Process Handbook for SAP Extended Warehouse Management (EWM)

Comprehensive Process Handbook for SAP Extended Warehouse Management (EWM)

This handbook serves as a detailed guide for SAP EWM application consultants and system architects. Its purpose is to provide a clear and comprehensive overview of the core inbound and outbound processes, foundational master data, key system configurations, and advanced functionalities within SAP Extended Warehouse Management. By synthesizing these critical components, this document aims to equip professionals with the knowledge required to design, implement, and manage efficient and robust warehouse operations.

1.0 SAP EWM Fundamentals

A solid understanding of the SAP EWM architecture, its organizational structures, and the key master data that drives all system logic is the no
n-negotiable prerequisite for designing and implementing effective warehouse processes. These foundational elements provide the framework upon which all transactional activities, from simple goods movements to complex, value-added services, are built.

1.1 System Architecture and Deployment Models

The choice of deployment model is a foundational architectural decision that impacts integration, performance, and the overall system landscape. SAP EWM can be deployed in two primary models, each with a distinct technical basis and strategic focus.

Deployment Model	Description & Characteristics
Embedded EWM in SAP S/4HANA	Strategic Focus: Integrated warehouse management for businesses that do not require the high-volume throughput and operational separation of a decentralized system.<br><br>Technical Basis: EWM is technically included as a component within the SAP S/4HANA instance. This "in-stack" model eliminates the need for a separate EWM server and complex data transfer mechanisms.<br><br>Key Integration Characteristics: Master data (e.g., Material, Business Partner) is shared directly between the ERP and EWM components, eliminating the need for replication. Transactional data is exchanged seamlessly within the same system, simplifying the document flow.
Decentralized EWM	Strategic Focus: High-volume warehousing, large-scale distribution centers, and operations requiring optimization, automation, and dedicated system performance. This model ensures that warehouse operations are not impacted by the performance of the central ERP system.<br><br>Technical Basis: EWM runs on a dedicated, separate server instance (either SCM-based or, more recently, S/4HANA-based).<br><br>Key Integration Characteristics: Requires robust integration with a back-end ERP system. Master data and transactional data must be replicated between systems using interfaces like the Core Interface (CIF) for SCM-based EWM, or ALE/IDocs and the Data Replication Framework (DRF) for S/4HANA-based decentralized EWM.

1.2 Core Organizational Structure

The SAP EWM organizational structure provides a hierarchical model to digitally map the physical layout of a warehouse. This structure is fundamental to stock management, as it determines the exact location of every product at any given time.

• Warehouse Number
  • The highest-level organizational unit in SAP EWM, representing the entire physical warehouse complex. All subsequent structural elements are defined within a specific Warehouse Number.
  • Storage Type
    • A physical or logical subdivision of the warehouse, characterized by its storage technology, organizational form, or function. A Storage Type Role is assigned to define its specific purpose. Key roles include:
      • Standard: A typical storage area for products.
      • Staging Area Group: An interim area for goods receipt or goods issue.
      • Work Center: A physical unit for activities like packing, deconsolidation, or quality inspection.
      • Yard: An area outside the warehouse for managing vehicles and transportation units.
    • Storage Section
      • An organizational subdivision of a Storage Type. Storage sections group together storage bins with similar attributes, which is often used to optimize putaway processes (e.g., a section for fast-moving items or heavy parts).
      • Storage Bin
        • The smallest addressable unit of space in a warehouse. The storage bin represents the exact position where a product is stored. Its coordinates are used to manage stock and optimize the travel paths for warehouse tasks.

1.3 Key Master Data Objects

Master data objects are the core data records that contain all the necessary information about products, business partners, and packaging. This data is the engine that drives automated processes and ensures operational consistency.

Business Partner A central object representing all parties involved in warehouse processes. The same business partner can have multiple roles, which are critical for stock ownership and management. The primary roles are:

• Custodian: The business partner responsible for managing the warehouse itself. A custodian is assigned to each warehouse number.
• Owner: The business partner who legally owns the stock. In a standard scenario, this is the plant. For consignment stock, the vendor is the owner.
• Party Entitled to Dispose: The business partner who is entitled to dispose of the stock. This is typically the plant where the stock is planned and managed.

Product Master This represents the materials managed within the warehouse. The data flows through a distinct hierarchy, with each level adding more specific information:

1. Material (ERP): The global master record created in the ERP system.
2. Product (EWM-global): The material master is transferred to EWM, creating a warehouse-number-independent product master.
3. Warehouse Product (EWM warehouse-specific): This is a warehouse-number-dependent view of the product. It contains all the parameters that relate to storage in a specific warehouse, such as putaway control indicators and replenishment data.

Packaging Specifications A master data object that defines all necessary packing levels, materials, and work steps for a product. It is used to drive various processes, including palletization, packing at work centers, kitting, and Value-Added Services (VAS). Its structure includes:

• Header: General information about the specification.
• Contents: The product or other packaging specification to be packed.
• Level: Defines the instructions for a specific packing layer.
• Element: Defines either a specific packaging material to be used or a work step to be performed.

Handling Unit (HU) An object in EWM that represents a physical unit of product and packaging materials (e.g., a pallet, a carton) which can be tracked and moved as a single, identifiable entity throughout all warehouse processes. It is uniquely identified by a number such as an SSCC. HUs are essential for managing packed stock and executing multi-step movements controlled by storage control.

With these foundational elements of architecture, organizational structure, and master data established, the handbook will now detail the end-to-end inbound process flow.

2.0 The End-to-End Inbound Process

The inbound process, encompassing all activities from goods arrival to final putaway, is a cornerstone of warehouse efficiency. Executing these steps correctly is critical for maintaining inventory accuracy, ensuring stock availability for subsequent sales or production processes, and optimizing the use of warehouse capacity.

2.1 Standard Inbound Document Flow

For a typical procurement process, the flow of documents from the ERP system to EWM creates a clear data chain that guides the physical receipt of goods.

ERP Purchase Order -> ERP Inbound Delivery (from ASN) -> EWM Inbound Delivery Notification -> EWM Inbound Delivery

• ERP Purchase Order: The initial procurement document.
• ERP Inbound Delivery: Created in ERP, often automatically from a vendor's Advanced Shipping Notification (ASN), this document signals that a shipment is en route.
• EWM Inbound Delivery Notification: The replication of the ERP delivery into EWM triggers the creation of the Inbound Delivery Notification. In recent EWM versions and in Embedded EWM, this step is optional, and the system creates the EWM Inbound Delivery directly.
• EWM Inbound Delivery: This is the primary warehouse request in EWM; it drives all subsequent inbound activities, such as goods receipt posting and putaway task creation.

2.2 Goods Receipt Posting

Posting the goods receipt (GR) formally acknowledges the arrival of stock in the warehouse and updates inventory levels. EWM supports two primary methods that can be performed at different points in the process.

Posting Method	Operational Process
Explicit Goods Receipt Posting	The goods receipt is posted as a distinct, initial step. This is typically done when goods physically arrive at the warehouse door, often using a dedicated transaction to process the inbound delivery. This method provides immediate visibility of the received stock.
Implicit Goods Receipt Posting	The goods receipt is posted automatically in the background upon the confirmation of the first warehouse task associated with the delivery (e.g., the unloading task). This streamlines the process by linking the physical movement with the inventory posting, but it means inventory is not updated until the first movement is confirmed.

The choice between Explicit and Implicit GR is a fundamental design decision, representing a trade-off between immediate inventory visibility upon physical arrival (Explicit) and a more streamlined, system-guided process with fewer manual steps (Implicit).

Synchronous Goods Receipt in Embedded EWM

In an Embedded EWM environment, a simplified synchronous process is available. For certain goods movements (e.g., receipt from a purchase order), an inbound delivery is not required. A goods movement posting directly in Inventory Management (e.g., via transaction MIGO) can trigger the automatic creation of putaway warehouse tasks in EWM, further streamlining the inbound flow.

2.3 Putaway Strategies and Bin Determination

Once goods are received, SAP EWM uses a sophisticated, multi-step logic to determine the optimal destination storage bin. The system first narrows down the search area and then applies a specific rule to select the final bin. The selection of a putaway rule is a key configuration that directly impacts warehouse density and putaway efficiency.

The sequence of determination is:

1. Storage Type Search: Based on the Putaway Control Indicator defined in the Warehouse Product master data (see Section 1.3) and other parameters from the inbound delivery, the system finds a search sequence of permitted storage types.
2. Storage Section Search: Within a determined storage type, the system can further narrow the search to specific sections based on indicators from the product master.
3. Storage Bin Type Determination: The system can restrict the search to bins of a certain size or type, often based on the Handling Unit type being put away.

After identifying the search area, EWM applies a specific putaway rule defined for the storage type:

• Empty Bin: The system searches for the next available empty storage bin. This is ideal for random storage environments like high-rack storage.
• Addition to Existing Stock: The system prioritizes placing stock in a bin that already contains the same product, provided there is sufficient capacity. This helps consolidate stock but violates strict FIFO.
• Fixed Storage Bin: The system places the product into one or more specific bins that are pre-assigned to that product in the warehouse product master.
• Bulk Storage: A strategy for storing large quantities of a single product in stacks without shelves. The system manages placement by rows and stacks, often enforcing a single product per bin.
• Pallet Storage: A strategy that works with HU types to put away stock in storage types where bin sectioning is determined by the dimensions of the first pallet placed.
• Near Fixed Picking Bin: For products with a fixed picking bin, this strategy searches for an empty bin in a reserve storage type that is in close proximity (typically the same aisle) to the fixed picking bin.

2.4 Complex Putaway using Storage Control

For warehouse processes that require multiple physical steps between goods receipt and final putaway, EWM uses Storage Control to model the entire movement sequence.

Control Type	Description
Process-Oriented Storage Control (POSC)	This models multi-step movements driven by a business process requirement. It defines a sequence of steps such as unloading, quality inspection, deconsolidation, or Value-Added Services (VAS), each of which occurs in a physical location mapped in the system as a Work Center (a specific Storage Type Role, as detailed in Section 1.2).
Layout-Oriented Storage Control (LOSC)	This models movements dictated by the physical layout of the warehouse. It is used to route products through mandatory intermediate points, such as an identification point (I-Point) or pick point (P-Point), which are often required for automated conveyor systems.

The decision to use POSC is driven by business value (e.g., quality mandates), while LOSC is a technical necessity dictated by warehouse automation and physical constraints.

Once goods are correctly stored and available for use, the warehouse focus shifts from receiving to efficiently fulfilling customer and production orders through the outbound process.

3.0 The End-to-End Outbound Process

The outbound process is the most customer-facing part of any warehouse operation. The speed, accuracy, and efficiency of picking, packing, and shipping directly impact customer satisfaction, supply chain reliability, and overall business success.

3.1 Outbound Document Flow

Similar to the inbound process, the sales-based outbound process is managed by a clear chain of documents that originates in the ERP system.

ERP Sales Order -> ERP Outbound Delivery -> EWM Outbound Delivery Request -> EWM Outbound Delivery Order -> EWM Outbound Delivery

• ERP Sales Order: The initial customer requirement document.
• ERP Outbound Delivery: Created in ERP, this document authorizes the shipment of goods to the customer.
• EWM Outbound Delivery Request: A replication of the ERP delivery in EWM. In modern EWM versions, this interim document can be skipped.
• EWM Outbound Delivery Order: This is the primary warehouse request document in EWM that drives all subsequent outbound activities like picking, packing, and staging.
• EWM Outbound Delivery: This final document is created after picking and is used to post the goods issue.

3.2 Picking Execution and Optimization

Picking begins with the system determining the best stock to fulfill the Outbound Delivery Order. EWM uses a strategy determination process that considers key inputs like the Stock Removal Control Indicator from the Warehouse Product master data (see Section 1.3) to find the appropriate storage type search sequence and stock removal rule.

Key Stock Removal Rules include:

• FIFO (First In, First Out): The system prioritizes picking the oldest quants first, based on their goods receipt date (WDATU).
• LIFO (Last In, First Out): The system prioritizes picking the newest quants first.

To translate the system's picking plan into actionable work, EWM uses Warehouse Orders. A Warehouse Order is an executable work package assigned to a warehouse employee. It groups one or more warehouse tasks together. Warehouse Order Creation Rules (WOCRs) are used to build these work packages automatically. WOCRs apply sophisticated filters, limits (e.g., maximum weight or volume), and sorting logic to group tasks into optimized picking assignments for employees.

3.3 Wave Management

A wave is a method of grouping warehouse request items (e.g., from multiple outbound delivery orders) to be processed together in a coordinated and efficient manner. This allows the warehouse to release and manage large volumes of work in logical blocks. The automatic assignment of delivery items to the correct waves is managed through Wave Templates and the powerful Condition Technique, which can use attributes like the shipping route or customer to group orders. Once a wave is released, the system creates the corresponding warehouse tasks for all its items.

3.4 Goods Issue and Final Steps

After picking is complete, the goods are moved to a staging area and then loaded onto the transport vehicle. The final step in the physical process and in the system is the Goods Issue Posting. This posting, performed in EWM against the outbound delivery, is the critical trigger that communicates the departure of stock to the ERP system. This action finalizes the delivery, updates inventory management, and initiates the billing process in ERP.

Beyond these standard inbound and outbound flows, warehouses must manage a variety of internal and specialized processes to maintain efficiency and add value to the supply chain.

4.0 Advanced Processes and Special Handling

Modern warehouses handle far more than simple putaway and picking. They are dynamic centers for complex logistics operations that add significant value. This section analyzes several advanced processes that are integral to modern supply chains and require specialized system configuration in SAP EWM.

4.1 Cross-Docking Scenarios

Cross-docking is a logistics practice where products are unloaded from an inbound transport and loaded directly onto an outbound transport with little or no storage in between. SAP EWM supports two main categories of cross-docking.

Category	Sub-Types & Description
Planned Cross-Docking	The decision to cross-dock is made before the goods arrive at the warehouse.<br><br>Transportation Cross-Docking (TCD): Transports HUs across different distribution centers to a final destination.<br><br>Merchandise Distribution: Plans and controls the flow of goods from a vendor through the warehouse directly to recipients like retail stores.
Opportunistic Cross-Docking	The decision to cross-dock is made after goods have arrived, often to fulfill an urgent, unforeseen need.<br><br>Push Deployment (PD): SAP APO determines that an inbound delivery is relevant after goods receipt, often to push stock out to a location with high demand.<br><br>Pick from Goods Receipt (PFGR): The system identifies an urgent outbound order and fulfills it directly from the goods receipt area instead of putting the stock away first.<br><br>EWM-Triggered: EWM itself identifies a match between incoming stock and an open outbound order and reroutes the stock to goods issue.

4.2 Value-Added Services (VAS) and Kitting

Value-Added Services (VAS) A VAS Order is an instruction to perform a value-added service for one or more products, such as applying special labels, inserting marketing materials, or performing customer-specific packing. The VAS order is created with reference to a delivery item and a packaging specification, which defines the specific work steps and materials required to perform the service, typically at a dedicated work center.

Kitting Kitting is a specialized form of a Value-Added Service. EWM models the assembly process using a VAS Order, which is triggered by the outbound delivery's item hierarchy. The structure of the kit itself is received from the item hierarchy within the ERP outbound delivery.

• Kit-to-Order: The kit is assembled specifically for a sales order. The process is initiated by the outbound delivery order and uses a VAS order to manage the assembly at a work center.
• Kit-to-Stock: Kits are pre-assembled and placed into inventory to be sold later. This process can be triggered by a production order in ERP or initiated directly within EWM using a VAS order, resulting in an inbound delivery for the finished kit and an outbound delivery for the consumed components.

4.3 Handling Batch-Managed and Serialized Products

Certain products require more granular tracking due to regulatory requirements, quality control, or service needs.

• Batch Management: Products can be managed in distinct batches, which are homogenous quantities produced together. Batches can be created in either the ERP system or directly in EWM during the inbound process. For outbound picking, batch selection criteria (e.g., specific quality characteristics) can be passed from ERP to EWM to ensure the system selects and picks only appropriate batch stock.
• Serial Numbers: Serial numbers provide unique identification for a single, individual item. EWM supports different levels of tracking, each imposing a greater degree of system control:
  • Serial numbers for document items: Serial numbers must be recorded on inbound and outbound delivery documents, but their specific location within the warehouse is not tracked by the system.
  • Serial numbers at warehouse number level: The system requires serial numbers for every goods movement within a specific warehouse, providing visibility but not an inventory-managed link.
  • Serial numbers in inventory management: This is the highest level of control. A serial number becomes an inventory-managed characteristic, meaning the system knows the exact location of every individual serialized item.

To support all these complex processes, SAP EWM provides a comprehensive suite of tools for monitoring, mobile execution, and performance analysis.

5.0 Warehouse Monitoring, Execution, and Analytics

Constant visibility and control are paramount in a modern, high-volume warehouse. This final section covers the key tools SAP EWM provides for managing day-to-day operations, enabling efficient task execution on the warehouse floor, and analyzing performance data to drive continuous improvement.

5.1 The Warehouse Management Monitor

The Warehouse Management Monitor is the central cockpit for warehouse supervisors to monitor all activities, identify potential issues, and resolve exceptions. It provides a comprehensive, real-time view of the entire warehouse operation.

• Node Hierarchy Tree: An organized navigation tree allows users to easily access different object classes, such as inbound/outbound documents, stock levels, resources, and system alerts.
• Parent/Child Data Views: The monitor displays data in a two-part screen. The top screen shows a summary list of parent objects (e.g., outbound delivery orders), and the bottom screen shows the related child objects (e.g., the individual items within the selected order).
• Methods: Users can perform direct actions on selected objects without leaving the monitor. For example, a supervisor can manually confirm a warehouse task, post a goods receipt for a delivery, or cancel a warehouse order directly from the list view.
• Hotspots: Key data fields are configured as interactive hotspots. Clicking on a warehouse task number, for example, directly navigates the user to the detailed display transaction for that specific task.

5.2 Mobile Execution with the RF Framework

The Radio Frequency (RF) Framework is the backbone of mobile execution on the warehouse floor. It enables real-time, scanner-based processing for all physical activities, including putaway, picking, packing, and physical inventory. The framework supports a wide variety of device types, from character-based terminals to modern graphical and browser-based devices.

This framework is tightly integrated with Resource Management, where each employee and piece of equipment (e.g., a forklift) is defined as a resource. This allows EWM to assign warehouse orders to specific resources and to track the execution of work by individual users in real-time.

5.3 Analytics and Performance Management

SAP EWM includes a powerful set of tools for performance analysis, allowing management to move from simple monitoring to strategic improvement.

• Measurement Services: A flexible framework that allows the business to define and track custom warehouse Key Performance Indicators (KPIs). The system can be configured to measure nearly any process metric, such as the number of late outbound deliveries or the average time to put away an item.
• Warehouse Cockpit: A graphical dashboard used to visualize and monitor the KPIs defined through Measurement Services. It provides an at-a-glance view of warehouse performance using charts and graphs, helping managers quickly identify trends and potential issues.
• Labor Management: A comprehensive toolset designed to optimize workforce productivity. It allows for detailed labor planning, the measurement of employee performance against engineered labor standards (ELS), and in-depth analysis of planned versus executed workloads. This enables the warehouse to accurately forecast labor needs and identify opportunities for performance improvement.
• BI Content for SAP EWM: SAP provides preconfigured Business Intelligence (BI) content, a set of roles, workbooks, queries, InfoCubes, and other data models for SAP Business Warehouse. This enables strategic, in-depth analysis of warehouse data to identify long-term trends and support strategic decision-making.
• SAP S/4HANA Embedded Analytics: This modern approach embeds analytical capabilities directly into transactional processes within S/4HANA. It provides real-time operational insights through Core Data Services (CDS) views and Fiori applications, eliminating the need for a separate BI system for many day-to-day analytical tasks.
• Financial Performance Metrics: EWM provides the capability to track and analyze key financial metrics. This includes maintaining data on the average number of full-time equivalents (FTEs), labor costs, and daily fixed costs for the warehouse, which can be extracted to a BI system for strategic analysis of cost-per-delivery-item and other financial KPIs.

Mastering these interconnected processes, master data objects, and system tools is essential for any EWM professional aiming to design and operate a highly efficient and modern warehouse.