantity-relevant picking strategy is based on the quantity required in the
transfer order and whether that quantity is defined as large or small. Warehouses
may have storage types where small quantities of material are stored and also
have storage types where large quantities are stored.
8.8.1
Configuring the Quantity Relevant Picking Strategy
You can define the quantity-relevant picking strategy by following the menu path
IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Stock
Removal Strategies 폷 Define Strategy for Large/Small Quantities.
Unlike some other picking strategies, this configuration has two parts, as shown
in Figure 8.30. The first part of the configuration is to activate the quantity-relevant strategy for the warehouse where the picking will take place. The second
part of the configuration is to determine the sequence in which the storage types
are searched so that the relevant material to be picked is found.
Figure 8.30 Two-Part Configuration for Quantity Relevant Picking Strategy
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Quantity-Relevant Picking
Figure 8.31 shows that for storage type 001, the picking strategy has been
changed to quantity relevant, option M, and this will be used when material is
withdrawn from any storage bin in the storage type. The second part of the configuration is to define the search sequence for the storage type.
Figure 8.31 Quantity-Relevant Picking Strategy for Storage Type 001
When the entries in the storage type search sequence are made, it is necessary to
enter the first storage type for the smallest quantity. The second in the sequence
should be larger than the first, and subsequent storage types should get larger in
the search sequence, as shown in Figure 8.32.
Figure 8.32 Storage Type Search Sequence for Quantity-Relevant Picking
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Figure 8.32 shows the storage types that have been entered in the storage type
search sequence. The picking functionality will search these storage types in
sequence.
In Figure 8.32, two sequences of storage types can be used to find the relevant
material for picking. In the first line, this is the sequence used for warehouse 001,
and the operation is E, for picking. For a transfer order that uses quantity-relevant
picking to pick material in warehouse 001, the function will review the material
in the first storage type, 002. If the material cannot be found in this storage type,
the system will review the material in the second storage type, 007, and so forth
until the material is found.
If the material cannot be found, then warehouse staff has to process the transfer
order manually and enter a storage type and storage bin into the transfer order.
8.8.2
Quantity-Relevant Picking and the Material Master Record
When a transfer order is being processed, the transaction determines whether the
transfer order line item quantity is small or large. The source storage bin that is
proposed in the transfer order will be from either a small-quantity storage type or
a large-quantity storage type.
The check for this definition of large versus small quantity is performed for this
picking strategy based on the control quantity field of the WM screen in the material master record. The control quantity that is entered for this material and storage type combination is the threshold that divides large from small.
In this case, as shown in Figure 8.33, the dividing threshold is a quantity of 20.
This means a transfer order line item with a quantity of 18 is deemed a small
quantity, and a line item quantity of 21 is deemed large. This threshold will vary
from material to material and storage type to storage type.
For the quantity-relevant picking strategy, the system uses movement type 603 to
determine which storage type is to be used in the transfer order for picking.
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Figure 8.33 Control Quantity Field in the Material Master Record
8.9
Business Examples—Picking Strategies
A picking strategy for the warehouse is a method that determines the way a material is chosen to be picked for a production order or for a customer sales order.
The strategy of picking material involves deciding what material is to be picked.
Several picking strategies can be used, including first in, first out (FIFO); last in,
first out (LIFO); and shelf life expiration date (SLED).
8.9.1
Storage Type Search
Some companies have complex warehouse facilities and invest a lot of time and
resources into managing their warehouse for maximum efficiency. One way they
can do this is to design specific storage type searches where only certain materials
to be picked from storage types and the order of picking can be defined by the
storage type search.
Example
Some companies do not implement a storage type search for picking, as they
believe they have a simple warehouse operation that does not require any assistance from the system. One company that believed this was a manufacturer of
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locomotive parts based in Baltimore. The company had been manufacturing parts
for a variety of industries since the 1940s. Their process was manufacturer parts
on a contract basis from multinational transportation companies. The company
manufacturers thousands of the same part each week, and they store less than 50
stock items in their warehouse.
The manufacturer implemented an SAP system in the 1990s and used a basic WM
configuration without stock removal strategies. That decision was based on the
fact that they stored so few parts that all the warehouse staff knew where each
part was located.
The company found that after 2002, the contracts they were receiving required
that they indicate which parts were made from a particular batch of raw material,
and finished goods needed to be identified using batch management. Once this
change was implemented, the picking of parts in the warehouse became significantly more complicated. The warehouse staff knew where the parts were but not
the batch. As picks required a certain batch to be pulled, the warehouse foreman
spent a lot of time creating transfer orders. Once management noticed that warehouse efficiency was declining, a recommendation to implement storage type
search was proposed and then implemented.
8.9.2
First In, First Out (FIFO)
The picking strategy for first in, first out, or FIFO, as it is more commonly known,
removes the oldest quant from the storage type defined in the storage type
search. This is found in most manufacturing industries where the material companies want to sell first is that which has been stored in the warehouse the longest time.
Example
In the manufacturing industry, most companies want to rotate their stock so that
the finished goods that are placed in the warehouse first are taken out of the
warehouse first and delivered to the customer. A Michigan-based manufacturer
of hand tools was purchased by a German multinational manufacturing company,
which led to a simple implementation of an SAP system a year later. The company
manufactured thousands of the same items each day, and they were stored in the
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warehouse before being sold to customers. Finished goods tended to stay in the
warehouse for less than a week before being shipped to customers or distributors.
Due to the limited time that product remained in the warehouse, the company
did not implement a FIFO or SLED policy. Sales orders began to slow down at the
beginning of 2008, and by summer, the warehouse was filling up, as manufacturing was producing product based on plans that needed to be revised. The finance
department asked the warehouse to make sure the finished goods that were
picked for a sales order were the oldest in the warehouse. The system records the
date on which the items are receipted into the warehouse, so the supply chain
team made configuration changes to instigate a first in, first out strategy that
ensured that the oldest material was picked first.
8.9.3
Fixed Bin
Many companies require that certain materials always be placed in the same location within the warehouse. This may be because of the size of the item or characteristics of the item that require a specific location to be selected. The picking
strategy for fixed storage bins relies on the data that has been entered into the
material master record for the material to be picked.
Example
A British beverage company had been running SAP WM for about four months
and previously operated the warehouse using SAP MM. After the warehouse
fixed the issues with correct stock being closer to the loading dock, the company
began reselling an imported beverage that used oversized crates to store the individual bottles. The pallets of the imported beverage were too tall for the standard
racks that had been used for many years. The oversized pallets were stored in an
open storage area near the warehouse office where damaged items were usually
stored.
The warehouse team modified several storage bins into one large storage bin
closer to the loading dock so that they could accommodate pallets of the imported
beverage. The imported beverage was always placed in the same storage bin,
which was entered on the material master, and this was the fixed bin from which
the material was always picked from.
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8.9.4
Shelf Life Expiration Date (SLED)
When you look at an item in a supermarket, you almost always see an expiration
date. This is relevant to any item that has a shelf life, not just food items. In an
increasing number of industries the shelf life of materials is a very important
characteristic. It is important that warehouse managers review the shelf life expiration dates (SLEDs) to ensure that out of date material does not have to be
scrapped.
Example
In the food industry, it is important to ship product to customers so that items in
the warehouse do not pass their expiry date. For canned goods the urgency to
ship product is less than fresh items, which generally have a very short shelf life.
A British manufacturer of snack foods produced items that had a shelf life of
between six weeks and one year. For items with a short shelf life it was important
to ensure that no items in the warehouse had a shelf life that made them unsellable. Generally, no customer would take product with less than three weeks of
remaining shelf life. If items in the warehouse did have a shelf life of less than
three weeks, then these would either be sold at a loss in the staff shop or donated
to charity.
The company had been using a combination of off-the-shelf software and custom
systems to assist with warehouse operations and shelf life processes. In the early
2000s, a Swiss multinational food company purchased the firm, and the legacy
systems were replaced with an SAP system. The warehouse management implementation was deemed to be of great importance, as ensuring that product was
delivered to the customer with the correct shelf life was vital to the company. The
implementation team used the picking shelf life strategy in combination with
entering the correct shelf life information on the material master records. The
warehouse foreman was able to see shelf life across the warehouse for the items
stored there and was able to reduce the amount of material could not be shipped
to customers.
8.10
Summary
This chapter discussed picking strategies used in the warehouse. All of the strategies we have discussed here may be used at any site. Although FIFO and fixed bin
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picking strategies are very common, do not discount other picking strategies that
may improve the efficiency of a particular warehouse.
Some retail companies, such as Walgreens and Kohl’s, use picking strategies that
are not FIFO, so be prepared to ask companies’ financial departments how they
value their stock and whether FIFO is the strategy they want to use. Consult with
the warehouse staff to see if the picking strategies in the SAP system reflect the
way they need to work. Be prepared to demonstrate how each of the strategies
works and how material is assigned to the transfer order. Meeting the needs of
warehouse management may require changes to the configuration of the picking
strategies.
In Chapter 9, we will discuss the different putaway strategies that can be
assigned, how these are configured, and how they are used.
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Putaway strategies are important in locating material quickly and
logically and thus helping to improve warehouse efficiency. Material for
which putaway is performed without a protocol is often difficult to locate
and costs extra time and money to move and ship.
9
Putaway Strategies
The putaway, or stock placement, strategies discussed in this chapter will help
you to decide where to store material received into the warehouse. Several putaway strategies are possible, including:
왘
Fixed bin storage
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Open storage section
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Next empty storage bin
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Bulk storage
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Near picking bin
You do not have to define a putaway strategy for placement of material into the
warehouse; indeed, many warehouses manually determine the putaway storage
bin during the transfer order process. However, in your efforts to produce warehouse efficiency using SAP WM, it is important to discuss the process of material
putaway in the warehouse and to adopt putaway strategies if necessary.
Once the putaway strategy has been adopted, the system uses it to assign the
appropriate storage bin to store the material. A putaway strategy may not be
necessary, but accepting the system-generated putaway location relieves the
warehouse staff of one more responsibility and effectively speeds up material
putaway.
Having introduced the concept of putaway strategies, let’s look at the first of
these, the fixed bin storage putaway strategy.
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9.1
Fixed Bin Storage
The putaway strategy for fixed bin storage takes into account the data that has
been entered into the material master record for the material to be placed in
stock. The material is stored in a single bin, that is, a fixed bin. The data regarding
this bin and the parameters of the bin are located in the material master record of
the material. For example, the storage bin is entered into the material master
record and does not change unless the material master record is changed.
9.1.1
Fixed Storage Bin in the Material Master
The fixed storage bin is entered into the material master record in the WM
screen.
Note
In SAP ECC 6.0, this is the second WM screen, but it may vary depending on the version
you are using. This storage bin is used for fixed bin picking and fixed bin putaway.
Figure 9.1 shows the WM screen for material 100-500. In the Storage Bin Stock
section of the screen, the Storage Bin field has the entry A-01. This is the storage
bin fixed for this material in this fixed bin storage type: 005. This information is
used for the fixed bin putaway strategy.
Figure 9.1 Fixed Storage Bin Information in the Material Master Record: Transaction MM02
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9.1.2
Configuring the Fixed Bin Storage Putaway Strategy
You can define the fixed bin storage putaway strategy by following the menu path
IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Putaway
Strategies 폷 Define Strategy for Fixed Bins.
Figure 9.2 shows the putaway strategy for storage type 005. The fixed bin storage
strategy is entered as an F for fixed bin storage putaway. You can set a number of
other stock placement configuration fields as well.
Figure 9.2 Configuring the Fixed Bin Storage Putaway Strategy
9.1.3
Stock Placement Control Indicators
Figure 9.2 shows that, apart from the stock putaway strategy, you can configure
several other control indicators. These are described here:
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Stk plcmt requires confirmation
Select this checkbox when putaway must be confirmed, including confirmation of removal from the source storage bin, placement in the destination bin,
and placement in the return bin, if relevant.
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Dst bin ch. during confirm
This field controls whether the transaction allows a change to the destination
storage bin during confirmation of the transfer order. If this field is selected, it
is possible to change the destination storage bin during confirmation of the
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transfer order. If the field is not selected, then it is not possible to change the
destination storage bin.
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Mixed storage
Set this field to allow different quants to be stored in a storage bin in this storage type. There are several options for this field:
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Blank
Mixed storage is not allowed.
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A
Several storage units with the same material can be stored in a single bin.
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B
This allows one material, but in different batches per bin and storage unit.
Each storage unit can contain more than one batch of the same material.
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C
This option allows several batches in one storage bin but only one material.
However, it is not possible to put different batches in a single storage unit.
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X
This option allows any mixed storage without restrictions. Different material numbers and different batches can coexist in the storage bin and in
individual storage units.
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Addn to stock
This field allows a quant of a material and a batch number to be stored in a
storage bin with the same material and the same batch as an addition to existing stock.
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Retain overdeliveries
Select this checkbox if the storage type into which the material is being placed
can accommodate the overdelivery.
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Mail control
This field is the mail control for the replenishment storage type. If an error
occurs during automatic creation of transfer orders in production planning,
this field is used to define which user is to be informed.
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Capacity check method
Setting this field means a capacity check will be carried out for the storage bins
in this storage type. This field is required if there is a possibility that the capacity can be exceeded. There are several options for the capacity check method:
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Fixed Bin Storage
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Blank
No check of capacity
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1
Check of maximum weight
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2
Check based on palletization of storage unit type
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3
Check of maximum quantity per storage bin in a storage type
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4
Capacity usage check based on material
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5
Capacity usage check based on storage unit type (SUT)
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6
Capacity usage check based on the sum of the material and the storage unit
(SU)
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Act. Capac
This is the active capacity check. Selecting this indicator ensures that an active
capacity check is executed when goods are placed into stock. This is not needed
for strategies B, F, and I.
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SUT check active
Selecting this checkbox activates the storage unit type check for the putaway.
The storage unit type must be entered for transfer orders using this putaway
strategy. The storage unit type refers to the type of storage unit, such as a pallet
or wire container.
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Storage sec. check active
Select this checkbox is set when a storage section check is required for stock
putaway. When the indicator is selected, the transfer order will search the storage bins in the storage sections that have been identified in the configuration
of the storage section search.
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Block upon stk plcmt
Setting this field will execute a blocking indicator at the time of storage putaway. Two blocks can be activated: one for the storage bin and one for the
quant. If the storage bin block is set, the storage bin is blocked from any activity when the material is placed into it. This may be done to make sure the material is not moved or sold until a check or inspection is made on the contents of
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the bin. If a block is activated only on the quant, then this block applies only to
that quant that has undergone putaway and not to any other quants in the storage bin.
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Assigned ID point stor. Type
This field is the identification point for a storage type. Any goods movements
that do not have a specific storage bin in this storage type as their destination
are first directed to the identification point. At that point the material is identified and a transfer order is generated for the transfer of the material into the
correct storage type.
Now that you have a good understanding of these indicators we can move on to
an example of the putaway strategy for fixed bin storage.
9.1.4
Example of Fixed Bin Storage Putaway Strategy
In this section, we will show you how the fixed bin strategy configuration for a
storage type affects material putaway in the warehouse. The putaway strategy has
been configured for storage type 005 as a fixed bin, as shown in Figure 9.2.
A stock placement is initiated by the creation of a transfer order that will move
the material from a location. Normally, this is a movement from a goods receipt
interim storage type to the fixed bin storage bin of the storage type defined in the
material master.
You can use Transaction LT01 to create a transfer order that will move the material into fixed bin storage type 005. The material assigned for putaway has been
goods-receipted into storage type 902 and the storage bin for receiving, which is
WE-ZONE.
Figure 9.3 shows the initial screen for creating a transfer order for putaway of the
material from a goods receipt. The transfer uses movement type 501, as it will
remove the material from the goods receiving interim storage type 902 and place
it in the appropriate storage bin for the fixed bin storage strategy.
Figure 9.4 shows the system-generated transfer order item information for material 100-500. Based on the configuration for the fixed bin putaway strategy, the
material has been moved from the interim storage for the goods receipt and
selected for transfer to the fixed bin defined in the material master record for
material 100-500.
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Fixed Bin Storage
Figure 9.3 Creating a Transfer Order: Transaction LT01
Figure 9.4 System-Generated Destination Storage Bin Based on
the Fixed Bin Storage Putaway Strategy
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Figure 9.5 shows that quantity of material 100-500 has now been placed in fixed
bin location A-01 in storage type 005. This was achieved by using Transaction
LS24.
Figure 9.5 Stock Overview for Material 100-500 in Warehouse 001
After reviewing the functionality of putaway strategies for fixed bins, we’ll turn
our attention to the open storage putaway strategy.
9.2
Open Storage
The concept of open storage applies when materials are stored in areas of open
floor, where there are no racks or lines. The storage type is roughly divided into
storage sections, and the protocol is that one storage section is represented by
one storage bin.
9.2.1
Configuring the Open Storage Putaway Strategy
You can define the open storage putaway strategy by following the menu path
IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Putaway
Strategies 폷 Define Strategy for Open Storage.
Figure 9.6 shows the putaway strategy for storage type 003. The open storage
strategy is entered as a C for fixed bin storage putaway. Because the storage is
open and not as restrictive as rack storage, you must select the Mixed Storage
and Addn to Stock fields so that multiple materials can be entered into the one
storage bin.
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Open Storage
Figure 9.6 Configuration for the Open Storage Putaway Strategy
9.2.2
Example of Open Storage Putaway Strategy
Now let’s see how the open strategy configuration for a storage type affects material putaway in the warehouse.
Open storage allows the storage of different materials in the same storage bin.
The current stock in one open storage bin shows that two materials are stored in
one bin. You can see this by using Transaction LS02N or by following the menu
path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Bins and
Stock 폷 Single Displays 폷 Storage Bin.
Figure 9.7 shows that in one storage bin—C-008—there are two materials. The
configuration for the open storage putaway allows for mixed storage and an addition to existing storage. This is how open storage works.
You can use Transaction LT01 to create a transfer order for material putaway into
open storage type 002. The material for putaway has been goods-receipted into
storage type 902 and the storage bin for receiving, which is WE-ZONE.
Figure 9.8 shows the initial screen for the creation of a transfer order for putaway
of the material from a goods receipt. The transfer uses movement type 501
because it will remove the material from the goods receiving interim storage type
902 and place it in the appropriate storage bin for the open storage strategy.
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Figure 9.7 Materials Stored in Open Storage Type 003: Transaction LS02N
Figure 9.8 Creating a Transfer Order: Transaction LT01
Figure 9.9 shows the system-generated transfer order item information for material 100-500. Based on the configuration for open storage putaway strategy, the
material has been moved from the interim storage for the goods receipt and
selected to be transferred to the open storage bin—bin C-008.
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Open Storage
Figure 9.9 System-Generated Destination Storage Bin Based
on the Open Storage Putaway Strategy
Figure 9.10 shows information about open storage bin C-008 for open storage. It
shows that the bin has three materials stored in it and that this can continue if
material needs to be stored in the open storage type of the warehouse.
Figure 9.10 Materials Stored in Open Storage Type 003: Transaction LS02N
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Now that we’ve reviewed the open storage putaway strategy, we’ll examine the
next empty bin putaway strategy.
9.3
Next Empty Bin
Some warehouses are structured so that material can be stored in any bin within
the storage type. This structure can result from the nature of the material stored
in the warehouse; for example, different materials may all be stored in the same
size container. If this is the case, the putaway strategy can be configured so that
the system will select the next empty bin.
In manufacturing industries that produce electronic components, the parts are
often small, delicate, and prone to damage by static. These components are stored
in the warehouse in containers that are safe for all products. Many warehouses
that store these products use carousel storage, where the parts are stored in identical containers in a carousel system that places new items in the next empty bin
available.
9.3.1
Configuring the Next Empty Bin Putaway Strategy
You can define the next empty bin putaway strategy by following the menu path
IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Putaway
Strategies 폷 Define Strategy for Empty Storage Bin.
Figure 9.11 shows the putaway strategy for storage type 001. The next empty bin
putaway strategy is entered as L for next empty bin. Note that other indicators are
selected for this strategy. The most significant is the storage section check checkbox: Storage sec check active. Because the strategy is to find the next empty bin,
you can use additional strategies at the storage section and storage bin. Defining
a storage section search gives the warehouse staff a better idea of where the next
empty bin will be located. This is not necessary but is often used with the next
empty bin strategy.
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Figure 9.11 Configuration for the Next Empty Bin Putaway Strategy
9.3.2
Displaying Empty Bins
You can view the empty bins for a warehouse and storage type by using Transaction LS04 or following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷
Internal Whse Processes 폷 Bins and Stock 폷 Display 폷 Empty Storage Bins.
Figure 9.12 Display of Empty Bins in Storage Type 001: Transaction LS04
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Figure 9.12 shows the empty bins that can be used for a stock putaway. However,
the bins with an “X” in the IA field are unavailable because of an inventory count.
These bins need to be counted and therefore cannot be used in stock putaway.
The only bins in storage type 001, storage section 001 that can be used in the next
empty bin strategy are 01 – 09 – 04, 01 – 09 – 06, and 01 – 09 – 08.
9.3.3
Example of Next Empty Bin Putaway Strategy
Let’s now examine how the next empty bin strategy configuration for a storage
type affects the material putaway in the warehouse.
Transaction LT01 is used to create a transfer order for material putaway into storage type 001. In this case the material has been created for only storage type 001
and no other. The material to be put away has been goods-receipted into storage
type 902 and the storage bin for receiving (WE-ZONE).
Figure 9.13 shows the initial screen for creating a transfer order to put away the
material from a goods receipt. Movement type 501 is used because it will remove
the material from the goods receiving interim storage type 902 and place it in the
appropriate storage bin for the next empty bin putaway strategy.
Figure 9.13 Creating a Transfer Order: Transaction LT01
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Next Empty Bin
Figure 9.14 shows the system-generated transfer order item information for
material 100-500. Based on the configuration for the next empty bin putaway
strategy, the material has been moved from the interim storage for the goods
receipt and selected to be transferred to the next empty bin in storage type 001,
which is 01 – 09 – 04, as we saw previously in Figure 9.12.
Figure 9.14 System-Generated Destination Storage Bin Based
on Next Empty Bin Putaway Strategy
After the material has been stored in empty storage bin 01 – 09 – 04, Transaction
LS04 should only show two valid empty storage bins: 01 – 09 – 06 and 01 – 09 –
08. These lack the indicator in the IA column to show that they are blocked for an
inventory count, while the other storage bins have an “X” in the IA column to
indicate they are blocked for the inventory count, as shown in Figure 9.15.
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Figure 9.15 Display of Empty Bins in Storage Type 001: Transaction LS04
9.3.4
Cross-Line Stock Putaway
Using the next empty bin putaway strategy can be problematic if the storage bins
are selected from only one part or one side of the warehouse. Therefore, it is possible to create a search variable that allows the next empty bin to be selected
based on criteria. It is important to remember that before any storage bins can be
created for this storage type, the cross-line stock putaway strategy must be configured.
Before you can begin configuring cross-line stock putaway, review the storage bin
structure. Without understanding how the bin coordinates have been configured,
you cannot design the sort sequence.
Storage Bin Structure
You can configure the storage bin structure with Transaction LS10 or by following
the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Master
Data 폷 Storage Bins 폷 Define Storage Bin Structure.
Figure 9.16 shows that the structure of the storage bin has the bin definition template configured as two numeric characters (represented by an N), followed by a
constant (represented by a C), then two more numeric characters (represented by
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an N), one more constant, and then two more numeric characters. The configuration includes start and end values as well as the increment of the storage bin
when the bins are created automatically.
Figure 9.16 Configuration of the Storage Bin Structure for Storage Type 001: Transaction LS10
Once you have reviewed the bin structure for storage type 001, you can configure
the cross-line stock putaway using a sort sequence based on the bin structure.
Cross-Line Stock Putaway Configuration
You can configure the cross-line stock putaway with Transaction OMLM or by
following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷
Strategies 폷 Define Sort Sequence for Putaways.
Figure 9.17 shows how the sort configuration can select any of the 10 characters
that can make up the storage bin. In our example for storage type 001, the storage
bin uses only eight characters. Positions 3 and 6 are nonnumeric and therefore
cannot be used in the sort sequence.
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Figure 9.17 Configuration of Cross-Line Stock Putaway Strategy: Transaction OMLM
In this example, the structure of the storage bin is based on a row, stack, level scenario, which is very common. The configuration in Figure 9.17 shows that the
numeric characters in positions 7 and 8 are the first part of the sort. Therefore,
the level is the primary sort characteristic, and the empty bins on a level will be
filled first.
The next part of the sort is configured for the numeric characteristics in positions
4 and 5, which represent the stack. Therefore, the level will be filled first, and the
next empty bin will be found on the next stack. The row is not part of the sort
sequence and has no role in the selection of the next empty bin.
That concludes our discussion of the next empty bin putaway strategy. Now we
will examine the bulk storage putaway strategy.
9.4
Bulk Storage
Bulk storage is used for material that is stored in large quantities. This is not to be
confused with material that can be stored in bulk containers, such as grain, sand,
cement, fertilizer, and so on.
Example
In the beverage industry, a production run of beer may produce several thousand cans
of product. Once this is placed in packs and then stored on pallets, it will be stored in
the bulk storage type.
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Bulk Storage
You can define the options for the bulk storage putaway strategy with the Transaction OMM4 or via the menu path IMG 폷 Logistics Execution 폷 Warehouse
Management 폷 Strategies 폷 Putaway Strategies 폷 Define Strategy for Bulk Storage.
Figure 9.18 shows that a number of options that can be configured for bulk storage putaway. The first option is for activating the bulk storage putaway strategy
for the storage type. The other three options shown in Figure 9.18 all relate to
bulk storage putaway scenarios that involve storage units. Storage unit management will be discussed in Chapter 11.
Figure 9.18 Configuration Options for the Bulk Storage Putaway Strategy
Figure 9.19 shows the bulk storage putaway strategy for storage type 004. The
strategy is entered as a B for bulk storage. Note that other indicators are selected
for this strategy. The storage unit check (SUT Check Active) checkbox is selected
because much of bulk storage uses storage units. The other field to be selected is
the addition to stock (Addn to Stock). This allows more material to be added to
the same kind of material currently in the bulk storage type.
Now that we have reviewed the bulk storage putaway strategy, we can discuss the
next putaway strategy. This is called near picking bin.
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Figure 9.19 Configuration of Bulk Storage Putaway for Storage Type 004
9.5
Near Picking Bin
This strategy is used for material that is frequently picked, because it is appropriate to store the material close to the picking area. The warehouse can use this
strategy to see of the material can be placed in a fixed bin. If not, the system will
try a reserve area and finally try to find a bin that is closest, using a configured
search.
You can define the options for the next picking bin putaway strategy with Transaction OMLA or via the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Strategies 폷 Putaway Strategies 폷 Define Strategy for Near Picking
Bin.
The options in Figure 9.20 show the configuration that can be carried out to fully
define the strategy for the near picking bin. This screen shows six possible configuration selections:
왘
Putaway strategy activation
왘
Storage type control definition
왘
Search per level definition
왘
Row and shelf assignment
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Near Picking Bin
왘
Storage bin generation
왘
Consistency check
Figure 9.20 Configuration Options for the Near Picking Bin Putaway Strategy
The first option is the activation of the putaway strategy. This may be the only
configuration that is required for a simple strategy if that is all the warehouse
management recommends.
Figure 9.21 Configuration of Near Picking Bin Putaway for Storage Type 035
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Figure 9.21 shows the near picking bin putaway strategy for storage type 035.
The strategy is entered as a K for the near picking bin. It is correct to leave the
configuration with just this one setting. This will perform putaway in the reserve
storage bin, without searching for the fixed bin or carrying out a search for a relevant bin.
9.5.1
Storage Type Control Definition
If the storage type control is configured, this can be used when the fixed bin storage is full. The control enables configuration of a reserve storage type for a fixed
bin area and specifies how that area is to be filled.
Figure 9.22 shows that storage type 035 has been configured as the reserve area
for fixed bin storage type 005. When the fixed bin area is checked for open bins,
using putaway strategy F, the system will look at storage type 035, which is used
for putaway strategy K, to find an empty storage bin.
Figure 9.22 Storage Type Control Function Configuration for Storage Type 035
The structure of the storage bin name is configured in the Str.StBNo field. The A
coordinate represents the shelf, the B coordinate represents the stack, and C represents the level.
You can select the Unknown Material checkbox if storage of a material is
allowed in the reserve area even if it is not assigned to the reference storage type,
in this case 005. This allows warehouse staff to add material to the reserve area
even if that reserve area is not meant for the material assigned for putaway.
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Near Picking Bin
The Number of Reserve Bins Limited field allows the number of bins set aside as
reserve bins to a set to a limited number. The actual number of reserve bins can
be set in the last field, No. Res Bns.
9.5.2
Search per Level Definition
This configuration allows the search for a bin to be confined, initially, to a limited
area. For example, materials of a specific height may be stored on only one level,
and the search should only take into account that one level, given that the material would not be stored elsewhere. The first part of the configuration is the
search on each level.
Figure 9.23 shows the configuration needed to search for an empty storage bin
within the reserve storage type. If a fixed bin is selected but is occupied, this configuration initially determines how many stacks to either side of the fixed bin—in
this case a fixed bin on level one—should be checked for an empty bin. The value
in the Srch Width field is the number of stacks that are searched on either side of
the fixed bin. If there is no configuration for a level in this transaction, then the
search for an empty bin will occur across the whole level.
Figure 9.23 Configuration for a Search for a Bin on a Certain Level
Figure 9.24 should be configured only if the storage type is not numbered by
aisles. Check with the warehouse staff before setting this configuration. If a
storage type is numbered by aisles, then the shelves on either side of the aisle will
be numbered the same. If they are not numbered by aisle, then they will be
different.
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Figure 9.24 Assignment Aisle to Shelf Configuration
Example
If you are standing in an aisle between two racking systems, there are shelves on either
side at the same level. If the physical entity of the storage type is made up of the aisle
and the shelves on each side of the aisle, then the shelves have the same number. However, some storage types are physically divided by the aisle so the shelves on either side
are numbered differently.
9.6
Business Examples—Putaway Strategies
When material arrives in the warehouse, it needs to be stored in the most appropriate location. Putaway strategies help you to decide where to store material in
the warehouse. There are several putaway strategies you can use, including fixed
bin, open storage, next empty storage bin, and bulk storage.
9.6.1
Fixed Bin Storage
The putaway strategy for fixed bin storage takes into account the data that has
been entered into the material master record for the material to be placed in
stock. The material is stored in a single bin, and the data regarding this bin and
the parameters of the bin are found in the material master record of the material.
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Example
A British beverage company had been using SAP WM for about four months and
previously operated the warehouse using SAP MM. After the warehouse had
fixed the issues with correct stock being closer to the loading dock, the company
began reselling an imported beverage that used oversized crates to store the individual bottles. The pallets of the imported beverage were too tall for the standard
racks they had used for many years. The oversized pallets were stored in an open
storage area near the warehouse office where damaged items were usually stored.
The warehouse team modified several storage bins into one large storage bin
closer to the loading dock so they could accommodate pallets of the imported
beverage. The imported beverage was always stored in the same storage bin,
which was entered on the material master, and this was the fixed bin where the
material was always placed when the material was receipted into the warehouse.
9.6.2
Open Storage
The concept of the open storage strategy applies when materials are stored in
areas of open floor, where there are no racks or lines. The storage type is roughly
divided into storage sections, and the norm is that one storage section is represented by one storage bin.
Example
A manufacturer of chemicals used in paint manufacturing sold over 40 variations
of one product. The chemical composition of the material determined which customer would purchase the finished good, and the item had a short shelf life when
the characteristics remained within tolerances. The finished goods were stored in
drums and pales on racking systems in the warehouse. The company also produced a semifinished product that had a stable composition and a shelf life of
over a year. The semifinished product only remained in the warehouse for an
average of nine days, and often the company would have several backorders.
Unlike the finished goods, the semifinished item was not required to be identified by shelf life or batch number, so the items were stored close to the end of the
production line rather than in the racking. By storing the semifinished material in
an open storage area, the warehouse staff did not have to spend time moving the
drums to racking and then pulling them from the racking when an order came in.
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The open storage placement strategy was perfect for the semifinished material, as
it did not have the complexities of the company’s finished goods and therefore
required less of the warehouse operator’s time.
9.6.3
Next Empty Bin
Some warehouses are structured so that material can be stored in any bin within
the storage type. This structure can result from the nature of the material stored
in the warehouse, for example, if many different materials can be placed in the
same-size container. If this is the case, the putaway strategy can be configured so
that the system will select the next empty bin.
Example
A California-based distributor of imported electronics parts had used an SAP system for over a decade and was using WM with some degree of success. Material
was stored in racking that was segregated into storage types based on the rack
size. The warehouse operation was not as efficient as it could be, and the company was considering redesigning the warehouse. Before any redesign was implemented, the company sold its warehouse in Silicon Valley and leased a smaller
warehouse to reduce costs.
The company rationalized the material it stored in the warehouse and moved
only 75% of the materials to the new warehouse. To accommodate the material in
the smaller warehouse, the company decided to use several automated storage
and retrieval systems (AS/RS). The benefits of using this type of storage instead of
traditional racking were that they gave the company a high-density, automated
storage system that took advantage of all the overhead warehouse space. The
company installed vertical storage systems, and this required the WM configuration to be altered to allow for the next empty bin placement strategy to be used.
When items arrived at the warehouse, the system allocated the next empty bin so
that the storage systems were used as efficiently as possible.
9.7
Summary
Putaway strategies are often less well thought out than the picking strategies that
define warehousing management decisions. Whereas considerable time and
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Summary
effort are spent tweaking the efficiency of the outbound picking procedures,
management often forgets the time and effort involved in locating a material for
which putaway was illogical.
If putaway is not performed sensibly, all the effort involved in efficient shipping
will not bear fruit, because the material for picking will not be moved to the picking area in a timely manner. The strategies for putaway are important to the efficient flow within the warehouse and should be carefully examined to determine
which configuration is best for the warehouse.
In Chapter 10, we will discuss inventory procedures such as cycle counting and
physical inventory.
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Inventory procedures are important because they ensure that system
information about the material in the warehouse is correct. Materials can
be counted by annual inventory or by frequent cycle counting, which is
more popular and can yield more accurate results.
10
Inventory Procedures
Inventory counts occur in every warehouse, but the method of counting inventory varies among companies and often among locations within the same companies. An annual inventory count often starts with a group of trained and
untrained counting staff and ends up with a large number of discrepancies that
need to be investigated rather than adjusted immediately.
Other procedures have been adopted, such as continuous and cycle counting,
which reduce the emphasis on the annual count. In this chapter, we’ll discuss the
inventory procedures that clients use and how these are performed within the
system.
Now that we have outlined the contents of this chapter, let’s examine the first
topic: the annual physical inventory.
10.1
Annual Physical Inventory
The annual physical inventory occurs in many places other than the warehouse.
At the end of the fiscal year, company finance departments require the counting
of assets and stock to start the fiscal year with an accurate financial picture. For an
annual count to be as painless as possible, the organization needs formal procedures and documents, as well as fully trained counters.
10.1.1
Before the Count
The count often takes place on a weekend or on a day when vendors have been
told that deliveries will not be received while the physical inventory is in
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progress. Making sure all physical purchase orders have a nondelivery notice
stamped on them for the day of the inventory effectively reinforces this. Accounting staff should be available for any financial issues that occur or decisions that
need to be made. Because stock movement in the warehouse will be impossible,
the sales force and customers need to be informed about the nonshipment
period.
The organization should use the experience of previous inventory counts to calculate the staff required for a successful count and fully train the employees designated as counters. The counters should be trained just before the count, with an
emphasis on accuracy.
If the annual inventory is the first in a location or has not been successful in the
past, it may be prudent to perform a test count of a small storage type, noting the
number of storage bins counted and the time required. This is a good way to
determine how many counters and how much time is needed for the physical
inventory.
To make sure the process is as easy as possible for the counters, it is best to send
the warehouse a team to make sure materials are contained within their assigned
locations and all materials and storage bins are clearly identified. Often, a lot of
time is wasted when the material cannot be identified or counters cannot find a
specific location. That warehouse team also can count in advance the bulk storage
types and dead stock. This reduces the shutdown time caused by the inventory
count.
Tip
Counted material and material not to be counted, such as warehouse equipment and
packaging, should be clearly labeled to prevent confusion. It’s also a good idea to label
damaged material and material that has been written off and is awaiting disposal.
10.1.2
Configuring Annual Inventory
You need to address a number of configuration steps before any count can be performed. Let’s review these now:
1. Set the default values for each storage type in the warehouse via the menu path
IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Activities 폷 Physical
Inventory 폷 Define Default Values.
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2. You need to configure the default values for each storage type, shown in Figure
10.1, before the physical inventory. The following variables need to be
addressed:
왘
PrintMat
Select this checkbox if you have to have the material information printed
on the count document. The material information is quite extensive and
includes the material number, material description, plant number, batch
number (if defined), special stock indicator, special stock number, stock
category, and quant number.
왘
No.Bins
Select this checkbox if the storage bin must be displayed during the entry
of the inventory. If manual entry is required, do not select this checkbox.
왘
No.Mat
Select this checkbox if you need the material number to be displayed during the entry of the inventory. If manual entry of the material is required,
then do not select this checkbox.
왘
Entry
This field defines the input method for the inventory count. There are
three possible entries: P for via a list of items, S for page by page, and A for
sequential.
왘
DblLn
If selected, this checkbox allows the inventory to be counted on two lines
rather than one.
왘
Diff.
This field allows configuration of a percentage value for deviation between
book and actual stock. If the material counted is entered and is greater than
the percentage configured in this field, a warning message will be displayed and a decision made to allow the difference or reject it. For example, if percentage of 5 is entered and the counted material is 10% greater
than the book stock, then a warning will be issued. Normally, this deviation value is very low or is zero because most deviations will require investigation.
왘
Next Page
This checkbox allows quants in the same bin to be printed on different
pages. This need arises when mixed storage occurs, such as in open storage
bin locations.
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Figure 10.1 Physical Inventory Configuration Values for Storage Types
3. Set the inventory type for each storage type via the menu path IMG 폷 Logistics
Execution 폷 Warehouse Management 폷 Activities 폷 Physical Inventory 폷
Define Types per Storage Type.
This transaction, shown in Figure 10.2, allows configuration of the storage type
for annual, continuous, or cycle counting. You can configure the following fields:
왘
Invent.
This field defines the inventory procedure for the storage type. This can be
ST for annual inventory, PZ for continuous inventory, or blank for no specific inventory method.
왘
Plcmnt Inv
Select this checkbox when you must make an inventory each time material
is moved into an empty bin. The checkbox is often selected when a company uses continuous inventory procedures.
왘
Zero CkIn
This checkbox is used for continuous inventory based on zero stock checks.
When this checkbox is selected, a count should be taken for all storage bins
in this storage type when the remaining material is removed from a bin.
왘
ZeroCheck
Select this checkbox to trigger a zero stock check, but not just for continuous inventory. If this checkbox is selected, a zero stock check is required
when a storage bin becomes empty.
왘
Cycle Co
Selecting this checkbox sets the storage type for the cycle counting procedure that is discussed later in this chapter.
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Figure 10.2 Inventory Configuration for Storage Types
4. Set the procedure for inventory differences and the movement types to deal
with these. You can find this by following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Activities 폷 Physical Inventory 폷 Define
Differences and Document Limits.
Figure 10.3 shows the movement types and document limits that have been configured for warehouse 001.
Figure 10.3 Configuration for Differences and Document Limits for Each Warehouse
The movement types are configured for posting of any inventory differences or
clearing any differences that may occur when the count document is entered. The
document that the counter used may have a quantity different from the book
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stock, and after investigation and more checks a difference is agreed upon. The
difference is posted, and the internal movement type defined in this configuration is used to post the difference to an interim record.
The Document Items field refers to the number of items that are allowed for each
record. You can change this to a larger or smaller amount as required.
10.1.3 Processing Open Transfer Orders
When the physical inventory count begins, the storage types to be counted must
be clear of open transfer orders. Check for open transfer orders by using Transaction LT22 or following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷
Internal Whse Processes 폷 Stock Transfer 폷 Display Transfer Order 폷 For Storage Type.
Figure 10.4 shows the selection screen for Transaction LT22. In this instance, you
must view all open transfer orders for the storage type that is ready to be
counted. You need to ensure that the open transfer orders are displayed, because
it will be necessary to confirm or close these open transfer orders.
Figure 10.4 Initial Screen for Displaying Transfer Orders per Storage Type
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Figure 10.5 shows that there are two open transfer orders for storage type 001.
You can see that the transfer orders are still open because the confirmation indicator, Co, is still red, which means not confirmed. The open transfer orders need
to be confirmed or closed, depending on whether the material can be transferred,
has been transferred, or cannot be transferred before the count starts.
Figure 10.5 Display of Open Transfer Orders for Storage Type 001
You can confirm each transfer order with Transaction LT12 or by following the
menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷
Stock Transfer 폷 Confirm Transfer Order 폷 Single Document 폷 In One Step.
Figure 10.6 Confirmation of Transfer Orders Prior to Inventory Count
Figure 10.6 shows the confirmation of an open transfer order for the storage type
to be counted. Once all the transfer orders are closed for the storage type that will
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be counted, they can be blocked so that no other inbound or outbound movements can take place.
10.1.4 Blocking the Storage Type
To block the storage type for stock placement and stock removal, use Transaction
LI06 or follow the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal
Whse Processes 폷 Physical Inventory 폷 In Warehouse Management 폷 Block Storage Type.
Figure 10.7 shows the block on storage type 001 for both stock placement and
stock removal. The block should remain in place until all the inventory documents have been processed for the storage type.
Figure 10.7 Blocking Stock Placement and Removal for Storage Type 001
10.1.5 Creating Annual Inventory Documents
Once the storage types to be counted have been decided upon, checked for activity, and blocked for movements, the count documents can be printed and given
to the counters.
The transaction to produce the count documents is Transaction LX15, which you
can find by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Physical Inventory 폷 In Warehouse Management 폷 Physical Inventory Document 폷 Create 폷 Annual Inventory.
The initial selection screen, shown in Figure 10.8, allows entry of specific storage
bins if not all the bins in the storage type are to be counted.
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Figure 10.8 Selection of Storage Types for Annual Inventory Count
The session name is used to create the documents in a batch job. This can be run
in the background or in the foreground. After you enter the data that may be
required, you can execute the transaction, and the process will display a summary
of the counting that can begin.
Figure 10.9 shows the bins that can be counted, in this case 53, with 77 quants.
To process the documents, you can activate the transaction by selecting Physical
Inventory Document 폷 Activate or by pressing (Shift)+(F4). The transaction will
create a background job so that the documents can be printed.
The background session called RLINV010 has been created, as shown in Figure
10.10. It can be processed to create the two new count documents based on the
information that was entered in Figure 10.8. To execute this transaction, click the
Process button or select Session 폷 Process Session.
The dialog box shown in Figure 10.11 is displayed after the session has begun
processing. You can enable processing in the background or foreground and
choose additional functions such as the ability to cancel if an error log is triggered.
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Figure 10.9 Summary of Physical Inventory Count that Can Be Processed
Figure 10.10 Batch Input Session for Processing Inventory Count Documents
Figure 10.11 Dialog Box During Processing Session for Count Documents
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10.1.6 Displaying the Count Documents
After the count documents have been processed you can view by using the Transaction LX22 or following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷
Internal Whse Processes 폷 Physical Inventory 폷 In Warehouse Management 폷
Physical Inventory Document 폷 Overview. Figure 10.12 shows the initial data
entered to select the count documents created by the batch processing. The warehouse number and storage type have been entered, along with the criteria to
show only documents that have not been counted. Once the data has been
entered, you can press the (F8) function key or click the Execute button to process the transaction.
Figure 10.12 Initial Selection Screen for Displaying Count Documents: Transaction LX22
Figure 10.13 shows the six inventory count documents created by Transaction
LX15. You can activate these documents by clicking the Activate button and then
print them by clicking the Print button on the application toolbar or by selecting
List 폷 Print.
Figure 10.14 shows the first page of the count document that has been printed for
storage type 001. The count document is handed to the counter, who then manually enters the count figure into the document. Once finished, the count document is returned for data entry.
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Figure 10.13 Overview of Six New Inventory Count Documents
Figure 10.14 First Page of Printed Inventory Count Document for Storage Type 001
10.1.7 Entering the Inventory Count
After the counter has returned the count document to the data entry area, the
count document can be entered into the SAP system. The transaction to enter
count documents is Transaction LI11N, which can be reached through the menu
path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Physical
Inventory 폷 In Warehouse Management 폷 Count Results 폷 Enter.
Figure 10.15 shows the initial screen for entering the count document. You can
enter the count document number, the warehouse, and the count date. Enter the
name of the counter if there are many counters and recounts may require different counters.
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Figure 10.15 Initial Entry Screen to Enter a Count Document:
Transaction LI11N
Figure 10.16 shows the detail screen, which reflects the information on the count
document. The data entry clerk enters the amount from the count document into
the appropriate line in this transaction. If the counter finds additional material,
and there is not a line on the count document to reflect this, the data entry clerk
can add this by clicking the New Item button on the application toolbar.
Figure 10.16 Detail Screen for Entering Data from the
Inventory Count Document
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After the total count for the document has been entered, you can post the document by pressing the (Ctrl)+(S) or selecting Inventory Count 폷 Posting.
10.1.8 Count Differences
After the count has been entered, it can be accepted or recounted if the variance
is too great. You can see the variance by using Transaction LI14, which you can
find following the navigation path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Physical Inventory 폷 In Warehouse Management 폷 Count
Results 폷 Recount.
Figure 10.17 shows the initial screen for Transaction LI14, to initiate a recount.
You can allow a certain percentage deviation in book inventory against the count
or allow a value deviation.
Note
A large deviation in the count may only account for a few dollars in value, which the
accounting department will allow. When a small deviation in the count causes a large
difference in value, the accounting department may require a special investigation of
the deviation.
Figure 10.17 Initial Screen for Recounting an Inventory Count Document
Figure 10.18 shows part of the count for the document entered. The count is for
storage bin 03 – 01 – 02 that has only a 2.89% count variance but a value variance
of $9.00.
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Figure 10.18 Count Document and Deviations in Value and Count
Depending on the accounting department’s procedures on variance, a recount
may be required for certain storage bins in this count document. To create a
recount document, click the Initiate Recount button or press (Shift)+(F4). The
processing returns to the initial screen and a message is displayed that shows the
recount number.
10.1.9 Entering a Recount
After the recount has been initiated and you know the recount number, you can
enter the recount into the transaction used for the initial count—Transaction
LI11N. You can reach this via the menu path SAP 폷 Logistics 폷 Logistics Execution 폷
Internal Whse Processes 폷 Physical Inventory 폷 In Warehouse Management 폷
Count Results 폷 Enter.
You enter the recount into Transaction LI11N with the same information as the
original count (as shown in Figure 10.19) but with the recount number that was
provided. In this case, the recount number is 01.
The recount document, shown in Figure 10.20, can be printed and given to a
counter to perform the recount. Once the line items have been recounted, the
document can be returned to the data entry clerk for re-entry. If the accounting
department wants to ensure the most accurate count, the organization can perform an additional recount using Transaction LI14.
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Figure 10.19 Initial Screen for Recount Document Entry
Figure 10.20 Line Items from Count Document that Are Part of Recount
10.1.10
Clearing Differences
If no more recounts have been deemed necessary, the count differences can be
cleared and a final posting made to the warehouse inventory.
The differences between the book inventory and the count information can be
written off or on by using Transaction LI20 or following the menu path SAP 폷
Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Physical Inventory 폷
In Warehouse Management 폷 Clear Differences 폷 Warehouse Management.
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Figure 10.21 shows the initial screen for allowing differences between the book
stock and the count to be made. There is an allowance to enter a variance in percentage or in value to restrict the write-off. In the example shown in Figure
10.21, no variance has been entered.
Figure 10.21 Initial Screen for Transaction to Clear Inventory
Count Differences
Figure 10.22 shows the storage bin that has a material variance between the
inventory count and the book stock. The details show the percentage difference
and the difference in value.
Figure 10.22 Materials with Variance Between Book Stock
and Inventory Count
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You can write off the difference between the book value and the count value by
clicking the Write Off button on the application toolbar or pressing (Shift)+(F5).
Now that we’ve examined the processes involved in the annual physical inventory, we’ll move on to a process called continuous inventory.
10.2
Continuous Inventory
The principle behind continuous inventory is that dividing the annual physical
inventory count into several smaller inventory counts performed over the year
ensures that all material is counted. Many companies prefer this method because
it reduces the effort required and the stress involved in conducting a single count.
The key to performing a successful continuous inventory is to ensure that all storage bins are counted in a systematic manner and the counts are successfully documented.
10.2.1
Configuring Continuous Inventory
The configuration for continuous inventory is to set the inventory type for each
storage type. You can find this by following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Activities 폷 Physical Inventory 폷 Define
Types per Storage Type.
Figure 10.23 Configuration for Continuous Inventory for Storage Types
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Figure 10.23 shows the configuration that has been entered for storage types 001
and 002 is PZ, which indicates continuous inventory.
10.2.2 Creating a Continuous Inventory Count Document
The transaction to produce the count documents for continuous inventory is
Transaction LX16, which you can find via the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Physical Inventory 폷 In Warehouse
Management 폷 Physical Inventory Document 폷 Create 폷 Continuous Inventory.
Figure 10.24 shows the initial screen for creating a continuous inventory count
document. The warehouse number and storage type are entered, and a range of
storage bins can be selected. The following parameters are available:
왘
Group number
This is a user-assigned number for grouping together certain counts. This can
be as simple as the number of the week if you are combining counts that take
place the same week.
왘
Bins with qty. less than
The bins will be selected if they contain a quantity of material that is less than
the figure entered in this field.
왘
No activity since (no. of days)
This bin will be selected if there has been no activity in it for more than the
number of days entered in this field.
왘
Max. no. of quants per bin
The bin will be selected if the number of quants in the bin is less than the number entered into this field.
왘
Only empty bins
Select this checkbox if only empty bins are to be selected.
After entering all the required parameters, you can execute the transaction by
pressing the (F8) function key.
Figure 10.25 shows that there are three storage bins with material that can be
counted in warehouse 001, storage type 001. You can highlight these and activate
them for counting by pressing (Shift)+(F4) or selecting Physical Inventory Document 폷 Activate.
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Figure 10.24 Initial Data Entry Screen to Create Continuous
Inventory Count Document: Transaction LX16
Figure 10.25 List of Quants that Can Be Counted as Continuous Inventory
Figure 10.26 shows that after the three storage bins were activated, Transaction
LX16 created continuous count document 7. This document can then be printed.
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Figure 10.26 Continuous Inventory Document 7
10.2.3 Printing a Continuous Inventory Count Document
You can print the continuous count document can be printed using the Transaction LI04 or by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷
Internal Whse Processes 폷 Physical Inventory 폷 In Warehouse Management 폷
Physical Inventory Document 폷 Print Warehouse Inventory List.
Figure 10.27 Initial Entry Screen for Printing Continuous Count Document 7
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Figure 10.27 shows the initial screen for printing the continuous count document. Enter the warehouse and document number as well as the recount number,
if appropriate. Select the printer and other options such as print in landscape,
print immediately, and so on.
Figure 10.28 shows the count document that is printed via Transaction LI04. The
document shows the storage bins to be counted, the material expected in those
storage bins, and a space where the counter can write the quantity that he counts
in the storage bin.
Figure 10.28 Printout of Continuous Inventory Count Document
The completed count document should be returned to the warehouse staff member responsible for entering continuous inventory counts.
10.2.4 Entering the Count Results
Once the items on the continuous count document have been counted, the count
figures can be entered into Transaction LI11N. You can find this transaction via
the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷
Physical Inventory 폷 In Warehouse Management 폷 Count Results 폷 Enter.
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Figure 10.29 shows the count that has been entered for the continuous inventory
count document. Once all the figures are entered, you can save the count.
Figure 10.29 Count Entered for Continuous Inventory Count Documents
Now that the three storage bins have been counted, they do not need to be
counted again until the next fiscal year. If you try to include these storage bins in
a count document, the bins will not appear. A manual check of the materials
might be made for some outbound orders, although this would take place outside
of normal cycle-counting procedures.
After the fiscal year is complete and all the bins have been counted, the storage
bins should become available for counting. To ensure that the storage bin table—
LAGP—is clear of the count date and time of the previous fiscal year, report RLREOLPQ should be run using Transaction SE38 or included as part of an end-of-year
batch job. Make sure the Basis team knows this needs to be performed. We suggest that you ask if this job can be placed in any end-of-year batch runs that may
occur for the finance or production department.
Now, after examining the processes of continuous inventory, we can focus on the
popular method used in counting inventory known as cycle counting.
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10.3
Cycle Counting
Cycle counting is basically the process of continually validating the accuracy of
the inventory in the warehouse by regularly counting a portion of the inventory,
on a daily or weekly basis. This way, every item in the warehouse is counted at
least several times a year.
10.3.1 Benefits of Cycle Counting
Many companies choose the cycle counting method because they cannot afford to
pay the costs involved in large annual inventory events. Frequent cycle counting
shortens the time between physical counts of any material and, as a result, any
discrepancies that turn up during a cycle count have occurred recently. This gives
the warehouse management the opportunity to understand the cause of the discrepancy and perform any remedial action. Inventory write-offs, as a percentage
of inventory investment, are much lower with regular cycle counting.
10.3.2 Materials Management Configuration Steps with Cycle
Counting
You configure the cycle counting indicators, A, B, C, and so on using Transaction
OMCO, which is located in the configuration of the Materials Management module (SAP MM). The menu path is IMG 폷 Materials Management 폷 Inventory
Management and Physical Inventory 폷 Physical Inventory 폷 Cycle Counting.
Figure 10.30 shows the configuration fields for the four cycle-counting indicators, A, B, C, and D:
왘
No. of phys. Inv
This field defines the number of times a material must be counted per year. For
example, materials that are assigned an “A” indicator will be counted 12 times.
왘
Interval
The interval is the maximum number of work days, as defined by the factory
calendar, that can pass before the material has to be counted again.
왘
Float time
The float time is defined as the number of days after the planned count date
that the material can be still be counted.
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왘
Percentage
This field is the percentage of materials assigned an indicator. Therefore, in the
example shown in Figure 10.30, 56% can be allocated A materials, 28% are B
materials, 14% are C materials, and only 2% are D materials. The total must add
up to 100 percent. These percentages are used in defining the indicators for the
materials in the plant.
Figure 10.30 Configuration for Cycle Counting: Transaction OMCO
To automatically determine the indicators for materials in a plant, execute the
ABC analysis.
10.3.3 Using the ABC Analysis
If the ABC indicators are configured for a plant, you can perform an ABC analysis
to assign the correct indicator to each material. You can run the ABC analysis for
cycle counting with Transaction MIBC by following the menu path: SAP 폷 Logistics 폷 Materials Management 폷 Physical Inventory 폷 Special Procedures 폷 Cycle
Counting 폷 Set Cycle Counting Indicator.
Figure 10.31 shows Transaction MIBC, which allows the entry of the plant and a
material type. In this case, the ABC analysis will be performed on material type
FERT: finished goods.
The transaction proposes a range of dates for either consumption or requirements. The user then decides whether to use the material consumption data or
material requirement data as the basis for defining the ABC indicator. You also
have the option of altering the percentages already configured for the plant.
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Figure 10.31 Execution of ABC Analysis to Assign ABC Indicators
Figure 10.32 shows the results of the ABC analysis that was performed on the finished goods in plant 1000. The results show that several materials have changed
ABC indicators. This will result in a change in the number of cycle counts needing
to be performed.
Figure 10.32 Results of ABC Analysis Performed on Finished Goods in Plant 1000
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10.3.4 ABC Indicator and Material Master
After the ABC analysis has been performed and the ABC indicator has been
assigned to the material, the indicator is written into the material master record.
You can see the ABC indicator by viewing the plant data screen in the material
master, using Transaction MM03.
Figure 10.33 shows the plant data screen for the material master record of material T-F144. In Figure 10.32, this material is the first material in the list and is
assigned an A indicator. In the plant-data screen, this indicator is seen as the cycle
count physical inventory field: CC Phys. Inv. Id.
Figure 10.33 ABC Indicator Shown on Material Master Record as
Cycle Count Physical Indicator
There is also a field next to that checkbox labeled CC fixed. You can set this checkbox manually on the material master to prevent the ABC analysis process from
changing the ABC indicator. This guarantees that no matter how much the consumption or requirements of this material change, the ABC indicator remain the
same unless it is manually changed on the material master record. Check with the
warehouse staff to ensure that this indicator is set correctly.
10.3.5 Cycle Counting Configuration for Storage Type
You can set the configuration for cycle counting to the inventory type for each
storage type. To do this, follow the menu path IMG 폷 Logistics Execution 폷 Ware-
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house Management 폷 Activities 폷 Physical Inventory 폷 Define Types per Storage
Type.
Figure 10.34 shows the configuration for warehouse 092, storage type 101. No
inventory method is defined—neither continuous nor annual—but the cycle
counting indicator is set for these four storage types. Therefore, the storage types
will use the cycle counting indicators set in the material master records to define
how the material is counted.
Figure 10.34 Cycle Counting Configuration for Storage Types
10.3.6 Creating a Cycle Count Document
Transaction LX26 produces the count documents for cycle counting. You can find
it by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal
Whse Processes 폷 Physical Inventory 폷 In Warehouse Management 폷 Physical
Inventory Document 폷 Create 폷 Cycle Counting.
Figure 10.35 shows the selection entered into Transaction LX26 for warehouse
MG1 and storage type 101. When this transaction is executed, the system will
review all the material in the storage bins to ascertain whether a cycle count is
required, based on the cycle count indicator on the material master and the last
time the material was counted.
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Figure 10.35 Creating a Cycle Count Document: Transaction LX26
Figure 10.36 shows an overview of the count documents that can be created for
the warehouse number and storage type entered in the initial selection screen. In
this example, two storage bins that have been selected: 01 – 01 – 01, where the
cycle count is overdue, and 01 – 01 – 02, where a cycle count is scheduled.
Figure 10.36 Review of Storage Bins that Require Cycle Counting
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To activate a count document, highlight the line item and select the activate icon.
The transaction returns the inventory count document number for the cycle
count selected.
10.3.7 Printing the Cycle Count Document
After the cycle count document has been created, you can print it for warehouse
staff to perform the count. Use Transaction LI04 or follow the navigation path
SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Physical Inventory 폷 In Warehouse Management 폷 Physical Inventory Document 폷 Print Warehouse Inventory List.
You can give the cycle count document to a member of the warehouse staff to perform the count as part of his daily warehouse routine. Figure 10.37 shows the
printout of the count document that the warehouse operator will use to record
the count of the storage bin.
Figure 10.37 Printout of Cycle Count Document Created by Transaction LI04
10.3.8 Entering the Cycle Count
After the item on the cycle count document has been counted, the result can be
entered into Transaction LI11N. You can find this transaction by following the
menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷
Physical Inventory 폷 In Warehouse Management 폷 Count Results 폷 Enter.
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Figure 10.38 shows the information for the storage bin that has been counted.
Once all the figures are entered, you can save the count.
Figure 10.38 Entering the Count from the Cycle Count Document
Now that the count has been entered for this storage bin, the material does not
need to be counted again until the date that is determined by the configuration of
the ABC indicators for this plant. In this case, the material has an A indicator, and
the configuration for the plant is set for the material to be counted six times a
year.
Now that we have examined the functionality of cycle counting, we will examine
the zero stock check.
10.4
Zero Stock Check
A zero stock check is the process of performing a stock check on a storage bin
after the material has been removed, in order to ensure that the storage bin is
empty. You cannot do this in storage types such as open storage where there is
mixed storage or for storage-unit-managed bulk storage.
However, in warehouses with very few open storage bins, the zero stock check is
a valuable tool to ensure that the next transfer order to use the storage bin will
not fail. The zero stock check is a good step to take when the warehouse has not
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been good at maintaining inventory accuracy. If the warehouse is new to SAP and
in the past has not been accurate regarding bin contents, a zero stock check can
provide a level of comfort to ensure that the inventory accuracy is improving.
10.4.1 Configuring Zero Stock Check
You can set the Zero Stock Check checkbox for each storage type. The configuration can be set in the inventory type configuration for each storage type, which
you can find by following the menu path IMG 폷 Logistics Execution 폷 Warehouse
Management 폷 Activities 폷 Physical Inventory 폷 Define Types per Storage Type.
This transaction, shown in Figure 10.39, enables configuration of the storage type
for annual, continuous, or cycle counting. The other fields allow configuration of
the zero stock check with and without continuous inventory and are described
here:
왘
ZeroCkIn
This checkbox is used for continuous inventory based on zero stock checks.
When this checkbox is set, a count should be taken for all storage bins in this
storage type when the remaining material is removed from a bin.
왘
ZeroCheck
Set this checkbox to trigger a zero stock check, but not just for continuous
inventory. If this checkbox is set, a zero stock check is required when a storage
bin becomes empty.
Figure 10.39 Zero Stock Check Configuration for Storage Type 001
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10.4.2 Performing an Automatic Zero Stock Check
If the configuration for a storage type is set to require a zero stock check on the
removal of all materials from a storage bin, the check will be triggered from the
transfer order.
Using transaction LS24, you can review the stock overview for material 100-500,
seen in Figure 10.40. It shows that there is a quant of 10 pieces in storage bin 01
– 09 – 04 located in storage type 001. From the configuration shown in Figure
10.39, we know that the zero stock check is required when a storage bin has been
emptied. Therefore, a transfer order from this bin to the KANBAN area in the
warehouse will empty the bin in and create the requirement for a zero stock
check.
Figure 10.40 Warehouse Stock Overview for Material 100-500
Figure 10.41 shows a transfer order created by Transaction LT10 to move the
total material from storage bin 01 – 09 – 04 to the KANBAN storage bin in the
production supply area, storage type 150. The zero stock check checkbox is set for
this storage type, so it is possible to view this inside the transfer order. You can do
this by selecting Extras 폷 Other Data or by press the (F7) function key.
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Figure 10.41 Transfer Order to Trigger a Zero Stock Check
Figure 10.42 shows the physical inventory information based on the item in the
transfer order. In this case there are three fields, which are relevant for the zero
stock check:
왘
Invent. method
This inventory method is designated via the configuration. In this case, PN represents continuous inventory based on zero stock check. Other options are PZ
for continuous inventory, ST for annual inventory, MA for manual inventory,
and CC for cycle counting.
왘
Inventory rec.
This is a system-defined inventory record number based on the zero stock
count that needs to be carried out.
왘
Zero stock chck
This field is the status for the zero stock check. The options are:
왘
1
System requires a zero stock check to be carried out
왘
2
Manual requirement for a zero stock check to be carried out
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왘
3
Bin is empty, after system check
왘
4
Bin is empty, after manual check
왘
5
Bin is not empty, after system check
왘
6
Bin is not empty, after manual check
Figure 10.42 Physical Inventory Data of Transfer Order
Figure 10.43 Zero Stock Transfer Order Confirmation Check
Figure 10.43 shows the zero stock check dialog box that appears during the confirmation of the transfer order. If the transfer order has removed all the material
from the storage bin, then the check is required to ensure that this is correct. If it
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is not, then an amount can be entered into this screen, and the information needs
to be investigated before posting.
10.4.3 Performing a Manual Zero Stock Check
If there is no continuous inventory configuration for a zero stock check for a storage type, then a manual zero stock check can be carried out if the storage bin is
noted as empty after a transfer order has removed stock from the bin.
Figure 10.44 shows that the configuration for a continuous inventory zero stock
check has been removed, but the configuration for a zero stock check remains on
stock removal triggered manually from a transfer order.
Figure 10.44 Zero Stock Check for Storage Removal Without Continuous Inventory
Figure 10.45 shows the stock overview for material 100-500. You can see that
there is a quant of 90 pieces in storage bin 01 – 09 – 04 in storage type 001. The
configuration has now been changed for storage type 001, and the system does
not require a zero stock check when a bin is empty. Therefore, the only way a
zero stock check can be triggered is manually.
Confirming a transfer order by each item, as performed in Transaction LT11,
enables manual creation of a zero stock check. You can find the transaction by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Stock Transfer 폷 Confirm Stock Transfer 폷 Single Item 폷 In One Step.
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Figure 10.45 Warehouse Stock Overview for Material 100-500
Figure 10.46 shows confirmation of line item 1 in transfer order 398. The line
item shows that the all the material from the storage bin is going to be transferred
to the KANBAN storage bin. In this instance, you can manually trigger a zero
stock check by clicking the Zero Stock Check button on the application toolbar or
by selecting Goto 폷 Zero Stock Check.
Figure 10.46 Confirmation of a Transfer Order with Zero Stock Check
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The screen shown in Figure 10.47 allows the warehouse staff to enter a value in
the remaining quantity box if there is any material in the storage bin even though
the system indicates that the bin should be empty. If a value is entered that is not
zero, an investigation may be required before the value is posted to the system.
Figure 10.47 Dialog Box Allowing Zero Stock Check in Transfer Order Confirmation
Now that we have examined the zero stock check function, let’s look at some
business examples of inventory procedures.
10.5
Business Examples—Inventory Procedures
At some time every warehouse counts the inventory it holds. The method of
counting inventory varies among companies and sometimes among locations
within companies. The count can take place once a year, as with an annual inventory count, or on a regular basis such as continuous inventory or cycle counting.
10.5.1 Annual Physical Inventory
At the end of the fiscal year, a company performs a count of assets and stock to
provide an accurate financial picture. For an annual count to be successful, an
organization should implement formal procedures and documents, as well as use
fully trained counters.
Example
A U.S. manufacturer of industrial tools implemented an SAP system after using a
number of disparate PC systems for many years. In their legacy system, the physical inventory was taken each weekend for the company’s main warehouse and
once a month for material stored in offsite third-party warehouses.
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With the advent of their SAP implementation, the company initially continued
weekly physical inventories and found that inventory accuracy was significantly
higher than previously. With more accurate data the company decided to perform counts on the weekend for items that had inaccuracies during the week. The
weekend count now only represented 10 to 20 items having to be counted. The
count was performed for these items, but it produced conflicting results. Some of
the counted materials showed a count total equal to the book total, whereas
others were significantly different, with some variations greater than the issues
during the week.
The supply chain management team decided to postpone any more weekend
counts until the issue was resolved. The ensuing investigation of the count
process found that the preparation work before the count was causing the inaccuracies. The team had asked the warehouse second shift to print the count documents so that the counters could start early on Saturday morning. What was
happening was that the count documents were printed before all movements in
the warehouse were completed. Some material was moved in the warehouse late
Friday night, but the confirmation of the warehouse transfer orders were not
processed until Monday morning. This caused material to physically be in the
correct bin, but the system did not reflect this. The count documents therefore
did not show the correct physical total in the bin, and the count could never be
accurate. Once this was identified, the management asked that all transfer orders
be processed before the count documents were printed. This change in the preparation allowed a more successful count to take place.
10.5.2 Continuous Inventory
The principle behind continuous inventory is that dividing the annual physical
inventory count into several smaller inventory counts performed over the year
ensures that all material is counted. Many companies prefer this method because
it reduces the effort required and the stress involved in conducting a single count.
Example
An Austrian beverage company produced small batches of alcoholic beverages for
the European market. The firm produced small amounts of its finished goods and
in its warehouse stored items that were not already allocated for customer sales
orders. The warehouse was never more than 20% full, so the company counted
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the warehouse stock each week. As the demand for their products grew, the company doubled the number of its finished goods and decided to sell products for
smaller beverage manufacturers in Austria and Germany. This increase in sales
led to the company having to store a significantly larger number of products, and
soon it had to lease a new warehouse to contain the ever growing inventory.
The weekly count was no longer an option, and the supply chain team considered
a cycle count approach to inventory counting, but instead opted for the continuous inventory process. The supply chain team divided the two warehouses into
12 sections, based on the storage types, and then instigated a monthly count
where each month they counted a different section. This approach allowed the
whole warehouses to be counted at least once each year.
10.5.3 Cycle Counting
Cycle counting is the process of continually validating the accuracy of the inventory in the warehouse by regularly counting a portion of the inventory, on a daily
or weekly basis. This way, every item in the warehouse is counted at least several
times a year.
Example
A California electronics company packed components they purchased from manufacturers in the United States, Taiwan, and China and sold them to businesses
and consumers in North America. Originally the company suffered from poor
inventory control, and customer orders were often delayed due to the inability to
find items in the warehouse and the lack of faith in the inventory figures that
were calculated by aging PC systems. When the company wanted to expand, by
purchasing a local competitor, the investment group they approached for funding
required that they replace their computer systems and improve record taking as
part of the deal. The company implemented an SAP system and installed two vertical carousels in the warehouse for high-density, automated storage.
As the company’s inventory accuracy was poor, below 80%, they decided to
implement a cycle counting policy where fast-moving stock was counted frequently. The company used ABC analysis to indentify which materials needed to
be counted at the different frequencies. The accuracy of inventory of the fastmoving goods improved initially after the implementation of cycle counting,
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reducing the number of customer orders that had to be delayed due to inventory
inaccuracies. The company still found inventory accuracy issues with slowmoving stock, but after a year of cycle counting, the company’s inventory accuracy was above 96%.
10.6
Summary
In this chapter, we discussed the ways a company can accurately keep track of its
physical inventory and ensure that it is reflected in the warehouse management
system. However, counting material is a process that is subject to human error.
The traditional annual inventory is a once a year attempt to count the stock in a
warehouse, and if the count is wrong it remains wrong until the next year. In
today’s warehouses, the traditional annual inventory is being superseded by frequent cycle counting. Cycle counting is thought to be a more accurate method of
counting but still is subject to the same level of human error. The benefit of cycle
counting is that the more you count, the more likely it is that the count will be
correct.
More frequent counting produces a more accurate picture of the stock in the
warehouse and eliminates the stress on the warehouse caused by an annual
inventory. Cycle counting should be considered a quality assurance procedure
whereby the counting ensures the quality of the count.
The other aspect of quality assurance is to correct the count errors when they are
found and to investigate why the errors occurred. Other methods that support
the accuracy of the warehouse stock include the zero stock check. This can
improve warehouse stock accuracy, as it provides extra counting events when a
bin is expected to be empty and thus is an easy addition to frequent cycle counting.
In Chapter 11, we will examine storage unit management and discover how storage units affect standard stock placement and removal.
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Storage unit management was developed to enable warehouse management to identify the container that holds a material as it moves around
the warehouse. It is often important to manage the movement of the container as well as the material or materials it contains.
11
Storage Unit Management
Storage Unit Management is the warehouse management equivalent of handling
unit management, the functionality found in SAP IM. Storage unit management
was developed exclusively for WM, and from it SAP developed handling unit
management for SAP Materials Management (MM). There are slight differences
between the two, as seen here:
왘
Handling unit management allows for the nesting of handling units, that is, a
handling unit containing several other handling units, whereas storage unit
management does not allow the nesting of storage units.
왘
Handling unit management requires that an item be unpacked and packed,
whereas this is not required for storage unit management. The storage unit is
used to contain a quantity of material for its movement around the warehouse.
The storage unit comprises one or more materials and a container such as a pallet
or a packing box. These items together make up the uniquely identifiable storage
unit that can be moved and stored within the warehouse.
This chapter will introduce some of the key elements of storage unit management. You’ll learn how a storage unit is created and how the storage unit can be
planned before the material arrives at the receiving dock. The chapter will thoroughly explain other key functionalities, including the use of storage unit management in putaway and picking within the warehouse.
Now that we have highlighted some of the key topics in this chapter, we will
introduce the storage unit management functionality.
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11.1
Introduction to Storage Unit Management
In modern warehouses, deliveries from a vendor may not arrive separated into
quants of specific materials. In many retail operations, vendors send different
materials on one pallet, and these arrive at the warehouse and are unloaded on
the pallet. At this point, the warehouse staff can break down the pallet into distinct material quants. They then store the quants separately or store the pallet of
material as a whole.
The pallet and the material on the pallet can be described as a single unit—a storage unit—made up from the container and the material stored with the container.
If the warehouse staff decides to store material in the container, then storage unit
management will need to be configured for the warehouse. Although the entire
warehouse need not be designated for storage units, certain storage types need to
be identified to accept storage units.
To allow storage unit management to be used in the warehouse, you must carry
out several configuration steps.
Note
Using storage unit management when handling unit management is already used in SAP
IM can cause some confusion. Before configuring any storage unit management steps,
confer with the supply chain team to avoid miscommunication.
11.1.1
Activating Storage Unit Management
For each warehouse where storage unit management is to be used, it must be configured to be active. You can find the configuration step by following the menu
path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Storage Units 폷
Master Data 폷 Activate Storage Unit Management per Warehouse.
Figure 11.1 shows the checkbox for activating storage unit management for warehouse 009. No storage unit management can take place until this checkbox is set
for the relevant warehouse.
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Figure 11.1 Activating Storage Unit Management for Warehouse 009
11.1.2
Defining Storage Unit Number Ranges
For each of the warehouses activated for storage unit management, you need to
define the number range for the storage unit. To find this configuration, follow
the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Storage
Units 폷 Master Data 폷 Define Number Ranges.
Figure 11.2 Defining a Number Range for Warehouses with
Storage Unit Management
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Figure 11.2 shows the configuration for warehouse 009, where the storage unit
number range is set as 01 and the assignment type as 2. These settings mean that
the storage unit number is internally assigned, and it allows for numbers to be
used more than once.
11.1.3
Defining Storage Type Control
The storage type control is configured for the placement and removal strategies
explained in earlier chapters. In this instance, the storage type control is configured for the storage unit management controls of those strategies.
You can find the configuration steps by following the menu path IMG 폷 Logistics
Execution 폷 Warehouse Management 폷 Storage Units 폷 Master Data 폷 Define
Storage Type Control.
Figure 11.3 shows the configuration for storage type control for storage type 001
in warehouse 009. To ensure that the configuration is correct for a storage type
when storage unit management is active, you should consider the settings
described here:
왘
SU mgmt active
Select this checkbox to show that this storage type is storage unit managed.
왘
Putaway strategy
This is set to P, which means the storage unit type putaway has been selected.
왘
Mixed storage
Because different materials can be moved on the same pallet as a defined storage unit, the mixed storage field must be marked with an “X.”
왘
Full stk rmvl reqmt
If this checkbox is selected, it affects the storage unit, not just the materials. A
complete removal involves the complete storage unit.
Discuss these configuration settings with warehouse staff to ensure that you have
correctly identified the way the warehouse needs storage unit management to
operate.
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Figure 11.3 Storage Unit Management Configuration for Storage Type Control
11.1.4
Defining the Storage Unit Type
The storage unit type distinguishes the containers used in conjunction with the
materials to comprise the storage unit. A storage unit type is configured as a
three-character field, and you can also enter a 20-character description.
You can find the configuration steps by following the menu path IMG 폷 Logistics
Execution 폷 Warehouse Management 폷 Master Data 폷 Material 폷 Define Storage
Unit Types.
Figure 11.4 shows the storage unit type configured for each warehouse. Each container used in the warehouse should be configured. We identify the different
storage unit types because the sizes of these containers depend on the type of
racking they are designed for or the storage facilities they are part of, such as storage carousels. The storage unit type identifies the physical aspects of the container, which is important during storage bin searches.
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Figure 11.4 Configuration of Storage Unit Types
That concludes the introduction to storage unit management. We’ll continue by
explaining the storage unit record.
11.2
Storage Unit Record
The storage unit does not come into use outside of warehouse management and
can only exist when material needs to be moved within the warehouse. Therefore, the storage unit is created when the material making up the storage unit is
first proposed. This can happen in response to a receipt from a purchase order or
be created later for movement within the warehouse.
11.2.1
Creating a Storage Unit Record by Transfer Order
The storage unit can be created when the movement is triggered. The transfer
order, which is the procedure for moving material around the warehouse, is the
catalyst for creating a storage unit record.
Use Transaction LT07 to create a transfer order for a new storage unit. You can
find the configuration steps by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Stock Transfer 폷 Create Transfer
Order 폷 Create Storage Unit.
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Storage Unit Record
Figure 11.5 shows the initial screen of Transaction LT07. The storage unit does
not exist until this transfer order is created. The actual movement of the material
with its container requires that the transfer order create the storage unit as part of
the process. If the storage unit is numbered externally, you can add the relevant
number on this screen. Systems often need to have the number of the storage unit
created internally.
Figure 11.5 Initial Screen for Creating a Storage Unit: Transaction LT07
The initial screen must contain the warehouse number and the movement type.
In this instance, entering the movement type requires that a requirement number
be entered.
Figure 11.6 shows the entry of an item into a transfer order that will create the
storage unit. This screen shows the details required for creating a transfer order:
warehouse number, movement type, plant, material, and material quantity. In
addition, the data required to create the storage unit has been entered, such as the
storage unit type. The configuration of storage unit types is shown in Figure 11.4.
Once the data is entered correctly into the screen, click Create Trans. Order to
create the transfer order and the storage unit.
Figure 11.7 shows the transfer order with the source and destination storage
types. The destination storage type shows that there is a new storage type to be
entered. This has been created from the data entered into the screen shown in
Figure 11.6.
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Figure 11.6 Entering Items to Create a Storage Unit: Transaction LT07
Figure 11.7 Transfer Order Created with Storage Unit Placed into Stock
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Planning Storage Units
11.2.2
Displaying a Storage Unit
After the transfer order is confirmed, you can display the details of the storage
unit. The transaction for this is Transaction LS33, which you can find by following
the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷
Bins and Stock 폷 Display 폷 Single Displays 폷 Storage Unit.
Figure 11.8 shows the details of the storage unit that has been entered. The information displayed is from the entry of the transfer order. The movement data
reflects the last time the storage unit was moved and the transfer order that
performed the movement.
Figure 11.8 Details of a Storage Unit: Transaction LS33
Now that we have explained the creation and layout of the storage unit record,
we will go on to describe how to plan storage units.
11.3
Planning Storage Units
The storage unit can be planned before the material arrives in the warehouse. The
warehouse manager can prepare the containers for the arriving material so the
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material can be scanned on the receiving bay and placed in the container with
which it is combined to make up the storage unit.
Planning storage units is the process of creating the transfer orders but not confirming them. Creating the transfer order creates the storage unit, so that it will
exist when the material arrives at the receiving dock.
11.3.1
Planning Storage Units by Transfer Order
Warehouse management can plan storage units for incoming materials by using
Transaction LT0A, which can be found via the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Inbound Processes 폷 Goods Receipt for Purchase Order, Order,
Other Transactions 폷 Putaway 폷 Create Transfer Order 폷 Preplan Storage
Units.
Figure 11.9 shows the initial screen for Transaction LT0A, creating storage units
for planning purposes. The quantity of the material entered on the transfer order
is the amount that is expected to arrive on the inbound delivery. Because the
movement type is for the planning of storage units, it requires entry of the storage unit number and the code Y for storage units. To continue with the planning,
click the Preparation button.
Figure 11.9 Creating Storage Units for Planning: Transaction LT0A
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Planning Storage Units
Figure 11.10 shows the next screen for planning storage units. The transfer order
creation program defaults the storage type and a source bin for the container. At
this point in the transaction, you can create the transfer order in the foreground
by pressing the (F5) function key or in the background by pressing (F6).
Figure 11.10 Planning for Storage Units: Transaction LT0A
Figure 11.11 shows the transfer order that has been created for the inbound
material. The material will be moved from the goods-receipt area using the container, and this will be storage unit CV-8990002. The storage unit will be moved
to storage type 005, bin location 01-15-10.
The transfer order is not confirmed at this point; this process is for planning the
movement. Storage unit documents are printed that are stored until the material
arrives. The confirmation takes place when the material arrives at the receiving
dock and is moved to the storage bin.
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Figure 11.11 Completing the Transfer Order: Transaction LT0A
11.3.2
Receiving Planned Storage Units
Once the planned storage unit has been assigned, the transfer order remains
unconfirmed until the material arrives. When the material arrives and is checked,
it can be moved into stock using Transaction LT09, which you can find by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Stock Transfer 폷 Create Transfer Order 폷 Move Storage Unit.
Figure 11.12 shows the storage unit that was created in Figure 11.11, entered
along with the movement type. The transfer order is for the planned storage unit
and the material arriving at the receiving dock.
The transfer order can be confirmed internally, or—if there is a difference in the
actual amounts—a change can be made, identifying the difference.
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Planning Storage Units
Figure 11.12 Placing Material into Stock from a Planned Storage Unit
11.3.3
Recording Differences in Planned Storage Units
In Figure 11.11 there was no difference between the actual amount received and
the amount planned. If there was a difference, then that difference could have
been recorded in Transaction LT09.
After entering the storage unit and movement type, you can select the transfer for
confirmation, as shown in Figure 11.12. Instead of confirming internally, you can
use a worklist to record the material differences.
Figure 11.13 shows a quantity variance in the incoming material. The transfer
order was created with a quantity of ten, and the quantity that arrived at the
receiving dock was a quantity of eleven. The material quantity variance is
entered, and the transfer order is confirmed.
Figure 11.13 Confirming a Transfer Order with a Quantity Variance
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From the planning of storage units, we’ll now move on to discuss the documents
related to storage units.
11.4
Storage Unit Documentation
You can print the following four documents to aid the storage unit process:
왘
Transfer order document
왘
Storage unit contents document
왘
Storage unit document
왘
Storage unit—transfer order document
We’ll describe these documents more fully in the subsections that follow.
11.4.1
Transfer Order Document
The transfer order document is simply the transfer order that can be printed with
or without storage unit management. The transfer order printout shows the
detailed information about the movement of a single item in a storage unit. A separate transfer order document is printed for each item on the transfer order. The
format of the document can be determined by the warehouse staff and can be
modified by ABAP code. The document can display any information from the
transfer order and can be configured to print bar codes so that data can be
entered using a radio frequency (RF) scanning device.
The transfer order document can be printed manually via Transaction LT32 by
following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Inbound Processes 폷 Goods Receipt for Purchase Order, Order, Other Transactions 폷 Print
and Communication 폷 Transfer Order for Storage Unit.
Figure 11.14 shows the selection screen that prints several documents relating to
a storage unit. Enter the storage unit, and select printing of just the transfer order
or of the other three storage unit documents. You can enter the print code,
printer, and spool control data if the system is configured for this.
Figure 11.15 shows the transfer order printout for storage unit 1000001581. The
transfer order and the transfer order item number are printed as bar codes for
scanning by an RF device.
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Storage Unit Documentation
Figure 11.14 Print Transfer Order for Storage Unit Entered: Transaction LT32
Figure 11.15 Printout of Transfer Order from Transaction LT32
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11.4.2
Storage Unit Contents Document
The storage unit contents document displays a list of the contents and quantities
of all the materials in a storage unit. The storage unit number is usually printed in
both numerical and bar code formats. You can select this document by choosing
the SU Contents Document checkbox in Figure 11.14.
The print preview screen shown in Figure 11.16 displays the contents of the storage unit. Two materials combine to make up the storage unit. In this example, the
storage unit number has been bar-coded for easy scanning on the warehouse
floor. This can be printed and kept with the storage unit as it is moved in the
warehouse. This gives warehouse staff an easy way of identifying what is in the
storage unit without examining the actual material.
Figure 11.16 Storage Unit Contents Document
11.4.3 Storage Unit Document
The storage unit document displays multiple prints of storage unit numbers in
numerical and bar code formats. This document is often printed on paper that can
be used for labels.
To print this document, select the checkbox for SU Document in Transaction
LT32 as shown in Figure 11.14.
Figure 11.17 shows the storage unit number and bar code printed for administration.
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Storage Unit Documentation
Figure 11.17 Sample Storage Unit Document
11.4.4 Storage Unit Transfer Order Document
The storage unit transfer order document describes the movement of the storage
unit. It resembles the printout of the transfer order but can be modified by ABAP
code if your organization needs details added or additional bar codes printed
because many RF devices are used on the warehouse floor.
To print this document, select the checkbox SU TO Document, in Transaction
LT32 as shown in Figure 11.14. Figure 11.18 shows the details of the storage unit
and the movement of the storage unit in the warehouse.
Figure 11.18 Storage Unit Transfer Order Document
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Now that we have discussed the storage unit documents, the next topic is the role
of storage unit management in stock putaway.
11.5
Putaway with Storage Unit Management
Storage units are often created when material arrives at the receiving dock and
needs to be placed into storage using a container. Storage units can be created
with one material or with many different materials combined. It is also possible
to move material from the receiving dock into a storage unit that already exists in
the warehouse.
11.5.1
Creating a Storage Unit
In this chapter, we have already seen how to create a storage unit using a transfer
order, as shown in Figures 11.5, 11.6, and 11.7. We’ll now describe three methods of material putaway in the warehouse:
왘
Storage unit—single material
왘
Storage unit—multiple materials
왘
Storage unit—add to existing stock
These are described more fully in the subsections that follow. Let’s first examine
a situation where the storage unit is created for one material that will not be
stored with other material.
11.5.2
Storage Unit—Single Material
You can create the storage unit for a single material with Transaction LT01, which
you can find by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷
Internal Whse Processes 폷 Stock Transfer 폷 Create Transfer Order 폷 No Source
Object.
Figure 11.19 shows the initial screen in Transaction LT01, where the transfer
order is created with no reference. The movement type used in this Transaction is
501: goods receipt without a purchase order. The material is entered along with
the warehouse number, quantity of material, plant, storage location, and storage
unit type. Click the Preparation button to process the transfer order.
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Figure 11.19 Initial Screen to Create a Storage Unit with One Material
Figure 11.20 shows the material and the source storage bin where the material is
located now. You can add the destination storage bin and then create the transfer
order in the background by pressing the (F6) function key.
Figure 11.20 Preparation for Stock Placement Screen
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11.5.3
Storage Unit—Multiple Materials
You can create a storage unit that contains multiple materials with Transaction
LT07, which you can find by following the menu path SAP 폷 Logistics 폷 Logistics
Execution 폷 Internal Whse Processes 폷 Stock Transfer 폷 Create Transfer Order 폷
Create Storage Unit.
Figure 11.21 shows the initial screen for Transaction LT07. Enter the warehouse
number, movement type, plant, and storage location. Click the Preparation button to process the transfer order.
Figure 11.21 Initial Screen for Creating a Storage Unit with Multiple Materials
Figure 11.22 allows the entry of the materials that will be associated with the one
storage unit. You can add several materials and their quantity to the storage unit.
Once you have added all the materials, click the Create Trans. Order button to
create the storage unit and the transfer order.
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Figure 11.22 Entering Multiple Materials When Creating a Storage Unit
11.5.4 Storage Unit—Add to Existing Stock
To create a storage unit that contains multiple materials, you can use Transaction
LT08 by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal
Whse Processes 폷 Stock Transfer 폷 Create Transfer Order 폷 Expand Storage
Unit.
Figure 11.23 shows the initial screen for adding material to an existing storage
unit that already contains stock. This is needed when material arrives in the
receiving area later than it should have and the storage unit it was to be in has
already been created using other materials that were scheduled to be part of that
storage unit.
Completing the initial screen of Transaction LT08 requires that the storage unit be
entered along with the movement type and plant number. Once the data is
entered, click the Preparation button to process the transfer order.
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Figure 11.23 Initial Screen for Adding Stock to an Existing Storage Unit
Figure 11.24 shows the entry of the material and the quantity to be added to storage unit 1000001581. After the materials have been added to this screen, click
the Create Trans. Order button to add the materials to the storage unit via creation of the transfer order.
Figure 11.24 Entering Material to Add to an Existing Storage Unit
Now that we know how storage unit management is used with stock putaway,
we’ll examine how it integrates with stock picking.
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Picking with Storage Unit Management
11.6
Picking with Storage Unit Management
Material to be removed from the warehouse can be picked from storage units.
The material can be removed in such a way that the whole storage unit is consumed by the pick or so that a partial pick is made from the storage type. For
example, if a customer order requires a quantity of 40 and the storage unit is a full
pallet with a quantity of 160, the pick from this storage unit will be a partial pick.
11.6.1
Complete Stock Pick
The entire storage unit can be picked for a goods issue even if the requirement is
for less than the quantity in the storage unit. To do this, you must set the configuration at the storage type level. You can find this by following the menu path
IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Master Data 폷 Define
Storage Type.
Figure 11.25 shows the configuration for a storage type that allows an entire storage unit to be picked even when the requirement is only for a partial amount.
Select the Full Stk Rmvl Reqmt Act checkbox to force the whole storage unit to
be removed.
Figure 11.25 Configuration for a Storage Type to Allow Full Stock Removal
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11.6.2
Partial Stock Pick
If the Full Stk Rmvl Reqmt Act checkbox is not selected in the storage type configuration to force a full stock removal, as it is in Figure 11.25, it is possible to
perform a partial pick from a storage unit. This would allow the partial pick for a
customer order of 40 units of material from a storage unit with a full 160 units on
the pallet.
11.6.3 Complete Stock Pick with Return to Same Bin
A partial pick can be performed when the full stock removal checkbox is selected,
but this requires that the Return Stock to Same Storage Bin checkbox be
selected in the configuration for the storage type. You can find this configuration
step by following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Master Data 폷 Define Storage Type.
Figure 11.26 shows the storage type configuration for storage type 001, where
both the checkbox for full stock removal requirement and the checkbox for
returning stock to the same storage bin are selected. This allows the full storage
unit to be removed from stock for a pick, but if the goods issue does not require
the full amount, the remaining stock will be returned to the same storage bin.
Figure 11.26 Configuration to Select the Checkbox for
Returning Stock to the Same Storage Bin
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Picking with Storage Unit Management
11.6.4 Partial Stock Removal Using a Pick Point
A partial pick can be performed on a storage unit with the use of a pick point. A
pick point is a location in the warehouse where materials are removed for a partial stock pick from a storage unit. The pick point is defined in storage type configuration, which you can find via the menu path IMG 폷 Logistics Execution 폷
Warehouse Management 폷 Master Data 폷 Define Storage Type.
Figure 12.27 shows that the Stor. Type Is Pck Pnt field is set for storage type 011.
This allows partial removal of storage units using the functionality of the pick
point.
Figure 11.27 Configuration to Set the Storage Type as the Pick Point
When you remove storage units from a pick point, the storage unit information is
not lost, as it would be if the material was removed to an interim goods issue and
then a partial amount was returned to stock.
When a transfer order confirms a quantity of material to be moved from the pick
point to the goods issue area for the outbound transfer order, the system posts
the remaining material quantity from the storage unit to the pick point. The
remaining material from the storage unit can be moved back to the original storage bin or to a new storage bin, depending on how the warehouse management
uses storage unit functionality.
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This concludes the examination of picking with storage unit management. Now
let’s look at some business examples.
11.7
Business Examples—Storage Unit Management
Storage unit management is the WM equivalent of handling unit management,
the functionality found in SAP IM. Storage unit management was developed
exclusively for WM, and from it SAP developed handling unit management for
SAP Materials Management (MM).
11.7.1
Planning Storage Units
The storage unit can be planned before the material arrives in the warehouse. The
warehouse staff can prepare the containers for the material so it can be scanned
on the receiving dock and placed in the container with which it is combined to
make up the storage unit.
Example
A California electronics component company implemented SAP WM when they
merged with a competitor. The combined warehouse used small bins to store
items, and this caused the issue of having dozens of bins all containing the same
material. As the company grew, the use of the small bins became more problematic so they reconfigured their tracking system so that the size of the bin location
was larger and was based on a standard-size tote. The warehouse was redesigned
so that the items were stored in a larger container, or storage unit, than could be
moved from the goods receiving dock to the warehouse and back to the shipping
door.
The warehouse racking was divided into bin locations that would accept a single
container. If the bin location was empty, then no container would be stored
there.
To make sure material was stored efficiently in the warehouse, the warehouse
manager reviewed the inbound deliveries. They then preplanned the containers
so that each material received could be placed immediately in a container so it
could be easily moved around the warehouse.
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11.7.2
Putaway with Storage Units
Storage units can be created when material arrives at the receiving dock and is
then placed into storage inside a container. Storage units can be created with one
material or with many materials combined. It is also possible to move material
from the receiving dock into a storage unit that already exists in the warehouse.
Example
A manufacturer of consumer hand tools had implemented an SAP system, including WM, when the company was purchased by a private investment firm. The
company did not implement storage unit management, and the process for
receiving goods into the warehouse involved the warehouse staff removing the
raw materials from shipping pallets and placing the items into storage bins.
The receiving process would sometimes take considerable time, as the shipping
pallet sometimes held several different items that needed to be removed and
stored. This led to a bottleneck at the receiving dock while the pallets were
unloaded. The company hired a consulting firm to review warehouse operations,
and one of the recommendations was to stop unloading the mixed pallets but
store the materials together in one storage bin. The company implemented storage unit management and allowed the contents of the incoming pallets to be
stored together as quants in the same storage bin.
11.7.3
Picking with Storage Units
Material removed from the warehouse can be picked from storage units. The
material can be removed in such a way that the whole storage unit is consumed
by the pick or so that a partial pick is made from the storage type.
Example
A manufacturer of metal fasteners stored their finished goods in a warehouse that
had implemented SAP WM. The finished goods warehouse layout was primarily
a series of racking that contained pallets of the same item. The pallets were made
up boxes of fasteners, and items were sold to customers by the box.
Because the boxes were stored on a storage unit, that is, a pallet, the warehouse
operators would pull the pallet for the transfer order and deliver the pallet to the
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shipping dock. The shipping team would then remove the number of boxes
required by the sales order. If there were boxes remaining on the pallet those
boxes and the pallet were returned to the original storage bin.
11.8
Summary
The storage unit management functionality was designed for the warehouse and
is a useful tool for materials that need to be moved around the warehouse in a
container. It is simpler than handling unit management, a method used in SAP
MM, because it does not require packing or unpacking. Once a storage unit is created in a transfer order, assignment of materials is all that is required. Storage
units can contain one material or several materials.
Many warehouses use containers, pallets, and transportation materials to move
material from one storage type to another. In many cases, warehouses do not frequently use storage unit management because they have been told it is too complicated or cumbersome for efficient warehouse operations. This is not the case,
and it is the responsibility of the consultant or employee to discuss and propose
this and other SAP WM functionalities that may improve warehouse efficiency.
In Chapter 12, we will discuss the functionality available to the warehouse manager to manage hazardous materials in the warehouse.
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Hazardous materials are used in many production processes and have to
be stored in the warehouse. Many regulations govern the storage and
transportation of these materials. The hazardous materials functionality
in SAP WM provides a structure for correctly managing this process.
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Hazardous Materials Management
Hazardous materials are often found in warehouses. These materials are either
raw materials or finished goods, depending on the nature of the company’s products. A hazardous material is one that can produce harmful immediate physical
effects such as a fire, sudden release of pressure and explosion, acute health problems such as burns and convulsions, and chronic illness such as organ damage
and cancer.
Having hazardous materials in a warehouse is a great responsibility for warehouse owners. They operate, in the United States, within limits set by federal,
state, and local agencies that regulate hazardous materials to protect human
health and the environment.
These agencies have regulations that pertain to the handling, storage, and distribution of hazardous materials. In the United States, these include the federal
Clean Air Act, Clean Water Act, Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, also known as the Superfund), Resource
Conservation and Recovery Act (RCRA), Safe Drinking Water Act (SDWA), Hazardous Materials Transportation Act (HMTA), Toxic Substances Control Act
(TSCA), and many others.
Apart from the federal laws in the United States, states have their own strict regulations that must be observed. Some of the state laws are the California Safe
Drinking Water & Toxic Enforcement Act, Connecticut Manufacturing Employer
Hazardous Materials Notification Act, and Louisiana Hazardous Materials Information, Development, Preparedness, and Response Act.
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In other countries, organizations exist to work in the same manner as the federal
Environmental Protection Agency (EPA) in the United States. These include the
Canadian Environmental Assessment Agency (CEAA), the Department of the
Environment and Water Resources in Australia, and the Department for Environment, Food, and Rural Affairs (DEFRA) in the UK.
12.1
Introduction to Hazardous Materials
To safely and properly handle and store hazardous materials, it is important to
know the hazards of those materials. Many companies, laboratories, and educational establishments have hazard communication programs that help their personnel working with hazardous materials be aware of the materials stored in the
facility.
12.1.1
Classification of Hazardous Materials
Any number of hazardous materials may be stored in a warehouse. They are generally be assigned to one or more of the following classifications:
왘
Flammable liquid
This includes any liquid with a flash point below 100° Fahrenheit, such as gasoline or paint lacquers.
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Combustible liquid
This includes any liquid with a flash point between 100 and 200° Fahrenheit
that produces enough vapor to ignite if exposed to an ignition source. Examples are diesel fuel and home heating oil.
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Flammable solid
This is any substance that can cause a fire through friction, absorption of moisture, or spontaneous chemical changes and that, when ignited, will burn so
vigorously that it creates a hazard. Flour and white phosphorous, for example,
are both flammable materials.
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Oxidizer
This is a substance that readily yields oxygen to stimulate the combustion of
organic matter. Common household bleach is an example of an oxidizer.
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Corrosive
This is any liquid that corrodes steel (SAE 1020) at a rate greater than 0.250
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inches at a test temperature of 130° Fahrenheit or has a pH of less than 2 or
greater than 12.5. Common acids, including hydrochloric acid, sulfuric acid,
and nitric acid, are all corrosive materials.
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Organic peroxide
This is an organic compound containing the chemical bond of oxygen joined to
oxygen. Organic peroxides are used in many industries. For example, benzoyl
peroxide is an organic peroxide that is used in acne medication.
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Poison
This is a substance so toxic that it presents a risk to life or health. Examples are
potassium cyanide and mercuric chloride.
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Compressed gas
This is a substance in gas or liquid form contained in a vessel under pressure.
This includes cylinders, lecture bottles, and aerosol cans. These substances may
be flammable, nonflammable, or poisonous. Examples include propane and
hydrogen.
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Cryogenics
This includes substances that are extremely cold, such as liquid nitrogen, liquid
helium, and dry ice. These substances may also become asphyxiation hazards if
spilled in nonventilated areas.
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Radioactive
This includes any material with a specific activity greater than 0.002 micro
curies per gram (uCi/g), such as uranium and plutonium.
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Biomedical
This includes tissues, organs, and blood from humans and primates.
12.1.2
Master Data Configuration for Hazardous Materials
If a warehouse contains hazardous material, then certain master data configuration steps must be made to define the sections, warnings, and hazardous material
management strategy.
Fire-Containment Sections
Fire-containment sections must be configured if there are areas in the warehouse
with different fire-containment properties. For example, some areas in the warehouse that may contain hazardous material may have two-hour minimum fire
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resistance, whereas other areas may have four-hour minimum resistance. Once
configured, these sections can be assigned to storage bins.
To find this configuration, follow the menu path IMG 폷 Logistics Execution 폷
Warehouse Management 폷 Hazardous Materials 폷 Master Data 폷 Define FireContainment Sections.
Figure 12.1 shows the configuration for the fire-containment sections that can be
set up for each warehouse. In this example, the sections are identified by their
fire resistance. Some warehouses may have a series of fire-containment storage
cabinets or areas that can be identified as configurable sections.
Figure 12.1 Configuration for Fire-Containment Sections for Each Warehouse
Hazardous Material Warnings
You can configure warnings to be used with hazardous materials. The configuration allows the creation and assignment of many material warnings when dealing
with hazardous materials.
For this configuration, follow the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Hazardous Materials 폷 Master Data 폷 Define Hazardous
Material Warning. These hazardous material warnings, as shown in Figure 12.2,
can be configured for the whole system. The warnings may be different for different warehouses that may be situated in different countries. The environmental
agency for the country where each warehouse is situated may be able to advise
you on hazardous material warnings.
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Figure 12.2 Configuration for Hazardous Material Warnings
Hazardous Material Storage Warnings
Certain warnings are required when hazardous materials are being transported or
when they are placed in storage. Configuring this in the system allows the assignment of many storage warnings when dealing with hazardous materials.
To find this configuration, follow the menu path IMG 폷 Logistics Execution 폷
Warehouse Management 폷 Hazardous Materials 폷 Master Data 폷 Define Hazardous Material Storage Warning.
Figure 12.3 Configuration for Hazardous Material Storage Warnings
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Figure 12.3 shows the configured hazardous material storage warnings. These are
not specific to a particular warehouse, so each warehouse management team has
to ensure that the storage warnings can be adopted for their warehouse, or further configuration will be required.
Aggregate States
You configure the aggregate state by following the menu path IMG 폷 Logistics
Execution 폷 Warehouse Management 폷 Hazardous Materials 폷 Master Data 폷
Define Aggregate States.
The aggregate state is given a material in its normal conditions, that is, a temperature of 20°C and a pressure of 1 atmosphere. The aggregate state of the material
is solid, liquid, or gas. Radioactive elements can be denoted as a different aggregate state, but all radioactive materials are solid. Because there can be a maximum
of only four aggregate states, as shown in Figure 12.4, no further configuration is
required.
Figure 12.4 Configuration of Aggregate States for Hazardous Materials
Region Codes
Because a company’s warehouses can be in different countries, it is possible to
configure different regions for hazardous material management. You can configure the region codes via the menu path IMG 폷 Logistics Execution 폷 Warehouse
Management 폷 Hazardous Materials 폷 Master Data 폷 Define Region Codes.
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Figure 12.5 shows a number of region codes that have been configured for hazardous materials. These region codes are not the same as SAP country codes; the
region codes can incorporate different countries, such as European Community
(EC) countries or former Soviet republics. You could configure a region code that
incorporates more than one country; for example, a region code may include the
countries of Belgium, The Netherlands, and Luxemburg.
Figure 12.5 Configuration of Region Codes for Hazardous Materials Management
Storage Classes
You can configure storage classes to classify hazardous materials based on their
features. A storage class can be used by stock putaway strategies. The definition of
the storage classes used in SAP is based on the guidelines issued by the U.S.
Department of Transportation, which administers the HMTA.
You can configure storage classes by following the menu path IMG 폷 Logistics
Execution 폷 Warehouse Management 폷 Hazardous Materials 폷 Master Data 폷
Define Storage Classes.
Figure 12.6 shows the defined storage classes as defined by the U.S. Department
of Transportation. If there are more appropriate storage classes for the company’s
warehouse, they can be configured here.
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Figure 12.6 Configuration of Storage Classes for Hazardous Material Management
12.1.3
Configuring Hazardous Material Management
This next phase of configuration is for activating the hazardous material management. You can find this configuration by using Transaction OMM2 or via the
menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Hazardous
Materials 폷 Strategies 폷 Activate Hazardous Material Management.
Figure 12.7 shows the configuration required for hazardous material management. The first configuration step is to activate the hazardous material check.
Activating the Hazardous Material Check
This configuration step activates the section check, the hazardous material management, and the water-pollution class for a designated storage type in a warehouse.
In Figure 12.8, the configuration has been set for storage type 006 in warehouse
001. Storage type 006 has the section check activated. The X in the field shows
that the storage section is determined and a check was made. Entering Y means a
storage section determination is made, but no check.
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Figure 12.7 Configuration for Hazardous Material Management
Figure 12.8 Activate Storage Section Checking and Hazardous Material Management
The hazardous material management field has been configured with the value 1.
This means the hazardous material check is made at the storage-type level only.
Entering “2” in this field requires a check at the storage-type and the storage section level.
The water pollution class (WPC) classifies a material in terms of its capability of
polluting water. The values are defined as:
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왘
0
Not a water pollutant
왘
1
Minimal water pollutant
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2
Water pollutant
왘
3
Extreme water pollutant
Entering “1” in the WPC field allows materials with WPCs of 0 and 1 to be stored
in the storage type.
Assigning a Region Code
Once the region codes have been configured, as shown in Figure 12.5, they can
be assigned to the active warehouses.
Figure 12.9 shows the assignment of the configured region codes to the active
warehouses.
Figure 12.9 Assignment of Region Code to a Warehouse
Storage Classes per Storage Type
In this configuration step, you can assign all the storage classes, defined as shown
in Figure 12.6, to a certain storage type in the warehouse. For example, some
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storage types are suitable for containing compressed gas but not organic peroxides. This depends on the physical attributes of the storage type and whether
those attributes are suitable to store materials of specific storage classes.
Figure 12.10 shows the assignment of storage class 5.2, organic peroxides, to storage type 006 in warehouse 001. This means storage type 006 allows the storage
of organic peroxides. The other fields in this configuration relate to the priority of
the storage class in the storage type.
Figure 12.10 Assignment of Storage Classes to Storage Types
Example
A storage type may allow several storage classes to be stored in it, but the priority determines which storage class is given priority over the others.
The Blocked checkbox temporarily blocks the storage type for a particular storage class. This may occur if certain materials have been stored in the storage type,
rendering it unavailable for hazardous materials of other storage classes.
Selecting the Conf.Ptwy checkbox requires that any stock placement for this storage class be performed in the foreground, overriding any other requirement for
that storage type.
Storage Type Search
This allows the additions to the storage type search to allow for any storage class
configuration that has been made.
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Figure 12.11 shows that a new storage type search has been added to include reference to a hazardous material storage class. The storage type search now
includes a search where the storage class is 5.2. This search will try to find an
empty storage bin in storage type 006 if the material has a storage class of 5.2.
Figure 12.11 Additions to Storage Type Search Configuration
Storage Section Search
If the warehouse is using a storage section search as well as a storage type search,
then you can configure the storage section search to include the storage class.
Figure 12.12 Storage Section Search Including the Storage Class
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Hazardous Material Record
Figure 12.12 shows the configuration for warehouse 001 and storage type 006.
The new configuration line shows that if the material has a storage class of 5.2,
the system will search for an empty bin in storage section 005 first and then storage section 001.
Now that we have examined the basics of hazardous materials, we’ll focus on the
hazardous material record.
12.2
Hazardous Material Record
The warehouse needs to create hazardous material records for materials that
require special handling or storage due to their hazardous nature. The hazardous
material record contains many fields that describe the hazardous nature of a
material, such as the water-pollution class if the material is a water pollutant. In
addition, it contains the various hazardous material warnings that may have to be
displayed if the material is transported and a breakdown of any other hazardous
material that is a component of the transported material.
12.2.1
Creating a Hazardous Material Record
You can create a hazardous material record with Transaction VM01, which you
can find by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Master Data 폷 Material 폷 Hazardous Material 폷 Create.
Figure 12.13 shows the data entered for the hazardous material record. SAP does
not assign the hazardous material number, so you must decide on an external
number.
The general data lets you include more detailed information for the material,
including the storage class, water pollution class, aggregate state, and flash point.
Also, you can describe the material in terms of its components, which themselves
can be hazardous. The percentages can be given for each of the components.
Once you save the hazardous material record, you can assign it to a material master record.
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Figure 12.13 Entry of Hazardous Material Record
12.2.2
Assigning the Hazardous Material to a Material Master Record
You can assign the hazardous material record to an existing material master
record. Because the hazardous material information is held within SAP WM, the
hazardous material number is assigned to the material master record in the WM
screen of the material master.
Figure 12.14 Hazardous Material Assigned to a Material Master Record
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Hazardous Material Functionality
Figure 12.14 shows the WM screen for material 1829. The material is a 55-gallon
drum of methyl ethyl ketone peroxide, which is hazardous material number 2330
– 0001102, as shown in Figure 12.13. The hazardous material number is assigned
to the material master record. Therefore, any warehouse movements of the material will show that it is a hazardous material and special circumstances may apply.
12.3
Hazardous Material Functionality
To ensure that a hazardous material is tracked, the warehouse staff can use several
reports. For emergencies, there are reports for the fire service or hazmat teams,
detailing where the hazardous materials are.
12.3.1
List of Hazardous Materials
The list of hazardous materials can be selected by region, and it shows all of the
hazardous materials with records on the system. This does not imply that all the
materials are stored in any particular warehouse, but it does show all hazardous
materials that potentially could be in stock within the region.
The transaction for this is LX24, which you can find by following the menu path
SAP 폷 Logistics 폷 Logistics Execution 폷 Information System 폷 Warehouse 폷 Stock 폷
Hazardous Material 폷 List.
Figure 12.15 List of Hazardous Materials for a Specific Region
Figure 12.15 shows a list of all the hazardous materials that have been entered for
the region of the United States. The list should be reviewed periodically, as local
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laws and regulations can and do change. The warehouse management and the
environmental health and safety manager for the plant should carry out the
review.
12.3.2
Fire Department Inventory List
Periodically, the warehouse facility may be inspected by regulatory authorities or
by the local fire department. At any of these inspections, the reports identifying
the hazardous material stored within the warehouse may be required. The fire
department inventory list is a report on the quantity of material in each fire containment area, by storage class. The fire department can review the potential
hazards and offer advice about storage changes.
You can use Transaction LX06 to produce the fire department inventory list, or
follow the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Information System
폷 Warehouse 폷 Stock 폷 Hazardous Material 폷 Fire Department Inventory List.
The fire department inventory list, shown in Figure 12.16, identifies each fire
containment area and the hazardous storage classes currently stored inside. The
weight and quantity of the material shows the fire department the level of potential hazard within each containment area. If the fire department decides that there
is too much stock of a certain hazardous storage class in a containment area, the
warehouse would have to move some quants to other suitable storage bins.
Figure 12.16 Display of Fire Department Inventory List
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Hazardous Material Functionality
12.3.3 Check Goods Storage
The check-goods storage report is used to ensure that all hazardous material has
been stored correctly. The report reviews all of the quants of material to see
where they are stored and checks against the configuration entered for hazardous
materials. It checks that:
왘
Hazardous materials are not stored in storage types managed specifically for
nonhazardous materials
왘
Material are stored in the correct storage type based on water-pollution class
왘
Materials are stored in the correct storage type based on storage class
If any of these checks produce an error, the report produces an error log showing
how many errors have occurred for each storage type. Figure 12.17 shows an
example.
You can product the check-goods storage list can be produced using Transaction
LX07 or via the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Information
System 폷 Warehouse 폷 Stock 폷 Hazardous Material 폷 Check Goods Storage.
Figure 12.17 Error Log Produced by the Check Goods Storage Report
Figure 12.17 shows that for storage type 001 there are 25 instances where hazardous material is incorrectly stored. More detailed information is required to find
out why each quant has been stored incorrectly. You can display the information
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at the storage-bin level for each storage type by highlighting the storage type and
pressing (Shift)+(F4) or clicking the Storage Bins button on the application toolbar.
Figure 12.18 shows the error log at the storage-bin level. The incorrect storage
column indicates the error code. The codes are as follows:
왘
0
Hazardous material in a storage type not managed for hazardous materials
왘
1
Water pollution class not maintained for storage type
왘
2
Storage class not maintained for storage type
왘
3
Hazardous material not maintained for storage section
Figure 12.18 Error Log at the Storage Bin Level
The report should be used to ensure that hazardous materials are correctly stored
in the warehouse. If materials are not stored correctly, they should be moved to
a correct location to ensure warehouse safety.
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12.3.4 Hazardous Substance List
The hazardous substance list produces a report of all the hazardous material that
is stored in a particular warehouse or storage type or fire-containment area.
You can produce the hazardous substance list using Transaction LX08 or by
following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Information
System 폷 Warehouse 폷 Stock 폷 Hazardous Material 폷 Hazardous Substance List.
Figure 12.19 shows the hazardous material stored in the warehouse. The report
shows the fire-containment area where the material is stored, as well as the hazardous storage class and water pollution class.
Figure 12.19 Hazardous Substance List: Transaction LX08
12.4
Business Examples—Hazardous Materials Management
In warehouses there is a possibility that some of the materials stored are hazardous in nature. It is important to safely and properly handle hazardous materials as
they are received, stored, and shipped from the warehouse. Your company or
client may have hazard communication programs that help their personnel working with hazardous materials to be aware of the materials stored in the facility.
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12.4.1
Storing Hazardous Material
Material that has been identified as hazardous is required to be identified as such
and stored in the designated area. A hazardous material is an item that is capable
of producing harmful physical or health effects. Some materials need to be stored
in areas with materials that have the same hazard, for example, storing flammable
materials with other flammable materials.
Example
Many warehouses contain hazardous materials that are used in the manufacture of
finished goods or for cleaning equipment on the production line. A manufacturer
of consumer hand tools did not use any hazardous materials, as the operations
that required the use of hazardous materials were performed by subcontractors.
After a subcontractor declared bankruptcy, the company brought the painting
operation for some of their products back in-house. This meant the company
needed to purchase and store a selection of paints, paint additives, and lacquers.
Some of these items were classified as hazardous, and the company realized they
should be stored separately from other materials. The material safety data sheet
(MSDS) contained the information that the company needed to help it store the
material in the warehouse. Because some of the materials were flammable, the
company had to store the material in the warehouse in a separate room that was
fire resistant and had suitable ventilation.
12.4.2 Hazardous Material Functionality
To ensure that hazardous material is tracked, several reports are used in the warehouse. If there is an emergency in the warehouse or within the plant, the warehouse
staff can print reports for the fire service or hazmat teams, detailing where the hazardous materials are stored.
Example
A Canadian electrical components company opened it first American manufacturing plant in Nevada. The company used several hazardous materials in the manufacturing process, and the materials were stored according to the information in
the material safety data sheet (MSDS). They applied for a hazardous materials
permit from the Nevada Department of Public Safety, they were informed that
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Summary
they needed to report details about hazardous materials if they stored, transported on-site, dispensed, or handled hazardous materials. The company was
required to report extremely hazardous substances (EHSs), hazardous materials,
gasoline, and diesel fuel.
The company had implemented an SAP system when the manufacturing facility
was opened, and they were using the hazardous material functionality, which
allowed reports to be generated. The state of Nevada allowed companies to enter
their hazardous material information online using the state’s online hazardous
materials reporting system. The company had the ability to print reports for
emergency services in the case of a problem, and the data entered online was
immediately available for use by emergency planning and response agencies,
avoiding delays that might occur with processing of hard copies.
12.5
Summary
Hazardous materials are used to produce finished goods in thousands of companies every day. Laws and regulations at different levels of government in every
country govern the storage of hazardous materials. In the United States, federal
and state laws determine what materials are treated as hazardous and how they
should be stored.
The SAP WM configuration for hazardous materials allows such material to be
stored in the correct storage bin in the correct storage type. Any error in the storage of hazardous material is not only potentially dangerous, but can result in penalties levied against the warehouse owner.
In Chapter 13, we will examine the functionality of electronic data interchange,
better known as EDI.
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Electronic data interchange (EDI) is a standard for passing data between
trading partners. SAP supports this functionality by the use of intermediate documents (IDocs).
13
Electronic Data Interchange (EDI)
Electronic data interchange, commonly known as EDI, is a standard format for
exchanging data. The standard is ANSI X12, and it was developed by the Data
Interchange Standards Association. EDI is used throughout the business world to
move data from one company to another, known as trading partners.
The EDI message contains a string of data elements, each of which represents a
singular fact, such as a material number, quantity, price, and so on, that are separated by delimiters. The EDI message consists of what would usually be contained in a typical business document or form, such as a purchase order or an
advance shipping notice.
SAP supports EDI through the use of intermediate documents, more commonly
known as IDocs.
13.1
Introduction to EDI
EDI has been used since the 1960s and is a way in which standard business documents are exchanged between companies using a computer system. The standard documents that can be exchanged include purchase orders, shipping notices,
and invoices.
13.1.1
Advantages of Using EDI
The advantages of using EDI over paper-based documents or telephone instructions are that it offers greatly reduced data entry errors, reduced processing time,
the availabilty of data in electonic form, reduced cost, a standard means of communications, and an efficient business processes.
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Data Accuracy
One of benefits of EDI is that is gives better data accuracy. EDI eliminates the
need to copy data from one paper document to another or to key the data into an
SAP transaction. Data accuracy is lower when data is manually transferred. EDI
transactions also verify the data prior to transfer, so data does not need be verified a second time when the SAP system receives it.
Processing Time
It takes only seconds or minutes to transmit EDI data around the world. Data processed by sending a physical document can take days, and data sent by fax takes
time to print, fax, and re-enter into the SAP system. The data sent by EDI is available in the SAP system far quicker than any other means.
Reduced Costs
The obvious reduction in cost is that it reduces the amount of data processing by
employees. The hourly cost of a data processing clerk is immediately saved when
EDI is implemented. There are cost savings of the mail sorting, envelopes, telephone, postage, and courier services. Nonphysical cost savings include the labor
costs of finding and dealing with errors that are introduced during data entry.
One other cost benefit that companies may take advantage of, based on the speed
with which documents arrive via EDI, is any discounts vendors offer for prompt
payment.
Competitive Advantage
Using EDI may give your company a competitive advantage if your competitors
are not taking advantage of EDI. However, if your company’s competitors have
implemented EDI and your company has not, then it will be at a disadvantage
despite any other efficient processes it has in place.
13.1.2
Types of EDI
EDI transactions are used between millions of companies each day. There are
many EDI transactions and different types of EDI implementations. This section
will look at the different types of EDI environments.
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Introduction to EDI
Web-Based EDI
The types of EDI that are available for companies to implement offer a wide array
of products that suit companies that have no technology department through to
companies that have hundreds of IT consultants.
If your company has no technology staff or does not have the capability to implement EDI, then a web-based EDI service may be most appropriate. This type of
EDI replicates the contents of a paper-based document on a website. The form on
the website contains several boxes where users can enter information. After the
necessary information has been entered to the form, the information is automatically converted into an EDI message and then securely sent to the trading partner.
EDI via a Value-Added Network (VAN)
Companies can use a value-added network (VAN) for their EDI needs. A VAN is a
private network that provides a secure environment for EDI information to be
exchanged between trading partners. A company can have an account with a
VAN, which acts as an electronic mail box where companies can send and receive
EDI documents.
EDI via a Virtual Private Network (VPN)
A virtual private network (VPN) is a facility that uses the public communication
infrastructure to conduct private communications. Millions of companies use this
type of communication. A VPN authenticates users, encrypts data, and manages
private communications. EDI messages can be passed securely across the VPN.
EDI and AS2
AS2 is not a type of EDI but is a communication protocol used to exchange EDI
documents. The growth in the use of AS2 has been due to the requirement of the
retail giant Wal-Mart, which maintains that suppliers must communicate with
them using the AS2 protocol. AS2 communication creates an envelope for a message, which is then sent securely over the Internet using digital certificates and
encryption.
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13.1.3
EDI and IDOCS
An IDoc is a uniquely numbered intermediate document that can be used to
exchange data between any two processes. An IDOC consists of several segments,
each of which contains several fields. The IDoc is made up of three types of
records: a control record, one or more data records, and one or more status
records. It is a perfect vehicle for EDI transmissions, as it allows data to be
exchanged without conversion from one format to another.
You can use Transaction WE05 to view IDocs that have been transmitted, as
shown in Figure 13.1. The selection screen offers the user a choice of fields to
restrict the output.
Figure 13.1 Selection Screen to View IDocs
The system returns a list of IDocs that have been transmitted or received. Figure
13.2 shows an example.
From the list of IDocs it is possible to select one and click the detail icon to see the
data elements that comprise the IDoc. Figure 13.3 shows an example of the data
contained in an IDoc.
Now that we have examined the basics of the EDI functionality we will look at the
EDI processes that affect the warehouse.
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Figure 13.2 Outbound IDocs for EDI
Figure 13.3 Data Segment from an IDOC
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13.2
Using EDI in Warehouse Management
When your company has implemented EDI, it can communicate with trading
partners such as vendors and customers. The SAP system uses IDocs to support
the EDI function. When you process a transaction in the SAP system, it can produce an IDoc that can be used to send the EDI message to your trading partner.
Several EDI transactions are used in the warehouse, and these revolve around the
inbound and outbound functions of the warehouse processes.
13.2.1
Inbound Processing
The inbound logistics functionality offers visibility for incoming deliveries to the
warehouse, allowing for detailed planning and therefore greater warehouse efficiency. The inbound logistics process in the SAP system starts when your company’s purchase orders are processed at the vendor. The purchase order can be
sent to the vendor using EDI document 850, and this informs the vendor what
items you need and where you need the items to be shipped.
Once the vendor receives the purchase order via EDI document 850, they can
send back an EDI 997 acknowledgement confirming the receipt of the purchase
order. Your vendors can then send a shipping notification from which an
inbound delivery can be created.
The advance shipping notification (ASN) is a document the vendor sends to your
company via the EDI interface. Instead of the vendor calling or faxing your purchasing department to tell them a certain purchase order has been shipped, the
vendor sends a shipping notification electronically. The document that is sent is
called an EDI 856 advance ship notice.
The receipt of an ASN via EDI can trigger an inbound delivery to be created in the
SAP system. The information from the ASN EDI document creates an IDoc that
contains the information to create an inbound delivery. The delivery contains
information on the vendor, the items, the quantities to be expected, and the
delivery details.
Once the vendor fulfills the order, they send an EDI 810 invoice informing you
that the items were shipped and providing the cost of the items and the delivery
information.
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Business Examples—EDI
13.2.2
Outbound Processing
The outbound logistics functionality is equally as important to your company’s
supply chain because it offers visibility to the outgoing deliveries, allowing
detailed planning for packing and shipping, leading to greater warehouse efficiency.
When a customer places an order to your company, the SAP system creates a sales
order, and the outbound delivery document is created to facilitate the picking,
packing in the warehouse, and ultimate goods issue of the items as they are delivered to your customer.
If you have a remote warehouse, then the warehouse could be sent an EDI document 940. The manufacturing facility sends the EDI 940 to the warehouse. It is a
request to ship document that directs the warehouse to ship an order with all of
the associated shipment details including items and customer ship-to information.
When the warehouse has completed the shipment, it can send a return document
back to the manufacturer. The remote warehouse sends the EDI 945 shipment
advice, which contains the information required to invoice the customer.
Two other EDI transactions are used at remote warehouses. The first is an EDI
943 document, which a manufacturer uses to notify a warehouse that it is sending
material to the warehouse. Once the material arrives at the warehouse, an EDI
944 document is sent to the manufacturer informing them that the material has
been received.
If a change to the warehouse inventory has to be made, a manufacturer can send
an EDI 947 document called a warehouse inventory adjustment advice. The transaction is used to change the quantity or status of material in the warehouse.
This section has examined the use of EDI in WM. Now we’ll look at some business examples of EDI processes.
13.3
Business Examples—EDI
EDI is a process that is used daily in companies worldwide. It offers great benefits
for businesses, not only in direct cost savings, but also in data accuracy and
reduced processing time.
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EDI in the Warehouse
Warehouses process inbound and outbound transactions that can be triggered by
EDI transactions; for example, an advance ship notice EDI transaction sent by a
vendor can trigger an inbound delivery document. The implementation of EDI
can significantly improve the efficiency of warehouse processes.
Example
A distributor of automotive parts operated three West Coast distribution warehouses that satisfied orders from auto parts stores on the West Coast and Southwest of the United States. The company ordered parts from spares manufacturers
and automotive manufacturers using faxes or verbal purchase orders. The purchasing department would give a blanket order for a large quantity of parts, and
the deliveries would arrive at the facilities unexpectedly despite an agreed upon
delivery schedule.
The warehouses would find themselves in a situation where there were trailers
parked in the yard that could not be unloaded for several days. Other times the
warehouse would only unload one trailer in a day.
The company decided to implement an enterprise-wide EDI solution that would
require the purchasing department to continue to create purchase orders in the
SAP system, but the transaction would send an EDI 850 document to each vendor. The company required that all vendors send an EDI 856 advance shipping
notification in response so that the company knew when the items would arrive
at the warehouses. The EDI implementation and the introduction of the advance
ship notice reduced the backlog of trailers at the warehouses. It also allowed the
warehouse manager to more accurately manage his staffing level due to his
greater visibility of incoming deliveries.
13.4
Summary
Electronic data interchange (EDI) is used by millions of companies and can be
used seamlessly with SAP systems. Once EDI is implemented at your company it
offers cost saving benefits as well as greater efficiencies across the enterprise.
Several EDI transactions that assist in creating a more efficient warehouse are
used in WM for both inbound and outbound processes.
In Chapter 14, we will look at the processes of mobile data entry in the warehouse.
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Mobile data entry allows the remote entry of data by the use of bar codes
and radio frequency (RF) technology. SAP has incorporated mobile data
entry into warehouse management transactions, reducing the level of data
entry error and shortening the time needed to complete transfer orders.
14
Mobile Data Entry
Mobile data entry in the warehouse today involves the use of wireless radio frequency (RF) terminals or devices carried by the warehouse staff to record data.
The data that the staff records is usually in bar code form, either printed on the
paperwork for transfer orders or as bar code labels that identify products, storage
bins, or other objects.
The display on a RF device can use a graphical user interface (GUI). The information is transmitted from the SAP system, and individual transactions can be executed using a touch screen or keys. A device either has a GUI or is character-based
with a special, nongraphical user interface.
Standard SAP systems support RF devices, and several functions within the warehouse can be executed via RF.
Note
The standard SAP system has incorporated RF technology since the release of SAP ERP
4.6B.
The following list shows the timeline of RF technology in SAP systems:
왘
Release 4.6B
Introduction of RF transactions and SAPConsole
왘
Release 4.6C
Standard transactions delivered for handling unit management
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Release 4.7 Enterprise
RF for Task and Resource Management, Yard Management, and Value-Added
Services
왘
Release ECC 5.0
The first RFID scenarios
This chapter will examine the use of mobile data entry in the current system, SAP
ECC 6.0, and how technologies such as bar codes and RF are used in warehouse
functionality.
The next section discusses RF devices and SAPConsole.
14.1
Introduction to RF Devices
SAP transactions can be executed on RF devices that are handheld or forkliftmounted. No middleware software is required to connect the devices to the SAP
system.
The SAP system’s functionality enables real-time handling of material flow
through RF scanning devices. Having the screens and the business logic within
the SAP system makes it easy to distribute new processes to each device. Two
standard RF devices can be used with SAP systems:
왘
GUI devices
왘
Character-based devices
The main difference is that the character-based device uses terminal emulation,
and the GUI devices use a Microsoft Windows–based operating system. Let’s take
a more detailed look at each of these now.
14.1.1
Graphical User Interface Devices
The graphical user interface (GUI) RF device uses a small keypad, touch screen, or
some other interface, but the data is always displayed in a graphical manner, as
you would expect to see with a device such as a PDA or cell phone. The device is
connected to the SAP system, as any other standalone computer would be.
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14.1.2
Character-Based Devices
The character-based device is not connected directly to the SAP system but communicates via an interface called SAPConsole that was introduced in SAP ERP
Release 4.6B. Communication between SAPConsole and the RF device can be
achieved by using a Telnet server. SAP supports two industry standards for screen
sizes:
왘
RF devices for forklifts: 8 lines by 40 characters
왘
Portable RF devices: 16 lines by 20 characters
14.1.3 SAPConsole
SAPConsole is a tool that enables RF devices to be run within SAP applications.
Introduced in 1999, SAPConsole was shipped with SAP ERP Release 4.6B and was
used for bar code and handheld RF applications in the Logistics Execution System
(LES), which included WM.
SAPConsole can be described as a framework for automatic data collection (AIDC)
in a warehouse environment. It translates GUI screens to character-based screens
that are used on a variety of data collection devices.
SAPConsole does not contain business logic, databases, or external functionality.
Its sole function is to translate SAP GUI screens in the SAP environment to the
character-based equivalent. SAPConsole consists of four components:
왘
RF Terminal, which is the Telnet client
왘
RF Access Point, which allows for Wireless Ethernet
왘
Telnet Server/SAPConsole Administrator, which allows each RF terminal to
connect to the Windows machine in character-based mode and supports
VT220 terminal emulation
왘
SAP R/3 System that receives the data from the mobile terminals
An SAPConsole session allows a connection to the SAP system in real time,
exactly like an SAP GUI session. All the functionality and business logic resides
within the SAP application. SAPConsole connects the user to that business logic.
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14.1.4 Functionality Available with SAPConsole
In SAP ECC 6.0, many transactions are defined as mobile data entry and are available for use with RF devices. These include:
왘
Goods receipt
왘
Goods issue
왘
Material putaway
왘
Material picking
왘
Packing and unpacking
왘
Physical inventory
왘
Loading and unloading
왘
Serial number capture
왘
Stock overview
This section has examined the use of RF devices and the warehouse functions that
are available with SAPConsole. The next section will discuss bar code functionality.
14.2
Bar Code Functionality
The first bar code patent was issued in 1952 to Joseph Woodland and Bernard Silver. Their invention was described as a “bull’s eye” symbol made up of concentric
circles of varying thicknesses. The initial push for the bar code came from a grocery retailer, and as the bar code was developed—first by RCA and then IBM—the
grocery industry was the leading force behind its adoption. In the late 1960s,
Joseph Woodland, then working for IBM, helped develop the most popular version of the bar code technology: the Universal Product Code (UPC).
On April 3, 1973, the UPC was adopted as the industry standard. From then on,
any bar code on any product could be read and understood by any bar code
reader. Standardization made it cost effective for manufacturers to put bar codes
on their packages and for printer manufacturers to develop new technology to
reproduce the bar code with the exact tolerances it required.
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14.2.1
UPC Bar Code Format
The UPC bar code is split into two halves of six digits each. The first character is
always zero, except for some materials that have variable weight or special materials. The next five characters are the manufacturer’s code, followed by a fivedigit product code and a check digit. In addition, there are hidden cues in the
structure of the bar code to inform the scanner which end of the bar code is the
start and which is the end. This allows the bar code to be scanned in either direction.
Manufacturers register with the Uniform Code Council (UCC) to obtain a unique
manufacturers code for their company.
Manufacturers Code
All materials produced by a given company use the same manufacturer code.
Some codes are called variable-length manufacturer codes. Assigning fixed-length
five-digit manufacturer codes means that each manufacturer can have up to
99,999 product codes. Most manufacturers do not have that many products,
which indicates that thousands of potential product codes are wasted on manufacturers with only a few products. Therefore, if a manufacturer knows it will
produce a small number of products for bar coding, the UCC may issue it a longer
manufacturer code, leaving less space for the product code. This results in more
efficient use of the available manufacturer and product codes.
Product Code
The product code is a unique code assigned by the manufacturer. Unlike the manufacturer code, which the UCC assigns, the manufacturer is free to assign product
codes to each of its materials that require bar coding. Because the UCC guarantees
that the manufacturer code is unique, the manufacturer needs to ensure that it
does not duplicate product codes.
Check Digit
The check digit is an additional digit used to verify that a bar code has been
scanned correctly. A scan can produce incorrect data because of inconsistent scanning speed, print imperfections, or environmental issues, so it is important to
verify that the preceding digits in the bar code have been correctly interpreted.
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The check digit is calculated based on the other digits of the bar code. Normally,
if the check digit matches the value that could be calculated based on the data that
has been scanned, then there is a high level of confidence that the bar code was
scanned correctly.
14.2.2 UPC and EAN
After the UPC was adopted in 1973, the global interest in bar coding, especially in
retailing, led to the adoption of the International Article Numbering Association’s
European Article Numbering (EAN) code in December 1976.
The EAN code has 13 characters but is identical to the UPC code in that the actual
unique code is 10 digits long. In the UPC, the first digit is for the product, and the
last is a check digit. EAN has three characters that are not used for the unique
code. The three flag digits are used for the check digit and the country that issued
the bar code, not the product’s country of origin. Each country has a numbering
authority that assigns manufacturer codes to companies within its jurisdiction.
The manufacturer code is still five digits long, as is the product code, and the
check digit is calculated in exactly the same way as for the UPC code.
For the UPC and EAN to be compatible, the United States was issued the country
flags 00, 01, 03, 04, and 06 through 13. Because the EAN, sometimes called the
EAN-13, is a superset of the UPC, any software or hardware capable of reading an
EAN-13 symbol can also read a UPC code.
The Japanese Numbering Authority (JAN) codes are exactly the same as EAN
codes but are strictly for Japan and carry the country code 49.
14.2.3 Bar Code Structure
A physical bar code is a series of vertical lines of varying width that are called
bars, and spaces. The bars and spaces are called elements. Different combinations
of the bars and spaces represent different characters.
When a bar code scanner is passed over the bar code, the light source from the
scanner is absorbed by the dark bars and is not reflected, but it is reflected by the
light spaces. A photocell detector in the scanner receives the reflected light and
converts the light into an electrical signal.
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As the laser is passed over the bar code, the scanner creates a low electrical signal
for the spaces, which is the reflected light, and a high electrical signal for the bars,
where nothing is reflected. The duration of the electrical signal determines
whether the scanner has detected a wide or a narrow element. The bar code
reader’s decoder then interprets the signal. The decoder converts this into the
characters that the bar code represents. The decoded data is then passed to the
system in a traditional data format.
14.2.4 Bar Code Readers
Three types of bar code readers are available: fixed bar code readers, portable
readers with batch uploading, and portable RF readers. Let’s examine these in
detail now.
Fixed Bar Code Reader
This is the type of bar code reader you find at a retail store, where the reader is
tethered to the cash register and is used to scan items that are purchased.
Portable Batch Readers
These readers are battery powered and are used away from their host to collect
information and store it for a later batch upload to the host. These are used frequently in retail stores for taking inventory on store shelves and then uploading
that information to the host system at the end of inventory taking. Some newer
batch readers, from companies such as Symbol Technologies, Hand Held Products, and PSC, Inc., enable collection of more than 50,000 bar codes and can run
for more than 12 hours on a single charge.
Portable RF Reader
This reader is the most sophisticated because it allows the operator to record data
and transmit in real time. The communication is two-way and allows the operator
to receive updated instructions based on the data he collects. United Parcel Service (UPS) uses this type of reader to record tracking data and the receiver’s
signature. The Delivery Information Acquisition Device (DIAD) sends delivery
information to the UPS data center as soon as the delivery information is entered.
Drivers scan the package bar code, collect the receiver’s signature electronically,
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type in the receiver’s last name, and press a single key to complete the transaction
and send the data without returning to the vehicle.
14.2.5 Bar Code Reader Technologies
Three technologies are in use for reading bar codes:
왘
Photodiode
왘
Charge-coupled device (CCD)
왘
Laser
Let’s examine these further now.
Photodiode
Photodiode technology can be found in pen-style bar code readers. The photodiode and a light source are contained in the pen reader. As the reader is dragged
across the bar code, the photodiode measures the intensity of the light reflected
back from the light source and generates a waveform. This is used to measure the
widths of the bars and the spaces in the bar code.
Dark bars in the bar code absorb light and white spaces reflect light. As a result,
the voltage waveform generated by the photodiode is an exact duplicate of the
bars and spaces in the bar code. The scanner decodes this waveform. This type of
scanner was very popular in public libraries in the 1980s and 1990s. These wand
bar code readers are still widely available and plug directly into the USB sockets
of computers. Companies such as Unitech, ZBA, Inc., and Wasp Barcode Technologies still manufacture these wand-style bar code readers.
Charge-Coupled Device
A charge-coupled device (CCD) is an image sensor consisting of an integrated circuit containing an array of linked or coupled light-sensitive capacitors. The CCD
reader uses an array of hundreds of sensors lined up in a row in the head of the
reader. Each sensor acts like a single photodiode that measures the intensity of
the light immediately in front of it. The voltage pattern read by the reader is identical to the pattern in a bar code.
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CCD readers do not have moving parts, are considered extremely durable, and
require less maintenance than laser readers. CCD scanners consume very little
power and work under most lighting conditions. They are often cheaper than
laser scanners because they do not have as great a range and have to be closer to
the bar code to be read. In brief, these scanners are a low-cost option compared
with laser scanners but are robust and low maintenance.
Because they do not offer as great a scanning distance as laser readers, some warehouse operations do not use CCD readers, but they can be found alongside laser
scanners in most warehouse operations. The large companies involved in RF technology, such as Intermec Technologies Corporation and Hand Held Products,
manufacture these scanners.
Laser
Laser scanners work the same way as pen-type readers except that they use a laser
beam as the light source and typically employ either a reciprocating mirror or a
rotating prism to scan the laser beam back and forth across the bar code. Like the
pen type reader, they use a photodiode to measure the intensity of the light
reflected back from the bar code.
Laser scanners can read bar codes at a greater distance from the head of the device
than can a CCD scanner, enabling supermarkets to read codes on round cans and
flexible packages more easily. Laser scanners are often more expensive than CCD
scanners but have the advantage of reading longer and smaller-density bar codes
as well as working at greater scanning distances. Because of the ability to read
slightly curved bar codes, the laser scanner is the choice of supermarkets and
retailers. There are many manufacturers of laser bar code readers including Symbol, Metrologic Instruments, Inc., Intermec, and Hand Held Products.
14.2.6 Bar Code Support in SAP Systems
SAP systems read bar codes for identification and verification. The items that can
be identified include:
왘
Storage bin
왘
Material
왘
Storage unit
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왘
Handling unit
왘
Quantity
왘
Delivery
왘
Staging area
왘
Shipment
왘
Pick wave
It is possible to scan items for verification purposes, and these scanable fields
include:
왘
Storage unit
왘
Storage bin
왘
Material
왘
Quantity
This list of fields that can be used for bar codes will probably increase with future
releases of SAP systems.
14.2.7 Configuration for Bar Codes
Before bar codes can be used for mobile data entry, configuration needs to be
entered and reviewed to ensure that the correct format is being used.
Defining Verification Profiles
The verification profile is a set of fields that the user can verify. Several profiles
can be created for each warehouse, and each profile can contain several fields to
be verified.
You can find the configuration by following the menu path IMG 폷 Logistics Execution 폷 Mobile Data Entry 폷 Verification Control 폷 Define Profiles.
Figure 14.1 shows the profiles created for warehouses 001, 009, and 039. Each
profile verifies a different number of fields. The fields that can be attached to a
profile include:
왘
Source bin
왘
Destination bin
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왘
Storage unit identification at the source storage bin
왘
Storage unit identification at the destination storage bin
왘
Quantity of the material to be picked at the source storage bin
왘
Quantity of the material to be put away at the destination storage bin
왘
Material identification at the source storage bin
왘
Material identification at the destination storage bin
Figure 14.1 Configuration for Defining Verification Profiles
The system uses this configuration if scanning devices communicate directly with
the SAP system. For a given warehouse movement, this configuration specifies a
unique verification profile that determines what data the user must scan or key in
manually.
Example
If material is put away by storage unit number, the scanner operators have to verify that
they have completed putaway of the storage unit in the storage bin proposed by the system.
Assigning Verification Profiles
After the verification profile has been configured, it can be assigned to movement
types used in the warehouse that will be subject to bar code scanning. You can
find the configuration by following the menu path IMG 폷 Logistics Execution 폷
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Mobile Data Entry 폷 Verification Control 폷 Assign Verification Profiles to
Goods Movements.
Figure 14.2 shows the assignment of the verification profiles. The profile is
assigned to a movement type used between a source and destination storage type.
Therefore, in warehouse 001, the verification profile OUTBD1 is assigned to
movement type 601 when the movement is between any source storage type,
005 and the destination storage type 916.
Figure 14.2 Assigning Verification Profiles to Movement Types
Defining Bar Codes for Warehouses
The configuration for bar codes allows certain bar code types to be used in certain
warehouses. If the company uses one bar code throughout, then this is a simple
configuration task. Check with the company to configure the correct bar code
type used for each warehouse.
You can find the configuration by following the menu path IMG 폷 Logistics Execution 폷 Mobile Data Entry 폷 Bar Code 폷 Assign Bar Code Types to Warehouses.
Figure 14.3 shows bar code types assigned to each warehouse. The configuration
needs to be in place so that the system can interpret the correct bar code format.
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Figure 14.3 Assigning Application Identifier Types for Warehouses
Maintaining Bar Code Specifications
This configuration step defines the parameters for the bar code type. The minimum and maximum lengths determine the length of the bar code type. The prefix
identifies first part of the bar code string with an introductory character string. If
the specific data field that is attached to the bar code type has a variable length,
then a delimiter must close it.
You can find the configuration by following the menu path IMG 폷 Logistics Execution 폷 Mobile Data Entry 폷 Bar Code 폷 Maintain Bar Code Specification.
Figure 14.4 shows that the bar code type EAN-128 has defined minimum and
maximum lengths. Different bar code types have different configurations that are
specified in this configuration step.
Figure 14.4 Configuration to Maintain Bar Code Type
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This section has discussed the functionality of bar codes. Now we’ll examine the
processes in WM that support RF.
14.3
Radio Frequency—Supported Processes in SAP WM
The use of RF transactions is important in the warehouse because of the physical
size of warehouses and the time needed to perform tasks. Collecting data using RF
devices saves labor and time and improves the accuracy of data collection in the
warehouse.
Each user who operates an RF device must be entered into the system with the
information regarding his device. In addition, the user has to be assigned to a
queue that shows all transfer orders that require materials movement from a certain storage type. The queues are configured in the IMG.
14.3.1 Defining the Radio Frequency Queue
To assign a range of warehouse activities to certain users, you define functionality
called the RF queue management in the SAP Implementation Guide (IMG). This is
a two-part configuration where the queue is defined and then activities are
assigned.
You can find the configuration by following the navigation path IMG 폷 Logistics
Execution 폷 Mobile Data Entry 폷 RF Queue Management.
Figure 14.5 shows several queues created for several warehouses. The queues are
easily identifiable for picking, putaway, and goods receipt. The queues can be
assigned the relevant areas.
Figure 14.6 shows the unique queues for each warehouse with assigned areas.
For example, queue PUTAWAY01 for warehouse 001 has been assigned transaction type E, stock placement, between source storage type 902 and any destination storage type, denoted by ***.
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Figure 14.5 Creation of Queues for RF Transaction
Figure 14.6 Assignment of Areas to RF Queues
14.3.2 Adding a User for Mobile Data Entry
Each user who is assigned an RF device has to be assigned a particular area to
work in. If the warehouse is small, then users may work with several queues. In
larger warehouses, users may be specifically assigned to only work with certain
storage types.
Use Transaction LRFMD to add users for mobile data entry. You can find it via the
menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷
Mobile Data Entry 폷 User Master Data for Mobile Data Entry.
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The users are entered and assigned to a queue. In addition, you can define the
screen format and the user’s main menu, as shown in Figure 14.7. Once the user
has been added, he can use the RF device to access the queue to which he has
been assigned.
Figure 14.7 Adding a User for Mobile Data Entry
14.3.3 Logging on for Mobile Data Entry
The user can log on for mobile data entry using Transaction LM00, via the menu
path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Mobile
Data Entry 폷 Mobile Data Entry.
Figure 14.8 Logon Screen for Mobile Data Entry
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Figure 14.8 shows the screen that is displayed when a user logs on using Transaction LM00. The user can then use the RF device to perform the transactions he is
assigned.
14.3.4 RF Menus and WM Processes
You can view the menus displayed on the RF devices using Transaction LM00 and
program the displayed items using ABAP code. The menu structure that has been
defined for this example is shown in the following figures.
Figure 14.9 shows the initial menu selection for the RF devices. The supported
transactions are divided into five selections: inbound processes, outbound processes, stock transfer, internal warehouse processes, and inquiries.
Figure 14.9 Initial RF Menu Screen
To illustrate the menu paths that have been designed for the RF menu, Figure
14.10 shows the selections for the inbound processes.
If the Goods Receipt option is selected, the system displays the menu shown in
Figure 14.11.
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Figure 14.10 Menu Selections for Inbound Processes
Figure 14.11 shows the menu selections for the goods-receipt menu option.
These five transactions are available for the RF device user. If the user wants to
select a delivery, he selects option 1 and scans in or enters the delivery number.
Figure 14.11 Menu Selections for Goods Receipts
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Figure 14.12 shows the delivery details displayed on the RF device after the user
had scanned in the inbound delivery number. The user can select from several
function key options to perform a process.
Figure 14.12 Display of Inbound Delivery Details
This is one example of how transactions appear on the RF devices. Among the
supported transactions for RF are:
왘
Goods receipt
왘
Goods issue
왘
Material putaway
왘
Material picking
왘
Packing and unpacking
왘
Physical inventory
왘
Loading and unloading
왘
Serial number capture
왘
Stock overview
You can see that many processes are RF-supported. The next section will describe
the RF monitor.
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14.4
Radio Frequency Monitor
The RF monitor is a tool warehouse managers can use to view the queues that are
being worked on in the warehouse. Users with RF devices can only see the items
in their queue; only the users of the RF monitor have the overall picture of the RF
operations in the warehouse. Using the RF monitor benefits the warehouse by
enabling staff to:
왘
Monitor the queues and review the number of assigned transfer orders, the
number of users, and the ratio of workload to users
왘
Assign transfer orders and users to other queues
왘
Change the processing priorities of the transfer orders in the queues
왘
Give the warehouse manager a significant overview of the devices being used
and the work being performed
Let’s see how to access and use this monitor.
14.4.1 Accessing the RF Monitor
You can find the RF monitor in the SAP menu. The transaction to use is Transaction LRF1, which you can access via the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Mobile Data Entry 폷 Monitor Mobile Data
Entry.
Figure 14.13 RF Monitor Display
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Business Examples—Mobile Data Entry
Figure 14.13 shows the elements of the RF monitor. The navigation area is the
section on the left side of the screen that shows the number of users and the number of transfer orders. In this case, there is only one user and one transfer order
in the queue. The right side of the screen is the ALV (SAP List Viewer). It shows
the details from the transfer order; the section below shows details on the user
and the queue to which he is assigned.
14.4.2 Using the Radio Frequency Monitor
The RF monitor allows the warehouse manager to move transfer orders to other
queues by simply identifying the transfer order in the navigation area and dragging it to another queue folder.
Assigning users to other queues follows a similar process, where the user is highlighted in the navigation area and dragged and dropped into the queue required.
The RF monitor is kept updated by refreshing the transaction by pressing the (F5)
function key.
This section has examined the use of the RF monitor and the benefits that can be
gained by moving transfer orders to different queues to maximize efficiencies.
Next, we will summarize the contents of this chapter on mobile data entry.
14.5
Business Examples—Mobile Data Entry
Mobile data entry in the warehouse involves the use of wireless radio frequency
(RF) terminals or devices operated by warehouse personnel to record data. The
data they record is usually in bar code form, either printed on the paperwork for
transfer orders or as bar code labels that identify products, storage bins, or other
objects.
14.5.1 Bar Code Functionality
Bar codes are found on every product we purchase from the supermarket, and
scanners are used in our everyday lives. In the warehouse the bar code is an
important tool that not only reduces manual entry of data into the SAP system,
but improves warehouse efficiency.
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Mobile Data Entry
Example
A distributor of automotive parts implemented SAP WM and was using transfer
orders to place and remove stock in the warehouse. The layout was made up of
racking with storage bins large enough for a pallet of parts. Each of the storage
bins was identified with a numeric number, and a label with this number was
affixed to the top of the bin.
The company did not implement any RF solution and was operating with non–bar
coded documents. The printed transfer order documents identified the material
and storage bins in numeric form, so that the warehouse operator had to write on
the transfer order document if any changes were made, such as differences in
storage bin or quantity. The document was then given back to the warehouse
shift manager so he could made an amendments in the SAP system.
Although changes to the picking and placement documents were relatively infrequent, the amendments in the system were sometimes incorrect due to mistyping
or errors in identifying the correct storage bin. These errors led to inventory inaccuracies that were found during cycle counting.
The supply chain team identified that not only were there issues with the accuracy of warehouse operator notations and data entry, but the efficiency of the
warehouse operators was hindered by having to stop and write information on a
physical document. The recommendation was that the company implements a
pilot bar code program and handheld devices so that the operators could scan the
information from the picking document as well as the pallet and storage bin.
The company developed a pilot project for raw material stock placements with
three forklift trucks fitted with handheld devices to read bar codes on the transfer
order document, pallet labels, and storage bins. The supply chain team reviewed
the data after a month of the trial and found that no errors were generated by the
use of bar codes. The company then decided to extend the project to include bar
codes for both stock placement and stock removal.
14.5.2 RF Functionality
The use of RF transactions is important in the warehouse because of the physical
size of warehouses and the time needed to perform tasks. Collecting data using RF
devices saves labor and time and improves the accuracy of data collection in the
warehouse.
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Summary
Example
Bar codes and limited use of handheld devices were implemented at an electronics distributor. The company imported electronic components from abroad and
then resold them to retail customers through the Internet or large customers via
consignment.
The components were either stored in their own packaging, or if they arrived
without packaging, the components were stored in plastic bags and then a bar
code label was applied with the material number. The company used handheld
RF devices for picking and putaway using transfer orders, but other transactions
were manually completed.
The company operated with a warehouse that had very little free space. On occasion the warehouse staff could not place material in the warehouse, as there were
no available empty bins. The company decided to hire a consulting firm to assess
the warehouse layout and offer recommendations on how to make the warehouse more efficient.
The consultants came with some changes to the racking and the use of narrower
aisles to create 15% more space in the warehouse. Other recommendations
included extending the use of handheld devices to other SAP transactions such as
physical inventory. The company assessed the cost of purchasing more handheld
devices and the resources needed to develop the use of other transactions.
After some cost analysis the company decided to implement one new transaction
using the RF devices and then another transaction every six months. They
decided to implement the physical inventory process first followed by stock overview.
14.6
Summary
The use of bar codes and RF devices has made warehouse operation more efficient. Data entry errors are fewer, and the time needed to perform operations in
the warehouse has been reduced because RF devices can collect data without
requiring manual collection and manual entry of data after the user has returned
to the warehouse office.
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Mobile Data Entry
The use of RF devices for data collection and transaction processing in WM has
been increasing over a number of SAP releases. The modern efficient warehouse
uses RF technology and constantly reviews procedures to further adopt the technology to improve operations. As the support for mobile data entry increases in
WM, the use of the RF monitor will become more important to efficient mobile
data collection.
In Chapter 15, we will discuss the next logical step from RF technology—the
adoption of radio frequency identification (RFID).
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Radio frequency identification (RFID) technology has been available for
decades, but recently we have seen the push to use it as the ultimate tool
for tracking inventory. Large companies such as Wal-Mart and Target
expect RFID to reduce warehouse costs and improve supply chain efficiencies.
15
Radio Frequency Identification
Technology
Every industry publication has articles and commentary on radio frequency identification (RFID); however, it is not a new technology. The first use of RFID was
documented in the 1940s by the British Royal Air Force to identify aircraft in
World War II and was part of the refinement of radar. It was during the 1960s
that RFID was first considered as a solution for the commercial world. The first
commercial applications involving RFID were developed throughout the 1970s
and 1980s. These commercial applications were concerned with identifying
material inside a single location.
The latest attempt to commercialize the use of RFID started in 1998, when
researchers at the Massachusetts Institute of Technology (MIT) Auto-ID Center
began to research new ways to track and identify objects as they moved between
physical locations. This research centered on radio frequency technology and
how information that is held on tags can be effectively scanned and shared in real
time.
RFID is known today as the reading of physical tags on single products, cases, pallets, and reusable containers that emit radio signals to be picked up by RFID
reader devices. Industries see this technology as a way of identifying material
more accurately than with traditional means.
This chapter will give you an understanding of the technology behind RFID, the
history of that technology, the development of the technology into a commercial
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application, and where that applied technology is used within the framework of
SAP and WM.
15.1
Introduction to Radio Frequency Identification
Simply stated, RFID is a means of identifying an object using a radio frequency
transmission. The technology can be used to identify, track, sort, or detect a wide
variety of objects. Communication takes place between a reader or interrogator
and a transponder or tag.
Tags can either be active, powered by battery, or passive, powered by the reader
field. A reader field is an RF field that is transmitted by the reader to interrogate
the RFID tag. The communication frequencies used depend to a large extent on
the application; they range from 125 KHz to 2.45 GHz. Most countries impose
regulations to control RF emissions and prevent interference with other industrial, scientific, or medical equipment.
15.1.1
Mechanism of RFID
In a typical system, tags are attached to objects. Each tag has a certain amount of
internal memory that it uses to store information about the object, such as its
unique ID number or details including manufacture date and material information. When a tag passes through a field generated by a reader, it transmits this
information back to the reader, which identifies the object.
Until recently, RFID technology focused mainly on tags and readers, which were
used in systems handling where relatively low volumes of data. This is now
changing. RFID in the supply chain is expected to generate huge volumes of data,
which have to be filtered and routed to ERP systems. To solve this problem, companies have developed special software packages called savants, which act as buffers between the RFID frontend and the ERP backend.
15.1.2
Electronic Product Code
The Electronic Product Code (EPC) is the emerging RFID standard developed by
the MIT AutoID Center. It is the RFID version of the Universal Product Code
(UPC) bar code standard. Like the UPC, the EPC is intended to be used for specific
product identification as well as case and pallet identification. However, the EPC
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Introduction to Radio Frequency Identification
goes beyond the UPC: It not only identifies the material, but also provides access
to additional data about the origin and history of the specific batches or serial
numbers.
The EPC tag identifies the manufacturer, product, version, and serial number. It’s
the serial number that takes the EPC to the next level by providing access to data
related to a specific unit. This allows the tracking of the specific serialized unit history as it moves through the supply chain. This data may be stored elsewhere, but
a standardized architecture allows more ease of access. This architecture is known
as the EPC Network.
The EPC has become increasingly important because it is the standard being utilized by Wal-Mart, Target, Best Buy, and the U.S. Department of Defense in their
RFID mandates.
15.1.3
The Wal-Mart RFID Mandate
In June 2004, Wal-Mart announced that it would require its top 100 suppliers to
put RFID tags on all shipping crates and pallets by January 1, 2005. This would
then expand to its next largest 200 largest suppliers by January 1, 2006. WalMart requires that each tag store an EPC that can be used to track products as they
enter Wal-Mart’s distribution centers and then in turn are shipped to individual
stores. As the world’s largest company in terms of revenue, Wal-Mart’s mandate
had a profound affect on the RFID strategy of many large companies that sought
to remain direct suppliers.
By 2007, Wal-Mart had found that RFID’s ability to improve the supply chain was
limited by business partners’ willingness to participate. Wal-Mart’s targeted suppliers for the RFID program had some of the most efficient supply chains in the
industry, and these companies did not initially realize the benefit of RFID. Forrester Research calculated that the large Wal-Mart suppliers would have to invest
more than $9 million to cover costs associated with RFID to achieve the results
that Wal-Mart was expecting.
Despite the large investment required, many companies have accepted that the
increase in the use of RFID will occur in the coming years and that early adoption
of the technology is good business. Some Wal-Mart suppliers were quick to comply with the mandate. Proctor & Gamble, itself a giant company, introduced an
RFID policy in its organization, with the Wal-Mart mandate as a driver for its own
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development of RFID. Other suppliers to Wal-Mart, such as Gillette, KimberlyClark, and Kraft all started RFID projects at that time.
15.1.4 RFID Benefits
Supply chain management at large companies such as Wal-Mart is interested in
RFID advances that can achieve visibility of material through the supply chain.
These kinds of benefits are improving with other methods, such as electronic data
interchange (EDI), bar coding, and advance ship notifications (ASN).
Other benefits to companies lie outside of the supply chain, such as a reduction in
theft from the store and during transport and storage and a deterrent to the growing problem of product counterfeiting. Both of these issues cost companies billions of dollars each year. Pharmaceutical companies are increasingly worried
about counterfeiting, and RFID tags on products may help. However, the level of
security needed to combat theft and counterfeiting would require an RFID tag on
each product sold. The cost of the tag and placement of the tag on the product will
have to drop significantly for this to be viable.
Note
Today, in 2012, most companies that sell RFID tags do not quote prices because pricing
is based on volume, the amount of memory on the tag, and the packaging of the tag.
The cost of a 96-bit EPC tag is approximately 20 to 40 U.S. cents. However, if the tag is
embedded in a thermal transfer label on which companies can print a bar code, the
price will rise beyond 40 cents. A transponder in a plastic card or key fob can cost more
than $4.
15.1.5 RFID vs. Bar Codes
RFID has advantages over bar codes but has some disadvantages that still have to
be overcome. Until the disadvantages become insignificant, bar codes will still
play a part in supply chains and in warehousing.
Advantages of RFID
RFID technology does not require line-of-sight reading. The RFID tag can be read
through other materials, whereas bar codes require line of sight. This implies that
an RFID reader could read a pallet of mixed products, all of which contain indi-
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Introduction to Radio Frequency Identification
vidual RFID tags, without the need to physically move any of the materials or
open any cases.
If the pallet was full of mixed products, the large number of RFID tags could be
read almost instantaneously. The tags would be read sequentially, not simultaneously, but the reading still could be completed in microseconds.
The data on RFID tags can be changed or added to as a tag passes through specific
operations. Read-only tags are less expensive than read/write tags. RFID tags are
less susceptible to poor environmental conditions in which bar code labels
become unreadable. RFID tags can be sealed within a plastic enclosure, eliminating many of the problems that plague bar codes in harsh environments, where
they are exposed to chemicals, heat, and other damaging effects.
Disadvantages of RFID
Currently, cost is the biggest roadblock to the widespread use of RFID tags and
the replacement of bar codes for item-level tracking. Bar codes can be produced
for less than one cent. Currently RFID tags cost between 20 and 40 cents for the
most basic of tags. Even if the cost falls to several cents per tag, the cost is still a
significant addition to the cost of an item that is a low-cost piece of consumer
goods.
RFID signals can encounter problems when being read through some materials,
such as metals and liquids. Tag placement is found to be of great importance for
some materials that are in particular kinds of containers, crates, or shrinkwrapped pallets. Some case-level RFID tags have to be placed in a specific location
on the case and cases must be stacked in a specific orientation or configuration to
obtain a consistent read from the RFID tag.
The ability of RFID not to require line of sight is also a disadvantage. A RFID
reader reads tags within its range, and this may be problematic if the wrong tag is
selected. Therefore line-of-sight reading is preferred for some RFID applications.
If an RFID tags fails, it is not as obvious as the failure of a bar code. If the RFID tag
is not seen, then there is no check to know that a tag failed.
Now that we have discussed the basics of RFID, the next section will describe in
more detail the types of RFID tags that are available.
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15.2
Types of RFID Tags
Every object to be identified in an RFID system needs to have a tag attached to it.
Tags are manufactured in a wide variety of packaging formats designed for different applications and environments. The basic assembly process involves a substrate material, such as paper, PVC, and so on, upon which an antenna is deposited.
The antenna is made from one of many conductive materials including silver ink,
aluminum, and copper. Next, the tag chip is connected to the antenna, using techniques such as wire bonding or flip chip. Finally, a protective overlay made from
materials such as PVC lamination, epoxy resin, or adhesive paper may be added
to allow the tag to support some of the physical conditions found in many applications, such as abrasion, impact, and corrosion.
15.2.1
Tag Classes
One of the main ways of categorizing RFID tags is by their ability to read and
write data. This leads to the following four classes:
왘
Class 0—read only: factory programmed
These are the simplest type of tags, where the data—usually a simple ID number (EPC)—is written only once into the tag during manufacture. The memory
is then disabled from any further updates. Class 0 is also used to define a category of tags called electronic article surveillance (EAS) or antitheft devices,
which have no ID and only announce their presence when passing through an
antenna field.
왘
CLASS 1—write once read only (WORM): factory or user programmed
In this case, the tag is manufactured with no data written into the memory.
Data can either be written by the tag manufacturer or by the user, but only
once. No further writes are allowed, and the tag can only be read. Tags of this
type usually act as simple identifiers
왘
CLASS 2—read write
This is the most flexible type of tag, where users have access to read and write
data into the tags memory. They are typically used as data loggers and therefore contain more memory space than is needed for a simple ID number
왘
CLASS 3—read write with onboard sessions
These tags contain on-board sensors for recording parameters such as temperature, pressure, and motion, which can be recorded by writing into the tags’
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Types of RFID Tags
memory. Because sensor readings must be taken in the absence of a reader, the
tags are either semipassive or active.
왘
CLASS 4—read write with integrated transmitters
These are like miniature radio devices, which can communicate with other tags
and devices without the presence of a reader. This means they are completely
active with their own battery power source.
15.2.2 Active and Passive Tags
The first decision when considering a tag is between passive, semipassive, and
active. Passive tags can be read at a distance of up to 4 to 5 meters using the UHF
frequency band, whereas the other types of tags (semipassive and active) can
achieve much greater distances of up to 100 meters for semipassive and several
kilometers for active. This large difference in communication performance can be
explained by the following:
왘
Passive tags use the reader field as a source of energy for the chip and for communication from and to the reader. The available power from the reader field
not only declines very rapidly with distance but is controlled by strict regulations, resulting in a limited communication distance of 4to 5 meters when
using the UHF frequency band (860 to 930 MHz).
왘
Semipassive or battery-assisted tags have built-in batteries and therefore do not
require energy from the reader field to power the chip. This allows them to
function with much lower signal power levels, resulting in greater communication distances of up to 100 meters. Distance is limited mainly because the tag
does not have an integrated transmitter and till must use the reader field to
communicate back to the reader.
왘
Active tags are battery-powered devices that have active transmitters on board.
Unlike passive tags, active tags generate RF energy and apply it to the antenna.
This autonomy from the reader means they can communicate at distances of
several kilometers or more.
The experience gained by different companies running various trials and evaluations has so far shown that of the different RFID frequencies (LF, HF, UHF, and
microwave), HF and UHF are the best suited to the supply chain. In addition, it is
expected that UHF, because of its superior read range, will become the dominant
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Radio Frequency Identification Technology
frequency. This does not mean, however, that LF and microwave will not be used
in certain cases.
This section has looked at the types of RFID tags. Now we will examine some current uses of RFID.
15.3
Current Uses of RFID
RFID technology is already well established in several areas such as electronic
payment, supply chain management, and livestock tracking, as well as previously
unforeseen areas such as data conveying.
15.3.1
Electronic Payments
In many countries, smart cards based on RFID technology are becoming more
common in transport situations. Hong Kong introduced the Octopus system in
1997, and it is now used by more than 95% of the population.
The Oyster card, a Transport for London (TfL) contactless ticketing scheme, is a
smart card. TfL estimates that 1 million fewer transactions per week are made at
ticket offices and that there is a 30% improvement in the speed of passengers
passing through the ticket gates. It is more difficult to copy Oyster cards than it is
to copy the magnetic stripe cards, and because each card contains a unique ID
number, it can be immediately cancelled if the card is reported lost or stolen.
15.3.2 Retail Stores
Large retail companies are pushing the adoption of RFID tags as a way of achieving supply chain visibility and reducing theft and product counterfeiting. These
companies see RFID technology as a way of preventing out-of-stock occurrences,
the overstocking of products in warehouses, and the theft or loss of goods.
For instance, the total cost of crime, including crime prevention, for UK retailers
was £2.25 billion in 2002. Marks & Spencer tagged 3.5 million returnable food
produce delivery trays in 2002. This is among the largest supply chain operations
involving RFID in the world. The tagged trays are filled with individual food
items at the supplier, carried by the distributor to the shop, emptied, and then
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returned. The information on the tagged trays is read at each distribution point,
resulting in improved food delivery logistics and fresher food in stores.
U.S. fashion retailer American Apparel launched a 50-store pilot program in 2011
using RFID-embedded hangtags in all items sent to RFID-enabled stores. The
main purpose of the pilot was to investigate the use of RFID for inventory management.
Executives at American Apparel reported that the pilot RFID-enabled stores have
reduced the level of inventory shrinkage, improved overall stock levels, and
reduced employee turnover. All of the stores in the pilot program outperformed
non-RFID enabled stores.
15.3.3 Individual Product Tagging
Retailers are already looking at the tagging of individual products to allow for better control of product recalls and better-targeted marketing campaigns. In the
United Kingdom, the retail store Tesco undertook an RFID trial at one store in
2003, which involved tagging individual DVDs. RFID readers were built into the
store shelves to monitor each item. Not only was the stockroom alerted when a
shelf needed restocking, but staff were alerted when browsing customers
replaced DVDs in the wrong section.
15.3.4 Parts Tracking
Virgin Atlantic Airways has introduced RFID as a project to track critical, highvalue aviation assets moving through its logistics supply chain at England’s Heathrow Airport. The aim is to track and trace high-value repairable aircraft parts
often at short notice.
Virgin tags serviceable airplane parts that pass through its Heathrow warehouse.
When an item enters the warehouse, employees use a desktop computer to enter
the item into the aviation maintenance and parts-inventory tracking system the
airline already uses.
The next stage is a full inspection of the part. If it passes inspection, the part is
given a goods-receipt number, which triggers the generation of an RFID label.
Virgin Atlantic employees then attach the label to the container holding the part.
They also attach a tag to a storage bin. Once the containers and storage bins are
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tagged at the warehouse entrance and inspection area, the items and bins are
either placed on storage racks or sent out of the warehouse for immediate use on
an airplane.
This section has examined current commercial uses of RFID technology. Now we
will review the use of RFID in SAP systems.
15.4
RFID and SAP
SAP currently offers an RFID solution called SAP Auto-ID Infrastructure (SAP AII).
This is part of the SAP Business Suite, similar to SAP Supply Chain Management
(SCM), and it integrates RFID with current SAP functionality.
SAP AII can be implemented either as a standalone system or in the supply chain
function. The latest release of SAP AII is 4.0 SP03, and we’ll describe that version
in detail in this section.
15.4.1 Supported Functions in SAP AII
Several processes are supported by SAP Auto-ID Infrastructure (AII). In addition
to desktop user interfaces, mobile and fixed RFID devices support:
왘
Outbound processing (slap-and-ship)
왘
Flexible delivery processing
왘
Generation of pedigree notifications
왘
Returnable transport items processing
These processes will be discussed in more detail in the next four sections.
15.4.2 Outbound Processing (Slap and Ship)
Slap-and-ship is an approach to complying with customer requirements for physical identification of materials shipped through the outbound processes. The main
goal of the slap-and-ship strategy is to invest the minimum amount of capital into
an RFID implementation needed to comply with the mandates set forth by both
Wal-Mart and the Department of Defense.
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RFID and SAP
15.4.3 Flexible Delivery Processing
The flexible delivery process allows the automation of outbound and inbound
processing. The process allows organizations to:
왘
Create outbound deliveries in the ERP system
왘
Pack and load outbound deliveries in SAP AII
왘
Post goods issue in the ERP system
왘
Send advance shipping notifications
왘
Create inbound deliveries in the ERP system
왘
Unload inbound deliveries in SAP AII
왘
Post goods receipts in the ERP system
These processes are particularly suitable for current RFID technology and for the
goals of a great many retail customers.
15.4.4 Generation of Pedigree Notifications
Drug counterfeiting has become a major problem for the pharmaceutical industry
and it is estimated to cost $46 billion a year in lost profits. Although drug counterfeiting is relatively rare in the United States, the amount of counterfeit pharmaceuticals from overseas has increased in recent years.
The U.S. Food and Drug Administration (FDA) believe RFID will work effectively
to fight drug counterfeiting. The FDA’s Counterfeit Drug Task Force has been
investigating RFID technology and the concept of an electronic pedigree, called
e-pedigree, a procedure that records where a drug is manufactured and how it is
distributed.
The adoption of RFID at the case and pallet level would help secure the integrity
of the drug supply chain so that pharmaceutical companies can reliably provide
greater assurances that a product was manufactured and distributed safely. Many
drug manufacturers, such as Pfizer, Purdue Pharma, and GlaxoSmithKline, have
introduced RFID drug-pedigree projects.
The drug-pedigree system will authenticate pharmaceuticals as legitimate
throughout the supply chain. The system uses RFID to match each container with
its corresponding pedigree. During manufacture, or at any time prior to distribution, RFID tags can have a randomly generated code written to a chip or an
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already embedded code used to identify products. This code is unique to a product at one or more levels of packaging. It is stored along with related data and is
thereby available for authentication.
At various stages in the movement of the product, the tag is scanned to create a
digital record of the many transactions. When the material reaches stores, ready
for sale to consumers, a complete record of its distribution has been created and
stored.
SAP AII enables the generation of pedigree notifications. These XML messages
contain information that third-party vendors can use to create pedigrees that satisfy state requirements. Pedigree notifications provide data regarding:
왘
Manufacturer (e.g., name, address, state license number)
왘
Drug (e.g., name, dosage form, dosage strength, container size, expiration
date, lot number, ID)
왘
Trading partner (e.g., name, address)
왘
Person who should certify the delivery or the receipt of a drug (e.g., name,
address, phone, email)
왘
Date of transaction
More data may be available for pedigree notifications in future SAP AII releases.
15.4.5 Returnable Transport Item Processing
Returnable transport items (RTIs) are assets that can be identified if they are allocated with a tag encoded with Global Returnable Asset Identifiers (GRAIs). A
returnable transport item or asset is one the owner delivers to the custody of
another business entity, usually for a fee. RTI processing includes functions to:
왘
Manage, load, and unload RTIs filled with products or with other RTIs
왘
Track the current location of RTIs and evaluate stocks and cycle times
왘
Achieve transparency across stocks of RTIs
왘
Automate processes, reduce stocks, shorten cycle times, and recognize bottlenecks
The GRAI provides a unique identification of an asset. It uses the prefix assigned
to companies by the Uniform Code Council (UCC) to develop, assign, and maintain a unique asset number for equipment, resources, supplies, and so on to track
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Business Examples—RFID
location. Therefore, the GRAI is a unique code that is specific to the asset. The
EAN identification number of a returnable asset, GRAI, is defined as a physical
item with no reference to the contents. The EAN ID of a returnable asset enables
tracking as well as recording of all relevant data.
Returnable assets such as pallets, barrels, rail cars, and trailers for further use in
transport and trade processes are becoming increasingly important. The main
focus is to manage returnable assets within harmonized business processes and
leverage the EAN system in the unique identification of assets.
Now that we have reviewed the RFID applications available in SAP AII, we will
summarize what we have discussed in this chapter.
15.5
Business Examples—RFID
RFID is a means of identifying an object using a radio frequency transmission.
The technology can be used to identify, track, sort, or detect a wide variety of
objects. Communication takes place between a reader or interrogator and a transponder or tag. The use of RFID has increased recently and is widely used in the
retail industry.
Current Uses of RFID
RFID tags are found in many areas of the supply chain and are becoming increasingly common in warehouse situations. As the price of the technology decreases,
the use of RFID will increase further.
Example
A manufacturer of sports footwear supplied the major discount stores in North
America. Several of their larger customers used RFID so they could uniquely
identify pallets as they entered their warehouse. This allowed the customer to
perform a goods receipt of each pallet as it arrived.
The footwear company identified their pallets on four sides with labels that
displayed barcodes for the material and batch. The labels were used by retailers
that used scanners when pallets arrived at their receiving docks. The retailer’s
requirement for RFID tags allowed them to identify pallets as they entered the
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Radio Frequency Identification Technology
facility without having to move the pallet through a particular conveyor. The system received the information generated by the RFID tag on each pallet.
For the footwear manufacturer to comply with the new RFID requirements, they
worked with an RFID tag manufacturer to develop a “slap and ship” label. The
information on the tag included the material number, pallet number, and batch
number. The company decided to operate a standalone SAP AII system for the
RFID project that allowed tag picking, tag attachment, and the creation of delivery notes.
15.6
Summary
Radio frequency identification (RFID) technology has recently become commercially and technologically viable. RFID tags are essentially microchips that act as
transponders, always listening for a radio signal sent by RFID readers. When a
transponder receives a certain radio query, it responds by transmitting its unique
ID code back to the transceiver. Most RFID tags do not have batteries; instead,
they are powered by the radio signal requesting a reply.
RFID can be used in the warehouse. Since large corporations such as Wal-Mart
first mandated the use of RFID, many companies have been investigating RFID
for tracking the movement of materials. Although they may not reach the level of
the pedigree system proposed by the FDA, they can expect to improve the visibility of material through the supply chain.
The SAP Auto-ID Infrastructure (SAP AII) solution is available for companies that
want to use RFID with their ERP system. SAP AII requires configuration for the
interaction of the RFID processes with the ERP functions. As the cost of RFID tags
and readers falls, we can look forward to the proliferation of RFID and the need
for a more integrated RFID system.
In Chapter 16, we will examine the use of cross-docking in the warehouse and
how it can improve customer delivery times, reduce the need for warehouse
space, and cut labor costs.
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Cross-docking matches inbound and outbound deliveries to avoid having
to store material in the warehouse. Not all material is suitable for crossdocking, but when it can be used it reduces labor costs, delivery time to the
customer, and the amount of warehouse space used.
16
Cross-Docking
Cross-docking means taking an item of finished goods from the production plant
and delivering it directly to the customer with virtually no material handling in
between. Cross-docking reduces material handling and storage of the material in
the warehouse. In most cases, the material sent from production to the loading
dock has been allocated for outbound deliveries. The many benefits to a company
that uses cross-docking include:
왘
Lower labor costs because the material no longer requires picking and putaway
in the warehouse
왘
Less time moving material from production to the customer, improving customer satisfaction
왘
Less need for warehouse space, because the material is not stored
The finished goods are delivered from the production area directly to a location
near the loading dock and from there are packed and shipped. In some instances,
the material does not arrive at the loading dock from the production area, but
may arrive for shipment from the warehouse as a purchased product to be resold
or delivered from another company’s manufacturing plants.
This chapter will review the cross-docking functionality in SAP ECC 6. We’ll discuss planning for cross-docking, how the cross-docking actually takes place, and
how to use the cross-docking monitor. Let’s start with the first of those topics:
planning cross-docking.
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16.1
Planned Cross-Docking
Cross-docking has been used in warehouses for more than 50 years, but with the
current drive to reduce costs and increase customer satisfaction, practitioners of
supply chain management are using cross-docking as an important tool for warehouse efficiency.
16.1.1
Types of Cross-Docking
Several cross-docking scenarios are available to the warehouse management. In
her paper Making the Move to Cross Docking (WREC, 2000), Maida Napolitano
concluded that many warehouse operations involve a rapid turnaround of stock
from receiving to outbound delivery. Napolitano defined these types of crossdocking:
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Manufacturing cross-docking
This operation involves receiving purchased and inbound material required by
manufacturing. The warehouse may receive the material and prepare subassemblies for the production orders.
왘
Distributor cross-docking
This process can consolidate inbound materials from different vendors into a
mixed material pallet, which is delivered to the customer when the final material is received. For example, computer parts distributors often source their
components from various vendors and manufacturers and combine them into
one shipment for the customer.
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Transportation cross-docking
This operation combines shipments from different shippers in the less-thantruckload (LTL) and small-package industries to gain economies of scale.
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Retail cross-docking
This process involves receipt of material from multiple vendors and sorting
onto outbound trucks for several retail stores. This method was a key cost-saving measure for Wal-Mart stores in the 1980s. Wal-Mart procures two types of
products: material it sells each day of the year and large quantities of material
purchased once and sold by the stores and not usually stocked again. The first
product type is called staple stock, and the second is called direct freight. WalMart minimizes any warehouse costs with direct freight by using cross-docking
and keeping material in the warehouse as briefly as possible.
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Planned Cross-Docking
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Opportunistic cross-docking
Opportunistic cross-docking is the opposite of planned cross-docking because
it occurs without creating a known link between the inbound delivery and the
outbound requirement. The link is manually created. Opportunistic crossdocking can be used in any warehouse, transferring a material directly from
the goods-receiving dock to the outbound shipping dock to meet a known
demand, that is, a customer sales order.
Not all these types of cross-docking will be used at a warehouse. The amount of
cross-docking at the warehouse depends on the types of material entering the
warehouse and whether those materials are suitable for immediate shipment to a
customer. The next section describes the types of material that are suitable for
cross-docking.
16.1.2
Types of Material Suitable for Cross-Docking
Some warehouses do not use cross-docking because the materials stored in the
warehouse may not be suitable. Some materials are better suited to cross-docking
than others, including:
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Perishable materials that require immediate shipment
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High-quality items that do not require quality inspections during goods receipt
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Materials that are pretagged (bar coded, RFID), preticketed, and ready for sale
to the customer
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Promotional materials and materials that are being launched
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Staple retail materials with a constant demand or low demand variance
왘
Prepicked, prepackaged customer orders from another production plant or
warehouse
16.1.3 Planned Cross-Docking in SAP
SAP WM enables warehouse managers to plan the cross-docking process or to
allow opportunistic cross-docking. The main difference between the two is that
planned cross-docking allows decisions to be made before the material arrives at
the warehouse, whereas opportunistic cross-docking decisions are made after the
material has arrived.
Both types of cross-docking may occur in the warehouse, but planned cross-docking reduces the need to deal with material once it has arrived at the warehouse.
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This is an important benefit for retail warehouses that need to move produce with
short shelf lives, such as fruit and vegetables, to the retailer as quickly as possible.
16.1.4 Configuration for Cross-Docking
The initial configuration to complete is for planned and opportunistic cross-docking for the warehouse and the storage type. You can find the transaction by following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷
Cross Docking 폷 General Settings 폷 Maintain Warehouse Level Settings.
Figure 16.1 shows the configuration entered for the warehouse. The storage type
is the location where the two-step cross-docked material will be located. In this
example, the storage type is called XCD, shorthand for cross-docking. Only select
the two-step checkbox when planned cross-docking is required.
Figure 16.1 Warehouse Configuration for Planned Cross-Docking
This transaction allows the configuration for opportunistic cross-docking in the
warehouse for inbound, outbound, both, or not at all. There are other configurations not shown in Figure 16.1 that can be determined in this transaction. These
are:
왘
Consider FIFO
Select this indicator to allow the system to consider first in, first out (FIFO)
before implementing a cross-docking decision. In normal cross-docking the
FIFO rules are overridden because the material arrives and is shipped before
the material already in the warehouse.
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FIFO Tolerance
This field allows the entry of a FIFO tolerance between the material in stock
and the material arriving so that material within the entered tolerance can be
cross-docked even though it contradicts FIFO rules. If the inbound material is
older than the tolerance allowed, then the cross-docking decision cannot be
made.
왘
Time Ref
This field enables you to choose a date and time reference from which you can
calculate the default release date and time. The choices include delivery loading date and time, delivery picking date and time, and delivery planned goods
movement date and time. The release time for an outbound document is the
planned time for creating a transfer order for the document so it can be
released.
The next configuration step is to confirm that a movement type that is to be used
for cross-docking is set to allow cross-docking. You can find the transaction by
following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷
Cross Docking 폷 General Settings 폷 Define Cross-Docking Relevancy for Movement Types.
Figure 16.2 shows the configuration for the movement type applicable in each
warehouse. The CD Relevant checkbox should be selected for movement types to
be used for cross-docking.
Figure 16.2 Configuration of Movement Types for Cross-Docking
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16.1.5 Cross-Docking Decisions
A cross-docking decision is a link that can be made between a planning document, which can be an inbound or outbound delivery, and a candidate document,
which is another inbound or outbound delivery.
Example
If an inbound delivery is expected for 20 units of material XYZ, and there is a planned
outbound delivery of 20 units of XYZ to a customer, then these two documents, the
planning and the candidate, can be linked by a cross-docking decision.
The cross-docking decision can be made by two methods:
왘
Manual creation
The warehouse staff can decide to link a planning and a candidate document.
The decision can be made with the aid of the cross-docking monitor, which we
will discuss later in this chapter.
왘
Automatic creation
The system can automatically make the decision. When a transfer order is created for an inbound or outbound delivery, the system reviews all potential candidate documents to ascertain whether a link can be made and a cross-docking
decision created.
Now that we have examined the planned cross-docking functionality, we will go
on to review the cross-docking movements that occur in the warehouse.
16.2
Cross-Docking Movements
When a cross-docking decision is made before the material arrives, the movement can be processed as a one-step or two-step cross-docking process. Both of
these movements are described next.
16.2.1
One-Step Cross-Docking
As the name suggests, this movement processes the cross-docking movement in
one step, directly from the inbound goods receiving area to the outbound goods
issuing area.
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Cross-Docking Movements
For one-step cross-docking to be active, check the configuration for the warehouse to ensure that the two-step cross-docking checkbox is not selected. In Figure 16.1, the cross-docking configuration for the warehouse shows the checkbox
that can be selected to force two-step cross-docking.
In planned cross-docking, the inbound delivery is linked to the outbound delivery, and a transfer order is created to move the material from the goods receiving
area to the outbound delivery area.
Figure 16.3 shows the shipping notification for the inbound delivery. The material to be received from this inbound delivery is linked to the outbound delivery
of the same material.
Figure 16.3 Inbound Delivery Linked to Outbound Delivery via Cross-Docking
When the material arrives in the goods receipt area, it is unloaded, and a goods
receipt is posted in SAP IM. Figure 16.4 shows an outbound delivery with a
planned goods issue of a quantity of 100 for material 100-500. This is the same
quantity of material that is expected from the inbound delivery.
When the goods-receipted material is put away, a transfer order is created for the
material. If this cross-docking is planned, transfer order processing retrieves that
cross-docking decision. The system then creates a transfer order that proposes the
goods issue area, storage type 916, as the destination storage type on the transfer
order.
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Figure 16.4 Outbound Delivery Linked to Inbound Delivery via Cross-Docking
Figure 16.5 shows the transfer order for the cross-docking decision linking the
inbound goods receipt with the outbound delivery.
Figure 16.5 Transfer Order for One-Step Cross-Docking Process
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Cross-Docking Movements
Goods receipt area 902 is defined as the source storage type, and goods issue area
916 is defined as the destination storage type. After the transfer order is confirmed, the inbound delivery and outbound delivery documents are updated with
the actual recorded pick and putaway quantities.
16.2.2 Two-Step Cross-Docking
In cross-docking where the two-step procedure has been configured, as seen for
some warehouses in Figure 16.1, materials to be cross-docked are initially moved
from the goods receipts area to a cross-docking storage type. In the second step,
the material is moved to the goods issue area from the cross-docking storage type
when the outbound delivery is released.
The cross-docking storage type is defined in the same transaction as shown in Figure 16.1, which you can find by following the menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Cross Docking 폷 General Settings 폷 Maintain
Warehouse Level Settings.
Figure 16.6 shows the warehouse and the cross-docking storage type that have
been defined. For warehouse 001, the two-step cross-docking checkbox has been
selected, and the cross-docking storage type is defined as XDC.
Figure 16.6 Defining Cross-Docking Storage Type for Each Warehouse
When a link is created between an inbound and outbound delivery as part of a
cross-docking decision, the system reviews the decision to perform either a onestep or two-step process. In a two-step process, the system creates two transfer
orders:
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왘
A transfer order for the inbound delivery materials from the goods receipt storage type to the cross-docking storage type
왘
A transfer order from the cross-docking storage type to the goods issue storage
type
Figure 16.7 shows the shipping notification for the inbound delivery. The material to be received from this inbound delivery is linked to the outbound delivery
for the same material: 100-500. When the material arrives in the goods receipt
area, it is unloaded, and a goods receipt is posted in SAP IM.
Figure 16.7 Inbound Delivery Linked to Outbound Delivery via Cross-Docking
Figure 16.8 shows the transfer order created for the first step of two-step crossdocking. The material is received, a goods receipt posted, and a transfer order created to move the material from the goods issue storage type to the cross-docking
storage type XDC, where it will remain until the outbound delivery is ready to be
goods-issued.
Figure 16.9 shows the outbound delivery with a planned goods issue of a quantity of 105 for material 100-500. This is the same quantity expected from the
inbound delivery.
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Cross-Docking Movements
Figure 16.8 Transfer Order for First Step of Two-Step Cross-Docking
Figure 16.9 Outbound Delivery Linked to Inbound Delivery
via Two-Step Cross-Docking
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Cross-Docking
When the outbound delivery is released, the system creates a transfer order that
moves the cross-docked material from the cross-docking storage type and proposes the goods issue area, storage type 916, as the destination storage type on
the transfer order.
Figure 16.10 shows the second transfer order in the two-step cross-docking. The
material is removed from the cross-docking storage type and placed in the goods
issue storage type for the outbound delivery.
Figure 16.10 Transfer Order for Second Step of Two-Step Cross-Docking
After both transfer orders are confirmed, the inbound delivery and outbound
delivery documents are updated with the actual recorded pick and putaway quantities.
This section examined the movements associated with cross-docking. Now we’ll
turn our attention to the SAP cross-docking monitor.
16.3
Cross-Docking Monitor
Warehouse managers use the cross-docking monitor to review the cross-docking
situation in the warehouse and make any necessary changes. The monitor displays
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Cross-Docking Monitor
all inbound and outbound deliveries as well as transfer requirements, shipments,
groups, and cross-docking decisions.
16.3.1 Accessing the Cross-Docking Monitor
You can display the cross-docking monitor with Transaction LXDCK or via the
menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Cross Docking 폷 Cross Docking
Monitor.
Figure 16.11 shows the selection screen for the cross-docking monitor. The warehouse manager can select the warehouse and the planning direction, which is
either inbound to outbound or outbound to inbound.
Figure 16.11 Initial Selection Screen for Cross-Docking Monitor
The other selection parameters include a date range, shipping point, sales organization, delivery type, unloading point, and route.
It is important to enter the date range. If cross-docking in the warehouse is operated with small delays between inbound and outbound delivery—possibly
because of a lack of floor space—a narrow range of dates should be entered.
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Cross-Docking
You can click the In Background button to create cross-docking decisions using
the system optimization. If the warehouse manager wants to go directly to create
cross-docking decisions based on the inbound and outbound documents in the
system, you can click the Planning button.
Figure 16.12 shows the inbound and outbound transfer requirements for the date
entered into the selection screen. The warehouse manager can opt to use the
planning tool by clicking the Plan button or to select documents for creating
manual decisions.
Figure 16.12 Cross-Docking Monitor Detail Showing Inbound
and Outbound Transfer Requirements
16.3.2 Cross-Docking Alert Monitor
The warehouse manager uses the cross-docking alert monitor to identify potential
issues with cross-docking. You can access the alert monitor while working in the
cross-docking monitor by clicking the alert icon. You can also access it via Transaction LXDCA or the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Cross
Docking 폷 Alert Monitor.
Figure 16.13 shows one of the three alert screens that are available in the alert
monitor. The figure shows the deliveries for warehouse 001 that have been
released and that are now outside of the tolerance. The other two alert screens are
for transfer requirements that are outside of their tolerances and for cancelled
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Cross-Docking Monitor
transfer orders without replacements. The three alert screens are described in
more detail as follows:
왘
Deliveries with Release Time in the Past
This alert shows cross-docking-relevant outbound deliveries whose release
times and latest release times have passed. The yellow alert is displayed when
the release time is passed. The red alert is displayed when the latest release
time has passed.
왘
Transfer Requirements with Release Time in the Past
This alert shows cross-docking-relevant transfer requirements whose release
times and latest release times have passed. The yellow alert is displayed when
the release time is passed. The red alert is displayed when the latest release
time has passed.
왘
Cancelled Transfer Orders Without Replacement TOs
This alert shows transfer orders that have been cancelled without replacement
transfer orders being created.
Figure 16.13 Cross-Docking Alert Monitor Showing Past Delivery Dates
You can access three of the alert screens from Transaction LXDCA and display the
different screens within one transaction.
This section has reviewed the functionality and usability of the SAP cross-docking
monitor. In the next section we’ll look at some business examples of cross-docking.
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16.4
Business Examples—Cross-Docking
Cross-docking allows finished goods from production to be delivered directly to
the customer with virtually no material handling in between. Cross-docking
reduces material handling and storage of the material in the warehouse. Usually
the material moved from production to the loading dock has been allocated for
outbound deliveries.
16.4.1 Planned Cross-Docking
Warehouse managers can plan the cross-docking process or allow opportunistic
cross-docking. The main difference between the two is that planned cross-docking allows decisions to be made before the material arrives at the warehouse,
whereas opportunistic cross-docking decisions occur after the material has
arrived.
Example
A small manufacturer of consumer electronic goods operated three distribution
centers in the United States. The finished goods were taken directly from the production line and transported to one of the three distribution centers, as there was
very limited warehouse space at the production facility. Once the finished goods
arrived at the distribution centers they were received into a warehouse, where
they remained until they were shipped to a customer. The company used several
off-the-shelf distribution software packages as well as custom-built warehouse
and sales systems.
The company replaced their systems with an SAP system as part of a Y2K project
but kept their warehouse system, as it was a new development. The SAP and
warehouse systems were successfully integrated so that the three distribution
centers operated with adequate efficiency.
The company extended its product line, and several of their kitchen appliances
were very popular. A new production line was installed to cope with the added
demand for the new items. The distribution centers found that they could not
always keep up with customer deliveries, and often trucks waited for product to
arrive from the manufacturing facility. Unfortunately the warehouse staff had to
receive the items into the warehouse before they could be picked and delivered
to the customer.
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Business Examples—Cross-Docking
The logistics team recommended to management that they implement SAP WM
to obtain the benefits they did not have with their custom system. This included
the ability to perform cross-docking so that customer deliveries could be expedited.
A pilot SAP WM implementation was proposed for one of the distribution centers, which was used to evaluate not only cross-docking but other warehouse
functionality. The warehouse manager was able to plan the cross-docking before
items arrived from the production facility and give customers better service.
The pilot program showed management they could benefit from SAP WM functionality and especially cross-docking, so a decision was made to roll out the pilot
program to the other distribution centers.
16.4.2 Cross-Docking Movements
When a cross-docking decision is made before the material arrives, the movement can be processed as a one-step or two-step cross-docking process. A onestep movement processes the cross-docking movement in a single step, directly
from the inbound goods receiving area to the outbound goods issuing area.
A two-step cross-docking movement requires materials to be initially moved
from the goods receipts area to a cross-docking storage type. In the second step,
the material is moved to the goods issue area from the cross-docking storage type
when the outbound delivery is released.
Example
A manufacturer of fresh-baked goods and snack items operated 8 manufacturing
facilities and 30 distribution centers across the United States and Canada. The
manufacturing sites produced items 24 hours a day and shipped to the distribution sites when the items were ready; this depended on the finished good. The
distribution facilities either shipped to customer warehouses using their own
transport, or the customer provided their own trailers, especially for deliveries of
fresh-baked goods. The company had used an SAP system for many years, and the
use of cross-docking had been implemented at most of the distribution centers.
Initially the company had decided to operate with a one-step cross-docking process where all items, whether or not they were fresh-baked goods, were moved
directly to the outbound loading docks.
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The company had received some negative feedback from customers indicating
that their trailers were not being loaded for several hours after their expected
loading time. The distribution center management performed some analysis of
the movements of items and found that on occasion the warehouse could get
behind in loading, leading to delays of several hours for some deliveries.
To address the needs of the customers with fresh-baked goods deliveries, the
company decided to change the way cross-docking operated in some distribution
centers. Because some deliveries of snack items were not as time critical as freshbaked goods, the company decided to prioritize the deliveries that contained
fresh-baked goods.
To change the process, they decided to divide the distribution center into two
warehouses: one for fresh-baked goods operating one-step cross-docking and one
for all other items, which could operate with two-step cross-docking. The twostep process allowed the incoming items to be moved from the receiving dock to
a staging area close to the shipping docks and then moved to the goods issue area
when required.
16.5
Summary
Supply chain management involves a constant search for ways to make warehousing more efficient, improve customer satisfaction, and cut costs. If possible, material should be shipped directly from the manufacturer to the customer, avoiding
any warehouse costs. The next best thing is to implement cross-docking, which
removes the need for inspection on goods receipt, goods receipt staging, putaway, storage, picking, and goods issue staging.
Not all material is suitable for cross-docking, but using SAP cross-docking functionality makes it possible for some items. Many large organizations use crossdocking. It is most effective in the movement of items in the grocery industry,
where food is stored as little as possible and the speed of delivery to the retail
store is of the utmost importance.
In Chapter 17, we will discuss the processes that are included in the yard management functionality.
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The yard management functionality extends the visibility of stock beyond
the warehouse and expands the opportunity to increase efficiencies in the
warehouse.
17
Yard Management
The yard management functionality of SAP ERP tracks materials that are not in
the warehouse but are located in trailers and vehicles that are waiting to be
unloaded. The area outside the warehouse is described as the “yard” and is a
physical location where vehicles from vendors or third-party companies wait to
be unloaded or to be picked up for delivery. In some instances the vendor may
drop off the trailer so that the vehicle can pick up another trailer for an outbound
delivery. The trailers that are full of materials are located in the yard and can be
tracked using the yard management functionality. Some companies operate in
this manner and can have dozens of trailers waiting outside the warehouse to be
unloaded or delivered. In that instance the company uses yard management to
give greater visibility to material in their supply chain.
17.1
Introduction to YM
Yard management functionality is available in standard SAP ECC6 and is available
to be configured in Extended Warehouse Management (EWM). Some companies
have significant amounts of material not in the warehouse, but in trailers and
vehicles outside the warehouse. The YM functionality allows those companies to
have greater visibility but requires some configuration to set up the yard in the
system.
17.1.1
Yard Management Configuration
The yard management function is an extension of the warehouse and therefore
uses warehouse processes. To use yard management functionality, you need to do
some configuration, including defining the yard, doors, and staging areas.
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Defining the Yard
You have to define the yard in configuration by following the menu path IMG 폷
Logistics Execution 폷 Yard Management 폷 General Settings 폷 Define Yard. The
yard is defined as a three-character field that can be the same as the warehouse
number. Several characteristics are required in the definition of a yard, such as
the warehouse number the yard is associated with, the vehicle type, which is the
vehicle used to transport material around the yard, and the default packaging
material of the handling unit. The handling unit is created when a delivery is
assigned to a vehicle in the yard. The vehicle cannot contain any deliveries, so a
logical handling unit is defined for the delivery that is contained in the vehicle.
The other information you can assign when configuring a yard includes a scheduling time horizon, a yard scheduling profile, a time unit of measure, a default
weight unit of measure, an indicator to flag if vehicle sealing is required, a vehicle
waiting time, and the activity number range. Figure 17.1 shows the configuration
for defining a yard.
Figure 17.1 Defining the Yard
Yard Activities
When an activity takes place in the yard, a document is created and a number
range has to be created. In configuration, you can find this transaction by following the menu path IMG 폷 Logistics Execution 폷 Yard Management 폷 General
Settings 폷 Define Yard Activity Number Ranges. The number range for yard
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Introduction to YM
activities is assigned to the yard, and the number range is identified using a twocharacter field, as shown in Figure 17.2.
Figure 17.2 Maintaining the Number Ranges for Yard Activities
Reason Codes
When a user is using the yard activity monitor, he may want to block a vehicle,
and this may require a reason code to be entered. To define the reason codes in
configuration, follow the menu path IMG 폷 Logistics Execution 폷 Yard Management 폷 General Settings 폷 Define Reason Codes. Each reason code is a two-character code assigned to a yard number or to all yards if the default is used, as
shown in Figure 17.3. Each reason code is triggered by an execution object, such
as a changed destination, failed scheduling, or a blocked vehicle. The reason code
has a 40-character text associated with it, as well as a 20-character short text. Figure 17.3 shows the configuration for reason codes.
Defining Vehicle Number Ranges
The vehicles used in yard management are implemented as handling units. The
vehicle types are assigned to the yard, and the vehicle number ranges are assigned
to the vehicle types. You define the vehicle number ranges in configuration by
following the menu path IMG 폷 Logistics Execution 폷 Yard Management 폷 Vehicles 폷 Define Vehicle Number Ranges. The number range for the vehicles can be
external or internal as shown in Figure 17.4.
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Figure 17.3 Defining the Reason Codes
Figure 17.4 Defining the Number Ranges for Vehicles
Defining Vehicle Type Groups
The vehicle type groups are defined in the system as packaging material types.
These are used to represent the different types of vehicles that can be used in the
yard. You define the vehicle type group in configuration by following the menu
path IMG 폷 Logistics Execution 폷 Yard Management 폷 Vehicles 폷 Define Vehicle
Type Groups. Figure 17.5 shows the existing vehicle type groups. You can enter a
new vehicle type group from this screen by pressing the (F5) function key.
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Figure 17.5 Defining Vehicle Type Groups
The vehicle type group or packaging material type is a mandatory four-character
field. The user can enter a 20-character description for the vehicle type group and
define properties, such as the type of number assignment and applicable vehicle
number range intervals, for each group. Subsequently, it is possible to assign a
vehicle type to the group in the packaging material’s master record. When a vehicle is created, it is assigned to the vehicle type group to which its vehicle type is
assigned. Figure 17.6 shows the detailed information for a vehicle type group.
Figure 17.6 Changing Vehicle Type Groups
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Material Group for Vehicle Type
For each vehicle type it is possible to create a material group that allows materials
of similar characteristics to be stored in the same packaging. For example, materials that are affected by temperature need to be placed in certain packaging that
is then assigned to the same material group. You define the vehicle type group in
configuration by following the menu path IMG 폷 Logistics Execution 폷 Yard Management 폷 Vehicles 폷 Define Material Group For Vehicle Types. Figure 17.7
shows the configuration for the material groups.
Figure 17.7 Defining Material Groups for Vehicle Types
Allowed Vehicle Types
The vehicle type groups can be assigned to one or more vehicle types. For example, a vehicle type like a trailer can be assigned several vehicle type group or
packaging material types, such as certain pallets or containers. You define this
assignment in configuration by following the menu path IMG 폷 Logistics Execution 폷 Yard Management 폷 Vehicles 폷 Define Allowed Vehicle Types. Figure 17.8
shows the configuration for the assignment.
Defining Scheduling Profile
The yard scheduling profile contains the defaults the system uses when it performs any automatic scheduling. You can assign the scheduling profile to a yard
in configuration.
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Figure 17.8 Defining Allowed Vehicle Types
The identifier for the scheduling profile is a two-character field and is defined for
a specific yard. The components you can define for the scheduling profile include
the type of document such as inbound delivery, outbound delivery, shipment, or
return, or can be for all documents. The profile can also allow the user to create
defaults for start and end times and a specific calendar. You define the scheduling
profile in configuration by following the menu path IMG 폷 Logistics Execution 폷
Yard Management 폷 Location Determination And Scheduling 폷 Define Scheduling Profiles. Figure 17.9 shows the configuration for the scheduling profiles.
Figure 17.9 Defining Scheduling Profiles
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Defining Location Types
In the yard, it is possible to define a physical location type and assign the vehicle
type groups for each location type. A location type is defined as a two-character
field that can represent a location class such as a door, a parking space, or any
location in the yard. You define the location type in configuration via the menu
path IMG 폷 Logistics Execution 폷 Yard Management 폷 Location Determination
And Scheduling 폷 Define Location Type. Figure 17.10 shows the configuration
for the location type.
Figure 17.10 Defining Location Types
Defining Location Groups
A location group can contain several physical locations. For example, a location
group can represent the parking spaces on the east side of the yard. The configuration requires that the location group be assigned to a specific yard. You define
the location group in configuration by following the menu path IMG 폷 Logistics
Execution 폷 Yard Management 폷 Location Determination And Scheduling 폷
Define Yard Location Group. Figure 17.11 shows the configuration for the location type.
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Figure 17.11 Defining Location Groups
17.1.2
Yard Management Structure
A yard is defined as the area outside of the warehouse that can contain trailers
and vehicles that are either inbound to the facility or outbound from the facility.
In the previous section we discussed how a yard is defined in the system. The
yard is associated with a warehouse. Between the yard and the warehouse are
areas where the material moves, which are defined as the doors.
Defining Doors
The door is defined as an area that exists between the warehouse and the yard. It
is the location where materials leave the warehouse or are moved into the warehouse. You can define a door in configuration via the menu path IMG 폷 Logistics
Execution 폷 Yard Management 폷 Yard Map 폷 Define Doors. The door is defined
with a three-character field and is assigned to a warehouse. You can take several
optional configuration steps when defining a door. The door can be allocated a
staging area, as well as being defined as a location that accepts goods receipt and
performs good issues. Some doors at a warehouse can be dedicated only for
receiving inbound delivery or processing outbound deliveries. A door can also be
assigned to a physical location type or a location group. Figure 17.12 shows the
configuration for a door.
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Figure 17.12 Defining Doors
Defining Staging Areas
A staging area is defined as a temporary storage area for items that either are leaving the facility as part of an outbound or have arrived as part of an inbound delivery. Physically, a staging area is close to a door to minimize travel time for the
warehouse operators. Staff may prepare an outbound delivery by moving materials from a storage bin to the staging area prior to the time the outbound delivery
is due to leave. You can define a staging area in configuration by following the
menu path IMG 폷 Logistics Execution 폷 Yard Management 폷 Yard Map 폷 Define
Staging Area.
You can define the staging area as a 10-character field that is assigned to a warehouse. You can also assign it to a door at the time of configuration, but this is
optional, and defined it as being relevant for goods issue or goods receipt only or
for both. Figure 17.13 shows the configuration for defining a staging area.
Defining Yard Locations
A yard location is a physical location in the yard. This can be a packing space for
a trailer, a weighing point, a security checkpoint, or a location specific to your
company’s yard. When trailers arrive at the facility and are directed into the yard,
they may be required to park at a security checkpoint where the seals are checked
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and then may have to be weighed before being moved to a parking space. You can
configure these physical locations in the system.
Figure 17.13 Defining Staging Areas
You can define a yard location in configuration by following the menu path IMG 폷
Logistics Execution 폷 Yard Management 폷 Yard Map 폷 Define Yard Location.
Each yard location has to be assigned to a location class, such as parking space,
checkpoint, staging area, and so on. Figure 17.14 shows the configuration for
defining a yard location.
Figure 17.14 Defining Yard Locations
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Assign Location Groups to Storage Types
In yard management it is possible to assign a location group, defined in the previous section, to a storage type or types in the warehouse. For example, a location
group may be defined as the parking areas in the west side of the yard; this could
be defined in the warehouse as a specific storage type or types. You can define a
yard location in configuration via the menu path IMG 폷 Logistics Execution 폷
Yard Management 폷 Yard Map 폷 Assign Storage Types To Yard Location
Groups. Each yard location has to be assigned to a location class, such as a parking
space, checkpoint, staging area, and so on. Figure 17.15 shows the configuration
for assigning a location group to a storage type.
Figure 17.15 Assigning Location Groups to Storage Types
This section has described the configuration of yard management. Now we’ll
examine the processes you will find when using yard management.
17.2
Yard Management Processes
Companies that use yard management want to manage inbound and outbound
movements in the yard. To do this the system provides several monitoring transactions that give management a total view of the yard. The first transaction we
will look at is the yard monitor.
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Yard Monitor
The yard monitor allows management to review all the movements occurring in
a particular yard. The monitor gives the user an opportunity to review inbound
shipments, outbound shipments, inbound deliveries, outbound deliveries, vehicles, departed vehicles, activities, and return deliveries. You can access the yard
monitor using Transaction LYRDM or by following the menu path SAP 폷 Logistics 폷
Logistics Execution 폷 Yard Management 폷 Yard Monitor. The initial screen provides a tab for each of the documents, and selection criteria are available for each
tab. Figure 17.16 shows the selection criteria for the Inbound Shipments tab.
Figure 17.16 Yard Monitor Selection Screen
Once the user has entered the required selection criteria, the yard monitor displays a hierarchy that shows a total for the different classes. The user can select a
class in the hierarchy, and the relevant documents will be displayed. Figure 17.17
shows the class hierarchy and the inbound deliveries for yard Y50.
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Figure 17.17 Yard Monitor Output
Alert Monitor
Management uses the alert monitor to view objects that are of concern. The transaction code for the alert monitor is LYRDA, and you can also find it by following
the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Yard Management 폷 Alert
Monitor. The transaction requires that the user enter a yard number, and then
the monitoring screen is displayed as shown in Figure 17.18. The alert monitor
shows a hierarchy for the chosen yard. Selecting an object in the hierarchy shows
the relevant documents. For example, in Figure 17.18, one document is shown
for vehicles without scheduling locations.
To ensure that the alerts show the events required by management, you can
maintain the alert thresholds and warnings while in transaction LYRDA. Either
press (Ctrl)+(F1) or click the Upper/Lower Limit Alert Configuration icon. This
displays a screen, as shown in Figure 17.19, where the users can amend the lower
and upper thresholds and the upper and lower warning levels for each object at
all yards or a specific yard.
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Figure 17.18 Alert Monitor Output
Figure 17.19 Alert Monitor Maintenance
Checkpoint
The checkpoint transaction allows users to perform activities on vehicles when
they are in the yard. For example, if a user wants to check a vehicle into the yard
or check a vehicle out of the yard, he uses this transaction. To access the checkpoint, use Transaction LYCHP or follow the menu path SAP 폷 Logistics 폷 Logistics
Execution 폷 Yard Management 폷 Checkpoint.
Figure 17.20 shows the main screen for the check-in part of the checkpoint tool.
The user can enter any selection criteria to display information on vehicles and
activities. If the user wants to enter an activity, he can click the Insert icon and
enter information such as the reference document type, that is, inbound delivery,
outbound delivery, return shipment, transfer order, or non-SAP document. He
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can then enter details such as the vehicle license plate, driver information, container information, and vehicle type. If a check-in, move, schedule, weighing, or
rejection is to take place, the user can click the appropriate icon.
Figure 17.20 Check-in Screen
Loading and Unloading
You perform the loading and unloading of vehicles is performed using Transaction LYLDP, or you can follow the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Yard Management 폷 Loading/Unloading Point. The transaction requires
the user to enter a yard, and then it displays a set of selection criteria as shown in
Figure 17.21.
When the relevant vehicles are displayed, the user can perform several activities
such as loading, weighing, and sealing by clicking the icons on the screen.
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Figure 17.21 Load Registration Overview
Scheduling Chart
The yard personnel can use Transaction LYSCH to print a scheduling chart of
events to take place over a specified period using the transaction LYSCH or do so
by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Yard Management 폷 Scheduling Chart. The transaction allows the entry of times that the
scheduling chart should be printed for. Figure 17.22 shows that the user can
enter specific times from the present time to a previous time period. The user can
also specify if he requires inbound, outbound, or both types of movements as
well as show cancelled events. This scheduling chart is useful for yard managers
as they plan the events that need to occur for the yard to operate efficiently.
Yard Inventory
The yard personnel can see at any time what the vehicle inventory of the yard is.
They can perform this task using Transaction LYVHC or find it by following the
menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Yard Management 폷 Yard
Inventory. The transaction shows the vehicle inventory for a specific yard. The
user has the option of entering selection criteria such as the vehicle stock status,
which can be empty, full, or partially full vehicles. Figure 17.23 shows an example of the yard inventory display.
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Figure 17.22 Yard Scheduling Chart Selection Screen
Figure 17.23 Yard Inventory Screen
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Business Examples—Yard Management
Now that we have looked at the processes of the yard management function, we
will now look at some relevant business examples.
17.3
Business Examples—Yard Management
Yard management is used to track materials that are not in the warehouse but are
located in trailers and vehicles that are waiting to be unloaded. The functionality
gives management at busy warehouses the ability to view the incoming movements and to manage those movements so that the yard and the warehouse operate efficiently.
Yard Management Processes
The yard management function offers a range of processes that give the user the
ability to successfully monitor and schedule movements that are inbound or outbound from the warehouse, increasing efficiency inside and outside of the warehouse.
Example
A distributor of automotive spare parts operated a major distribution facility in
Nevada that fulfilled orders for auto parts stores in the Western United States.
The facility received parts from automotive manufacturers as well as parts manufacturers across the United States and abroad. The facility was a 24-hour operation and received container-sized loads as well as packages and smaller deliveries.
The inbound delivery area was designed to have eight receiving docks that could
accommodate a single trailer. The outbound area was similarly designed but with
nine docks.
The facility was originally one of three distribution centers in the Western United
States, with others being in Portland, Oregon, and Phoenix, Arizona. To reduce
costs, the other warehouses were closed and all items were now sourced out of
the Nevada warehouse. The results of the other warehouses closing was that the
number of deliveries, both inbound and outbound, was more than the facility
could deal with in a normal two-shift operation, so a third shift was introduced to
deal with the number of trailers.
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The company used SAP WM, but the issues were outside of the warehouse, as
trailers were often parked at the facility for days waiting to be unloaded. This was
due to a lack of visibility on the part of the warehouse staff. The trailers were
parked wherever spaces appeared, and this did not give warehouse personnel any
idea of what trailers needed to be unloaded first. The same became true of the
outbound operation also. The warehouse would expect to be loading certain trailers for an outbound delivery, but they would still be stuck in the inbound parking
area waiting to be unloaded.
The company looked at several options to assist with the issues but decided to use
the yard management functionality in SAP ERP to provide greater visibility of the
vehicles in the yard. Because the issues were immediate, the company did not
perform a pilot project. The implementation immediately gave warehouse staff
the visibility they required to see which vehicles needed to be unloaded, and
using the scheduling function, they were able to produce a document for the day
that gave the staff the information they needed to deal with the incoming trailers.
17.4
Summary
Yard management is a tool that some companies need to efficiently deal with the
number of vehicles coming into and out of the yard before they reach the warehouse. The visibility the functionality provides is key to increasing the efficiency
of the warehouse when dealing with a large number of incoming and outbound
vehicles.
In Chapter 18, we will discuss some new developments in warehouse management.
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The warehouse management functionality of SAP ERP has evolved from a
simple locator system to a full suite of warehouse software that covers the
entire warehouse operation. New developments are helping to optimize
the use of labor and warehouse operation monitoring.
18
Developments in Warehouse
Management
Standard WM has evolved from the earliest functionality in SAP R/2, where it was
a good locator system, through the R/3 releases that incorporated putaway and
picking strategies, storage-unit management, wave picking, the warehouse activity monitor, SAPConsole, and RF transactions. SAP ECC 6.0 brings additional
functionality such as the Warehouse Control Unit.
Because more warehouse functionality is expected in later releases of SAP ERP
and SAP Supply Chain Management (SAP SCM), this chapter describes some of
the latest SAP developments available in warehouse management. Some warehouse operations use task and resource management (TRM), value-added services
(VAS), or Extended Warehouse Management (EWM).
Although these three areas are new compared with the standard WM, they are
integrated into common warehouse processes. Your company may already be
using manual functions that are similar to VAS or TRM. This chapter will help you
understand these developments and know how to help your company take
advantage of the functionality.
The next section examines the functionality of TRM and its integration with standard warehouse management.
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18.1
Task and Resource Management
TRM functionality allows warehouse staff to further maximize their efficiencies
by providing processes to help execute planned warehouse tasks. The TRM functions do not plan the warehouse work but help manage the work defined by the
planning function and manage the resources to perform the tasks. The functionality in TRM falls into five core areas:
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Resource management
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Request management
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Task management
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Route management
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Bin management
Let’s examine these in more detail now.
18.1.1
Definitions in Task and Resource Management
Although TRM functionality relates to tasks and resources that occur in the warehouse, the terms in TRM do not always relate directly to standard warehouse terminology. The terms included in this section are specific to TRM.
Site
The primary physical area defined in TRM is the site. This is not always directly
equivalent to a warehouse. A site can be a warehouse, part of a warehouse, or
many warehouses. It can also define an area that is not part of the traditional
warehouse, such as a parked trailer area or even warehouse offices.
You can define a site in TRM configuration by following the menu path IMG 폷
Logistics Execution 폷 Task and Resource Management 폷 Master Data 폷 General
Settings for TRM.
Figure 18.1 displays the configuration elements required to create a site. The site
number is a four-character field and can represent an area that may be a warehouse, part of a warehouse, or multiple warehouses. The site is a uniquely
defined physical area. The other fields to be filled in include the time zone, unit
of measure for time and distance, short text, and the number ranges for tasks,
resources, requests, and messages.
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Figure 18.1 Site Configuration for TRM
Site Map
After creating the site, you can define it via different physical properties. These
physical properties are defined as part of a site map. The site map allows the planning of efficient routes in the warehouse based on the physical definition. These
physical properties are not found in standard WM and require some explanation.
They are:
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Zones
This is a physical location within a site that is used for a specific function, for
example, a work center or pallet storage area.
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Nodes
A node can be used in two ways: as a physical node where material is placed
and as a logical node where resources pass. The logical node may be an entry
point or exit point. All physical nodes can be assumed to be logical nodes, but
logical nodes are never physical nodes.
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Obstacles
This is simply a physical object or barrier defined in the site as an area through
which resources cannot pass. This may be a wall or a rack of fixed equipment.
When the system determines a route for a resource to take, it plans around the
defined obstacle.
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Working areas
These are physical areas between two zones that are defined as areas where
resource planning occurs. For example, a working area may be the physical
area between the goods receiving dock and the picking area.
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Defining a Zone
You can configure a zone in the TRM function area of the IMG by following the
menu path IMG 폷 Logistics Execution 폷 Task and Resource Management 폷 Master Data 폷 Site Map Management 폷 Define Zones, Operations and Serving
Zones.
Figure 18.2 shows the zones that are defined for site 0001. The zone can be given
a 10-character identifier, and a zone function must be defined as well. The function can be set as a pick-up and drop-off point, work center, storage area, or
empty pallet zone.
Figure 18.2 Zone Definition for a Site
Defining a Node
You can configure a node in the TRM area of the IMG. The node cannot be
defined prior to the zone creation. You can find the transaction by following the
menu path IMG 폷 Logistics Execution 폷 Task and Resource Management 폷 Master Data 폷 Site Map Management 폷 Define Nodes and Entries/Exits to/from
Zones.
Figure 18.3 shows the definition of each node for the site. The node can be given
a 14-character identifier. Use X, Y, and Z coordinates identify the node within the
site and allow you to locate the node in a three- dimensional context.
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Figure 18.3 Definition of Nodes for a Site
Defining a Zone Entry/Exit
A node can be defined as an exit, entry, or both for a zone. The menu path is the
same as for defining a node: IMG 폷 Logistics Execution 폷 Task and Resource
Management 폷 Master Data 폷 Site Map Management 폷 Define Nodes and
Entries/Exits to/from Zones.
Figure 18.4 Definition of Zone Entry and Exit Points
Figure 18.4 shows the node for the zone. The dedicated direction for the node is
defined as an entry, but this can be changed to exit or to both entry and exit. This
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allows the system to choose a node with the correct direction. For example, if a
route from a storage bin to the loading dock requires a path through a node, that
node has to be an entry or both an exit and an entry.
Defining an Obstacle
An obstacle is an area that a resource cannot pass through, such as a wall. The
planned route must take an obstacle into account and find a pathway around it.
The obstacle should be defined to identify the physical definition of the object.
Example
If the obstacle is a wall, then nodes in each corner should define the wall.
You can configure the obstacle with a transaction found via the menu path IMG 폷
Logistics Execution 폷 Task and Resource Management 폷 Master Data 폷 Site Map
Management 폷 Define Obstacles.
Figure 18.5 shows that each obstacle defined for the site is given an obstacle
type—Wall or Rectangle in this case—and is defined by a series of nodes that
have specific coordinates. Therefore, the route planning will avoid the obstacle in
determining the route for the resource.
Figure 18.5 Definition of Obstacles in a Site
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Defining a Zone Group
A zone group is simply a grouping of zones. You create zones to more easily
define the working areas between zones. You can only assign zones to the zone
group after the zones have been defined.
To configure the zone group, you can use the transaction found via the menu path
IMG 폷 Logistics Execution 폷 Task and Resource Management 폷 Master Data 폷
Site Map Management 폷 Define Zone Groups and Assign Zones.
Figure 18.6 shows the defined zone group and the zones that are assigned. The
zone group can be entered with up to 10 alphanumeric characters.
Figure 18.6 Assignment of Zones to a Zone Group
Defining a Working Area
The working area is the physical area between two zones or zone groups that is
defined as an area where resource planning occurs. You can configure a working
area with the aid of the zones and zone groups that define the working area.
To configure the working area, you can use the transaction found via the menu
path IMG 폷 Logistics Execution 폷 Task and Resource Management 폷 Master Data 폷
Site Map Management 폷 Define Working Areas.
Figure 18.7 shows the working areas that have been defined for a site. A working
area can be defined as the area between a source zone or a source zone group and
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a destination zone or zone group. When defining a working area, you have the
option to allow a single path from source to destination; that is, the resource can
pass from the source to the destination only or be allowed in both directions.
Figure 18.7 Definition of Working Areas Within a Site
Defining a Resource
TRM defines a resource as an object capable of receiving and executing tasks. This
resource can be a warehouse employee or a piece of warehouse equipment. You
can create the resource using the resource element maintenance wizard, Transaction LRSW, which you can find by following the menu path SAP 폷 Logistics 폷
Logistics Execution 폷 Task and Resource Management 폷 Resource Element
Maintenance Wizard.
Figure 18.8 shows the first screen of resource creation, requiring that you enter
the site and activity. The resource is only viable in one site. If the resource works
in two sites, then it must be duplicated.
Figure 18.9 shows the entry of the resource. The resource element can have an
identifier up to 20 characters long. The element or worker’s name can also be up
to 20 characters long. On this screen, you select whether the resource is a worker
or a device.
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Figure 18.8 Using the Resource Element Maintenance Wizard to Create a Resource
Figure 18.9 Entry of Resource Element and Element Name
Figure 18.10 shows the element type that has been chosen for the resource. In
this example, the resource allocated is a forklift truck driver, but it could have
been a picker, driver, packer, and so on.
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Figure 18.10 Element Type Entry for Creation of Resource
On the next screen for creating the resource, you can add optional attributes. The
one field in this screen that should be filled is the Role Check field. There is an
option to allow no role checks, which means the resource can be used in any
working area. If you choose to allow no role check, then allocating the resource to
working areas is not necessary.
If the role check is selected, the next screen allows the resource to be added to
working areas and for those areas to be prioritized for the allocation of tasks.
Figure 18.11 shows that this resource has been added to three working areas and
that those working areas are prioritized. Priorities are manually entered. The
other tabs on this screen relate to the types of handling units (HUs) that the
resource can work with and the priority given to working with the various HU
types. The last tab is for element types this resource can work with. For example,
a resource can be allocated as a forklift driver and a material picker.
After the entries for this screen are made, the resource details are completed, and
the resource has been created.
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Figure 18.11 Entry of Allocated Working Areas for a Resource
18.1.2
Resource Management
TRM’s resource management functionality is one of its core areas. The resource
management function manages the resources, whether they are devices or personnel, and can allocate and reallocate the orders that are assigned to the
resource. The resource management configuration allows the definition of
resource types and resource elements that can be used to create resources.
In configuration, the resource management transaction defines all of the functionality used in creating resources. You can find the transaction by following the
menu path IMG 폷 Logistics Execution 폷 Task and Resource Management 폷 Master Data 폷 Resource Management.
Defining Resource Element Types
The element type is used to create a resource, with options for a device, such as a
forklift or crane or a worker.
Figure 18.12 shows the resource elements that have been configured for site
0001. The elements are in two categories: element types for the device category
and element types that can be assigned for workers.
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Figure 18.12 Defining Resource Element Types for a Site
Defining Resource Types
A resource type is used for devices such as cranes and forklifts. In this configuration, you can enter the speed of the device so that the route can be timed and
scheduled.
Figure 18.13 shows the resource types with their respective velocities in meters
per second (M/S). This velocity unit of measure can be changed. The node
entered for the resource type is the default node from which the resource receives
its first task after logging on to the system.
Figure 18.13 Definition of Resource Types for Site
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Each resource type has components that when combined make up the resource
type. The resource type HC_EQU shown in Figure 18.13 can be defined as a
worker and a forklift truck. Therefore, the resource type must be defined in configuration to have components, in this case a driver and a forklift truck.
Figure 18.14 shows the two components: the forklift truck and the forklift truck
driver assigned to the resource type. Therefore, when the resource type is used to
define a resource, these two components must be defined as well.
Figure 18.14 Two Components Defined for a Resource Type
Each resource type can be allocated to certain working areas. For example, a forklift truck may be a certain size and only be allowed in certain areas of the warehouse. Therefore, the resource type for this forklift may be restricted to certain
working areas.
Figure 18.15 shows the working areas that have been assigned to resource type
HC_EQU. The resource type cannot be allocated to working areas not defined in
this configuration.
One more definition of the resource type that you can configure is capacities. The
resource type cannot hold or move an infinite amount of material in each task, so
the capacity of the resource type is configured for each handling unit that it can
accommodate.
Figure 18.16 shows the number of HUs the resource type can move or carry. In
this example, the resource type has a capacity of 40 small boxes or 1 wire basket.
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Figure 18.15 Allocation of Working Areas to a Resource Type
Figure 18.16 Capacities Configuration for a Resource Type
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18.1.3 Request Management
The request management function controls the requests that arrive in TRM for
the movement of material. The request is derived from the transfer orders created
in WM. The transfer order requests that material be moved from one storage bin
to another.
The scheduler function within the request management function moves the
request to task management when required. When the request is then transferred
to the task management function, the program breaks down the request into its
individual elements.
After the resources have completed the task, the request management function
collects the confirmation, and final confirmation of the move of the material is
recorded in the transfer order. The request is removed from the request management function.
18.1.4 Task Management
When the request is moved from request management to task management, it is
broken down into individual tasks. The request may contain several individual
tasks. You can create a number of scenarios when converting the requests to
tasks. Let’s take a look at these now.
One Request—One Task
This is a very simple request, for example, one that requires the movement of one
pallet from storage bin YXZ to storage bin 123. This simple request may involve
moving a pallet of material from high-rack storage to the open storage type.
One Request—Several Tasks
This also may be viewed as a simple request, for example, moving a pallet to a
high rack. However, this request may comprise two tasks in TRM: the first task to
remove the pallet on a forklift to the rack and a second task to use a larger forklift
to stack the pallet in a high rack.
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Several Requests—One Task
If there are several transfer orders to move material to an open storage type, this
may be performed with one task because the material can be moved on one pallet.
Several Requests—Several Tasks
With this scenario, several transfer order items, or requests, may require picking,
packing, and then moving to the loading dock. This requires several tasks, such as
picking, placing the material in packing material, and using a forklift to move the
packed material to the loading dock.
Creating a Task
Tasks are created from the requests that are forwarded from standard warehouse
management. The request management function sorts, schedules, and releases
the requests to task management. Task management then identifies and creates
the tasks based on the routes necessary to fulfill the request. The tasks are placed
in the task pool and resources are assigned to complete the task and fulfill the
request.
Task Selection by Resource
The resource is assigned several tasks. The resource uses a presentation device to
communicate with the TRM function in the warehouse. This may be a radio frequency (RF device) that the worker resource is using on the warehouse floor.
Three modes can be used to select tasks: user selected, system guided, or semisystem guided. In the system-guided option, the task-management function
assigns the highest-priority task.
18.1.5 Route Management
Route management contains the functions that determine the route information
and calculates route duration and route priority. The basis of route management
is the entries already described in this chapter, for example, zones, nodes, working areas, and obstacles.
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Task and Resource Management
The route is simply the course that a resource travels between the start and end
points. When tasks are being created, the route management function creates the
route for a particular resource type to take. This may be a mandatory route
because of height or safety restrictions.
Mandatory Routes
You create mandatory routes in configuration. You can find the transaction by following the menu path IMG 폷 Logistics Execution 폷 Task and Resource Management 폷 Control Data 폷 Define Mandatory Routes.
Figure 18.17 shows that for all HUs, the route in site 0001 between zones
001SQ1ZN01 and 902ZN01 must pass via zone PNDN02. The mandatory route
between the same two zones may be different for varying HUs if these are
required.
Figure 18.17 Definition of Mandatory Route in Route Management
Route Exceptions
Route exceptions are used when a route between two nodes has been calculated,
but due to the nature of the resource type, the route is either not valid or the distance of the route is not as calculated.
You can enter this configuration via the menu path IMG 폷 Logistics Execution 폷
Task and Resource Management 폷 Control Data 폷 Define Route Exceptions.
In Figure 18.18, the route between nodes WCND1 and EPZND has been configured for an exception for resource type PICK_TPY, which is a warehouse picker.
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This may be needed because a picker cannot pass down a particular aisle because
of safety concerns and must take a longer route. If the picker could not take that
route, it would be flagged as invalid in this transaction and not selected by the
route management function.
Figure 18.18 Defining Route Exceptions
18.1.6 Bin Management
The storage bins in standard warehouse management are allocated to storage
types and storage sections. However, within the TRM function, the site map is
created based on X and Y coordinates. Therefore, you need to assign these types
of coordinates to the storage bins.
The transaction to set the X and Y coordinates for warehouse storage bins is
LSET_BIN_COORDINATES. You can find it by following the menu path SAP 폷
Logistics 폷 Logistics Execution 폷 Task and Resource Management 폷 Storage Bin 폷
Maintain Storage Bins by Selection.
Figure 18.19 Entering Coordinates for Warehouse Storage Bins
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Task and Resource Management
Figure 18.19 shows the entry of X and Y coordinates for a warehouse storage bin.
The storage bin is allocated to a zone, and the coordinates identify the storage bin
as an item into the site map.
18.1.7 TRM Monitor
The TRM monitor is the transaction that keeps SAP WM aware of the situation
within the TRM function with respect to transfer orders, inbound and outbound
deliveries, tasks, and resources. The transaction for the monitor is LTRMS and
you can find it by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷
Task and Resource Management 폷 Monitor.
Figure 18.20 shows the initial selection screen for the TRM monitor. The monitor
has screens for groups, outbound deliveries, inbound deliveries, transfer orders,
transfer order items, tasks, and resources.
Figure 18.20 TRM Monitor Initial Selection Screen
In this section, we examined the functionality available in task and resource management. The next section discusses the processes available in value-added services.
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18.2
Value-Added Services
Value-added services (VAS) are operations performed on materials that improve
their value, functionality, or usefulness. These services include repacking, tagging, price marking, labeling, and shrink-wrapping. This generally occurs in the
warehouse prior to an outbound delivery to a customer.
You can create VAS orders that instruct warehouse staff to perform certain tasks.
These tasks may be part of a VAS template that is used for some materials.
18.2.1
Configuring VAS
You need to complete several configuration steps before using VAS. These
include defining a VAS work center and defining VAS for the warehouse. Let’s
explore configuration in detail now.
Defining a VAS Work Center Profile
A VAS work center is a location where VAS activities, such as packing or labeling,
are performed. You should set up these work centers in configuration via the
menu path IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Value Added
Services 폷 General VAS Settings 폷 Define VAS Work Centers.
Figure 18.21 Defining VAS Work Centers
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Value-Added Services
Figure 18.21 shows the definition of a VAS work center in relation to a warehouse, storage type, storage bin, plant, and storage location. You can enter additional information for the work center, but the functionality for the additional
information will not be available until after release ECC 6.0.
Defining VAS Settings for the Warehouse
For VAS to operate in a warehouse, you need to make some settings for the VAS
functionality. You make these settings configuration by following the menu path
IMG 폷 Logistics Execution 폷 Warehouse Management 폷 Value Added Services 폷
General VAS Settings 폷 Define VAS for Warehouse.
Figure 18.22 shows the basic settings for the warehouse in which VAS operations
will occur. These settings are:
왘
Time unit of measure
Seen in Figure 18.22 as Time UoM, this is the basic unit of measure used for the
VAS orders in this warehouse.
왘
Procedure
This is the procedure that determines which VAS template to use. The procedure is configured in the IMG.
왘
Automatic exit from VAS after VAS order confirmation
If this checkbox (AutVASExit) is selected, a transfer order from the work center
to the next destination is automatically created when the last of the VAS orders
in the work center has been confirmed.
왘
Internal movement type
This field (Int.MvType) is the transfer order movement type to be used in this
warehouse for material when it is transferred between work centers. For
example, an order may have to be moved from a work center that labels to a
work center that shrink-wraps the material on the pallet.
왘
Movement type for work center to final outbound destination
This field (FEx.MvType) is the transfer order movement type used in this warehouse for material sent from the work center to the final outbound destination.
왘
Final putaway movement type
This field (FPt.MvType) is the transfer order movement type to be used in this
warehouse for material sent from the work center to the final putaway location.
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Figure 18.22 Defining VAS Settings for a Warehouse
Defining these movement types for each warehouse ensures that the correct
movements will be made when material is moved with VAS orders.
Defining the Procedure for VAS Template Determination
This procedure determines the VAS template to be used. A VAS template enables
instructions to be reused for different documents with the same conditions.
Therefore, you can create several templates to create orders for different situations without having to enter the conditions each time. The procedure is based on
the access sequence and determination type used in areas such as price determination in SD or batch determination in MM.
Condition types, based on access sequences using fields in condition tables,
define the procedure.
Figure 18.23 shows that six procedures have been created for the VAS template
determination. Each of these procedures is based on a set of sequenced condition
types. You make these configuration settings by following the menu path IMG 폷
Logistics Execution 폷 Warehouse Management 폷 Value Added Services 폷 VAS
Template Determination 폷 Define Procedure for VAS Template Determination.
The usage field P defines the procedure for packing object determination. The
application PO represents the packing object. To review the condition types that
make up the procedure, select the procedure and select the Control option in the
dialog structure as shown in Figure 18.24.
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Value-Added Services
Figure 18.23 Procedures for Determining VAS Templates
Figure 18.24 Condition Types Defined for VAS Determination Procedure
Figure 18.24 also shows the condition types used in sequence in the procedure to
determine the VAS template.
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18.2.2 Creating the VAS Template
To define the VAS template, use Transaction LVAST01 or follow the menu path
SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Value Added
Services 폷 Master Data 폷 VAS Template 폷 Create.
Figure 18.25 shows the details entered when creating a VAS template. The
attributes include:
왘
Execution Method
This refers to the execution of a VAS order. There are three options: WCNTR
while in the work center, TOEXGP during the execution of a transfer order for
a group of items, and TOEXIT during the execution of a transfer order for a single item.
왘
Template Sequence
This entry allows the orders to be sequenced in order when they are displayed
at the work center, depending on the template from which they are created.
The template sequence is 1 for VAS template 76, and 2 for VAS template 77.
Orders created with template 76 are sequenced before orders created with
template 77.
왘
Instruction Control
This field determines what is displayed in the work instructions of any VAS
order based on this template. There are three options: A to display all components in the packing instructions, B to not display the packaging items, and C
where the instructions are to be displayed on the text.
왘
Standard Duration
This value represents the time it should take to complete a VAS order based on
this VAS template.
왘
Total Weight
This field specifies the total weight of the handling unit, including the weight
of both the packed materials and the packaging materials.
Work center information is entered to allow the use of work centers where the
VAS template will be valid and with the priorities given to those work centers.
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Value-Added Services
Figure 18.25 Creation of VAS Template: Transaction LVAST01
18.2.3 Creating a VAS Order
You create a VAS template to create VAS orders easily and efficiently. You can create the VAS order with reference to a work center or without reference. To create
a VAS order for a work center, use Transaction LVASWC02; to create a VAS order
with no reference, use Transaction LVASWOR.
Using Transaction LVASWOR, you can create a VAS order if you know the VAS
template. You can find Transaction LVASWOR by following the menu path SAP 폷
Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Value Added Services 폷 Processing VAS Orders 폷 Create without Reference.
Figure 18.26 shows the initial screen for creating a VAS order without using a reference. Data required to create an order with Transaction LVASWOR includes the
warehouse number, work center number, and a valid VAS template number.
Once these are entered, click the Execute VAS button to create the VAS order.
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Figure 18.26 Initial Screen for Creating a VAS Order Without Reference
Figure 18.27 shows the details of the created VAS order 10201. The main part of
this order shows the work instructions the warehouse staff uses to execute the
VAS order. The order shows three steps for the staff to follow, with special
instructions on packing and labeling for this material.
Figure 18.27 Details of a VAS Order
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Value-Added Services
18.2.4 VAS Monitor
Warehouse managers can get an overview of the status of VAS orders at any time
with the VAS monitor, accessed via Transaction LVASM. You can find this by following the menu path SAP 폷 Logistics 폷 Logistics Execution 폷 Internal Whse Processes 폷 Value Added Services 폷 VAS Monitor.
Figure 18.28 shows the complete picture of the VAS orders for warehouse 001.
Currently, according to the VAS monitor, there is only one VAS order 10201
which was created without reference. The monitor allows the details of any of the
orders to be displayed.
Figure 18.28 Detail Screen of the VAS Monitor: Transaction LVASM
18.2.5 VAS Alert Monitor
You can access the VAS alert monitor from the VAS monitor or via Transaction
LVASA. The alert monitor can bring to light any actual and potential problems
regarding VAS orders. The alert monitor shows unprocessed VAS orders, issues
with regards to expected versus actual bin stock, and VAS orders that are missing
transfer orders. VAS alerts can be configured in the IMG.
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18.2.6 VAS and TRM
TRM supports the VAS function. For the interaction to be complete, it is important
to configure the VAS work centers as work center zones in TRM. The movements
to and from a VAS work center are routes in the TRM function.
This section described the functionality within the VAS process. In the next chapter we’ll examine the Extended Warehouse Management (EWM) functionality.
18.3
Summary
As warehouse operations become more complex and technology provides more
functionality to control and monitor warehouse operations, the software running the warehouse has to be more than a simple locator system. Warehouse
management functionality now incorporates such elements as task and resource
management, value-added services, and all the Extended Warehouse Management functions such as slotting and rearrangement.
The next chapter examines the processes and functionality that can be found in
Extended Warehouse Management (EWM).
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Extended Warehouse Management (EWM) provides functionality for efficiently managing complex high-volume and high-velocity warehouses.
19
SAP Extended Warehouse Management
SAP Extended Warehouse Management (SAP EWM) is part of SAP SCM and can
be integrated with SAP WM to provide a seamless warehouse system. The basic
warehouse operation can be efficiently operated using SAP WM, but in warehouses that have high volume or a complex process, the EWM functionality offers
a greater degree of visibility and efficiency.
19.1
Introduction to SAP Extended Warehouse Management
Extended Warehouse Management is part of SAP SCM and extends the functionality of basic SAP WM. EWM can use the organizational structure from SAP WM
and goes into greater depth to give additional functionality. EWM can integrate
with SAP WM so that documents created in the SAP ERP system trigger events in
the EWM system.
19.1.1
History of EWM
Extended Warehouse Management started as part of the SAP R/3 Enterprise
Release in 2004. The functionality included yard management, cross-docking,
and value-added services. EWM was introduced as a separate standalone product
as part of SAP 5.0 in 2005. Since then, EWM has been extended to include labor
management and RFID functionality released as SAP EWM 5.1 in 2007. The latest
release is called SAP EWM 7.0, and it includes production supply and graphical
warehouse layout.
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19.1.2
Integrating SAP EWM and WM
Extended Warehouse Management is a separate component as part of the SAP
SCM product. It does not replace SAP WM but can be used to manage large and
complex warehouses with high volume and velocity. EWM can be used in the
same environment as SAP WM, and many SAP customers have decided to operate
in this fashion.
19.2
Organizational Structure
The organizational structure of the warehouse can be set up the SAP WM system
and then linked to the EWM system. The warehouse number in EWM is a fourcharacter field, whereas it is only a three-character field in SAP ERP. However the
EWM system has additional structures in the warehouse such as activity areas.
19.2.1
Activity Areas
The activity area is a structure in EWM that is a group of storage bins. The bins
are grouped together for a reason such as stock removal or stock placement. A
storage bin can be assigned to more than one activity area.
19.2.2 Product Master
The product master is the EWM version of the material master from SAP ERP. The
product master is derived from the material master but has additional information relevant to EWM. The product master has an additional view called Warehouse Management Execution. Some of the additional fields include the handling
indicator (which is used describe how a material is moved from one location to
another), the warehouse material group, warehouse storage condition, an indicator indicating whether an item is likely to be pilfered, quarantine period, and
catch weight (which identifies whether a material is managed using catch weight).
19.2.3 Transportation Data
Extended Warehouse Management data is used in route determination, and the
transportation data in EWM reflects this. Transportation lanes are created as a
link between two locations, which can be plants, customers, or vendors. The
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Organizational Structure
transportation lane defines which products can be shipped between two locations
and which method of transport can be used.
Transportation Zones
A transportation zone is created when a transportation route is created. The zone
can determine which locations are included, and once data is assigned to the
transportation zone it is transferred to all of the locations in the zone. This
reduces the amount of data that needs to be entered for each zone.
Transportation Route
The transportation route is used to describe the characteristics of a physical route
between two locations. The transportation route is used in determining the most
relevant route during route determination. A transportation route has several
characteristics such as legs, lead times, and shipping conditions.
19.2.4 Resources
In EWM a resource is an object that performs tasks in the warehouse. A resource
can be a piece of equipment, such as a forklift, or a warehouse employee.
Resource Types
You can group similar resources together as resource types in EWM. These
resource types can be assigned to bin types, so that a resource type, such as a certain type of forklift, can only have access to certain types of bin, based on aisle
width.
Queues
The queue is used in the assignment of warehouse orders. A warehouse order is
assigned to a queue, and the resource group is assigned to a sequence of queues.
A warehouse order can then be assigned to a particular resource.
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19.3
Documents in SAP EWM
Extended Warehouse Management has several documents that are used in the
warehouse. EWM documents are found in the outbound delivery process,
inbound delivery process, and internal warehouse tasks.
19.3.1 Warehouse Tasks
There are two types of tasks in the warehouse: product warehouse tasks and handling unit warehouse tasks. A product warehouse task performs a movement of
stock in the warehouse. These tasks are used for picking, putaway, and internal
warehouse movements. A handling unit warehouse task is used to move an entire
handling unit within the warehouse.
19.3.2 Warehouse Orders
A warehouse order is a combination of several warehouse tasks that are given to
a warehouse resource to perform in a specific period of time. A warehouse task is
assigned to a warehouse order based on a set of rules.
19.3.3 Inbound Delivery Notification
When an inbound delivery is processed in the SAP ERP system, the delivery is
checked to see if it is relevant for an EWM warehouse. If it is, then an inbound
delivery notification (IDN) is created. The IDN is usually activated in the background, and this creates an inbound delivery document in EWM.
19.3.4 Outbound Delivery Request
When an EWM-relevant outbound delivery document is processed in SAP ERP, a
document is created in EWM called an outbound delivery request (ODR). Once
activated, the ODR creates an outbound delivery order in EWM. A goods issue
can be performed on the outbound delivery order, and this creates another document in EWM called the EWM outbound delivery, which can be called the final
delivery.
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Processes in SAP EWM
19.4
Processes in SAP EWM
Several processes in EWM create efficiencies in the warehouse. The EWM system
provides functionality for inbound and outbound deliveries that help reduce the
complex warehouse processes in high-volume and high-velocity warehouses.
19.4.1 Inbound Processing
The inbound process in a warehouse commences when the SAP ERP system
receives an advance ship notice (ASN). It can be transferred to EWM, and an
inbound delivery notification (IDN) is created. It is possible to activate the IDN, as
well as reject the IDN if required by the vendor. An inbound delivery in EWM
can be created once the IDN is activated. The inbound delivery includes data such
as the product data, quantity to be delivered, movement data, and status. When
the vehicle that contains the product arrives at the warehouse for the inbound
delivery, the transportation unit (TU) is registered in the yard management function. If the information about the TU was sent in the original ASN, then the TU
can be produced automatically when the inbound delivery is transferred from
SAP ERP to EWM.
When scheduled, the vehicle can be unloaded, and the status of the TU can be
changed manually when the unloading is complete. The physical condition of the
product can be inspected, adjustments made if necessary, or the delivery can be
rejected. The inbound delivery can be goods-receipted manually or automatically
when the putaway warehouse task has been completed. The goods receipt in
EWM is then transferred to the SAP ERP system.
19.4.2 Outbound Processing
The outbound process can begin with a sales order creation in SAP ERP or the SAP
CRM system. An outbound delivery is generated, and the process begins in the
warehouse. The outbound delivery is forwarded to the EWM system, and an outbound delivery request (ODR) is generated. The ODR can be activated, and an
outbound delivery order (ODO) is created. After the creation of the ODO, you
can manually create warehouse tasks (WTs), and the warehouse order (WO) can
also be created. The physical tasks of picking the product, packing, kitting, staging, and loading can also start.
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After the products have been loaded onto a vehicle, the ODO can be goodsissued. The final outbound delivery document is generated and transferred to the
SAP ERP system.
19.4.3 Internal Warehouse Movements
Several internal movements can be performed in EWM, such as replenishment,
rearrangements, ad hoc movements, and posting changes.
Replenishment
The replenishment process in EWM takes product from a reserve area and moves
it to a forward picking position in the warehouse. There are five types of replenishment: planned replenishment, order-related replenishment, crate part replenishment, direct replenishment, and automatic replenishment.
Rearrangements
During the rearrangement process the system compares how the product should
be placed in the warehouse, based on information entered, with how the product
is actually stored in the warehouse. For example, if a product was identified as a
slow-moving item but now is in demand, the system will rearrange the product
so that the bin locations are located in an area with fast moving stock.
Ad Hoc Movements
Sometimes product is in a bin location that is not close to other bin locations
where the product is usually stored. In this instance an ad hoc movement may be
instigated so that the warehouse staff can move the product to a different bin
location
Posting Changes
A posting change can be driven from the SAP ERP system or in the EWM system.
A posting change notice can be created in SAP ERP and transferred to the EWM
system as a posting change request.
This section has described some of the processes available in the EWM system.
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Summary
19.5
Summary
SAP EWM extends the functionality of SAP WM so that companies with complex
high-volume warehouses can operate more efficiently. The EWM processes can
be triggered by events in the SAP ERP system, and many companies have implemented EWM as an add-on to their current SAP ERP implementation.
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After learning about WM, its functionality and configuration issues, it’s
now time to put it in action and move forward.
20
Conclusion
In the preceding chapters we discussed each element of the major functionality of
SAP WM. In this conclusion, we’ll examine the lessons learned and make suggestions for further skill development.
20.1
Lessons Learned
In the preface, we noted that this book should be of interest to people other than
those who work directly with SAP WM, including those who work in related
application areas such as Materials Management (SAP MM), Production Planning
(SAP PP), and Sales and Distribution (SAP SD). We are confident that the integration between SAP MM, SAP WM, and SAP SD should now be clear to you.
Warehouse management does not exist in isolation. The material master is the
repository of the warehouse data for each material. The SAP MM functionality
creates the goods receipts and the movement of material into a storage location
that triggers a movement into the warehouse, as does a goods receipt from production.
The outbound deliveries created via SAP SD sales orders trigger the material picking and movement of the material to the goods issue in the warehouse. It is
important for those of you working with SAP WM to have a solid understanding
of the way it is fully integrated with the other supply chain modules.
Chapter 2 explained the key warehouse structures, and this is basic knowledge
that should be learned thoroughly. Understanding the structure and components
of the warehouse is vital to understanding how material is stored and moved.
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20
Conclusion
One important lesson to take away from this book is the role of the transfer
requirement and the transfer order, as described in Chapter 5. The transfer order
moves material in the warehouse—whether it is putaway to a rack or a stock pick
for an outbound delivery. Understanding how the transfer order processes the
movement is critical.
The picking and placement strategies may not always seem logical. However, the
different strategies are key to efficient warehouse operation. Chapters 9 and 10
explained the various picking and putaway strategies. We suggest talking to your
warehouse managers about how they use these strategies to optimize warehouse
efficiency.
Chapter 13 described electronic data interchange (EDI), which although not specifically part of SAP WM is a subject that users and consultants alike should
understand. The use of EDI documents, especially advance shipping notifications
(ASNs), is particularly important to the warehouse.
The final chapters in the book reviewed the new technologies being adopted in
warehouses. Everyone has seen bar codes and bar code readers, but the recent
commercial use of radio frequency identification (RFID) technology has the warehousing community wondering how this will make the warehouse more efficient
and how much it is going to cost. We have tried to demystify and clarify these
new technologies to help you make your own decisions regarding their adoption
and use.
Chapter 15 described SAP Auto-ID Infrastructure (SAP AII), developed for use
with RFID and warehouse transactions. Although use of this technology is not
widespread, any knowledge about it and about the SAP solution will be helpful as
the commercial adoption of RFID becomes more rapid.
Chapter 17 examined the functionality of yard management, and although it is not
used by every company that has implemented warehouse management, it is useful for businesses that need visibility of large numbers of trailers in the yard.
Chapter 18 examined three areas that are not standard in SAP WM but are
becoming more appealing to traditional SAP WM users. These are task and
resource management (TRM) and value-added services (VAS), and Extended
Warehouse Management. These topics will become more important in the future,
and we advise you to keep tracking their development.
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Future Directions
20.2
Future Directions
As you come to the end of this book, we hope you have learned many new
aspects of warehouse management that you may not have seen or heard of
before. No one can predict what will be released in SAP ECC 7.0 and beyond or
in future releases of SAP SCM with even more extended warehouse management.
What is clear is that a solid foundation of knowledge of the current standard SAP
WM system is a crucial key to success in the future. The advancements in warehouse management will build on the standard functionality. Improvements to
transactions may be part of future releases, but the standard functionality is sure
to remain.
The new functions of value-added services (VAS) and task and resource management are likely to become more mainstream in warehouse management, so
understanding the key elements of these modules now will be useful in your
future implementations. Although some of you may not have access to an SAP
Supply Chain Management (SCM) system, it is worth rereading Chapter 19 to
truly understand the functionality that exists in Extended Warehouse Management (EWM). We encourage you to educate yourself further about this as later
releases become available.
And with that thought we would like to conclude this book. We hope you found
it useful and valuable for your work and that you will continue using it as a reference guide as and when needed.
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Appendices
A
Bibliography ........................................................................... 561
B
Glossary .................................................................................. 563
C
The Author .............................................................................. 569
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A
Bibliography
Bacheldor, Beth. “SAP Introduces Software for Product Tracking.” RFID Journal,
March 2007.
Carter, M. Brian et al. SAP Extended Warehouse Management: Processes, Functionality and Configuration. Boston: SAP Press, 2010.
Emmett, Stuart. Excellence in Warehouse Management: How to Minimize Costs and
Maximize Value. John Wiley & Sons, 2005.
Florida State University. “Hazardous Materials Handling and Storage OP-G1.4.2.” Environmental Health and Safety Policies, 2007.
Frazelle, Edward. World-Class Warehousing and Material Handling, McGraw-Hill,
2001.
Gue, Kevin R. “Crossdocking: Just in Time for Distribution.” Graduate School of
Business & Public Policy, Naval Postgraduate School, May 2001.
Harrington, Lisa. “Managing Inside and Outside the Box.” Inbound Logistics, Thomas Publishing Group, April 2005.
Intermec Technologies Corporation. Practical Uses for RFID Technology in Manufacturing and Distribution Applications. Intermec Technologies Corporation, 2007.
Jenkins, Creed H. Modern Warehouse Management. McGraw-Hill, 1968.
Landt, Jeremy. “Shrouds of Time: The History of RFID.” Association for Automatic
Identification and Mobility, October 2001.
Moose, Chris. “Make Your Picking Moves in SAP WM Strategically.” SCM Expert,
Wellesley Information Services, March 2006.
Mulcahy, David E. Warehouse Distribution and Operations Handbook. McGrawHill, 1993.
Napolitano, Maida. “Warehouse Management: How to be a Lean, Mean CrossDocking Machine.” Logistics Management Magazine, January 2007.
Napolitano, Maida. “Making the Move to Cross Docking.” Warehousing Education and Research Council (WERC), 2000.
561
A
Bibliography
Navas, Deb. “ERP WMS Solves Integration and Improves Performance.” Supply
Chain Manufacturing and Logistics Magazine, September 2004.
Port of Los Angeles. “Warehouse No 1.” Board of Harbor Commissioners of the
City of Los Angeles, December 2001.
Swedberg, Claire. “Virgin Uses RFID for Plane Parts.” RFID Journal, August 2005.
Tompkins, James A. Warehouse Management Handbook. 2nd ed. Tompkins Press,
1998.
Trebilcock, Bob. “The ROI from RFID.” Modern Materials Handling Magazine, February 2007.
UK Parliamentary Office of Science and Technology. “Radio Frequency Identification,” Postnote. The Parliamentary Office of Science and Technology 225 (2004).
Wal-Mart Corporation. “Corporate Facts: Wal-Mart by the Numbers.” Wal-Mart
Corporation, November 2006.
Wal-Mart Corporation. “Continued Expansion of Radio Frequency Identification
(RFID).” Wal-Mart Corporation, November 2006.
Williams, David H. “The Strategic Implications of Wal-Mart's RFID Mandate.”
Directions Magazine, July 2004.
562
© 2014 by Galileo Press Inc., Boston (MA)
B
Glossary
ABC analysis This analysis is assigned to a
material, based on configuration, to indicate how often the material must be
counted each year.
active RFID tag This battery-powered tag
has an active transmitter onboard.
annual physical inventory A company performs this counting of assets and stock to
start the fiscal year with an accurate financial picture.
available stock This is the same as unrestricted stock, that is, material that is free to
be sold.
batch A batch is a quantity of material
grouped together for various reasons, often
because the materials have the same characteristics and values.
batch picking Batch picking is similar to
picking a single order, except that the
picker picks a batch of orders at one time.
blocked stock This term refers to material
that has arrived at the receiving dock damaged and is not available for sale.
bulk storage putaway strategy This strategy is used to place incoming material into
bulk storage.
consignment stock Consignment stock
comprises material owned by a vendor but
stored at the customer’s premises.
count into several smaller inventory counts
that are performed over the year. The goal
is to ensure that all material is counted.
cross-docking A company performs crossdocking when it takes a finished good from
the production plant and delivers it directly
to the customer, with little or no material
handling in between.
cross-docking monitor Warehouse managers use this tool to review the cross-docking
situation in the warehouse and make any
necessary changes.
cross-line stock putaway strategy This
enhancement to the next empty bin putaway strategy uses search variables that
allow the next empty bin to be selected
based on various criteria.
cycle counting This is a process whereby a
company continually checks the accuracy of
the inventory in the warehouse by regularly counting a portion, so that every item
in the warehouse is counted several times a
year.
distributor cross-docking This process can
include consolidation of inbound materials
from different vendors into a mixed-material pallet.
downstream sortation picking In this scenario, the picker can deposit all the materials listed on all transfer orders of the wave
into the tote on the conveyor.
continuous inventory This process consists
of dividing the annual physical inventory
563
B
Glossary
Electronic Product Code (EPC) The MIT
AutoID center developed this RFID standard.
Extended Warehouse Management (EWM)
EWM combines an entire physical warehouse under one warehouse number.
fire containment section This area in the
warehouse has a specific fire-containment
specification.
fire department inventory list This report
specifies the quantity of material in each
fire containment area, by storage class. The
fire department can review the potential
hazards and offer advice regarding storage
changes.
first in, first out (FIFO) The FIFO picking
strategy removes the oldest quant from the
storage type defined in the storage-type
search.
fixed bin replenishment This strategy specifies when the storage bin in the picking
area needs to be replenished so that outbound deliveries remain at maximum efficiency.
fixed bin storage putaway strategy This
strategy for fixed-bin storage takes into
account the data that has been entered into
the material master record for the material
to be placed in stock.
fixed storage bin picking strategy This is a
strategy for using fixed storage bins that
relies on the data entered into the material
master record for the material to be picked.
goods issue Goods issue is the movement
of material from the warehouse to an exter-
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© 2014 by Galileo Press Inc., Boston (MA)
nal source. This source can be a production
order or a customer.
hazardous material A hazardous material
is capable of producing harmful physical
effects such as a fire, sudden release of pressure and explosion, or acute health effects,
such as burns, convulsions, and chronic
injuries such as organ damage and cancers.
hazardous material warning This warning
is applied to materials to indicate the type
and level of hazard.
hazardous substance list This report lists
all hazardous material stored in a particular
warehouse, storage type, or fire-containment area.
inbound delivery An inbound delivery is
the process whereby goods are delivered to
a receiving area.
inbound delivery monitor This tool is used
to display open and completed deliveries,
both inbound and outbound.
inspection stock Inspection stock is material that has been set aside for a quality
inspection or another type of review. This
material has been valuated but does not
count as available stock.
internal stock transfer This process is triggered by the requirement to move a material from one part of the warehouse to
another, from storage bin to storage bin.
last in, first out (LIFO) The LIFO picking
strategy removes the last delivery of material to be received.
manufacturing cross-docking This operation involves the receiving of purchased
Glossary
and inbound material required by manufacturing.
near picking bin putaway strategy This
strategy is used to place incoming material
in an area near the picking bin.
next empty bin putaway strategy This
strategy determines that the material to be
placed in stock is placed in the next empty
bin.
node This term can refer both to a physical
node where material is placed and to a logical node where resources pass through.
obstacle An obstacle in warehouse management is a physical object or barrier,
defined in the site as an area where
resources cannot pass through.
one-step cross-docking This movement
processes the cross-docking movement in
one step, directly from the inbound goods
receiving area to the outbound goods issuing area.
open-storage putaway strategy This strategy allows the storage of different materials
in the same storage bin.
opportunistic cross-docking Applicable in
any warehouse, this strategy involves transferring a material directly from the goods
receiving dock to the outbound shipping
dock to meet a known demand.
outbound delivery The outbound-deliver
process involves picking goods, reducing
the storage quantity, and shipping the
goods. The process begins with goods picking and ends when the goods are delivered
to the recipient.
outbound delivery monitor This tool
allows the shipping department of the
warehouse to view the deliveries that need
to be picked for a variety of criteria entered
for the transaction.
partial quantities picking strategy Warehouse staff use this picking strategy to
reduce the number of storage units with
partial quantities.
passive RFID tag This tag uses the reader
field as a source of energy for the chip and
for communication from and to the reader.
pedigree notification To authenticate
pharmaceuticals as legitimate throughout
the supply chain, the system uses RFID to
match each container with its corresponding pedigree.
pick point (SUT) The SUT is the location in
the warehouse where materials are
removed for a partial stock pick from a storage unit.
picking area This term refers to a group of
warehouse management storage bins that
are used for picking.
picking wave profile Warehouses can us
this profile to impose limits on certain criteria when reacting to waves during wave
picking.
posting changes This warehouse movement changes the stock level of a material
because of a change in the status of a material in a storage bin.
print code This code defines the print format of the transfer order, the sort
sequence, and the printer to be used.
565
B
B
Glossary
progressive assembly picking In this picking method, the content of the transfer
order to be picked is moved from one zone
to the next.
resource. Options can be determined for
either a device, such as a forklift or crane,
or a worker.
project stock Project stock is material
being stored in the warehouse for a project
or a work breakdown structure (WBS) element.
resource type This object is used for
devices such as cranes and forklifts. In their
configuration, it is possible to enter the
speed of the device so that the route can be
timed and scheduled.
putaway strategy This strategy determines
the process of deciding where material
received into the warehouse should be
stored.
retail cross-docking This form of crossdocking involves receipt of material from
multiple vendors and sorting onto outbound trucks for several retail stores.
quant This term refers to the stock of
material stored in a storage bin.
returnable transport packaging (RTP) These
materials arrive on pallets or containers
and may need to be returned to the vendor.
quantity-relevant picking strategy Warehouses that have varying sizes of bins and
storage types where the same material is
stored use this strategy.
radio frequency (RF) monitor Warehouse
managers use this tool to view the queues
that are being worked on in the warehouse.
radio frequency identification (RFID) RFID
is a method of using a radio-frequency
transmission to identify an object.
rearrangement Part of EWM, this is used
to optimize the storage of materials in the
warehouse.
requirement type This classifies the origin
type, for example, asset, purchase order,
cost center, or sales order.
resource (TRM) A TRM is an object that is
capable of receiving and executing tasks.
resource element type Warehouse managers configure this object to create a
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© 2014 by Galileo Press Inc., Boston (MA)
route A route is the path a resource travels
between the start and end points in a site.
sales order stock This is individual customer stock that is managed in a warehouse.
SAP auto-id infrastructure (AII) AII is the
current SAP solution for RFID functionality.
SAPConsole This SAP tool enables RF
devices to be run within SAP applications.
semipassive RFID tag This tag uses built-in
batteries and therefore does not require
energy from the reader field to power the
chip.
shelf life control list This list shows
batches in the warehouse that are actively
monitored for shelf-life.
Glossary
shelf life expiration date (SLED) This is the
date on which the material is no longer
valid for sale.
storage section A storage section is the
part of a storage type that contains storage
bins where the material is kept.
shelf life expiration picking strategy With
this strategy, material is picked based on
the shelf life of the quants of material in the
warehouse.
storage type A storage type is a defined
area of the warehouse.
shipment type The shipment type classifies the movement types in the warehouse,
be they stock removal, stock placement, or
posting change.
site A site can be part of a warehouse,
many warehouses, or one warehouse.
site map A site map allows warehouse
managers to plan efficient routes in the
warehouse based on the physical definition.
slap and ship This is a method of complying with customer RFID requirements for
physical identification of materials shipped
through the outbound processes.
slotting Part of EWM, slotting assesses
storage parameters required by the material and proposes the storage section where
the material should be stored.
special stock This term refers to material
that is managed separately from regular
stock.
split picking This process involves the
splitting of a transfer order, whereby a new
transfer order is created when the picking
area is changed.
storage bin The storage bin is the lowest
level of storage defined in the warehouse.
storage type indicator This tool allows
only certain materials to be picked from
storage types. The order can be defined by
the storage type search for each storage
type indicator.
storage type search In this configuration,
a sequence of storage types is defined and
followed in searching for material that is
required for picking.
storage unit A storage unit is an identifiable unit in the warehouse, containing
materials and a container or pallet.
storage unit management (SUT) SUT covers the functionality and management of
storage units in the warehouse.
transfer order A transfer order is the
instruction to move materials from a source
storage bin to a destination storage bin in a
warehouse.
transfer order print document This is a
printed form of a transfer order, with or
without storage unit management.
transfer requirement This request covers
the transfer of materials from a source storage bin to a destination storage bin in a
warehouse.
transportation cross-docking This crossdocking operation combines shipments
from different shippers in the less-thantruckload (LTL) and small-package industries to gain economies of scale.
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B
B
Glossary
TRM monitor This tool keeps warehouse
management aware of the status of the
TRM function with respect to transfer
orders, inbound and outbound deliveries,
tasks, and resources
two-step cross-docking This method first
moves materials that are to be cross-docked
from the goods receipts area to a crossdocking storage type. In a second step, it
creates a transfer order from the interim
storage type.
Uniform Code Council (UCC) Manufacturers register with the UCC to obtain an identifier code for their company.
UPC bar code format This format was
adopted in 1973 as the industry standard so
that any bar code on any product could be
read and understood by any bar code
reader.
value-added services (VAS) VAS operations enhance materials to improve their
value, functionality, or usefulness.
VAS alert monitor This monitor shows
unprocessed VAS orders, issues with regard
to expected versus actual bin stock, and
VAS orders that are missing transfer orders.
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© 2014 by Galileo Press Inc., Boston (MA)
VAS template This tool is used for creating
VAS orders, based on condition functionality.
VAS work center In this location, valueadded services, such as packing or labeling,
are performed
wave monitor This tool enables selection
of waves for certain outbound deliveries.
wave pick This is a work package that contains several outbound deliveries.
working area Within EWM, a working
area is a physical location between two
zones that is defined as an area where
resource planning occurs.
zero stock check This process consists of a
stock check on a storage bin after the material has been removed, to ensure that the
storage bin is empty.
zone Within EWM, a zone is a physical
location at a site that is used for a specific
function.
zone picking This occurs when a picking
operator performs picks for storage bins in
their area, to reduce travel time between
picks.
C
The Author
A native of London, England, Martin Murray joined the
computer industry upon his graduation from Middlesex
University in 1986. In 1991, he began working with SAP R/2
in the materials management area for a London-based multinational beverage concern, and in 1994, he immigrated to
the United States to work as an SAP R/3 consultant. Since
then, he has been implementing Materials Management
(SAP MM) and Warehouse Management (SAP WM) in
projects throughout the world. He is employed by IBM Global Business Services.
Martin is the author of the best-selling SAP PRESS titles Materials Management
with SAP: Functionality and Technical Configuration (3rd Edition), Discover Logistics
with SAP ERP, and SAP Transaction Codes: Your Quick Reference to T-Codes in SAP
ERP. He lives with his wife in Orange County, California.
Acknowledgments
The author would like to specially thank Meg Dunkerley of SAP PRESS for her
faith in the author and her tireless efforts in getting the second edition of this
book completed.
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© 2014 by Galileo Press Inc., Boston (MA)
Index
A
ABAP code, 398
To modify transfer order document, 401
ABC analysis, 367
Indicator, 369
Perform, 367
Process, 369
ABC indicator
Viewing, 369
Accounting department, 33
Accuracy of warehouse inventory, 366, 382
Active capacity check, 52
Active tag, 473
Activity area, 548
Activity data, 45
Ad hoc movement, 552
Advance shipping notification, 440
Aggregate state, 418
Alert monitor, 512
Maintenance, 513
Output, 513
Allowed vehicle type, 504
Annual inventory
Configuration, 344
Assignment of warehouse, 40
Automatic data collection, 445
Automatic transfer order, 144
B
Bar code, 446
Configuration, 452
Defining for warehouse, 454
For identification and verification, 451
Reader, 449
Reader technology, 450
Scanner, 448
Structure, 448
Type, 455
Batch
Definition, 105, 122
Determination, 109, 300
Batch (Cont.)
Management, 88, 104, 122, 123
Number, 105
Number assignment, 106
Recording, 105
Search procedure, 113
Strategy type, 112
Batch management, 22
Batch missing, 45
Batch search procedure, 113, 114
Batch status, 108
Batch strategy type, 111
Best Buy, 469
Bin management, 536
Bin status report, 71
Blocked bin, 250
Blocking logic, 44
Book stock, 348, 359
Book value, 360
Break-bulk cargo, 30
Bulk pallet storage, 47
Bulk storage, 90, 315, 332
C
Canadian Environmental Assessment Agency,
414
Capacity check, 45
Method, 52
Carousel storage, 326
Catalyst International, 34
cGMP, 105
Change notice, 267
Charge-coupled device, 450
Check digit, 447
Check-in, 514
Checkpoint, 513
Clean Air Act, 413
Clean Water Act, 413
Clear difference, 358
Client level, 105
Complete stock pick, 407
Return to same bin, 408
571
Index
Comprehensive Environmental Response,
Compensation, and Liability, 413
Condition table, 109
Confirmation transaction, 257
Consignment material, 102
Consistency check, 335
Consumer purchasing, 31
Continuous inventory
Configuration, 360, 378
Document, 361
Document printing, 363
Control parameter, 41
Control quantity, 94
Corporation, 31
Count deviation, 356
Count document, 353
View, 353
Count result, 364
Count value, 360
Counting of assets, 343, 380
Counting of stock, 343, 380
Counts, 23
Creating new warehouse, 41
Crime prevention cost, 474
Cross-docking, 24, 480, 481, 547
Alert monitor, 494, 495
Automatic creation, 486
Benefit, 481
Configuration, 484
Decision, 486
Definition, 481
Manual creation, 486
Movement, 486, 497
One-step, 486
Planned, 482, 496
Planned in SAP, 483
Suitable material, 483
Two-step, 489
Type, 482
Cross-docking monitor, 492
Accessing, 493
Cross-line stock
Putaway, 331
Putaway strategy, 330
Cycle count document, 370
Printing, 372
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© 2014 by Galileo Press Inc., Boston (MA)
Cycle counting, 341, 365, 369
Benefit, 366
D
Data collection, 33, 464, 466
Data element
String, 435
Data governance group, 39
Data processing, 33
Date, 108
Available from, 108
Next inspection, 108
Production, 107
Shelf life expiration, 108
Default unit of measure, 43
Defining door, 507
Delivery date, 180
Delivery item status, 212
Message, 212
Packing, 212
Department for Environment, Food and Rural
Affairs, 414
Department of Defense, 469, 476
Department of the Environment and Water
Resources, 414
Destination dynamic storage bin, 132
Destination fixed bin, 131
Destination storage bin, 131
Destination storage type, 131
Destination view, 133
Difference indicator
Configure, 256
Distribution center, 31
Distribution warehouse, 229
Dock, 27
Document flow, 186
Document limit, 347
Downstream sortation, 242
Drug pedigree system, 477
E
Electronic data interchange, 24, 435
Advantages, 435
Index
Electronic data interchange, 24, 435 (Cont.)
Types, 436
Warehouse, 442
Electronic payment, 474
Oyster card, 474
Oyster system, 474
Electronic Product Code (EPC), 468
Empty bin, 327
Checking, 250
Display, 327
Putaway strategy, 330
End value, 61
Environmental Health and Safety, 24
Environmental Protection Agency, 414
e-pedigree, 477
EXE Technologies, 34
Extended Warehouse Management, 25, 91,
442, 498, 518, 519
External ID, 180
Goods receipt, 179, 201, 446 (Cont.)
Process, 22, 178
Transaction, 188
With inbound delivery, 179, 201
Without inbound delivery, 187, 202
Without inventory management, 196, 203
Goods receiving, 32
Goods storage
Check, 429
Group, 228
Creation, 229
Definition, 228
H
Finished goods, 367
Fire department inventory list, 428
Fire resistance, 416
Fire-containment section, 415
First in, first out strategy, 287
Fixed bin picking, 316
Fixed bin putaway, 316
Fixed bin replenishment, 23
Fixed bin storage, 316, 338
Flexible delivery process, 476, 477
Full stock removal, 54
Hand-held product, 451
Handling unit, 24, 55, 186
Hazardous material, 48, 413
Acute health effects, 413
Classification, 414
Correct storage, 430
List, 427
Master data configuration, 415
Number, 89, 426
Record, 425
Record creation, 425
Storage class, 424
Storage warning, 417
Warning, 416, 425
Hazardous Materials Transportation Act, 413
Hazardous substance list, 431
Hazmat team, 427, 432
Header status, 153
G
I
General view, 133
Generation of pedigree notification, 476, 477
GlaxoSmithKline, 477
Goods issue, 23, 205, 244, 446
Functionality, 205
Negative balance, 224
Goods movement data, 220
Goods movement status, 212
Goods receipt, 179, 201, 446
Area, 487
ID point, 50, 53
Inbound delivery, 179, 487
Creation, 180
Monitor, 183
Search criteria, 184
Transfer order, 182
Inbound delivery notification, 550
Inbound process, 459
Inbound processing, 440, 551
Inbound shipment, 33
F
573
Index
Individual product tagging, 475
Industry sector, 82
Defining, 83
Integration with material master, 80
Inter-company billing, 211
Intermec, 451
Internal warehouse movement, 552
International Article Numbering Association,
448
Inventory, 223
Annual physical, 343, 360
Continuous, 360, 381
Inventory count, 343, 354, 380
Document number, 372
Documents, 353
Previous, 344
Inventory Management, 96, 187, 191, 385,
410, 487
Goods movement, 127
Movement type, 127
Inventory method, 71
Inventory movement, 101
Inventory procedures, 341, 343
Inventory write-offs, 366
Items, 145
J
Japanese Numbering Authority, 448
L
Laser, 450
Laser scanner, 451
Last in, first out strategy, 292
Legacy system, 34
Loading, 514
Loading equipment quantity, 92
Location group, 506, 507, 510
Location type, 506
Logical movement, 156
Logistics, 30
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© 2014 by Galileo Press Inc., Boston (MA)
M
Mail control, 51
Mandatory route, 535
Manhattan Associates, 34
Manufacturer code, 447
Variable-length, 447
Manufacturing plant, 31
Master material
Create, 82
Material
Creation, 123
Fast-moving, 46
Level, 106
Movement between storage bins, 252
Overview, 271, 275
Putaway, 315
Quantity, 391
Rack storage type, 47
Slow-moving, 47
Stock overview, 375
Type, 367
Material batch number, 275
Material document, 188, 221, 225, 272
For outbound delivery, 221
Number, 272
Material group, 504
Material Master, 299
Record, 294, 295, 311
Material master, 22, 258, 426
Field, 83
Proposed unit of measure, 88
Record, 146, 259
Replenishment data, 146
Material movement
Inbound or outbound, 221
Material number
Change, 272
Material picking, 132, 133
Material putaway, 132, 133
Material type
Competitive product, 86
Configurable material, 85
Empties, 85
Finished goods, 84
Kanban container, 83
Index
Material type (Cont.)
Maintenance assembly, 85
Manufacturer part, 84
Nonstock material, 85
Non-valuated material, 86
Operating supplies, 84
Packaging material, 86
Pipeline material, 85
Production resources/tool, 84
Raw material, 86
Returnable packaging, 85
Semi-finished goods, 84
Service, 83
Spare part, 84
Trading goods, 84
Material variance, 359
Materials Management, 33, 366, 385, 410
Material-to-material transfer, 273
Maximum bin quantity, 93
Maximum storage period, 117
Means of transport, 180
Means of transport ID, 181
Minimum bin quantity, 148
MIT AutoID Center, 468
Mixed storage, 51
Mobile data collection, 464, 466
Mobile data entry, 24, 443, 457
Add user, 457
Logging on, 458
Movement, 139
Movement type, 126, 127, 347, 391, 485
Creation, 128
Inventory Management, 138
Reference, 138
Warehouse Management, 138
Movement types
Configuration, 260
Multiple processing, 44, 228
N
National distribution center, 31
Near picking bin, 315, 334
Negative stock, 54
Next empty bin, 326
Putaway strategy, 326, 340
Storage, 315
O
Open storage, 322, 339
Putaway strategy, 322
Section, 315
Organizational level data, 86
Organizational structure, 547, 548
Outbound delivery, 23, 207, 209, 222, 228,
245, 555
Document, 220
Elements of, 209
Monitor, 215
Number, 217
Outbound delivery request, 550
Outbound processing, 441, 476, 551
Outbound shipping, 33, 247
Overdelivery, 135
P
Packing, 243
Area, 243
Materials and processes, 243
Palletization, 91
Passive tag, 473
Photodiode technology, 450
Physical inventory, 341, 446
Information, 376
Pick, 169
Pick and transfer, 168
Pick quantity, 100
Adopt, 167
Picking, 23
Area, 63, 94, 258, 278
Operations, 228
Operator, 242
Placement strategy, 556
Point, 50
Process, 241
Picking and packing, 240
575
Index
Picking schemes, 241
Batch picking, 242
Progressive assembly, 242
Picking schemes, 241 (Cont.)
Single-order picking, 242
Zone picking, 242
Picking strategy, 281, 287, 309
Configuration, 290
Definition, 281
For partial quantities, 304
Quantity relevant, 306, 308
Type, 281, 309
Planned goods issue date, 208
Planned storage unit
Receiving, 396
Recording differences, 397
Plant, 391
Plant level, 106
Plant-maintenance cost center, 223
Port warehousing, 29
Posting change, 96, 267, 552
Definition, 267, 278
Notice, 156, 177, 267, 275
Preallocation stock, 135
Print code, 171
Printer designation, 173
Proctor & Gamble, 469
Product code, 447
Product master, 548
Production process, 299, 312
Production supply area, 375
Public warehouse, 32
Purchase order data, 184
Putaway, 23, 385
Block, 68
Material for, 323
Open storage, 323
With storage unit management, 402
Putaway data, 184
Putaway quantity
Adopt, 168
Putaway strategy, 313, 315
Activation, 334, 335
Configuration, 320
Type, 315, 338
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© 2014 by Galileo Press Inc., Boston (MA)
Q
Quality inspection, 267
Quality management, 96
Quant, 51, 58, 79, 99, 378
Definition, 51
Display, 74
Incorrect storage, 429
Moved, 249
Negative, 228
Number, 74
Record, 74
Quantity
Correct, 256
Queue, 549
R
R/2 link, 45
Rack storage, 47
Radio frequency, 33
Queue, 456
Terminal or device, 443, 463
Radio frequency device, 443
Character-based, 444
For forklift, 445
GUI device, 444
Portable, 445
Type, 444
Radio frequency identification (RFID), 24, 33,
464, 466, 467
Advantage, 470
Benefit, 470
Commercial use, 467
Current use, 474
Definition, 467
Disadvantage, 471
Frequency, 473
Mandate, 469
Reader, 468
Reader field, 468
Regulations for use, 468
Signal, 471
Tag, 470, 471, 472, 473, 474
Rearrangement, 552
Reason code, 501
Index
Reduction in theft, 470
Reference movement type, 138
Region code assignment, 422
Remaining shelf life, 119
Replenishment, 552
Replenishment control, 260
Replenishment quantity, 94, 148
Report inventory, 292
Request management, 533
Requirement type, 134, 154
Asset, 134
Cost center, 134
Purchase order, 134
Sales document, 134
Sales order, 134
Storage bin, 134
Resource Conservation and Recovery Act, 413
Resource element, 529
Resource element maintenance wizard, 526
Resource management in TRM, 529
Resource type, 530, 549
Allocation, 531
Component, 531
Definition, 530
Forklift truck, 531
Forklift truck driver, 531
Retail warehouse, 484
Return storage bin, 132
Return storage type, 132
Returnable transport item, 478
Processing, 476
Returnable transport packaging, 103
RF Monitor, 24, 462
Accessing, 462
Use, 463
RF scanning device, 398
Rounding quantity, 93
Route exception, 535
Route management, 534
Row and shelf assignment, 334
S
Safe Drinking Water Act, 413
Sales data, 208
Sales order, 206
Creation, 206
Number, 206
SAP Auto-ID Infrastructure (SAP AII), 476, 556
SAP ECC 6.0, 21, 81, 446
functionality, 519
Predefined industry sectors, 83
WM data entry screens, 87
SAP ERP, 519, 548
SAP EWM, 547
Document, 550
Process, 551
SAP MM, 21
SAP PP, 21
SAP SCM, 21, 548
SAP SD, 21
Sales order, 555
SAPConsole, 444, 519
Component, 445
Description, 445
Session, 445
Scheduler function, 533
Scheduling, 506
Scheduling chart, 515
Scheduling profile, 504
Search per level definition, 334
Sectioned bin, 250
Semipassive tag, 473
Serial number capture, 446
Shelf life
Minimum remaining, 117
Time unit, 117
Total, 118
Shelf life expiration, 22, 297, 303
Control list, 301
Date, 299, 312
Date calculation, 300
Picking strategy, 300, 303
Shelf life expiration date
Control list, 119
Rounding rule, 118
Shelf life functionality, 116, 122
Shipment type, 133, 149, 154, 191
Posting change, 134
Stock placement, 134
Stock removal, 134
577
Index
Shipping, 32
Shipping point, 207, 233
Definition, 207
Details, 208
Ship-to point, 145
Site map, 521
Slap-and-ship strategy, 476
Sort configuration, 331
Source data view, 133
Source dynamic storage bin, 131
Source fixed bin, 131
Source storage bin, 130, 308
Source storage type, 130
Special movement, 90, 139
Special stock, 138, 144
Indicator, 101, 285
Number, 101
Type, 139
Special storage, 48
Spool code, 173
Staging area, 508
Staging material for delivery, 208
Standard movement type, 126
Standard SAP system, 443
Standard stock placement, 383
Standard warehouse terminology, 520
Standard WM, 521
Start value, 61
State regulations for hazardous material, 413
Status of movement, 153
Stock, 94
Available, 99
Balance, 227
Blocked, 97
Category, 72, 94, 285
Consignment, 102
For putaway, 99
Inspection, 95
Management, 80, 81
Movement, 344
Overview, 446
Placement, 50, 90
Position, 293
Project, 102
Putaway, 285, 402
Putaway strategy, 50
578
© 2014 by Galileo Press Inc., Boston (MA)
Stock, 94 (Cont.)
Sales order, 101
Special, 100
Status, 98
Unrestricted, 95
Stock category, 145
Stock level, 190
Review, 198
Stock overview screen, 190
Stock placement control indicator, 317
Stock placement transaction, 68
Stock removal, 23
Manually triggered, 378
Strategy, 53, 288, 300
Stock replenishment, 247, 249, 258, 261
Stock transfer, 252
Confirm, 255
Internal, 249, 277
Storage bin, 22, 58, 78, 93, 350
Automatic creation, 60, 66
Block, 67
Blocking reasons, 69
Error log, 430
Fire-containment section, 64
Fixed, 258, 278
Generation, 335
KANBAN, 375, 379
Manual creation, 65
Maximum weight, 64
New structure, 62
Structure, 330
Structure definition, 59
Total capacity, 64
Type, 58, 64
Storage class, 419
Per storage type, 422
Storage location, 33
Storage location reference, 139
Storage section, 22, 56, 63, 89
Configuration, 56
Search, 424
Storage type, 22, 46, 76, 252, 510
Block, 350
Configuration, 289, 292
Control, 336, 388
Control definition, 334
Index
Storage type, 22, 46, 76, 252, 510 (Cont.)
Count, 350
Data entry screen, 49
Indicator, 282, 285
Search, 284, 286, 423
Search sequence, 307
Table, 91
Storage unit
Add to existing stock, 402
Contents document, 398, 400
Creating a record, 390
Creation, 402
Display, 393
Document, 398
Multiple materials, 402
Number range, 387
Picking, 55, 411
Planning, 393, 410
Planning by transfer order, 394
Putaway, 411
Record, 390
Single material, 402
Transfer order document, 398
Type, 92, 389
Storage unit management, 24, 52, 383, 385,
386, 410
Configuration steps, 386
Integrating with stock picking, 406
Key element, 385
Storing, 32
Supply chain, 27, 470
Supply chain management, 498
T
Target, 469
Task and Resource Management, 25, 519, 556
Five core areas, 520
Task management, 533
Scenarios, 533
Time data, 184
Time slot, 235
Toxic Substances Control Act, 413
Traditional warehouse, 520
Transaction
Post, 270
Transaction processing, 464, 466
Transfer, 169
Transfer order, 23, 137, 156, 225, 239, 254,
308, 556
Cancellation, 164
Confirmation, 166, 170, 264, 349, 409
Confirmation by each item, 378
Conversion, 229, 263
Creation, 156, 157, 176, 193, 213, 217, 268,
320, 328, 375, 394
Definition, 156
Detail, 271, 276
Display, 194
Document, 398
For goods receipt, 196
Item information, 324
Manual creation, 162
Multiple, 213
Open, 348, 349
Posted, 193
Printing, 171
Split, 214
Transfer order confirmation, 133
Transfer order creation, 132
Transfer orders
Creation, 490
Processing, 487
Transfer posting, 275
Transfer priority, 153
Transfer requirement, 22, 23, 134, 141, 145,
146, 153, 157, 158, 175, 179, 193, 228, 262
Automatic, 142
Confirmation, 230
Deletion, 154
Display, 191
Group, 231
Manual, 143, 145
Open, 230
Transportation data, 548
Transportation planning status, 211
Transportation route, 549
Transportation zone, 549
Trash tobacco, 28
TRM monitor, 537
Two-step picking, 90
Type of warehouse stock, 94
579
Index
U
U.S. Food and Drug Administration, 477
Uniform Code Council, 447
Unit gross weight, 89
Unit of measure, 33, 92
Unit volume, 89
Universal Product Code, 446
Unloading, 514
Unloading point, 144
V
Value-added service, 519, 538, 547, 556
Configuration, 538
Orders, 538
Work center profile, 538
Variance procedure, 357
VAS
Alert monitor, 545
Monitor, 545
Order, 542, 544
Template creation, 542, 543
Template determination, 540
Vehicle number range, 501
Vehicle type, 504
Group, 502, 503
Vendor batch, 109
Verification profile, 453
Volume unit, 43
W
Wal-Mart, 31, 469, 476
Warehouse, 29
Basic functionality, 35
Basic settings for VAS operations, 539
Bonded, 28
Configuration, 38
Efficiency, 412
Grid-lock, 249
Introduction, 27
Inventory, 358
Layout, 46
Management system, 32
Management system history, 33
580
© 2014 by Galileo Press Inc., Boston (MA)
Warehouse, 29 (Cont.)
Movement, 124
Number, 252, 391
Operation, 285, 546
Operation, increasing productivity of operation, 228
Parameter, 42
Stock, 121, 293
Structure, 75
Tobacco, 28
Warehouse management activities, 210
Warehouse management system, 22
Warehouse movement, 125, 174
Warehouse number, 138
Criteria, 185
Warehouse order, 550
Warehouse task, 550
Warehouse-to-warehouse transfer, 125, 174
Warehousing, 27
Cost, 32
Early example, 27
Overflow, 32
Seasonal requirement, 32
Water pollution class, 421, 425, 429
Wave creation, 233
Wave group release and print, 238
Wave Monitor, 233, 234, 238
Wave pick, 233, 236, 238
Creation, 233
Group, 233
Wave profile, 236
Weight unit, 43
Work breakdown structure, 102
Working area, 525
Definition, 525
Y
Yard activity, 500
Yard inventory, 515
Yard location, 508
Yard Management, 25, 499, 517, 547
Define, 500
Process, 510, 517
Structure, 507
Index
Yard monitor, 511
Output, 512
Selection, 511
Z
Zero stock check, 54, 373, 379 (Cont.)
Definition, 373
Dialog box, 377
Indicator, 374
Zone group, 525
Configuring, 525
Zero stock check, 54, 373, 379
Automatic, 375
Configuration, 374
581
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