Introduction:

With our vast experience, spanning over 14 years of Supply Chain consulting, we know that Warehouse Operations is an important area in supply chain which requires extensive cross functional cooperation between purchasing, manufacturing, Sales, transportation, workforce management departments. We are also aware of the fact that, while largely being manually managed, warehouse operations need meticulous tracking of inward, outward, and internal movement of inventory across the organization.

It is also important to track the physical movement of inventory in a Warehouse management system to plan for inward receipts, warehouse capacity optimization, distribution planning, Inventory cost optimization etc.

Key Challenges in Warehouse operations:

To identify the steps to get the best of the Warehouse Management potential, let us first understand the pain points:

• Operational inefficiencies due to ineffective warehouse space utilization, inaccurate inventory reports leading to stock out or over stock situation.
• Manual process of warehouse operations & offline system update leading to operational redundancies.
• Lack of standardization & streamlined process for picking, packing & put away can lead to operational inefficiencies, data inaccuracy & poor labour management.
• Most of the traditional warehouse management system offers limited functionalities in cartonization, kitting, inter-levelling etc.

Impact to the Organization:

The above points generally lead to organisations facing business impacts such as:

• Huge working capital due to excess inventory lying in the warehouse.
• Delay in Order fulfilment rate due to manual tracking of inventory across the warehouse. Longer Cash to cash cycle.
• Increase in cost of warehouse management due to warehouse space constraints, labour management & inventory movement visibility.
• Limitation in functional requirements such as kitting, cartonization, interleveling etc. impacts operational inconsistency, multiple system management and manual reconciliation.

How vVolve with SAP EWM as an enabler to  help address these challenges?

Now, since we have identified the pain points and its business impact, let understand how vVolve and SAP EWM can help:

1. Improved Operational Efficiency

SAP EWM provides advanced warehouse management capabilities, such as slotting optimization and put away strategies, to help optimize warehouse space utilization, which are explained in detail as shown below.

1. 1. Slotting – SAP EWM offers advanced slotting optimization capabilities that can help to organize the inventory at the most appropriate location based on their physical characteristics, volume, size, demand pattern & storage requirements. By slotting the inventory according to the above attributes, warehouse space shall be optimized.
   2. Advanced Put away Strategy- SAP EWM’s advanced put-away strategy helps to automatically assign the optimal location for each item during the receipt based on its characteristics. This helps to streamline the warehouse operations process in a more structured and effective manner.
   3. Cross docking – SAP EWM’s cross docking functionality helps to quickly move the inventory to outbound locations without the need for storing for a long time.
   4. Cartonization & kitting – By leveraging on the cartonization and kitting functionality, multiple items can be grouped and kitted together in a single carton (based on SAP BOM), space can be freed up for max utilization.
   5. ASRS – SAP EWM can also be integrated with ASRS (automated storage and retrieval systems). ASRS system can help to reduce the space required as most of the warehouse operations related to put away and picking process were automated with the help of robotic operations.

2. Improved Inventory Reporting & Reduced manual redundancy:

1. 1. SAP EWM can help to improve the inventory accuracy through warehouse automation via handheld device integration/ASRS etc. this help to avoid human error and manual redundancy. Most of the warehouse operations are automated such as picking/put away strategy determines the location for inventory placement and retrieval.

3. Cost Savings:

1. 1. Improved labour efficiency: through automation and process streamlining, SAP EWM can reduce the operational redundancy, improve the warehouse operations more efficiently with optimal utilization of resources.
   2. Reduced working capital by reducing the inventory level due to improved accuracy of inventory, reduced stock out situations, reduced write-offs (improved inventory accuracy implies improved inventory planning).
   3. Improved cost savings through process automation which helps to release FTEs to focus more on strategic and tactical operations.

SAP EWM Solution Options:

SAP EWM implementation cost includes one-time cost of implementation & license cost for activation of SAP EWM module in SAP S/4 HANA system. SAP offers Embedded EWM which can be activated in the existing S/4 HANA database itself. EWM can also be implemented in SAP ECC with the right expertise and tools.

Return on Investment

For an organization with an inventory value up to 10 million USD, SAP EWM implementation may take between 6-9 months for deployment; depending on factors such as number of entities, users, volume and so on. With our experience and resources, you will see the project being executed on-time.

In addition, we have observed organisations getting a Return on Investment of 20% on SAP EWM implementations. We shall work with you on a to build a custom report for your organisation related to this.

Why vVolve is your Partner of Choice for EWM Solution Deployment

vVolve in our 14+ years of experience in Supply chain consulting, have implemented EWM for various customers across the Sout East Asia region in industry sectors that include Pharma/Med-Tech, Retail, Manufacturing & Retail organisations.

Click here to get in touch with us & get a free assessment of your existing inventory management & warehouse operations process. Our SMEs shall advice on the potential areas for process optimization, automation, & cost savings.