SAP IM vs. WM: How to Choose, Use, and Optimize,Gavin Klaus Catalyst International, Inc.,What Well Cover ,Understanding the difference between WM and IM Choosing between WM and IM Optimizing and overcoming limitations with IM and WM,Inventory Management (IM),Key features/strengths Inventory management by quantity Visibility of on-hand quantity by storage location Management of special stocks Entry and documentation of all material movements Real-time updates of inventory Documentation of all receipts, issues and transfers Physical inventory Carry out physical inventory at the material level Perform inventory adjustments,R/3 Inventory Management (IM) (cont.),Key features/strengths (cont.): Inventory management by value Postings update account assignments for cost accounting Updates G/L account for financial accounting Key integration points Integrates directly with MRP, purchasing and invoice verification Provides information for MRP, updates PO; used to check conformity during invoice verification Real-time updates When transactions are entered, the results the stock updates real time to reflect actual changes,SAP Organizational Structure,Organizational Structure at the IM Level,Challenges with Inventory Management,Lack of detailed visibility to material flow e.g. When the delivery pick list is generated, the deliverys “actual pick quantity” is updated prior to actual picking Requires manual updates when quantities differ Inability to assign incoming materials to outbound demand to avoid multiple material handling continued.,Challenges with Inventory Management (cont.),Immediate update of inventory receipts and issues System inventory and status NOT representative of the physical process Limited visibility to locations of materials Only possible to assign a single fixed bin location per storage location Bin location is “text” only; no strategies are available,Solution: R/3 Warehouse Management,Initially released with R/2 as an Extension of IM IM-WM integration is real-time and automatic Enables granular traceability and control Ability to synchronize the system and material flow Simple-to-complex placement and removal strategies Assignment of inbound orders to outbound deliveries Allocation of storage bins Processing of all stock movements valid for WM Receipts, issues, transfers Utilizes stock placement and removal strategies e.g. Next empty bin, addition to stock, FIFO, LG/SM qtys.,Solution: R/3 Warehouse Management (cont.),Infancy to maturity Functionality considerably expanded with 4.6x and higher Two-step picking, two-step confirmation, managing multiple storage locations with a single warehouse Extension set 2.0 for Enterprise to include Cross Docking, Yard Management, Value Added Services,WM Picks Up Where IM Leaves Off,Typical assignment is one storage location to one warehouse It is possible to have multiple storage locations managed by a single warehouse,Quant,Bin 1,Quant,Quant,Quant,Bin 2,Stor. Type 2,Stor. Type 3,Warehouse1,Stor. Location 1,Stor. Type 1,Warehouse 2,Stor. Location 2,Plant 1,Location 1,Plant 2,Company,IM Level,WM Level,Stor. Type 1,Key WM Features,Management of materials Provides bin-level tracking Inventory management functions Various placement and removal strategies Value-added services e.g. Special handling requirements (labeling, packaging) Powerful picking control Two-step picking, wave picking FIFO, LIFO, large/small quantity picking strategies,Key WM Features (cont.),Warehouse activity monitors WAM, RF Monitor, outbound delivery monitor, wave picking monitor, TRM Monitor, Yard Management Cockpit, Cross- Docking Monitor Cross-docking Management of inbound and outbound movements Yard Management Appointment scheduling, check in and check out, assignment of dock doors, loading/unloading activities Task Resource Management Enhances WM by breaking work down into distinct task,Fully Integrated with the other SAP Applications Features: Flexible Warehouse Structures Goods Movements Control Inventory,WM Integration With Other Key R/3 Modules (cont.),Source: SAP WM LO530,WM Integration With Other Key R/3 Modules (cont.),IM-WM Processing of all material movements Automated communication with configurable processing SD-WM Two-step picking with SD-WM integration Wave picking opportunities Processing individual deliveries PP-WM Production support with PP-WM integration Supplying materials to the shop floor Internal and external automated replenishment options,WM Integration With Other Key R/3 Modules (cont.),QM-WM Handling of inventory samples Inspection lot is maintained with the material data Hand-held terminals-WM Processing of transfer requirements Processing of transfer orders Bin and material inquiries,Benefits of WM,Benefits Better control of inventory More accurate inventory Able to maintain lower inventory levels Better control of information Visibility to picking and put away status Reduced cycle time Gartner: 16-25%