Warehouse Management System

Warehouse Management refers to the science of operating a warehouse in general. The need for
good warehouse management stems from the need of organizations to be able to
 Receive and store goods in the best possible order to be able to ship them as required.
 Manage inventory effectively such that there is always a record of what is available in the
warehouse and where it is available.

With companies stocking thousands and thousands of different materials that are needed to be
shipped to customers on time, warehouse management has got a lot of importance in a supply
chain.
WMS software's greatest benefit comes from streamlining processes to move items faster and store
them more efficiently. When all goes well, this leads to reduced inventories and labor costs and
increased accuracy.

Benefits of Warehouse Management System:

The Warehouse Management supports the following operations:

 Cross-Docking: Moving inbound goods directly to outbound trucks so they don't have to be
stored
 Picking and Location Logic: Picking goods from certain locations to meet a particular goal and
identifying optimal locations and picking patterns

 Slotting: Placing products in the best locations for serving certain kinds of orders, such as for the
most frequently picked items

 Task Management (including task interleaving, a method for minimizing wasted trips by
grouping dissimilar tasks)

 Automated Data Collection (ADC): A single platform for devices such as bar code scanners, RFID
tags, and voice-recognition systems

 Yard and Dock Management: Managing inventory in or near trailers, especially for cross-docking

Pharmaceutical products need to be stored under strict conditions; requirements such as hygiene,
temperature, traceability are important in this sector.

 Ideal temperature to maintain efficiency of drugs:

Different drugs have different temperatures at which they become deactivated/denatured.
Hence, they should be stored in appropriately maintained temperature and humidity zones.
Warehousing solutions provide different temperature zones (Ambient (15–25ºC), Cold Room
(2–8ºC), Freezers (minus 25–minus 15ºC) and Ultra-low Temperature Freezer Rooms
(<minus 25ºC)) that can be individually controlled and maintained with the help of sensors
and alarms.

 Shelf Life: If you receive a delivery and the minimum shelf life expiration date is specified,
Warehouse Management checks the best-before date or expiration date in the delivery with
the minimum remaining shelf life.

 Technology: The use of hand-held terminals or other scanning devices can easily be
supported for WM transactions as a means to actually carry out physical goods movements.
Bar code scanning is used, for example, to confirm transfer orders. Using bar code reading
devices as described above enables your system to scan bar codes that are printed on
transfer order documents and other container documents.

The Warehouse Management Radio Frequency Device Integration (WM RFID) in a warehouse
virtually integrates with all the execution operations in the areas of Inbound, Outbound and Internal
Warehouse Operations.

Once the RF device connection has been established for a user with SAP, the mobile terminal can
provide the same functionality as a desktop terminal running the SAP WM module software. RF
queue management can be used to effectively streamlining similar transfer tasks into each RF queue
and users can be assigned to the RF queues to execute the tasks from the configured queues.

Storage Unit Management: The materials are stored on standard pallets, wire baskets or other
containers, are assigned an identifier or a number which is maintained in the system as the storage
unit number. Therefore, it is possible at any given time to know where each storage unit is located in
the warehouse complex, the amount of material contained in it, and which operations have been
processed or planned for it.

When SU management is not active in a storage type, all stock is managed as separate quants at the
storage bin level. With SU management, stock is managed at the pallet or storage unit level. A
storage bin can have one or more storage units. Similarly, each storage unit can consist of one or
more quants.

Warehouse Activity Monitor: The functions of the warehouse activity monitor are intended to assist
warehouse administrators to oversee, plan and optimize work processes in the warehouse. It
provides a means to notify responsible personnel in case there are delays or errors in the overall
system. The warehouse activity monitor helps you to identify and correct warehousing errors or
critical processes soon after they occur, thus enabling you to carry out warehousing transactions in a
timely manner.

Documents in Warehouse Management:

Transfer requirement- This is a document that serves to plan goods movements using the
Warehouse Management System. Transfer requirements are used to pass on information on goods
movements that are posted in Inventory Management (MM-IM) to the Warehouse Management
System (WMS).

The transfer requirement contains all the necessary information on a planned goods movement.

What should be moved?

Which quantity should be moved?

When should it be moved?

Transfer Order- Document used for executing goods movements with the help of Warehouse
management. We can create the transfer order with reference to a source document from
Warehouse management like Transfer Requirement, delivery etc.

Posting change- A posting change generally refers to change to the stock data of a material affecting
bookkeeping information. In the case of most posting changes, for example during release from
quality inspection stock, the goods remain in the same physical storage bin.

Typical Procurement processes with WM:

Purchase Order will be created whenever there is a requirement of Materials/ Services from an
external source, whether to use in Production or for direct consumption.

 In PO item level we can see Confirmation tab, where we need to select ‘Inbound Delivery’ as
a confirmation document.
  Inbound delivery will be created in advance as advanced shipping notification (ASN) from the
supplier. The ASN contains logistically relevant data, such as date and time of delivery,
material, quantities, and packing information. An inbound delivery is selected and processed
for putaway.

This is confirmation document that enable business to capture the shipping stage or gate entry as
soon material is shipped by the vendor or received at the store gate

 Using Subsequent functions in VL31N/VL32N- can also create the transfer order (see picture
below)

Based on the Putaway strategy system will pick the storage bin while creating transfer order.

The putaway process includes putting goods away in storage bins in the warehouse. There are
putaway strategies in the Warehouse Management (WM) system that simplify the search for
appropriate storage bins.

When the system creates transfer orders to move goods into or out of the warehouse, you do not
have to intervene when it comes to finding storage bins. This guarantees that stock movements are
processed quickly and consistently.
We can configure Raw Material quarantine area/ Floor in WMS, so that materials will be placed on
Floor for inspection and then after inspection it will be moved to actual storage locations.

Below we can see the materials which are received from Vendor are posted to “Interim Bin’ which
we call it as a Floor:

Upon confirming the Transfer Order, the materials will be posted to Actual storage bin as per the
strategy defined in WMS:
Widely used Putaway strategies are:

 Next Empty bin- This strategy is suited to more randomly organised Warehouse. In this
strategy, system will search within the storage type for next empty bin.
In a complex Warehouse we will have multiple storage bins, in this case user will face major
time in fetching the empty bin and searching for the location. By having the ‘Next Empty Bin’
strategy system will propose the storage bin automatically which helps the user to place the
material in Bins.
Below we can see that system automatically proposes the storage bin based on the Put away
strategy defined in WMS:

 Manual Stock Placement- No strategy is used, the storage bin will be selected and entered
manually by the user while creating transfer order.
Below we can see the material is posted to Interim Area/ Floor
 As we configured the WMS ‘Put Away’ strategy as manual, system will ask to enter the Bin
number manually:

 Fixed bins- This strategy is used when a material is to be stored in one particular storage bin
in a warehouse.
This is defined in the material master and for all putaway of this material, system will
determine the fixed bin.
 Anyhow, system will allow to override the fixed bin determination and enter a manual bin
while confirming the Transfer Order:

Dispensing Process:

As per the requirement from production person, warehouse person will transfer required materials
by using weighing machine to dispensing location.

Transfer can be done in SAP by using MIGO transaction or by using barcoding interface.
Below is the screen where we can transfer material from Warehouse to Dispensing location by using
barcode.

By using warehouse management the stock will be picked automatically by the system based on the
strategy defined in Warehouse, which reduces the effort and time of the user.
Material dispatch to Customer:

Against sales order we can do PGI in SAP or through Barcoding.

After providing Sales order and shipping point in barcoding screen, we can create automatic
delivery, system will pick the batches based on FIFO basis.

We can generate a pick list and forward the same to Warehouse team, so that warehouse person
can have a reference and it suggests how many pallets, boxes and part pallets are required for
delivery, so that warehouse person can make required arrangement to do delivery.
Against delivery, system will suggest from which bins materials has to be picked, by scanning the
warehouse pick list through barcoding, all the required details will be filled automatically in barcode
screen, which will reduce the user time and user mistakes.
We can have a control that warehouse user cannot pick the quantity from wrong Bin.

Report in Warehouse Management:

 Open transfer orders- LT22

 Stock at Warehouse Level- LX02

 Stock comparison of Inventory management/ Warehouse management- LX23

 List of Empty Bins in a Warehouse- LS04