Uptodate - CONSILIO GmbH

Warehouse management on S/4HANA: What you need to consider

Which strategy do I use to switch to S/4HANA? Which warehouse management system on S/4HANA is right for me? Cloud or on-premise? The most important facts in a nutshell.

Are you facing a conversion to S/4HANA? What will your warehouse management look like in the future and what approach should you take to the S/4HANA transformation? Which construction site do you tackle first? Do you recognize yourself in these questions? Then you are not alone. Experience shows that many customers are overwhelmed with the latest developments in the SAP world. There are many options available, but how do you best use them and what of them do you actually need? We show you how to switch to S/4HANA and which warehouse management systems have a future.

Today's SAP ECC 6.0 will no longer be maintained after 2027. By then at the latest, the switch to S/4HANA must have taken place. When ECC is replaced by S/4HANA, today's WM will also no longer be available.

Which systems can be used from then on?

SAP Stock Room Management and SAP embedded EWM

The new warehouse management systems on S/4HANA are called Stock Room Management and embedded EWM.

Those switching from SAP WM will quickly find their way around Stock Room Management, because it is nothing different from today's WM - with the difference that some functions are no longer supported in Stock Room Management. You can use the STOCKROOM_COMPLIANCE_CHECK report to check in your ERP or S/4HANA system whether you are using these functions. If the report shows no hits and you are not planning any process changes or enhancements, you can confidently use Stock Room Management. Stock Room Management will be available until 2040 - the planned end of maintenance. If the compliance check shows that some of the functions missing from Stock Room Management are required for your processes, you need to consider how much effort it would take to add them.

In general, the following components can no longer be used in Stock Room Management in contrast to SAP WM:  

 

The alternative to this is called EWM - extended Warehouse Management. As the name already suggests, various extensions and new functions are available here that map complex processes and allow individual adjustments. Compared to Stock Room Management, EWM enables significantly greater flexibility in process design. Historically, EWM has been developed as a decentralized solution. In S/4HANA, EWM exists as an embedded module - the embedded EWM - in the same S/4HANA system.  

EWM can be used in two versions: EWM Basic and EWM Advanced. 

EWM Basic: This version provides you with the most important functions in the goods receipt and goods issue process, reporting and inventory functions as well as production and HU and quality management. 

EWM Advanced offers extended functions such as labor and yard management. You can also map your material flow control in this extended, but also more expensive version of EWM. 

summary of the functionalities

The following is an overview of the functionalities of SAP Stock Room Management compared to SAP EWM:

On-premise or Cloud

One question that arises during the S/4HANA transformation is the hosting of the solution: Should the S/4HANA system be hosted on-premise or in the cloud? And can I run both stock room management systems on-premise and in the cloud? The answer is: Stock Room Management can only be operated on-premise.

If a move into the cloud is desired for EWM, several options are available here as well: licensing the system as before or using the Software as a Service offering, where the usage costs are in the form of a subscription. If one decides in favor of the SaaS solution, two different cloud versions are also available here: the private and the public cloud. Those with very simple processes often opt for the public cloud, in which no customizing options are available, but which is the cheapest option. If you have somewhat more complex processes, you move to the private cloud, which offers the scope of an on-premise solution. Again, SAP provides tools for moving to the cloud and beyond: the relatively new RISE with SAP product has already reported some success stories this year.

Once the S/4HANA system goes live, Stock Room Management and EWM will be available.

The right transformation strategy is crucial

A switch to S/4HANA is a transformation where the migration path is crucial. With the greenfield approach, the S/4HANA system is reinstalled and the processes are reconfigured. A Greenfield implementation is often used to redesign and streamline in-house processes. To support a new implementation, SAP provides help in the form of best practices.

In the Brownfield approach, the existing SAP system is converted to S/4HANA. In the process, historical data is retained and legacy data that is no longer needed is eliminated. In the brownfield approach in particular, it is important to create the technical prerequisites for migration. To this end, SAP provides tools such as the Readiness Check tool, which checks the system and indicates readiness for a changeover. The customer's own developments can be checked using Custom Code Analyzer.

The Crossfield approach is a hybrid approach in which the data transfer takes place via data migration and individual processes are comprehensively renewed.

For an all-encompassing transformation, the Beyond Brownfield approach is suitable in many cases: In this case, the data is migrated as in the brownfield and optimized to the status of a greenfield system.

The paths of an S/4HANA transformation are diverse. Deciding which path is right for your company and which warehouse management system is optimal for your own process mapping is strategically important. A conversion to S/4HANA and a new warehouse management system go far beyond a technical migration. In order to build a sustainable system and process landscape, a holistic analysis of the existing solutions with a view to the future is required. We are happy to support you with our expertise and experience in every phase of your transformation.

Choosing the right warehouse management system is a strategic decision that is essential for companies that want to remain future-proof and competitive in the market. We support you in the decision-making process and in every phase of the changeover.

Sebastian Keilhacker, Managing ConsultantCONSILIO GmbH

Further Informations:

Topics around efficient logistics management

Topics around a successful S/4HANA transformation