Uptodate - CONSILIO GmbH

Work-in-Process-Management in S/4HANA

WIP Management: Creating Transparency about Work in Process. How to map your WIP process in S/4HANA with the new release.

In the last quarter of 2022, SAP introduced the SAP S/4HANA 2022 release with the latest updates. In addition to various improvements in quality management, production and industry-specific topics, SAP delivers a new functionality for the management of work-in-process items with the new release: work-in-process management.

Management of work in process

WIP materials, which are still in the production process, could not be managed in the SAP standard system until now. Since they are never sold as semi-finished products or spare parts, they have no material master, are not in any bill of materials, and are unknown to the warehouse management system. The production logistician then often does not know which material is in which processing state and in which location. 

The management of such unfinished items is often organizational: A worker prepares the unfinished material and places it in a specific location in the warehouse. If the material is to go to the next production step, some time may have passed by then, possibly an entire shift. The next employee knows only by hearsay - or at best has noted down on a piece of paper - where the unfinished material is located. If the note is lost or the unfinished items have ended up in another location for some reason, the search begins. The system is of no help in this case, as it does not know the unfinished material or its storage location. 

Another problem with WIP materials is that their inventory is unknown. Their consumption and remanufacturing must also be manually monitored and controlled by the warehouse manager. If the estimation is not quite correct, there is overproduction and as a result a lack of space, or too few parts are made and the next production process has to wait until replenishment is made.

In both cases, WIP management is managed organizationally. It can only work if the processes are clearly defined and strictly adhered to. If the responsible employee is not available, error handling can become very cumbersome and time-consuming because the system does not provide any information about the whereabouts of the WIP material.

Work in Process Management

With the S/4HANA 2022 release, SAP closes this gap and offers a simple process for managing WIP material. With this new process, warehouse operators can manage unfinished items in the system until they are requested for the next production operation. In the process, a WIP material is recorded in the system with a WIP number, current inventory and location in the warehouse, allowing employees to track the whereabouts and quantity of WIP products at any time.

The process flow from goods receipt to staging

SAP EWM supports WIP management for both the goods receipt and staging processes. 
The goods receipt represents the process in which the prepared WIP items are physically stored in the warehouse after their preparation. For example, a wire is cut to the length of the pins. In this case, the cut wire is the unfinished material that goes into inventory in stock. For this WIP item, the goods receipt is posted as follows: 

1. create an inbound delivery for WIP stock.
2. determine a WIP product number 
3. storage of the WIP item on the WIP stock
4. receiving status is synchronized with MES

If the cut wire is required for further production, it is provided in the following steps: 

1. create stock request for WIP staging.
2. determine the WIP product during stock request creation
3. send stock change notification to MES when staging is confirmed.

When the WIP product is booked out of stock, the WIP process is terminated and the usual production process takes its course. 

WIP not equal to semi-finished part

The difference between a WIP and a semi-finished product is primarily that a WIP is a product made from raw materials or components that is posted as an issue to production and is not itself managed in inventory. A semi-finished product, on the other hand, has its own inventory, which is kept up to date through receipts and issues postings in Materials Management.

For example, a sofa that has been upholstered but not yet covered is a WIP product. A cut wire that is to be made into pins remains WIP even after it has been sharpened. Only when the final manufacturing step is completed - attaching the pin head - does the WIP become a semi-finished product the pin. 
In summary, a WIP product differs from semi-finished products in the following aspects:

- A WIP product is not part of the bill of materials (BOM).
- A WIP product does not have a valuation.
- WIP inventory does not need to be monitored and tracked in the Inventory application component.

Until now, many companies mapped their WIP process organizationally. This only functioned smoothly if the processes were clearly defined and strictly adhered to. With the new WIP management in S/4HANA, users can track at any time on the system side in which state, in which location and with which quantity the semi-finished part is located. 

Sebastian Keilhacker, Managing ConsultantCONSILIO GmbH

Further Informations:

Topics around the warehouse management