Optimize your Warehouse management with SAP EWM

When a company doesn’t store any goods, there is no need for Warehouse management to manage goods. But if you are one of the many considering how to manage your stock and Warehouse activities then go with S/4HANA Embedded Extended Warehouse Management.

SAP Extended Warehouse Management (EWM) is used to efficiently manage inventory in the warehouse and support the processing of goods movements. It allows the company to control the following processes in its warehouse:

  • inbound processes,
  • outbound processes and
  • movements of goods.

The main processes in a Warehouse are incoming and outgoing materials, goods receipts and goods issue, fulfillment of customer orders, and distribution of goods.

With the help of SAP EWM, all the goods movements are controlled by the warehouse management system – providing you the tools that allow you to manage and monitor warehouse activities. You can also manage additional functions in the warehouse: e.g. creation of serial numbers, batch numbers, maintenance of the vendor management inventory, resource optimization, and value-added services. Additionaly, SAP Extended Warehouse Management allows you not to only monitor the quantity of goods in the warehouse but also to manage other critical functions and delivery of goods efficiently.

SAP S/4 HANA, the Digital Core, is the next generation ERP system aiming to modernize and digitalize business. The SAP Lines of Business solutions continue to be consumed on their own or as part of SAP S/4HANA. Lines of Business solutions give more choice to customers, allowing true hybrid scenarios and incremental deployments.

In Q4/2016, SAP EWM became an embedded application component of SAP S/4HANA (on-premise edition 1610), known as S/4HANA Supply Chain Management for extended warehouse management. To make it simple, we’ll call it “embedded EWM”. With its release, both basic warehousing, and extended warehouse management are running on a common code base embedded in SAP S/4HANA. It combines best-in-class proven warehouse management capabilities with the benefits of SAP S/4HANA.

Deployment Options

The SAP Note 1606493 “SAP EWM Deployment Options Best Practices” provides some hints on the various different decision criteria. The embedded EWM in S/4HANA is similar to EWM-on-ERP. One of the important decision criteria is the system sizing. SAP offers a Quicksizer tool which also provides a “HANA version” of Quick Sizing. Within the HANA Version of the Quick Sizer Tool you can find the embedded EWM sizing tool in “SAP S/4HANA -> EWM Inbound” and “SAP S/4HANA -> EWM Outbound”.

EWM and WM can work in parallel inside a single S/4HANA client. It is not possible to run a single warehouse (single storage location) with a mixture of WM and EWM processes, which means that the warehouses must be linked to different storage locations.

The following image shows the deployment options for SAP EWM in S/4HANA:

  • SAP EWM on SCM Server
  • SAP EWM embedded in S/4HANA

Communication Methods

SAP ERP and EWM are closely integrated with each other for transfer of transaction and master data. There are two different ways of communication.

Core Interface – CIF is one of the common methods of communication between SAP SCM system and SAP Advanced Planning and Optimization (APO). Master data maintained in the ERP system like customers, materials and vendors is transferred to EWM system using CIF.

A separate integration model is used for inbound and outbound delivery transaction data. In this case, the RFC integration model is needed for communication. Specifically, iDocs or queued remote function calls (qRFC) are used.

Key Capabilities

Inbound processing

  • Transportation unit processing
  • Goods receipt management and optimization
  • Inbound quality management and internal routing

Storage and operations

  • Physical inventory slotting, replenishment, and rearrangement
  • Kit-to-stock management and value-added services

Outbound processing

  • Outbound planning, including routing, wave management, goods issue, and pallet planning
  • Picking optimization, packing, staging, and load management

Warehouse Management Portfolio

Embedded EWM in S/4HANA is available in two versions:

  • Basic Warehouse Management
  • Extended Warehouse Management

Both versions are available with the SAP S/4HANA installation. You set up the warehouse management version at the warehouse number level. You are able to change the EWM version used by a warehouse at any point in time.

Basic warehousing functions of embedded SAP EWM are already included in the SAP S/4HANA Enterprise Management license. Advanced EWM functionality will require the classic SAP EWM engine license. The decentral EWM always requires the classic SAP EWM engine license no matter whether you are using the advanced or basic features. Take a look at the picture below for an overview of the Advanced and Basic EWM functions.

Refer to the SAP S/4HANA 2020 Feature Scope Description for an extended description of the features contained in each version.

Why migrate from LE-WM to EWM

SAP’s strategy is to deliver a common core – development of a single codebase for warehouse management and its delivery for different deployment options for different customer needs.

Daily work requires precise real-time information that SAP S/4HANA EWM supports with its Warehouse KPIs Fiori App.

You should also consider that LE-WM only remains available until the end of 2025, this also applies to customers who didn’t run WM before.

Major differences between classic WM and S/4HANA EWM

S. No.FunctionalityClassic WMS/4HANA EWM
1TransactionsGUIGUI and SAP Fiori
2Warehouse number3 characters code4 characters code
3Storage sectionMandatoryNot mandatory
4Storage typeStorage unit or non-storage unit must be defined at storage type levelStorage unit concept replaced with handling unit (HU)
5HUM functionalityActivation at storage location levelActivation allowed in same storage types/bin
6Storage bin10 characters code18 charecters code
7Storage binUnique bin number not requiredBin number must be unique
8Storage binDynamic bins are possibleNo dynamic bins
9Storage binOne fixed bin by materialMultiple fixed bins by material
10Business partnerNot mandatoryMandatory (party entitlement to dispose)
11AnalyticsNot availableSAP Fiori Analytics/KPI

SAP Best Practices Content

SAP S/4HANA Best Practices content is the recommended content delivery for the SAP S/4HANA product. With the SAP S/4HANA Best Practices content for EWM, customers get a new warehouse XX10 (XX = Country Code) along with a pre-defined warehouse structure, related customizing, sample master data and business processes based on this setup. The key features and benefits are as follows:

  • Quickly enable pre-configured basic warehouse management processes using a clearly defined scope and explicit guidance
  • Comprehensive configuration settings, Test Scripts, Process Diagrams and other valuable assets, which can be used as accelerators in implementation projects
  • Fully compliant with “one system” requirements and simplifications such as: no CIF, use of S/4HANA Business Partners, Central Master Data, direct usage of S/4 customizing (e.g. HU Types) and direct read of the purchase orders (no EGR)
  • Predefined warehouse structure and sample master data
  • SAP Fiori Launchpad Enablement – unified user experience across all UI technologies
  • Support for German and US localization


Key Innovations Road Map

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