Erick Sanchez Part 1: What is Warehouse Management Software?

Gene: Before we begin this interview, tell me a little bit more about yourself and how you got started with D4M International and what your area of expertise is.

Eric: Sure!

Eric: I am Eric Sanchez, and I am a part of the D4M International’s consulting team regarding the SAP ERP implementation projects. I have been implementing the SAP systems at D4M probably since 2010, where the company was under its original name, R3D Consulting.

Eric: That being said, my main areas of expertise are mainly the SAP Material Management Module and Warehouse Management Module; that means everything related to purchasing, production and non-production purchasing.

Eric: Speaking of the warehouse management module, I am also a part of the development team; that means I can explain to the different companies how this WM module interact with the other SAP modules.

Eric: So, that’s my main area of expertise. Right now, I am in the process of learning EWM, which is the evolution of this warehouse management module in the new and improved version of SAP, S/4Hana.

Gene: Today’s topic is – as you mentioned – the differences between WM and EWM. So, listeners of this show know that we talked at length about trends and generalities regarding the SAP ERP software. However, we have rarely – if not ever – actually discussed the SAP modules themselves in detail.

Gene: So, to start things off, what is Warehouse Management Software and what exactly is the relationship with ERP software such as SAP as a whole?

Eric: Before we begin, let’s narrow down the list of modules in a way which is practical; after all, SAP themselves break down the list of modules to based on what you need from the software as an organization. For the sake of today’s conversation, let’s focus on the logistics modules.

Eric:  Logistics modules are often referred to as the “top five modules” in SAP. The first three modules are as follows: the MM module, which is Materials Management, the Production Planning module (PP for short), and the Sales and Distribution module (also known as the SD module).

Eric: The last two modules are often lumped together due to similarities in features and outcomes. I am of course referring to Finance and Controlling module (often abbreviated as FiCo). These two final modules are normally together in the finance side.

Eric: After these five modules, we have other different modules depending on the areas required. For example, we have a Quality Management area, a Transportation Management area, and a Plant Maintenance Area. However, we then have a specific module to manage all the internal warehouse activities. This final area is what we call Warehouse Management.

Eric: So, the WM module normally is part of the MM module because it’s the module that has all related to material movements or operations within the system; starting in the goods receiving activities to all the internal activities inside the warehouse. For example, it features the Put Away Production Replenishment activities, all the decanting pallets or pallet decanting activities, it also has all the picking, shipping and outside activities.

Eric: Now, regarding the Warehouse Management module, this module is part of the logistics areas of SAP; though, in this case, regarding everything related to the materials or to the products movements in the system.

Eric: Using WM, we can manage logistics areas in deep detail. That means, for example, if any customer doesn’t have this warehouse management module, they can only see all the stock at very high level; they can see only the total quantities they have in the system.

Eric: With this warehouse management module, we can have more detail, more control and sometimes more activities/steps in one specific operational process. That means, for example, in the system, we can see different reports to locate a specific material inside the warehouse; since now, we can represent all our warehouse structure, hierarchs, aisles, areas or sub areas in the warehouse. With WM, you can now represent all those things now in the SAP system, inside the module!

Eric: Since you can now represent all aspects of the warehouse, this also means you can look into specific palettes, boxes or “bins” within your warehouse as well as their intended destinations. (Side note, in SAP, we call this information “storage bins”, where you can see every time a specific quantities and serial numbers. That’s the main advantage of a WM module.)

Eric: So also, warehouse management module allows you to have an Radio Frequency solution (aka RF solution). This RF solution allows your operation to have scanning; meaning, you can scan one specific palette and you can move it. This process is referred to as a “bin-to-bin transfer”.

Eric: This is an example that you can have with a Warehouse Management Module; you can just scan one specific palette and then you can transfer it inside your warehouse, you can split this palette into two different pallets or two different storage units. You can send partial quantities, for example, to your production line by scanning this master palette.

Eric: So, it also allows you to have different RF menus depending on your internal activities. For example, people can be assigned to do goods receiving activities only to one team member; so, you can create different menus for different people. Then, you can see those different menus on your scanning or mobile devices, and then you can allow the people to do these different activities.

Eric: So that’s – more or less – how this Warehouse Management module on SAP works or interact with the other different modules.