SAP WM Deployment
Decisions,
Considerations,
and Lessons for
Complex Scenarios
Joseph Lucca
IBM Business Consulting Services
© 2006 Wellesley Information Services. All rights reserved.
Speaker Introduction
• Joe Lucca
Mr. Lucca is a Project Manager in IBM’s Logistics and
Distribution Practice, where he qualifies, sells, and leads SAP
Warehouse Management engagements
He has over nine years of SAP Implementation experience in
the Life Sciences and Consumer Products industries, leading
projects in the US, Asia-Pacific, Europe, and South America
Mr. Lucca holds a Bachelors of Science degree in Mechanical
Engineering from Rensselaer Polytechnic Institute
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IBM’s Logistics Practice
Provides four broad service offerings extending from strategy
through design and solution implementation
Merchandise Flows/
Logistics Strategy
Supply Chain Planning
and Fulfillment
Warehouse
Operations and WMS
Transportation/Import
Operations and TMS
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IBM’s Logistics Practice (cont.)
Merchandise Flows/ Supply Chain Planning Warehouse Transportation/Import
Logistics Strategy and Fulfillment Operations and WMS Operations and TMS
Merchandise Flow Inventory Optimization Warehouse Facility Transportation
Modeling Analysis Design and Material Flow Procurement and
Spend Analysis
Distribution Center CPFR and Shelf-Level Material Handling Design
Network Design Replenishment and Specification Transportation Process
Design and
Transportation Multi-Channel Order DC Process Design and Requirements Definition
Network Design Management WMS Requirements
Global Sourcing and
Inventory Stocking/ SCP and Order WMS Package Import Management
Deployment Strategy Management Package Implementation and
Implementation Systems Integration Over the Water
Logistics Outsourcing Transportation
Management Tools
Organization and Metrics Systems Integration and Warehouse Operations
Change Management Transition and
Implementation TMS Package
Implementation and
Optimization Tools – Systems Integration
Product Slotting and
Labor Management Carrier Score Carding
4
What We’ll Cover …
• Overview/Market Outlook
• Current and Future Functionality
• Deployment Considerations
• Lessons Learned
• Wrap-up
5
What We’ll Cover …
• Overview/Market Outlook
• Current and Future Functionality
• Deployment Considerations
• Lessons Learned
• Wrap-up
6
SAP WM’s Market Evolution
• Recent WM enhancements offer more functionality for
SAP customers who are faced with challenging
scenarios that WM has not historically been used
to address
Task and Resource Management (TRM) — 4.7 Ext. Set 1.1
Yard Management — 4.7 Ext. Set 2.0
Dynamic slotting/rearrangement — SCM 5.0
• An increasing number of North American customers are
live with Extension Set 2.0 functionality; however,
rollout experience and detailed product understanding
still lags behind
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In This Session ...
• Brief overview of current WM versions available
What is available in Extension Set 2.0? How do I “turn it on?”
What’s planned for SCM 5.0? What if I’m running ECC 5.0?
• Key considerations when planning a WM deployment
Determine your true need to implement WM
Appreciate the complexity in specific functionality
• Lessons learned from most recent implementations
Areas in which to expect customization
Project planning/timing expectations
What works well, key watch-outs
• Wrap-up and questions
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What We’ll Cover …
• Market Outlook
• Current and Future Functionality
• Deployment Considerations
• Lessons Learned
• Wrap-up
9
SAP WM Versions
• What’s currently available is
sometimes confusing
to customers
Over the last two years, the WM
product has expanded
functionality (and is continuing
to expand) rapidly
A very different and much more
advanced solution than it was
just a few years back
Most customers have been
hesitant to implement newly
released functionality
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SAP WM Versions (cont.)
• Currently being implemented:
SAP 4.7 (a.k.a., SAP Enterprise)
f Includes TRM in Extension Set 1.1
f Must enable Extension Set 2.0 to utilize Yard Management
(YM), Value-Added Services, Dynamic Cycle Counting, and
Direct Store Delivery
f Can be run centrally or decentralized
f With the addition of Extension Set 2.0, product is now
known as mySAP ERP EWM
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SAP WM Versions (cont.)
• Out of customer ramp up (available for all customers
to implement):
SAP ECC 5.0
f All functionality of mySAP ERP EWM (TRM, YM, etc.)
f Can be run centrally or decentralized (SAP recommends
decentralized if utilizing TRM)
f Customer-proven WM offering, number of live
sites increasing
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SAP WM Versions (cont.)
• In customer ramp-up phase (limited number of
customers implementing with guidance from SAP):
SCM 5.0
f Known as mySAP SCM EWM
f All functionality of mySAP ERP EWM (TRM, YM, etc.)
f Additional functionality including dynamic slotting, receipt
deconsolidation, and enhanced wave management
f Utilizes same processing engine and data available to APO
f Changes in core documents and configuration structure
f Implementation as part of SCM 5.0 inherently drives a
decentralized installation
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SAP WM Versions (cont.)
• In customer Ramp-Up phase (limited number of
customers implementing with guidance from SAP): (cont.)
SCM 5.0 (cont.)
f Viable SAP WMS offering for facilities that historically
would have looked to Tier-one solutions
f Part of SAP’s long-term roadmap for
Warehouse Management
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Landscape Overview — Decentralized mySAP ERP EWM
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Landscape Overview — mySAP SCM EWM
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What this Means for WM Customers
• SAP’s vision for WM
“Less complex” warehouses will
continue with the WM product we
have today
Advanced complexity warehouses,
historically requiring tier-one solutions,
will evaluate the
SCM 5.0 solution
• Existing customer base
Over 5,000 sites live on SAP WM
to date
No immediate need for these sites to
migrate to SCM 5.0
Upgrade path 4.7 ECC still exists for
all customers
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What We’ll Cover …
• Market Outlook
• Current and Future Functionality
• Deployment Considerations
• Lessons Learned
• Wrap-up
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When and Why to Investigate WM
• What drives customers to investigate using WM?
Embarking on an SAP implementation
Enterprise strategy to lower total cost of ownership/IT spend
Drive increase in efficiency
f Manage a single inventory balance
f Eliminate interfaces
f Enable cross-docking to expedite orders
Drive increase in accuracy
f Synchronize inventory process throughout the
order-to-cash cycle (or other mega process)
Profile of facilities in supply/distribution chain
Investigating an SAP-based RFID/Event Management solution
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Process and Functionality Considerations
• Inbound processes
Yard Management
f Visibility of all inbound, staged, and outbound vehicles
while on the property
f Task management of yard operations
f Single application to support Yard Management and
Warehouse Management
f Minimize driver time on property (efficient
door assignment)
Pre-receiving/Inbound Advanced Shipping Notifications (ASN)
f Standard, customer-proven functionality
f Minimal customization required
f Use of Inbound Deliveries drives better dock
scheduling, supplier compliance reporting, electronic
ASN receipts, etc.
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Process and Functionality Considerations (cont.)
• Inbound processes (cont.)
Receiving
f Use out of the box RF transactions as a base for
customer-tweaked transactions
f GUI transactions provide solid functionality for receiving
Put Away
f Strong put-away logic can be configured
f Use of TRM required to utilize Pick and Drop locations
f mySAP SCM EWM offers even more robust logic
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Process and Functionality Considerations (cont.)
• Outbound processes
Cross-docking
f Available with mySAP ERP EWM
f Limited number of sites fully utilizing functionality
f mySAP SCM EWM leverages APO components to optimize
cross-docking
Wave planning
f One key area in SAP WM where customization would
be expected
f Standard functionality is sufficient for lower volumes, but
advanced wave planning capabilities are not introduced
until mySAP SCM EWM
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Process and Functionality Considerations (cont.)
• Outbound processes (cont.)
Replenishment
f Another area where some development would be
necessary for higher volume facilities are where batch-
neutral picks are desired
f Pickface replenishment; fixed bins in SAP cannot be
driven to a negative quantity, thus preventing planning for
multiple picking waves
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Process and Functionality Considerations (cont.)
• Internal processes
Physical inventory
f Standard functionality solid; RF-driven counting requires
mobile transactions to be customized
f Dynamic cycle counting available in mySAP ERP EWM
Slotting
f Available with mySAP SCM EWM
f Leverages real-time demand and forecasts from APO to
drive slotting analysis and rearrangement
f With visibility to APO, analysis gives real insight to
demand for seasonal items
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Process and Functionality Considerations (cont.)
• Internal processes (cont.)
Reporting
f One of the most overlooked aspects of a
WM implementation
f Leverage BW where possible
f Set expectations early, evaluate relevance of legacy
reports, define “To-Be” metrics
Automation integration
f Standard interfaces provide stability
f Use RFCs for near real-time integration
f Be mindful of S95 architecture standard; keep business
logic in SAP
f Leverage TRM for business rules
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Project Planning for Success
• Size the effort and investment based on
planned returns
What do you want to achieve
both long term and in the
near future?
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Project Planning for Success (cont.)
• Further detailed investigation usually uncovers
additional considerations or boundaries for the project
Commit to an additional investment,
but evaluate and finalize the
implementation timeline at the
end of the blueprint phase
Scope and level of effort will be
clearly defined at the end
of blueprint
Leverage Steering Committee
for guidance
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What We’ll Cover …
• Market Outlook
• Current and Future Functionality
• Deployment Considerations
• Lessons Learned
• Wrap-up
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Planning is Crucial to Success
• Be clear and concise on project goals
What returns do you want to achieve?
Where do you expect to drive value?
• Prepare to rethink processes for
standardization
Are you willing to change operational steps to
drive standardization across sites or to utilize
standard functionality?
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Planning is Crucial to Success (cont.)
• Strong Steering Committee involvement
Plan for regular checkpoints
Leverage their guidance in addressing gaps and
scope containment
• Plan for realistic timing of design and testing
Avoid “slamming in” in the system
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Communication/End-User Involvement
• From the early planning phases, drive strong business
participation and ownership
Process development
Testing
Training
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Communication/End-User Involvement (cont.)
• Ensure blueprint workshops include all
necessary players
More time preparing for these sessions will pay off dividends
in the design phase
Avoid “redesign;” design efficiently
No opportunity for the “No one told me” excuse
• Spend time with end users to clarify business and
system requirements
Screen flow
Material flow
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Scope Management
• Gap identification and mitigation
Prioritize gaps with business users
Agree on mitigation strategy
Expect workarounds
• Reporting
One of the most overlooked components of a WM project
Define requirements and set expectations early
Realize that legacy reports need be evaluated for relevance in
the “To-Be” environment
Leverage BW, define value before developing custom reports
Define “To-Be” metrics; avoid comparison with
Legacy metrics
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Scope Management (cont.)
• Automation integration
Necessary to implement
in parallel?
Possibility to phase in?
Be mindful of S95
Architecture standard
• RFID
Best taken on as “second wave”
project to WM
Evaluate compliance requirement
Think broader event management
across the supply chain
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Partnering/Getting Assistance
• Internal center of excellence/support team might not
have WM capability
Need resources who understand functionality
and configuration
Limited TRM expertise in North America
• Engage an expert in WM business
processes and systems
Find the balance between process
and technology
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Partnering/Getting Assistance (cont.)
• Drive value
Strive for partnership vs. contracting
Work with a knowledgeable partner that is committed to doing
whatever it takes to make the project successful
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Successful Realization of the Solution
• Mitigate uncertainty
Commit to a specific spend for blueprint and
design development
As part of the blueprint estimate development effort and
build an implementation timeline to drive final funding request
for the project
• Thorough process design and testing
Formalize process review and sign-off
Include positive and negative scenarios
Validation
Run mock shifts to simulate post go-live environment
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Successful Realization of the Solution (cont.)
• Emphasis on training
Well-planned and executed training
empowers end users
Drives shorter stabilization period
• Prepare for issues
Working through troubleshooting scenarios
before go-live pays big dividends in user
readiness and front line support
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What We’ll Cover …
• Market Outlook
• Current and Future Functionality
• Deployment Considerations
• Lessons Learned
• Wrap-up
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Resources
• For more detailed information on mySAP SCM EWM:
http://help.sap.com/saphelp_scm50/helpdata/en/5f/c69040bca
2ef4ae10000000a1550b0/frameset.htm
• WMS Industry Best Practice references:
http://www.apics.org (Requires APICS membership)
Navigate to: Resources Publications Database
f Publication Title: “Real Customization”
• Related Supply Chain Case Study (The Body Shop)
http://www-1.ibm.com/services/us/index.wss/casestudy/imc/
a1008979?cntxt=a1005268
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7 Key Points to Take Home
• WM product has been significantly enhanced over the
last two to three years, driving increasingly complex
customer applications
• Understand the functional differences and unique
terminology among SAP WM versions
• Consider strengths and weaknesses of WM components
when evaluating the scope of an implementation
• Finalize development effort and funding for realization at
the end of the blueprint phase
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7 Key Points to Take Home (cont.)
• Prepare to rethink processes and standardization; be
open to changing operational steps to utilize
standard functionality
• Don’t overlook one of the most missed components of a
WM project: Reporting. Define requirements and set
expectations early.
• Drive value by working with a knowledgeable partner
that is committed to doing whatever it takes to make the
project successful
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Your Turn!
How to contact me:
Joseph Lucca
[email protected] 43
