In this week’s mini-sode, D4M’s Erick Sanchez talks about some key advantages to upgrading to EWM – including the S/4Hana 2027 cut off, greatly improved scanning speeds, and improved control of plant processes!
This is a great checklist to keep in mind when looking into implementing a WM module VS the EWM module!
With that said, let’s hear what Eric Sanchez has to say:
Gene: So, as we all know, S/4HANA is changing the ERP landscape quite a bit; as you mentioned before, EWM was a concept before the technology was implemented. EWM was not invented alongside S/4HANA, it was an idea percolating in the industry before that BUT – going forward – it will be included box standard with S/4.
Gene: Is EWM going to be necessary in manufacturing and – by extension – will companies inevitably phase out WM or will the client still be able to choose? If the client can still choose, what are the right situations for say a WM situation as opposed to an EWM situation?
Eric: So, as I previously mentioned, the EWM module started before the S/4HANA version of ERP was released, right? Since EWM came out after WM, it goes without saying that it is meant to be the evolution of the WM module. A lot of companies going forward (including SAP) will want organizations to move to EWM; to the point where it is now included is S/4HANA installations. But, as of right now, though companies will push for EWM upgrade, it is not mandatory in S/4HANA which – as I will discuss later – comes in handy in certain situations.
Eric: Now, whether or not EWM software is necessary or not, it really depends. For example, I have implemented the old version of SAP (which is the ECC6) and the newer version (which is S/4HANA) and I can genuinely tell you depends on the customer and their business.
Eric: That means if the customer really wants to have a specific control and specific reports – to have more detail on their stocks for example – then it is recommended to implement any Warehouse Management system because it will greatly help your manufacturing processes.
Eric: However, there is a lot that is changing in the warehouse software industry. No matter which choice of software you choose, in 2027 the SAP company will stop bringing support to the older Warehouse Management module. Then the plants or the customers that currently have the regular Warehouse Management module won’t receive any kind of support from SAP system or the company.
Eric: So that is one advantage of having EWM versus WM and because it is not only a technological evolution of the WM system, but a consistently supported one as well. So that is one important thing to mention.
Eric: Also, based on my experience at D4M, we normally work in the automotive industry and in automotive production plants. I can tell you that currently the normal operations/processes in this kind of industry is greatly improved by upgrading to the EWM module because it allows you to have all the control you want on all kinds of different phases on your production line or the different phases on your processes.
Eric: Now, returning to your question, if you ask me if there is a way to have the SAP system implemented without the EWM module, my answer is yes, you can do it; in fact, we actually have customers currently that have the SAP system implemented in the S/4HANA version and they don’t have EWM system.
Eric: As I mentioned before, they need to be aware of which specific activities they really want to have on the system or which kind of control they want to have in the system. I sometimes experience specific situations where the customer really wants to have a Warehouse Management System implemented for various reasons; they want to have control or even it is a requirement from the final customer for those plants, etc.
Eric: In the end, the customers who use Warehouse Management software tend to enjoy slightly better control BUT dislike the reduced speed of manufacturing in the process. Let me explain
Eric: Customers need to be aware that more control means (in the case of Warehouse Management) more steps in your operation. And sometimes, for example, when we start implementing this system, the operations people might complain saying things like, “you know, Erick, we downloaded or unloaded a full truck in probably 10/15 minutes. If we implement the warehouse management module, that means we need to scan every single box to be put away inside the warehouse!”
Eric: And I say “Yes. When you say ‘scan’, with a WM module, that means scan two times one specific box. Because the first scan means to pick the box. And then the second scan is when you are delivering the box in the final destination, in your racking positions. That means two scans per box OR per palette. In reality, that means probably you can unload your full truck in no, no less than 25 to 30 minutes even. So, that is duplicating the time, the processing time on your unloading activities.”
Eric: So, when a customer knows that they can decide if the control that they want to have in the system will impact the timing/processing in the different activities, there are advantages and disadvantages. But again, the answer is you can have your SAP system either if you have currently your ECC version or your S/4HANA version, without WM or without EWM. The answer is yes, but depends on the different industry sectors or industry activities.
Eric: For example, I can tell you that you cannot do manufacturing in the pharmaceutical industry without a Warehouse Management system, right? Because your operations ask you to have this kind detailed control because you are managing, for example, FIFO, you are managing hazardous materials, you are managing a huge variety of batches, etc. So, Warehouse Management Systems allow you to control all of these kind of activities and selecting your best options depends on your operation.
Eric: And even selecting a solution for your organization, it isn’t necessarily one size fits all. For example, we have a specific customer that currently has multiple different divisions within their organization; where in a specific division they request us to have a Warehouse Management System and, in another division, they don’t need warehouse management system because they don’t manage batches. This branch of the organization don’t manage FIFO, they don’t manage pallet control or internal activities for the materials.
Eric: So, it depends on the industry, depends on the customer, depends on the detailed control that they want to have.
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