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SAP WM –Process, Functionality, Scope, Benefits, Advantages, Disadvantage- Complete Reference- Part 1

The aim of a SAP Warehouse Management System (WMS) or Extended WMS should always be the same – to provide staff and managers with the information necessary to more efficiently track and control the movement of materials within the warehouse. To this end, SAP offers its own Warehouse Management (WM) application, which provides flexible, automated support to assist in processing all goods movements and maintaining current stock inventories.

But while SAP WM is a powerful solution that often proves to be a cost-effective means of optimising material flow and enhancing stock management, it’s one that I’ve found many warehouse managers are unaware of. In my experience, it’s surprisingly common that companies do not know they could be augmenting their existing SAP software with WM – a system that can offer so much and is relatively cheap to implement. That is not to say everyone should immediately rush out to change their existing WMS, or even for those without a WMS to automatically

Choose WM, as this solution is not necessarily for all companies, especially not for those without SAP. For those not already using SAP, WM as an independent, and standalone option doesn’t offer the versatility or power of a combined package, where WM is integrated within an existing SAP framework. Moving away from an independent WMS solution and towards an integrated approach, such as one utilizing WM in conjunction with SAP, offers advantages to warehouse managers:

  • If your company is already using SAP, it can implement SAP WM at minimal cost, when compared to the initial implementation investment

  • An integrated WMS means there is no need for complex interfacing between different systems

  • SAP WM is a stable, proven solution

  • Key functionalities offered by other WMS can be built into SAP WM as custom functionality at a much lower cost

  • Supports high-end systems which include tracking and routing technologies, such as Radio Frequency Identification and voice recognition

  • Processes goods receipts, goods issues and stock transfers quickly and easily.

Warehouse Data in the Material Master:- Material Master Data Warehouse Management

Warehouse number (XYZ)

Storage type (F01)

Picking storage type (F01)

Storage bin (A1-04-003)

Maximum bin quantity (50)

Minimum bin quantity (10)

Rounding quantity (blank)

Control quantity (blank)

Documents in WMS

Transfer requirement-This is a document that serves to plan goods movements using the Warehouse Management System (WMS).On the one hand, 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).

Structure: – 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?

The planning date is important for further automatic processing.

Which transfer type is the basis of the goods movement?

Each goods movement in the warehouse is classified by a transfer type indicator. This key differentiates between:

A stock put away, a stock pick, a stock transfer.

Why is it to be moved?  Was the transfer order created as a result of a purchase order or a production order, or was it created manually?

Replenishment qty. (blank).

Transfer Order:- Document used for executing goods movements with the help of Warehouse Management (WM). Logical, physical goods movements or stock changes can be the basis for a transfer order. These include:

Picks, Put away, posting changes

We Can create the transfer order with reference to a source document from WMS or other SAP application components. A source document can be a:

Delivery document, Transfer requirement, Material document, Posting change notice.

Transfer Order Structure- A transfer order contains all the necessary information on a planned goods movement. What should be moved?  Which quantity should be moved?  Where should the bin be moved from (source storage bin), and where to (destination storage bin)?

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.

Integration. We generally trigger posting changes in Inventory Management (MM-IM). If you implement the Warehouse Management system (WMS), you process the posting change notice from MM-IM in the WMS. For more information, we can also trigger material status changes in the WMS, for example if a physical goods movement in the warehouse is the cause for the posting change.

Posting Change Types in the WMS- Type of Posting Change

  • Release from quality inspection stock

  • Processing blocked stock

  • Posting change in quality inspection stock

  • Posting change from material number to material number

  • Dividing batches amongst other batches

  • Posting changes between storage locations.

Interim Storage Type

The Inventory Management (IM) application component communicates with the Warehouse Management component through interim storage types. Goods receipts and issues posted in IM are automatically updated in WM in these interim storage types.

Standard SAP interim storage types:

901  GR area for Production

902  GR area for external receipts

910  GI area general

916  Shipping area deliveries

917  Quality assurance

999  Differences

How SAP IM and WM Movement Type Integrates and how Posting occurred in IM and WM synchronises the Inventory updates in SAP System. Each Inventory Management movement type that is relevant for the WM system is allocated to a reference movement type, with which the system determines the corresponding movement in the WM system. If you do not want to connect an IM movement type to WM movement type, then assign Reference movement type 999. For example goods receipt posting for account assigned purchase order.

The warehouse management movement type provides the following information required for stock placements and stock removals:

1.Interim Storage type

2.Coordinate of the storage bin

3.Confirming and printing transfer orders

4.Indicator for Storage type search

5.Outbound Shipping

SAP WM General Business Process (here I have added Yard management steps for reference to SAP WM Inbound and Outbound Business process with Yard management activated. It is to show how Yard Management can help a company to track the Movements of Trailers (Tracks the movement of trailers and provides inventory visibility with the receiving/shipping yard).

  • SAP MM WM Inbound Process with yard Management Activated.

Creating Purchase Order

Approving / Releasing Purchase Orders

Creating Inbound Delivery with Reference to the Purchase Order

Creating an Unassigned Vehicle

Assigning Vehicle to Inbound Delivery

Checking Vehicle into the Yard

Scheduling a Dock Door

Moving Vehicle Using Mobile Device

Checking Vehicle Out of Yard

Viewing Activities on Vehicle Checked Out

Packing Receipt and Creating Transfer Order

Confirming Transfer Order

Posting Goods Receipt for Outbound Delivery

Checking Stock for Material.

Capture Excise Invoice

Creating Invoice Receipt.

  • SAP MM WM Outbound Process with yard Management Activated.

If suppose if your company wants to track the movement of trailers and provide inventory visibility with the receiving/shipping yard. Yard management describes a vehicle being checked into the yard, moved within the yard, scheduled to a dock, loaded with an outbound delivery, and checked out of the yard.


Yard monitor helps yard managers constantly get up-to-date information in the yard and to enable them to do quick responses. Yard scheduling chart provides a graphical representation of scheduling activities in a yard, which can give user overall status and is helpful to improve management efficiency. Workers in the yard can execute yard activities using RF presentation devices, and it supports personal customization, which supplies convenient user interface.

Key Process Steps

Creating Sales Order

Creating Outbound Delivery for Sales Order

Creating Transfer Orders for Deliveries

Confirming Transfer Order

Creating an Unassigned Vehicle

Checking Vehicle into the Yard

Assigning Vehicle to Outbound Delivery

Schedule a Dock Door

Moving Vehicle Using Mobile Device

Checking Vehicle Out of Yard

Viewing Activities on Vehicle Checked Out

Posting Goods Issue for Outbound Delivery

Creating Billing.

SAP WM Putaway Strategies

Fixed bin – Fixed bin assignment per material (data entered in Material Master, stored in Single fixed bin. Fixed bin storage is 005 in std. SAP. Strategy Indicator is “F” for Putaway and We need to select Addition to existing stock Indicator- X. Capacity check Method suggested here is “3”-Check Max Quantity per storage bin in a storage type. We have many options. Fixed Bin entered in Material master does not change until unless if any changes to Material master (for this Field). Storage Type- 001. This strategy is very simple.

Open storage – One storage bin per storage section (Materials stored in open Floor, per storage type roughly divided in to section and one storage section is represented by One storage bin. Normally people can ask how to view stock in open storage strategies any specific report. This assumes like a joke but I have faced this questions. E.g. Coal or some scrape or junk yard storages treated as Open storage strategy when WM is implemented. TO can be created using LT01. Movement type 501, Interim storage type is 902 and received in open storage bin WE-ZONE. Strategy Indicator is C. Storage is open and no restriction as rack storage. We need to set Mixed storage Indicator-X and Addition to existing stock- X in Storage Type control for strategies screen. Storage Type – 003

Addition to existing stock – Attempt to add material to existing stock

Next Empty bin – Search for next empty storage bin in the storage section. In Manufacturing Industries (Sony, Samsung, and LG electronics- example) producing electronic components, the parts are often small, delicate and subjected to damage by static. This components are stored in containers in warehouse that are safe for all Products. Many warehouses that store these products use carousel storage where the Parts are stored in identical containers in carousel system that places new Items in the next empty bin available. Material can be stored in any available empty next bin. Different Materials can be stored in different size containers.. We can check the stock using LS04. Storage Type – 001. Strategy Indicator is “L”. We need to select Stock Placement require confirmation check box. And SUT check active should made active and Storage section check active should be selected, because strategy is to find next empty storage bin. Defining storage section search is not necessary but it will help Warehouse Operator to getter better idea of where the next Empty bin will be located. We can use LS04 to check the bins.

Bulk storage – Search for bin in the bulk storage area. It is for materials that is stored in large quantities. Please do not get confuse with the materials stored in Bulk containers such as Grain, Sand, Cement, Fertilizer.

Mainly beverages and food industry- like Coke, Pepsi, and Nestle…Etc…a production run of beverages may produce several thousands of product. Once this is placed in pack and then stored on pallets, it will be stored in bulk storage type. Transaction to define Bulk strategy- OMM4.   We have sequence of configuration activity for Bulk. First we need to activate strategy, then Defining storage type control thirdly Defining Bulk storage Indicator and finally Defining Block structure. SAP STD Storage type used here is 004, Bulk strategy Indicator is B. we need to activate the stock placement requires confirmation switch because this allows more materials to be added to the same Material currently in the Bulk storage type. Addition to existing stock should get activated. SUT check active to be selected because bulk storage users Storage units.

Near Picking Bin – This strategy suits to materials undergone frequent Picking in Warehouse. So better to store material close to picking area. Normally Warehouse can use this strategy to see the materials can be placed in the fixed bin, If not system will try to reserve an area and finally try to find a bin which is close to Picking area.. like we are doing in Train with huge bags and luggage and we look for seat which is nearer to train compartment entrance or nearer to the Door so that we won’t make others feels Incontinence while getting down from the compartment, we can try to get the seat, but Ticket checker will tell us temporarily you can take some seat and once all sorted out I will give a nearest seat that suits your requirement. Here I am just giving example. Transaction used to configure is OMLA. We need to configure six steps 1. Putaway strategy activation 2. Storage type control definition 3. Search per level definition 4. Row and shelf assignment 5. Storage bin generation 6.Consistency check. Strategy Indicator is K. Storage Type for this strategy is 035. We need to select Stock placement requires Confirmation Indicator. It is good to leave the configuration with just one setting, This will perform putaway in reserve storage bin, without searching for Fixed bin or carrying out a search for a relevant bin.

SAP WM Picking Strategies

FIFO – The system proposes the oldest quant for the stock pick. It is more commonly known and used strategy- removes the oldest quant from the storage type in the storage type search. Normally found in manufacturing companies wish to see their first stored stock material and longest time in the Warehouse. Warehouse that have deep racks make it difficult for a staff/Warehouse worker to get to the correct material. One Famous method is Oldest material is picked is to use gravity flow racks for materials that are picked individually and not in boxes. The boxes are placed at the back of the rack and flow racks filled so that picking at the front moves the material forward from the back. This method is especially used in picking areas. Strategy Indicator is “F”.  Transaction used to check material stock is LS24.

LIFO – The system proposes the most recent quant for picking. It is just opposite to FIFO strategy. It is based on the last delivered Material to be considered for picking first. It is used mainly by many companies for inventory cost accounting. If stock is place more days in warehouse it will affect the value reported on gross profit margins. Investors tend to be more cautious to review gross profit margins, which are often considered as a measure of the value provided to consumers. LIFO can give the accurate valuation of the Warehouse stock. Mostly all retailers using LIFO, M& S, TIGER, TARGET and many more retailers. When LIFO picking is used no value change occurs for Older Material when new materials are received. Because of LIFO the older materials is not affected by the potentially higher prices of the new deliveries of the material. If older materials not affected that means it is not subjected to valuation for a new Price changes in Market. Again if older materials price is not increased then this prevents false valuation of current Inventory. Picking with LIFO method is not that much common as FIFO Picking. It may be used for financial department because of its more conservative view of the cost of Inventory and there it shows positive lights by some financial experts. Strategy Indicator is L. we need to activate Stock removal requires confirmation, Return stock to same storage location and execute Zero stock check indicators. Here storage type is 002. Transaction user to pick the material from storage is LT01.

Partial quantity – Removal from partial pallets first, then standard pallets. Indicator used here is A. picking of partial quantities is associated with SUM. Partial quantity is required by a warehouse if the Warehouse manager does not want to pick all the contents of a storage unit and then have to return some to the storage bin. A partial quantity allows the staff to remove some of the Quantities/ Content of a storage unit. Warehouse staff often try to reduce the number of storage units with partial quantities, and the partial quantities picking strategy can be more appropriate to confirm this. We need to select return stock to same storage bin. Initially the system will determine the quantity to be transferred equals or is greater than the quantity of a standard storage unit. If this is the case, then a standard storage unit can be picked form the stock. However if no standard storage units are available, the partial storage units quantities in the warehouse are used. If the system determines that the quantity in the TO is less than the quantity of the standard storage unit, then the system will initially proceed to remove partial storage units quantities from the Warehouse. However if no partial storage units unit quantities are available then the system will need to break down full storage units to obtain the correct Quantities for the transfer order.

Large/small (Quantity relevant Picking)- Pick proposal based on quantity- it is frequently used but it more suited for companies warehouse store the same material in the varying sizes of bins and storage types. We find this in old warehouse buildings. Quantity relevant strategy picking is based on the Quantity required in the TO and whether that Quantity is defined by a large or small. Warehouse may have storage types where small quantities of material are stored and also have storage types where larger quantities are stored. Here 2 step of configuration required 1. Activate the quantity relevant strategy for the warehouse where picking will take place. 2. To determine the sequence in which strategy type are searched so that the relevant material to be picked is found. Strategy indicator user is M. once entries in storage type search sequences are to be maintained.. it is necessary to say the first storage type with smallest quantity and then the second in the sequence would be larger than the first. ..and next larger in the sequence. In normal 2 sequence of storage type search to be maintained for the required picking. If material is not available in the first storage type in the sequence then system will search for second storage type in the same sequence. For picking operation the key defined is E. if putway operation then A. if suppose material is not found then warehouse staff manually process the TO and manually enter the Storage type and storage bin in TO.

Fixed bin – Picking from the fixed bin. It always relies on the date entered in Material master WM screen. In ECC 6.0 the storage type for fixed strategy in WM 2 View but it depends on version to version. To view stock position we can use LS24. Strategy Indicator is P. this strategy is used when material is allowed to pick from any storage bin within the storage type mentioned in Material master. We need to choose stock removal requires confirmation switch. Transaction LT01 can be used to pick from fixed bin.

SLED- Shelf Life Date expiration- mainly in Retail, Grocery, Food and beverages where perishable materials occupying majority space.this can be sales- focused Shelf life where it’s validity to certain period of time(day/week/ Month/year) before expiration date is reached they need to sell to end customer.Alternatively if it production focused then let say chemicals and raw materials kept only for so long still meet tolerance limits for use in production process. it is more important managers to re-view their date of expiration to ensure out of date materials does not have to be scrapped. Based on SLED date picking takes place. Details Maintained in material Mater.regarding shelf life characteristics in plant/storage view. We have Period let us sy 300, Min Rem.shelf life 30, Period ind. for SLED- D, Time unit – D, Total shelf life- 180 etc.

Regarding configuration first we need to activate SLED Management indicator for Warehouse and then as a second step we stock removal strategy to get activated. Indicator for SLED strategy is H. we need to set stock removal requires confirmation indicator. To display SLED stocks we can use LX27. Transaction to use LT01 for creating TO for short SLED Materials for storage type movement type used s 201 because it will remove the material and issue to cost center.

Configuration Setting for storage type Control




Usage of Indicators /Switches in Storage type control Definition screen.

*****We need to choose stock removal requires confirmation Indicator. If this indicator is set then picking of entire item must be confirmed in the destination St. Type or return storage type before the Quantity is made available. If negative stock allowed indicator is set then system allows posting of neg stocks Quants in storage type. This is done for Interim storage type/areas. If full stock removal requirement is selected then entire quant must be picked regardless of the qty required for actual picking.

If return stock to same storage bin then it is required that a reminder of the picked stock that was not needed Will be returned to the same bin that picked earlier. If Execute Zero stock check is activated only after stock picking is completed or emptied after stock pick. When Zero stock check is made the storage bin can only be used for putaways when 0- stock check is completed and confirmed. If Round- off Quantity for Picking is selected then system will round-off qty in the warehouse screen for the storage type in the MMR. Propose Post change @ storage bin- when warehouse needs to post and leave the materials in the same storage bin – especially during re-labelling process. This Indicator controls no transfer is to take place for a posting change.  Block upon stock removal when blocking indicator is set when material is picked. Value 1 for blocking storage bin and 2- for blocking Quant only.  Assigned Pick Point storage Type- if required for RF solution related business process requirement. Return storage type- into which any remaining qty of the picked Material to be stored now****.


Purpose of Storage Unit Management (SUM)

Storage unit (SU) management in Warehouse Management (WM) enables you to optimize warehouse capacity and control material flow by utilizing storage units within the warehouse.

A storage unit is a logical grouping of one or several amounts of material such as a pallet or a container that can be managed within a warehouse as a unit that belongs together. Storage units can be either homogeneous (containing one material item only) or mixed (containing two or more material items).

All storage units, whether the materials are stored on standard pallets, wire baskets or other containers, are assigned an identifier — 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.

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.

Storage unit management is generally activated in the warehouse for the following reasons:

  • Movement of mixed pallets (with more than one material) as a single unit within the warehouse

  • Identification and management of materials using storage unit numbers assigned internally or externally

  • WM can communicate with fork lift control systems via an interface without having to maintain material data in the external system.

It is only possible to deactivate SU Management in the warehouse number record if it has first been deactivated in the subordinate storage types.

In addition to the capabilities already available in WM, the activation of storage unit management in your system enables you to access several functions that are specifically designed for working with storage units.

Using SU management, you can

  • Create homogeneous and mixed storage units

  • Place materials into storage using an identification (ID) point

  • Create transfer orders and confirm stock movements for storage units

  • Transfer whole storage units internally

  • Add stock to existing storage units

  • Display the contents of storage units

  • Print documents to accompany storage units

  • Plan goods issues, for example, to stage materials in replenishment storage bins in production

All storage unit management functions are fully integrated with WM.

Mainly Configuration required at two levels in the Master Data

  1. Warehouse

  2. Storage Type

SU – Palletization Data in WM2 View – Material master


Many people asked what HUM & SUM is and where it is used…

In a WM we can work with SUM independently of HUM. The additional features or function allows you to enter materials and logistics careers as a logistic units that can only identify within a Warehouse using a Number. If we user HUM in connection with WM, then we must activate sum for all storage types in which you want to store handling units. During putaway, the system creates a storage unit for handling unit of a reference document. Example Inbound Delivery. This storage unit has the same identification number as its brother Handling unit.

The basic difference b/n HUM and SUM is that, HUM is a combination of Goods and Packing Material and it is mainly used for tracking purpose. Whereas when it comes to SUM, its nothing but palletization of the materials. The primary function of SUM is to effective use warehouse complex and gives greater flexibility in terms of handling goods movement and storing goods inside the warehouse.

For your clear understanding SUM is a subdivision of storage Bin where stocks are stored with SU number rather in quant number. The another advantage of SUM is, we can maintain two or more different quants inside a SU.

Both SUM and HUM shares same identification number, whereas SUM features limited within the warehouse, and HUM has its role outside the WMS.

HU is basically a material(s) which can be packed using packing material(s).

SU is defined for the purpose of handling and storing the material in Warehouse. you can have full pallet, half pallet or pallets of different sizes and capacities.

Following are the differences i can think of.

– HU is at IM level and Pallet is used for SUs at WM level.

– HU mgmt. is activated at Storage location level while SU mgmt. activated at Storage type level.

– HUs exists outside your organization (unique SSCC nos) while SUs are within the org, specifically at WM level.

– You can have HU mgmt. without SU mgmt. or vice-versa.

– When a HU is put away in warehouse, it is put away as SU. System automatically assigns the SU number same as HU. You can also work with SUs alone without HU mgmt., in which case, you have to be very careful while defining the number ranges for these two. I suggest you search forum for further details.

Handling unit management can be used with or without WMS. But when you have WMS in place you need SUM to process handling units.


  1. SUM can be controlled for each storage type and allows you through the use of SU’s to manage material quantities for each container or pallet as a self-contained unit within a storage type.

  2. Certain storage functions such as mixed storage control, removal from storage functions in bulk storage, or capacity checks requires use of SUM in the warehouse as prerequisite. SUM activated for following reasons

  3. Movement of mixed pallets as a single unit within the warehouse.

  4. Identification & management of materials using storage unit numbers assigned internally or externally.

  5. WM can communicate with fork lift control systems via interface without having to maintain material data in the external system.


  1. HUM represents a packaging controlled logistics system in which all movements are mapped through HU’s.

  2. If we use HUM then you must use the GR process with inbound deliveries.

  3. If we use HUM in connection with WM then we must activate storage unit management for all storage types in which you want to store HU’s.

  4. During put away the system creates SU for the HU of the reference document, e.g. inbound delivery. This SU has the same identification number as its sister HU.

  5. HUM must be activated for each plant/storage location combination.

  6. HU itself is created in inbound delivery during packaging.

HUMO Transaction to View HU Data


The stock is no longer in warehouse, the goods issue process is completed, the HU has PSTD status, and the delivery is posted. Hence a material document related to the goods issue created. That HU could be reversed by using the delivery document number in VL09. Notice that document where HU is involved can only be reversed once. HU will reach different system status based on the stage @ which HU exists. Some users complain that STO cannot be reprocessed because HU needs reversal on both inbound and outbound. It is a system restriction and in such case the operation needs to be done in the opposite direction to release the HU for further operations.

In this article I am not interested to touch SAP WM Configuration and how to Prepare SAP WM Questionner for collecting business requirement Gatheration because I have already explained those information in my earlier Articles. For those interested in SAP WM Configuration steps and preparing Questionner before going for Fit- Gap analysis, blue Print Documentation. It would be recommended to have a look on the below links for reference.

Step by Step Approach for Configuration of Warehouse Management

Questionnaire for Warehouse Management (WM) Module (for requirements understanding / understanding client’s business process)

SAP WM Monitoring ToolsPrimary warehouse process monitoring and control tools:

Warehouse Activity Monitor (“WAM”): assists warehouse administrators to oversee, plan and optimize work processes in the warehouse.

The drill down list provides information based on the Storage Types, Movements, etc.

Warehouse activity monitor is an instrument for monitoring warehouse movements. It informs you processes that have failed to run completely or have run with errors, and offers you the opportunity to create or correct missing documents. The Warehouse activity monitor contains seven objects for monitoring.

01 – Unconfirmed Transfer orders

02 – Open Transfer requirements

03 – Open posting change notices

04 – Open Deliveries

05 – Negative stocks

06 – Interim storage stocks

07 – Critical stocks for production supply.

A document or stock item is only displayed in the Warehouse activity monitor if the defined processing periods (in customizing) are exceeded.

RF Activity Monitor: used to control RF work, work items in queues, and assignment of work to associates

Yard Activity Monitor: used to control yard managers constantly get up-to-date information in the yard and to enable them to do quick responses.

Types of Warehouse Stock

Available Stock, Inspection Stock (Q), Blocked Sock (S), Blocked stock Returns (R),  à  we can check in Ls

Special Stock

Sales Order Stock (E), Consignment stock (K), Project Stock (Q), Returnable Transport stock. We can check in LX03.

Features of Inventory Management

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

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.

People will have a question on when Inventory management is more useful and acceptable to Implement ?

Answer is :-Inventory Management is More useful when…

Small facility

Lower levels of inventory on hand

Simplistic material handling processes

Lower volume of activity

Outsourced warehouse operations

Only need storage location or bucket of inventory visibility.

Important thing to consider in SAP IM

Required data for IM

Plant, valuation and storage location data

Relevant data for IM

Work scheduling, accounting, materials planning, purchasing, and classification, storage and quality management

IM menu

Goods movements

Material documents



Focused on reporting, lists and LIS

People will have a question on when Warehouse management is more useful and acceptable to Implement ?

WM is great when

Larger facilities

Large number of materials on hand

Higher volume or flow through

Traceability and visibility is critical

Track material flow, status, inventory levels

Complex processes

Automated systems, wide spread site.


Important thing to consider in SAP WM

Extend material master

Warehouse management view

No required data

Define warehouse structure

Minimize the number of storage types

Define based on similar and different rules for storing materials

Mixed stock, Storage or Handling Unit Management

Define the WM Processes

Automatic, semi-automatic and manual processing

Transfer order creation, confirmation, posting changes


Main Difficulties or Drawbacks in Inventory Management

Lack of detailed visibility to material flow

e.g.  When the delivery pick list is generated, the delivery’s “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

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

Warehouse Management is always advantageous when the Inventory management could not handle the materials in storage locations.

You can track the material exactly where it is stored and whether it is on the move or in storage bin.


In Normal people would say that they will recommend to client to use WM only if the standard logistics functionality is insufficient for your needs.

Answer is: – it is not true. We have many Functional Modules and customer/user Exits Provided by SAP. using FM/ Exits we can work on any kind of scenarios client currently following. even we can club 2 more strategies using Exit. for example in case of beverages for picking of Materials we need to consider FIFO and SLED because Materials in Beverage/ Food/ Groceries Industries (Coke, PEPSI, NESTLE..etc..even in our small Indian clients such as Subhiksha (TCS implemented SAP) perishable in nature and we cannot use for a long as earlier said they are sale oriented and mainly needs to concentrate in revenue (ROI) so we need to activate SLED Picking strategy and also system should pick First in First Out Materials for doing efficient Warehousing Operation. so we need to club this 2 Picking strategies. In Standard SAP this functionality is not available and so we need to use Exit. in Storage type control Definition we have the option of selecting Exit Check box. we need to activate from Config side. so that system will check the exit used by the Developer.

SAP Function Module & Exits


We can use function modules to replace a series of existing batch-input processes that is used in the Warehouse Management system. You can use these modules to combine different transactions on one screen or to enhance the range of functions in your system to meet your particular organisational requirements.
Create TR

Change TR

Create TO

Confirm TO

Cancel TO

Create multiple processing list

Start multiple processing list

Release multiple processing lists

Processing TR’s using Function Modules

It is possible to create and change transfer requirements in Warehouse Management using function modules. You can and should use these function modules instead of existing batch input processes. This will significantly simplify and improve the performance in comparison with batch processing. All plausibility checks are carried out in the same manner as with the creation of transfer requirements using batch input.

The following function modules are available for WM:

Processing TO’s using Function Modules. in website SAP Shared all the Details related to FM and exits. In my next coming article I would try to explain usage of FM and when to use suitable FM.

We can create, confirm, and change transfer orders in Warehouse Management using the function modules listed below.

The online transfer order processing is divided into three reports. They also allow you to update your own data when you Generate transfer order confirmations. If you use this function to create your own Projects, you can display additional information about each enhancement.

Customer Exits for Creating and Confirming TOs

Using customer-specified logic, the following customer exits permit you to become involved in the storage bin search process and, afterwards, to update customer data when creating and confirming transfer orders.

While creating customer-specific projects using this function, you can display additional SAP information about each individual customer exit.

The following customer exits related to transfer orders are available for use in WM:
Develop User Exits for Warehouse Management

The following SAP user exits are available for the area Warehouse Management.

•MWMTO001 Update own data after TO creation
•MWMTO002 Update own data after TO confirmation
•MWMTO003 Own strategy
•MWMTO007 Palletization and storage type search for stock placements
•MWMTO004 Own strategy
•MWMTO008 Storage type search for removals
•MWMTO005 TO-related under delivery
•MWMTO006 Bin-related over delivery and under delivery
•MWMTO009 Prevents deletion of TO items
•MWMTO010 Determines total planned TO processing time
•MWMTO011 Correction of processing time for TO item
•MWMTO012 Transfer order split
•MWMTO013 Enhancements of stock removal strategy “Stringent FIFO”
•MWMPP001 WM/PP interface: Automatic TR creation
•MWMRP001 Replenishment control: Selection of delivery items
•MWMRP002 Replenishment control: TR quantity allocation
•MWM2S001 Predetermining 2-step picking
•MWMD0001 TO printing using print program RLVSDR40
•MWMD0002 TO printing (multiple processing) through print program RLKOMM40

The SAP user exits MWMTO001 through MWMTO013 are in the same function group and can communicate with one another (with limitations) via global data.
For “Automatic TO creation (background processing)”, the following user exits are available:

•MWMTOAU1 Selection of requirements for automatic creation of orders.
•MWMTOAU2 Reference number assignment.
•MWMTOAU3 Selection of posting change notices for automatic creation of transfer orders.

All customer exits are in the same function group and can communicate with each other via global data with some limitations (for example, asynchronous updates).


Creating/Confirming TOs Online or Through Update Programs

For the Warehouse Management function modules, the update program for creating and confirming transfer orders can be controlled via a separate parameter.

Updates for normal transactions are carried out via the update program. However, you can set this especially for creating and confirming transfer orders. To do this, you must change the program ML03TPAR.

SAP uses an User Exit (SMOD/CMOD) in order to make an enhancement of customers a lot more convenient. There are very many user exits available within SAP. When using an user exit, the system does NOT become modified what happens when you start changing SAP for your needs. So, it is very interesting to make use of all options, that leave the SAP system as unmodified as possible. Therefore, you should always check the available user exits in the area for your needed enhancements.

You can activate user exits in the SAP transactions SMOD and CMOD. There you can check for the appropriate user exit and insert the new enhanced code in function modules for your needs.

Here you find the complete list of SAP User exits in SAP

(You can find this list in your SAP system as follows: you can see all the Details in   but here I would like to make the understanding simple – so that new person entering SAP WM- LE can easily get the knowledge Stuff. Please share your valuable comments.

CMOD -> Utilities -> SAP Enhancements -> F8 Execute)

Update own data during creation of TO

Update own data during confirmation of TO

Custom Putaway

Custom picking

Under & over deliveries

Palletization Data

Conversion of storage unit numbers

Interface for external systems

If you do not want the system to execute the posting changes immediately after confirming the transfer order, but rather cumulatively using the RLLQ0100 report, set the Combine post. changes indicator. You can also call this report from transaction

LQ01 (in the application menu, choose Logistics à Logistics

Execution à Internal Whse Processes à Posting Change à Direct

to Bin Stock à Posting Change Storage Location to Storage


Stock Removal

strategies in Customizing by choosing Logistics Execution à

Warehouse Management à Strategies à Stock Removal Strategies. If you need to make additional settings, you can access the relevant tables here.

Note: If you want to use your own search logic, you can use the SAP enhancements MWMTO004 and MWMTO013.

In Warehouse Management, you activate the shelf life expiration date update at quant level for a warehouse number. The expiration date is then stored in the quant data record in addition to the goods receipt date. In Customizing, choose

Warehouse Management à Strategies à Stock Removal Strategies à Define Strategy for Expiration Date. The Warehouse Management information system contains a report (RLS30010) that checks stocks according to their remaining shelf life.

Collective Processing of Outbound Deliveries

In addition to manual creation of single transfer orders for a single outbound delivery, there are several options for collective processing:

  • Automatic creation of transfer orders with report RLAUTA20

  • Group creation in the outbound delivery monitor and subsequent transfer

order creation for the group

  • Two-step picking

To use report RLAUTA20, message type WMTA (automatic transfer order) has to be determined in the outbound delivery message determination. This message type is used to create a transfer order for the outbound delivery. The program RLAUTA20 is called from the message control (program RSNAST00). If you want transfer orders to be regularly created in the background for your outbound deliveries, schedule the execution of the RSNAST00 program for message type WMTA. You can define determination records for the message type WMTA with the transmission medium 8 (Special Function).

Note: The message type WMTA can be used in the same way to create

transfer orders for inbound deliveries.

The Stock Transfer Process

Two transactions are available to create a transfer order for moving partial stocks within a warehouse number: transaction Create Transfer Order Without Source Object (transaction code LT01) and transaction Create Transfer Order from Stock

List (transaction code LT10). With the Create Transfer Order Without Source Object transaction, you can only move the stock from one storage bin. If you want to move the stock from entire storage section or picking sections in a storage type, or even all of the stock in a storage type, you should use the transaction Create

Transfer Order from Stock List (report RLS10034). In this program, you can select the quant’s you want to move and then enter the destination data.

Caution: The system creates a separate transfer order for each quant.

Process Flow

The internal stock transfer process is at the core of all the different types of

Replenishment control covered in this lesson. Generally, partial stocks are moved from one storage type to another within a warehouse number. As of SAP R/3 4.6C, you can use replenishment control to supply both fixed storage bins and bins in storage types with random storage. The following programs are available in the SAP ECC standard system:

  1. Report RLLNACH1 for fixed bin replenishment based on bin stock only

  2. Report RLLNACH2 for fixed bin replenishment based on bin stock and the current requirements in outbound deliveries

  3. Report RLLNACH4 for replenishment in storage types with random storage

To use these programs, you first have to add some storage type specific fields in the second Warehouse Management view of the material masters of all of the affected materials. For delivery-related control, you have to enter a replenishment quantity. For replenishment control based on the bin stock alone, you have to enter a minimum and a maximum quantity (for fixed bin materials, the maximum quantity is often already specified for the quantity-based capacity check and this quantity can be used by replenishment control as well).

Warehouse monitor

Note: After the physical inventory has been completed,

you can reset the Status of the storage bins to “not inventoried” using the RLREOLPQ program.

Transaction LT09 in the SAP system allows you to confirm open transfer order items and to generate new transfer orders for this purpose. If too many storage units are preplanned, you can use the report RLVSPLRE to reorganize the unused storage units.

There are three reports in the Warehouse Management system that provide an overview of the quantity of stored hazardous materials:

  • The fire department inventory list TX: LX06 (report RLS10060) displays

Information about the storage class, water pollution class and the amount of water pollutants among the hazardous materials in your warehouse. You can choose to run the report for a range of fire-containment sections and storage types within the warehouse or for the entire warehouse.

  • The correct storage check TX: LX07 (report RLS10070) creates a list for

each storage type that lists the number of bins that were checked, the number of quants that were correctly stored and the number of quants that were stored incorrectly due to the hazardous material storage parameters that were

Set up for your warehouse.

  • The hazardous substance list TX: LX08 (report RLS10080) lists materials

by hazardous material record number, concentration, hazardous material

warning, aggregate state and quantity. This report only selects materials

from storage types that are defined as storage types for hazardous materials in the WM system.

In addition, there is a report (TX: VM04) for Hazardous Substance Collective Data Transfer (RLVM0400) to fill the hazardous material master based on the EH&S specification data.

Archiving in Warehouse Management

The following programs are responsible for archiving the individual documents in Warehouse Management:

Transfer Requirements:

RLREOB10: Deletes archived transfer requirements

RLRB0001: Report for reading archived transfer requirements

Posting change notices:

RLREOU00: Archives posting change notices

RLREOU10: Deletes archived posting change notices

RLRU0001: Report for reading archived posting change notices

Transfer orders:

RLREOT00: Archives transfer orders

RLREOT10: Deletes archived transfer orders

RLRT0001: Report for reading archived transfer orders

System inventory records:

RLREOI00: Archives system inventory records

RLREOI10: Deletes system inventory records

RLRI0001: Report for reading archived system inventory records

Inventory count records (history):

RLREOH00: Archives inventory count records (history)

RLREOH10: Deletes inventory count records (history)

RLRH0001: Report for reading archived inventory count records (history)

You can schedule all reports as jobs in archive administration (transaction SARA) and you can read documents again that have already been archived.

For getting any output either by print, Fax, or any media you have to do output determination. output determination is also carried by Condition techniques. The detail procedure for Output Determination is :

Output Determination :

Output is a form of media from your business to one of its business partners or it can be within the organization. The output can be sent to any of the partners defined in the document. Outputs are usually in the form of Order Confirmations, Freight List, Delivery Notes, and Invoices & Shipping Notifications. Determining form of output is output determination. Here I have given SD part of output Determination. This is same for MM/WM/PP.

Types of Output:

Print Output, Fax, Telex, E-Mail & EDI (Electronic Data Interchange)


Configuration path: (following are the steps)

1) SPRO-> IMG-> Basic Functions-> Output Control-> Output Determination-> Output Determination using Condition Technique- >Output Determination for Sales Documents (or you can use output determination for billing documents depending on your requirement).

2) Create Condition Table: select the field Sales Doc Type from field catalog & Save

3) Maintain Access Sequence: 4-digits code & description.

4) Assign condition table to access sequence. Select Accesses line item and Go To Fields. Fields will display the fields we have selected in the condition table i.e. sales doc type.

Maintain Output Types:

AF00: Inquiry

AN00: Quotation

BA00: Order Confirmation

LD00: Delivery

RD00: Invoice

Select BA00 & Copy & Rename. Give the same 4-digit code as given to access sequence.

You Can Maintain:

Languages of Output

Partners (to whom you need to send output)

Print Program- print specification

Sap Script- layout or SMARTFORMS.

Assign Output Types to Partner Functions: go to new entries & assign your output type to partner functions.

Maintain Output Determination Procedure: V10000 (Standard Procedure). Go to new entries and create your own 6-digit code with description. Select the procedure, go to Control Data. Here mention the output type i.e. condition type and leave requirement and manual only columns as blank.

Determination Rule: link the 6-digit procedure code to doc types.

Create Condition Records: VV11. Select document type and click on Communication. Mention partner function, medium, time. Output device: LP01, Spool request Name: SD_003, Suffix 2: order_confir & flag on print immediately. Once you press enter you will come across 2 key combinations:

Sales organization/ Customer Number: fill SO, Customer No, Partner Function Abbreviation, Partner to whom the output should be sent, time, medium, language.

It contains: Sales Organization, Customer, Partner Function (The abbreviated form of the name that identifies the Partner) (During output determination, the system determines the recipient of the output from the master record for the specified partner function. In this field, you can explicitly specify a recipient that will override the standard partner. There must also be a master record for the partner that is specified explicitly.), Medium, Time & Language.}

Order Type: Document Type, Partner Function (abbreviation), Partner, Medium, Time & Language.

Path For Output Determination For Sales Documents: Logistics à Sales/distribution à Master data à Output à Sales Document à Create (t-code VV11)

Path for Output Determination for Delivery Documents: Logistics àSales/distribution à Master data à Output à shipping à Create ( t-ode VV21)

Path for Output Determination for Billing Documents: Logistics àSales/distribution à Master data à Output à Billing Document à Create ( t- code VV31)

Assigning Output Type WMTA to Inbound & Outbound Deliveries

Output type WMTA is assigned to outbound deliveries in the standard settings. This means that you can let the system create transfer orders automatically for picking. To have the system create transfer orders automatically for putaways in the Warehouse Management system (WMS), assign output type WMTA to inbound deliveries.

Picking List output for WM

We can do this in the transaction OMLV -> ‘Print Code’, Form name depends on the print code.  Few are here with.

Single print / TO item          LVSTAEINZEL

Multiple print / TO               LVSTALISTE

Single print for         LVSTAEINZEL

Multiple print            LVSTALISTE

Picking list version 1           LVSKOMMIL1

Picking list version 2           LVSKOMMIL2

Posting change notice         LVSUMBUCHEN

Single printout w. kanban    LVSTOSOLOKANBAN

Single printout w.kanban     LVSSAMMELKANBAN

EK00 is used for special case pickings which may not apply to what you are looking for. Typically, LD00 under application V2 is used for picking list. This picking list output type can be used for both IM and WM levels.

 However, for WM, the transfer order acts as a picking list since the bin level picks will appear on this form in lieu of the picking list generated via LD00. The configuration transaction OMNU is the place where the transfer order output determination is maintained. For additional documentation on WM outputs, please use the following documentation:


 Function Specs is a document which a functional consultant prepares to be given to Abaper. This Document contains details like Tables & fields name, Table joints, Logic for development, along with test case in sand box / test server to verify the development.

Functional specification is nothing but the required functionality that user required. the Functional consultant will gather requirement from the user and will prepare a document. the template of this document is different for different projects/companies.

We can see following content in Functional Spec.

Document Control, Change History, Issue No, Date, Name,  Change, Initial Draft, Authorizations, Role, Business Process Lead (customer), Functional Analyst (specification author), Technical Lead, Developer (if known), Select program type below and then use menu option tools > unprotect to open other fields for input, New Custom Objects Required

 Include all new tables, key new fields/domains, new lock objects, new match-codes, new transaction codes, new authorization objects, new function groups, reports and module pools (transaction programs). Don’t specify all includes, function modules, routines etc. here.

 Impacted SAP Transactions/Tables, Process Flow, New Tables/Structures Required Specify new tables and structures required. If appropriate, you may defer detailed field list/specification to the technical specification (e.g. for secondary tables and structures).

Error Handling

 Specify what to do if a condition passes AND fails (e.g. – what happens if a customer record is found, or is not found). Specify messages and type.

 Specify any special error logging or table storage, including use of standard application log where appropriate.

 Field, Validation, Message type/no., Message text, Security Considerations, Database Considerations, Conversion Implications, Batch Processing.

Functional Test Requirements

Consider all the conditions that need testing for this enhancement and document below. For each logic branch in theory both (or more) conditions of the branch should be tested. For each scenario that could impact program execution, all situations must be tested.

Test condition, Expected result, Data set-up reqt.& Dependencies.


Technical specification is nothing but how the technical consultant is going to develop the requirement. the step by step process to develop the same. This is also having templates which are different for each project. Technical Specification is the document prepared by the Technical consultants. These documents are prepared basing on the Functional Specification given by the Functional consultants. The Technical Specification contains the following;







Main objective of Technical Spec

based on user requirements, we need to analyze the requirement…then check which all database tables needs to be accessed and what are the links…then which way the select statements needs to be written…next are there any calculations etc…what are steps for error handling…what are the test cases….how output displayed… There are types of technical specification for reports, Enhancements, BDC. these specs are different. There we write description, selection screen variables, output variables, custom tables, pseudo code, error messages, UTP(unit test plan).

Below are the standards for Tech specs

1.1 Development Attributes

Program Name:



Development Class:

Message Class:

Program Type:

Execution Mode:

Schedule Frequency:


1.2 Program Functionality

1.3 Output Fields

Output Label

Related SAP table-field (if any)


Output Characteristics

1.4 Proposed Solutions

1.5 Solution to be implemented

1.6 Reasons of selection/rejection

1.7 Pseudo-Code / Flow Logic of the selected solution

1.8 Selection Screen

1.9 Database Tables Used

Table Name

Table Description

How the table is used in the program

1.10 External Files Used

1.10.1 External File Layout <file name>

1.11 Components External to Program Used

1.12 Error Conditions

1.13 Key Technical Test Conditions

1.14 Sample Test Data

1.15 Assumptions


Here I have shared sample Functional specification & Technical Specification Document.


SAP 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.

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

Main Features of SAP WM

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

Warehouse activity monitors

WAM, RF Monitor, outbound delivery monitor, wave picking monitor, TRM Monitor, Yard Management Cockpit, Cross-Docking Monitor.


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.

SAP WM sub-module of MM module takes care of ‘Warehouse Management ‘ functionality. Warehouses can be managed efficiently at ‘Bin location’ level using WM module.

*****WM module of SAP R/3 provides flexible, efficient, automated support that enables you to:

Manage complex warehouse structures

Define and manage storage areas and storage bins in the warehouse

Manage several different types of storage, such as high rack storage, block storage or fixed bin storage

Process all relevant postings and transactions such as goods receipts, goods issues and general stock transfers.

Monitor stock movements

Execute stock placements and removals using different put-away and picking strategies

Process stock differences

Manage hazardous materials

Use bar code scanners

Interface to external non-SAP warehousing systems

Manage inventory at the storage bin level

Ensure that stock posted in the Inventory Management system is the same as the stock in the warehouse

Integrate with materials management, product planning, quality management and sales and distribution

It primarily aims at defining and managing complex warehouse structures within a company.

SAP WM END USER Documentation



Comparison_between_SAP_IM_WM_Lean WM_DWM_EWM–Lean_WM_–_DWM_–_EWM.docx

The following points must be considered when implementing the SAP R/3 WM module:


Path optimization for:

Stock placements, Stock removal,  Stock transfer (for example, replenishment),  Even utilization of warehouse capacity, Balanced utilization of warehouse personnel, Possibility for improvement in warehouse stocking, Handling of means of conveyance for stock placement and stock removal, Possibility for improvement of work papers.

SAP WM Integration with Other Key R/3 Modules


Processing of all material movements

Automated communication with configurable processing


Two-step picking with SD-WM integration

Wave picking opportunities

Processing individual deliveries


Production support with PP-WM integration

Supplying materials to the shop floor

Internal and external automated replenishment options


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

Key Benefits in Implementing SAP WM


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% Picking Productivity Improvement

Better manage work and workforce to gain efficiencies

Tools to balance and optimize resources

Increased picking / shipping accuracy

11-25% Reduction in Customer Returns

Measurable benefits (In Approx…)

16-25% Picking Productivity Improvement

11-25% Reduction in Customer Returns

10-25% Savings in Material Handling Labor

10-40% Space Utilization Improvement

13-30% Reduction in Scrap

8-15%   Reduction in Carrying Costs

SAP WM module is one of the effective tools available to manage Warehouse and keep inventory at optimum level.

But it is a ‘Tool’ and you need a skillful craftsman who can understand your business needs and satisfy them using the tool. Potentials of the tool must be extracted fully for the best results. Here I would like to summarize SAP WM Advantages and Disadvantages. In this article I am not pointing SAP EWM.

No doubt SAP EWM is more advanced and sophisticated than SAP WM and SAP is not concentrating in promoting SAP EWM in current trend due to its overwhelming importance in Logistics fields.

SAP Lean WM:-

If you do not wish to update stocks in your fixed bin warehouse at storage bin level, Lean WM provides you with the option of using the advantages of warehouse management through transfer orders in the same way as warehouse management using the WMS.

If you are already using the standard WM system, we recommend that you implement Lean WM in a further warehouse where no updating of stocks at storage bin level is necessary. In this way, you ensure that the processes for warehouse management are uniform in all warehouses.

Since Lean WM does not update stocks at storage bin level, you can display the stock quantities solely in Inventory Management (IM) and not with the stock overview function in WM. Also, you cannot process possible stock differences that occur in the warehouse using Lean WM, only using Inventory Management (MM-IM):


Track exact stock location within one storage location with FIFO

Provides put away functionality for palletizing. etc

Provides better picking functionality

Allows for picking locations with replenishment when falls below a defined quantity

Allows segregation of stock types within a warehouse


Increased master data maintenance (This is hectic step normally people experience. we need to first frame the Warehouse structure or org in an excel. If not properly set storage type, section, bin, indicators, storage type search sequence, storage section sequence, storage bin type.. etc.. It would results in failure of put away or picking.

Additional process step for receipt and picking

Requires expert knowledge to configure for maximum benefit… because SAP WM offers many more put away/ picking or internal Warehouse functionality Control overs Material stock. In order to optimize the usage we need to know complete concept in knowing which switch to activate or which indicator to get deactivate based on the client requirements.

More complex to resolve problems caused by incorrect processing.

What is the BEST Stock Management Solution?

1 – Inventory Management

2 – Lean Warehouse Management

3 – Full Warehouse Management

4 – Decentralized Warehouse Management

Option#1:- IM – PRO’s & CONS



Key receipt, issue or transfer in a single step transaction

Immediate update of inventory

Requires less training commitment

Fewer transactions to document and present

Trace-ability of all material postings into SAP R/3

Date, user, material, quantity, storage location

Real-time update of accounting information.


Does not handle complex warehouses operations well

Unable to monitor activities

Lacks tools to manage resources and tasks

Lacks functionality to optimize key processes (picking)

Inaccurate system inventory

Inventory updated before the physical movement

Requires additional work if there are discrepancies

Limited trace-ability

Only visibility is when the system posting took place

No visibility to the follow on physical activities

Option#2:- Lean WM – PRO’s & CONS

Use of very small portion of WM capabilities

You do not process goods receipts or issues as a subsequent process in WM,

No storage bins are managed in the WM application

Evolved from SD pick list

Put-away and pick from 1 or more fixed bins

Bin is hard assigned on material master

TO’s are created for picks and put away, and pick list is created from TO’s


Requires less configuration than full WM

Reduced number of steps in the process

Use of transfer orders as pick lists

Confirmation is not required

Additional processing options

Confirm put-away, picking, over-deliveries, shortages, batches

Print transfer orders

Integration to HR

Additional picking functionality

Wave picking is possible with Lean WM.


Optimization opportunities

Picking – Two step picking

Packing – Pick and pack in a single step

Cross-docking – Inbound, outbound, prod. Materials

Monitoring and real time visibility to process status

Visual queues at the detailed steps

Open tasks, completed tasks

Additional inventory methods (annual, zero stock)

The module is FREE with the purchase of SAP.

Option#3:- Full Warehouse Management


Inventory counting interferes with operations without RF

Prior to 4.7 extension set 2.0

Initial overhead to set up depending on design

Master data

Capacity checking, control cycles

Configuration requirements

Designing the warehouse layout and set up

Potential for additional steps to support processing


Clearing differences

Processing posting changes.

Option #4 – Decentralized Warehouse Management

Use of SAP as a standalone WMS

With SAP or other ERP/host as the core system

Core system and decentralized WM run on separate machines

Communication is through BAPI’s for transactions and IDOC’s for master data

Goods movements done through delivery notes to the stand-alone SAP WM system.


On a separate machine

Decreases criticality of down time

24×7 operation

Can leverage newer SAP R/3 releases

Even if core system is on an older release

Can add additional warehouses without impact to the core system

Can communicate to multiple core ERP systems


Core system is not 24×7 operation

IDOC and/or BAPI errors

IDOC failures

Human intervention is required to work the error queue

IDOC overhead

IDOC’s do not offer all of the available field options that a user may or may not use with the PC transaction

Must modify the IDOC

SAP Console has to be set up in the decentralized system and in the core system

Physical Inventory Purpose

We can carry out a physical inventory of your company’s warehouse stocks for balance sheet purposes.

Physical Inventory Procedures- The SAP System supports the following physical inventory procedures:

  1. Periodic inventory

In a periodic inventory, all stocks of the company are physically counted on the balance sheet key date. In this case, every material must be counted. During counting, the entire warehouse must be blocked for material movements. The stocktaking of all stock in a company on a fixed date (usually at the end of the fiscal year). There are no transfers in the warehouse on this day.

  1. Continuous inventory

In the continuous physical inventory procedure, stocks are counted continuously during the entire fiscal year. In this case, it is important to ensure that every material is physically counted at least once during the year. In continuous inventory, you distribute the physical inventory for all storage bins over the course of the fiscal year, and can carry out inventories at different times as you require.

  1. Cycle counting

Cycle counting is a method of physical inventory where inventory is counted at regular intervals within a fiscal year. These intervals (or cycles) depend on the cycle counting indicator set for the materials. In cycle counting inventory, you enter your material stocks physically at regular intervals within a fiscal year. By dividing materials into various classes (for example, A, B, C, D, and so on), you specify for those materials at which intervals or cycles the inventory is to be performed. This allows you to inventory fast-moving materials in your warehouse more often than slow-moving materials. The Cycle Counting Method of Physical Inventory allows fast-moving items to be counted more frequently than slow-moving items. Important thing here-

The cycle counting inventory at quant level is not based on the storage bin, but rather on the individual quant in your warehouse.

  1. Inventory sampling

In MM – Inventory sampling, randomly selected stocks of the company are physically counted on the balance sheet key date. If the variances between the result of the count and the book inventory balance are small enough, it is presumed that the book inventory balances for the other stocks are correct.

SAP WM Control Cycle:- it is an integration Part of SAP WM with PP.

Production supply from the warehouse is a stock removal operation.

Staging components for production from the warehouse is mapped as an “other goods issue” in Logistic Execution. There are two ways of staging components for production from the warehouse:

Without using WM-PP interface

With using WM-PP interface

Staging Components without WM-PP interface

  • If you do not use WM-PP interface, then goods issue posting for the work order / process order will generate a transfer requirement in an interim storage area, the “Goods issue area”.

  • The components requested are removed from interim storage area using a transfer order which completes the staging process.

Staging Components with WM-PP interface

If using WM-PP interface, then the process flow is reversed.

  • Transfer posting is not created as a result of goods issue posting, but rather using request created with special transaction.

  • The requested components are not transferred to goods issue area, instead sent to a separate interim storage type, “Production supply”.

  • Stocks in interim storage area are cleared immediately as a result of IM posting, so there is no new transfer requirement.

Advantages of using WM-PP Interface

  • We can backflush components, that is, post the goods issue after completion of the production process together with the confirmation of the work order.

  • We can fine tune how and where you stage materials for production using control cycles. This means that you can stage some components for a specific order, others for multiple orders, and others with no reference at all to an order.

  • If there are changes to the quantities or dates/times in the plant order, the system can adjust the transfer requirement automatically or create it again.

Terminology that are used in WM-PP interface

  • Production Supply Area : Production supply areas (PSAs) are used for material replenishment and are situated directly on the shop floor in the production department.

The supply area groups work centers near production storage bins based on the material staging methods. You need to enter the PSA in the work center master data.

To create production supply areas in Customizing for Warehouse Management in your system, choose : Logistics Execution – Warehouse Management – Interfaces – Define Production

  • Control Cycle : The control cycle record is made up of the plant, production supply area and material and determines for the WM- PP interface the production storage bin and the type of material staging that is used. The production storage bin is defined by the whole key: warehouse number, storage type and bin.

To create control cycles choose : Logistic Execution – Master data – Warehouse – Production Supply – Control cycle production supply – Create

  • Work Center : Operations are carried out at a work center. In SAP R/3 System work centres are business objects that can represent the following real work centres, for example:

􀃆Machines, machine groups

􀃆Production lines

􀃆Assembly work centers

􀃆Employees, groups of employees

To create control cycles choose : Logistics –Production- Master data-Work centers


  • In order to use WM-PP interface, then one has to create at least one production supply area and at least one control cycle for staging in Warehouse Management.

  • If you decide to use the WM-PP interface, you have to activate it for your warehouse number(s). Once you have activated the interface, the transfer requirements for material staging are created in special transactions (LP10, LP11, and LP12), not as a result of Inventory Management postings.

  • As can be seen in above screen shot, PSA groups together work center. So, its very important in deciding how many PSA’s are required. You have to pay considerable attention to the distribution of work centers you want to supply with materials from Warehouse.

  • During creation of Control cycle, you can specify how and where you want to stage materials from the warehouse. You can specify the type of staging using the Material Staging Indicator.

  • There are 4 material staging indicators that are available in control cycle screen:

􀃆Indicator 1 (Pick Part), also known as Dispensed material

􀃆Indicator 2 (Crate Part)

􀃆Indicator 3 (Release order part), also known as Line side material

􀃆Indicator 4 (Manual Staging)

The Warehouse Management system (WMS) supports the following inventory procedures for continuous inventory:

  • Continuous Inventory

  • Continuous Inventory during Putaway

  • Continuous Inventory during Stock Removal (Zero Stock Check)

  • Cycle Counting Inventory per Bin

  • Cycle Counting Inventory at Quant Level

  • Inventory Sampling (MM-IM-PI)

Interface with Quality Management

In case of materials subjected to quality checks, after goods receipt inspection lots are generated in Quality Management module. This inspection stock of the material can be handled using any of the following four options in Warehouse Management.

Move Inspection lot stock to Interim storage type relevant for Quality    assurance (917) and the remaining to destination bin.

Retain Inspection lot stock at GR area interim storage type (902) and the remaining to destination bin.

Move entire quantity to the destination bin.

Retain entire receipt stock at GR area interim storage type (902).

Benefits of Continuous Physical Inventory

Better distribution of workload in the warehouse

The inventory can be carried out in periods with lower workload

Periodic Inventories are usually time consuming and labour intensive

Up-to-date information on the availability of the stock in the warehouse

The cost of the inventory can be reduced by planning it carefully

Zero Stock Check- Purpose

In a zero stock check you use the fact that during checks of the bin stocks, according to the storage bin data in the Warehouse Management system, a storage bin should be empty after a stock removal. During the physical removal of stock from storage, you check whether the storage bin data matches the actual stock situation.

Tips for Optimizing and Overcoming Limitations With IM and WM

1 – Physical Inventory tips

2 – Enhance visibility of material flow and locations

3 – Automate picking and put-away

4 – Automatically replenish fixed bins

5 – Consolidate your picking activities

6 – Overcome bottlenecks with RF

1 – Physical Inventory tips in IM

Only possible if the storage location data has been maintained

Solution: Activate automatic storage location for movement types that receive material into the plant

Avoids the need to create storage data manually

For materials with multiple storage location requirements.

Use the mass creation option for entering all valid storage locations at one time into a single entry screen.

Transaction code = MMSC

2 – Enhance visibility of material flow and locations in IM

Use fixed bin assignment to gain additional visibility

Material master storage location view

Two-step transfers vs. one-step movements

Storage location-to-storage location (movements 313, 315)

Plant-to-plant (movements 303, 305, 351, 352)

Outbound delivery monitor

Use to view outbound deliveries, shipments and loading activities.

3 – Automate Picking and Put-away (WM)

Define a picking strategy per storage type

A – Partial quantity management

If picking results in partial quantities, pick from here first to avoid breaking new pallets

M – Large/small quantities included

Use to facilitate larger quantity picks from bulk areas and smaller quantity picks from rack areas

P – Fixed bin from material master

For fast moving items, assign a dedication location toward the front of the warehouse

Use replenishment to enough maintain stock for demand

Define a put away strategy per storage type

AVOID manual put away practices

C – Open storage

Use for large items that don’t require a specific bin assignment

I – Addition to existing stock

Useful for consolidating receipts of the same material upon put-away

Caution: Since only one quant resides in a bin, all materials in the bin adopt the same receipt date (unless batch or storage unit managed).

L              – Next empty bin

Great fit for high rack storage; whereby a standard rack section can hold 2-3 units of storage

Useful for storing pallets of material; one pallet per bin location.

Now Many People will think to know which Put away strategy and Picking Strategy normally used for different Industry. Answer would be depends on Client industry type, business Process they are following and Materials they are handling, Nature of Material and their characteristics.

4 – Automatically Replenish Fwd. Picking Locations Batch program (WM)

A scheduled job to read fixed bin data and generate replenishment transfer orders

2 required programs



“Upon transfer order confirmation” option

Creates an automatic replenishment TO when a pick

Confirmation drives the fixed bin location below the min. stock level

5 – Consolidate Your Picking Activities (WM)

Two-step picking

Based on selection criteria, relevant deliveries are read and like material requests are collected

This collection results in a single aggregated picking order and task for each like material (first step)

TO splitting can be leveraged to distribute large picks

The second step is the re-allocation procedure

This is the process of “re-assigning” the specific materials and quantities back to the original requirement

Reduces duplicate picking efforts

Cuts order fulfillment cycles

6 – Overcoming WM Performance Bottlenecks with RF

Potential bottlenecks and solutions

More detailed operations require more transactional steps

Leverage RF to reduce the data entry requirements

Leverage RF to consolidate/combine transactions

Physical inventory blocking

Leverage RF to reduce the time a bin is blocked

In R/3 Enterprise, inventory can be processed if an open transfer order exists

Pick and pack in a single step with RF

Incorporate RF to pick into a handling unit to avoid the need to perform packing as a separate task

Points to be considered for Evaluating IM vs. WM

1 – Define business processes

2 – Evaluate ROI of a WMS solution

3 – Consider RF functionality

4 – Training resources and schedule

5 – Focus on optimization opportunities

Finally we need to scale the solution on SAP Warehouse Management Products (IM, WM, Lean WM, Decentralized WM , Extended Warehouse Management )based on

  1. Operational Complexity

  2. Transaction Volume

Responsibilities of the Warehouse Administrator

  • Maintain the Material/ Equipment/ Equipment Master Data records

  • Prepare the Warehouse workload daily

  • Process and control the IBTs

  • Process Drop Shipments (Third Party Receipt)

  • Control Equipment Cycle Count

  • Facilities & Monitors Put away/ Picking/ Cross Docking/ Internal- Warehouse Movements

Tasks of the Warehouse Administrator

  1. Preparation of the warehouse workload (incoming planning)

  2. Plan and process the actual Internal Branch Transfer (IBT)

  3. Process the new Material/ Equipment/Article Receipt at Third-Party location (Drop Shipment)

  4. Validate the Material/ equipment/ Article receipt (Third Parties & Special Procurement materials)

  5. Update the Material/ Equipment/ Articles Master Record

  6. View the storage bin blocked for cycle count

  7. Display open Purchase Orders (PO) and planned incoming Material/ equipment/ Articles

  8. Prepare the equipment to be sent to the refurbished area

  9. Launch the Material/equipment/ Articles cycle count

  10. Co-ordinate with Warehouse supervisor and workers for Put away, Picking, Cross Docking & Internal Warehouse Movements.

  11. Preparing Reporting & Trending for Inbound/ Outbound of Material Movements.

  12. Planning and Organizing of Day to Day Warehouse activities.

  13. Try to resolve the issues immediately without stoppage of Material Flows technically and administratively.

  14. He needs to quickly react to changing Technology and New IT trends and bring efficient warehouse control and Material Flows.

Some Few Business Process


Stock Transfer

 St Loc –to-St Loc

 MB1B: Transfer Posting      Mov Type: 311    Need to fill Receiving St loc

 LB11 (for sending Loc): Create TO wrt to TR

 LT12: Confirm TO

 LS26: Check the movement (goods move to 921 st type)

 LB11 (for receiving loc): Create TO wrt to TR

 LT12: confirm TO

 LS26: Check the movement


Plant –to-Plant

 MB1B: Transfer Posting     Mov Type: 301      Need to fill Receiving Plant

 LB11 (for sending Plant): Create TO wrt to TR

 LT12: Confirm TO

 LS26: Check the movement (goods move to 921 St type)

 LB11 (for receiving Plant): Create TO wrt to TR

 LT12: confirm TO

 LS26: Check the movement


Storage Type –to- Storage Type


LT10: Stock Transfer              ( For Mass)      -> LT12

LT01: Stock Transfer               (for Partial)     -> LT12

  1. Stock Transfer

     T Code- LT10

Note: Movement type: 999

          Here we are transferring “Elements’ from 030 St type.

          Similarly 040 St type to enter above for ‘Loop set’.


And we get the following screen.

Select the material (with reference to batch no), that is to be transferred.

 Here we selected ‘Element’ 0320.800.292 with batch AMIT-001


We see the following screen in with the transferred  stock is shown with ‘Tick’.

Now we need to Create a TO for this Transfer and confirm the TO

Double click on the Document No

(Or go to LT21)

We get the following screen

For TO Confirmation.

Go to  ‘Transfer Order’ Menu at the Task Bar.

And click on Confirm -> Transfer Order

(Or go to LT12)

We will get the following screen


We will get the following screen


we get the following screen

Save. – to Confirm the transfer Order.

Stock is transferred to 080.

You can verify this in LS24.

Enter the plant, warehouse, Material, and batch.

Stock Transfer St-type to St-type (Partial)


Click on confirm Internally icon and save.

TO is confirmed. be careful while moving the stocks related to a specific batch.

Bin –to- Bin

LT10: Stock Transfer                      ->   LT12

Customer Return

The Screen shots are similar and so I like to share the Process flow with Transactions Details


VA01: Sales Order

VL01N: Create Outbound Delivery

LT03: Create TO

LT12: Confirm TO

VT01: Shipment

VF01: Invoice


VA01: Order type- RE (std SAP), YARB (MICO), with Doc type

VL01N: Return Delivery

LT03: TO

LT12: Confirm TO

VA01: remove the billing block (credit note) to blank

VF01: Invoice


Vendor Return-  The Screen shots are similar and so I like to share the Process flow with Transactions Details


ME21N :Create PO

MIGO: GR(Mat Doc)

MIRO: Vendor Invoice ( optional )

LT04/LT22:  TO Creation

LT12: TO Confirmation


MIGO: Cancel Material doc

(Verify: Negative stock in 902)

LT01: Create TO

(Define source)Mov:999

LT12: Confirm TO

ME21N: Return PO



The Screen shots are similar and so I like to share the Process flow with Transactions Details

MB1A: Goods Issue,

Mov Type:551

Require cost centre

LT06: TO for the material Doc

 Need to give source of the stock

LT12: Confirm TO

Change of Batch number or transfer of material from one batch to other batch within same plant

This process is used for transferring the quantity of stock from one batch to other batch without affecting the accounting postings.

User should enter the quantity and batches very carefully. Otherwise it results in stock balances.


The stock should available with the batch from where you are going to transfer to new or existing batch.

You can create new batch in the destination batch or can use the existing batch.

Please proceed with the following steps.

Transaction Code: MIGO


I hope i have pointed out important Functionality of SAP WM. but it is like Ocean. We cannot summarize all in one Article. My aim is to make understanding Simple to new consultants and Warehouse business Managers, users. I hope this article is not only useful to SAP MM WM LE Guys but also for other module consultants- PP, QM, PM, ABAP, EWM. because SAP is having very tight bondage with all other modules. We can try our best.

I hope my earlier articles (Blog) will support more and it helps to understand SAP WM Functionality more. In precise SAP is rocking in ERP/ SCM Field. We cannot find this much versatile product in the ERP/ SCM Field of Business. SAP is always number one.

Comparison between SAP IM- WM –Lean WM – Decentralized WM – EWM


SAP WMHU, IMHU, Reciept from vendor, issue to Production with in Warehouse in Process Industries

SAP ASRS- Automated Storage & Retrieval systems in Warehouse

SAP Warehouse Management_Step by Step configuration Document

Thanks to SAP in bringing very useful, intelligent, Automated system in the ERP Field.

*****I would like to Discuss some more business Process, Connecting SAP WM to external systems in my Part-2 Article***


SAP WM- Process, Functionality, Scope, Benefits, Advantages, Disadvantage-Complete Reference-Part 2

Generally WM provide better automation of processes, particularly with RF, but requires more maintain and process discipline. In this Article I would like to share information only on SAP WM. if we need to discuss on other SAP WM Products that would be lengthier. So I will complete SAP WM Article. I hope experts will summarize more that this Article would do. But it will give some starter pack information for a New Person in Warehouse Field or a Functional business user- based on the Industry Nature/ Functionality/ business Process/ requirements we need to select the put away or picking strategies. I think almost all the gap observed from SAP WM for the complicated scenarios (Consolidation, De-consolidation, slotting and re-arrangement, Value added Services, Inbuit AS/RS functionality, (no need of WCS components in EWM), MFS, Connecting PLS’s, SCADA for Data Acquisitions and trending and now SAP EWM speaks with SAP HANA and so trending is not a show stopper) are handled thru Extended Warehouse management. So that SAP EWM is sophisticated, Real-time intelligent Inventory control system.









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  1. Bose GN

    Hi Shivakumar

    Thanks for an excellent documentation and a detailed process knowledge sharing. Really helps a lot


  2. Mark L lee

    Process flow are explained well. I would recommend to add Handling unit management related content. please share your contact number.


    I really appreciate this. Am a learner and i want to know more.

    I was thinking i should start ready MM materials but with this i now have interest in WM.

    Is there a certificate exam on WM?

  4. shivakkumar Geetha venkatesan Post author

    Hi David,

    Thanks for the kind words and appreciation,

    yes we have certification for WM. but I would recommong to got with SAP EWM for certification purpose because SAP will given more importance to SAP EWM and one point of time they will stop supporting SAP WM. please also get it confirmed with SAP.



  5. shivakkumar Geetha venkatesan Post author

    Hi David,

    Please find the details. now topic coverage is WM+LE     [ both the areas ]—logistics-execution-and-warehouse-management-with-sap-erp-60-ehp6-g/


    SAP Certified Application Associate – Logistics Execution and Warehouse Management with SAP ERP 6.0 EHP6





  6. shivakkumar Geetha venkatesan Post author

    Thanks Lee. here i am adding the HUM related links created by Christina Rosa – it is very useful to all.

    I hope it is more useful for the guys working in SAP HU + SAP WM/MM. we can considers Christina’s documents as master reference. It is more appreciated. Thanks Christina.




    This is Excellent Shiva. Your blogs clears all my doubts to understand WM . I really appreciate your Guidance and will be first follower for all your blogs now..Thanks again. great work.


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