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How Retailers Can Deploy SAP S/4HANA Supply Chain for Extended Warehouse Management

In meetings with retail customers the various deployment options of SAP’s warehouse management solution are always an interesting point of discussion. I will describe the deployment options from a historical point of view starting in chapter a) with SAP Extended Warehouse Management (Business Suite) whose end of life is coming closer. You can also go directly to chapter d) and read about the main deployment options of SAP S/4HANA Supply Chain for extended warehouse management in the retail industry.

a) De-Central Deployment of SAP Extended Warehouse Management (Business Suite)

SAP Extended Warehouse Management (Business Suite) was designed to manage high-volume warehouse operations and integrate complex supply chain logistics with warehouse and distribution processes – delivering the ultimate in visibility and control. Optimize inventory tracking, cross-docking, distribution operations, omnichannel order fulfillment, and more – all in real-time.

SAP Extended Warehouse Management (SAP EWM) was launched as part of SAP Business Suite in 2006. The latest release is SAP EWM 9.5 (released in November 2017). Please note that SAP EWM (Business Suite) has an end of guaranteed maintenance, see SAP Note 2911449 – Updated Maintenance Timelines for SAP EWM Product Versions.

SAP EWM (Business Suite) is integrated out-of-the-box as side-by-side deployment with:

  • SAP Merchandising for Retail (ECC), the industry specific version of SAP’s classical ERP solution (some still know it as IS-Retail). It is a real-time integrated solution for merchandise management that enables head office, stores as well as trading partners access to information and transactions that support best practice business processes across the entire retail merchandise life cycle. SAP Merchandising for Retail is available since 1996 and has been constantly evolved in over 20 years. The latest Release is SAP ERP 6.0 Enhancement Package 8. 
  • SAP S/4HANA Retail for merchandise management (on-premise edition), the industry specific version of the SAP S/4HANA product line for retail companies (first launched in 2016). This solution is the digital core of a retailer’s future value network. It enables retail companies to connect their workforce, suppliers, consumers, and the Internet of Things (IoT) in real-time to capture every opportunity and leverage digital transformation for increased business value.

Since 2016, SAP EWM (Business Suite) is out-of-the-box integrated with SAP S/4HANA Retail for merchandise management (on-premise edition 1610) as side-by-side deployment. Please note that this deployment option with Business Suite SAP EWM has an end of guaranteed maintenance, see SAP Note 2911449. (In May 2019 the side-by-side deployment of EWM on S/4HANA with SAP S/4HANA Enterprise Management has been released. More details will follow in section c) below.)

b) Embedded EWM functionality within SAP S/4HANA Retail for merchandise managementIn 2016, Extended Warehouse Management became an embedded application component within SAP S/4HANA Enterprise Management (on-premise edition 1610). The official name is SAP S/4HANA Supply Chain for extended warehouse management, in the following called SAP S/4HANA EWM. This embedded SAP S/4HANA EWM is also available within SAP S/4HANA Retail for merchandise management. It combines the proven best-in-class capabilities of SAP EWM (Business Suite) with the benefits of SAP S/4HANA.

Initially, SAP S/4HANA EWM was based on the functionality included in SAP EWM 9.5. It is important to know that both, SAP EWM and SAP S/4HANA EWM are almost identical as they are based on the same code line. SAP S/4HANA EWM came with an adapter layer to integrate into SAP S/4HANA Enterprise Management but it has an identical common core with the classical, decentralized SAP EWM (Business Suite). Since that point of time all new development happened only in SAP S/4HANA EWM which is SAP’s strategic product for warehouse management. All SAP S/4HANA versions after 1709 provide more EWM functionality than SAP EWM 9.5. Please note that Business Suite SAP EWM has an end of guaranteed maintenance depending on the release (see SAP Note 2911449 – Updated Maintenance Timelines for SAP EWM Product Versions). For the major differences between SAP S/4HANA EWM 1909 and SAP EWM 9.5 please refer to SAP Note 2806070.

c) De-Central Deployment of SAP S/4HANA EWM

SAP S/4HANA EWM is also offered as decentralized Extended Warehouse Management on S/4HANA since SAP S/4HANA 1809 FPS02 (May 2019). It is a complete SAP S/4HANA installation, in which only the SAP S/4HANA EWM part is used. This decentralized S/4HANA EWM is integrated out-of-the-box with SAP Merchandising for Retail (ECC) and SAP S/4HANA Retail for merchandise management as side-by-side deployment. Please check SAP Note 2840129 for release information and restrictions of decentralized SAP S/4HANA EWM.

d) Main Deployment Options of S/4HANA EWM for Retail

The sidecar approach with a decentralized S/4HANA EWM supports business scenarios and processes for complex and automated warehouses and distribution centers. This deployment option provides proven customer value, such as high-volume data processing, risk mitigation and scalability for large distribution centers.

But what does that mean in detail?
In the retail industry, high-volume and high-performance warehouses and distribution centers are very common. In many cases warehouse automation like high rack storage, automated sorters and conveyors is in place. Decentralized SAP S/4HANA EWM can guarantee dedicated performance for retail warehouses as it receives a chunk of deliveries as workload from the SAP ERP system (SAP Merchandising for Retail or SAP S/4HANA Retail for merchandise management) and can process this particular workload independent from the integrated SAP ERP system. In this way the warehouse can ensure the necessary short response times for the warehouse pickers and especially for the connected warehouse automation. This is important when the ERP system is executing several parallel processes which might affect performance, like large finance reports running. A decentralized SAP S/4HANA EWM can also guarantee the availability of a retail warehouse as it could even work on the received workload and perform the logistics processes during planned or exceptional downtimes of SAP ECC or SAP S/4HANA. SAP plans to support also a different release strategy with the side-by-side approach. A retailer might do a specific release upgrade only for the decentralized SAP S/4HANA EWM rather than upgrading the whole ERP system.

The embedded EWM in SAP S/4HANA may be considered for small and medium retail warehouses and distribution centers with low volume, low throughput and without warehouse automation in place, like regional warehouses or small e-commerce distribution centers like dark stores. In those cases, a retailer can benefit from the simplified integration of embedded EWM to SAP S/4HANA business processes and from a lower TCO by running a single system.

Please take this information as a first entry for discussions per individual customer project and study carefully SAP Note 1606493 – SAP EWM Deployment Options Best Practices.

New implementation of SAP’s warehouse management solution:
The recommended product for new EWM implementations is SAP S/4HANA EWM (SAP S/4HANA Supply Chain for extended warehouse management). It combines the proven best-in-class capabilities of SAP EWM (Business Suite) with the benefits of SAP S/4HANA. As SAP EWM (Business Suite) will run out of guaranteed maintenance (see SAP Note 2911449) it is not recommended for a new implementation.

Migration from SAP EWM (Business Suite) to SAP S/4HANA EWM:
Customers will have to migrate their decentral EWM on Business Suite to an S/4HANA based installation. Please refer to SAP Note 2911449 – Updated Maintenance Timelines for SAP EWM Product Versions. SAP plans to provide a migration guide for migration from SAP EWM (Business Suite) to SAP S/4HANA EWM.

Related SAP Notes:

  • 2911449 – Updated Maintenance Timelines for SAP EWM Product Versions
  • 2806070 – SAP S/4HANA 1909: Release information and restrictions for EWM in SAP S/4HANA
  • 2840129 – Release information and restrictions of Decentralized EWM on S/4HANA 1909
  • 2839077 – Guidance on how to integrate with SAP ERP or SAP S/4HANA with active Retail Industry Solution
  • 2775345 – Conceptual differences decentral EWM on S/4HANA compared to EWM 9.5
  • 1606493 – SAP EWM Deployment Options Best Practices

Related SAP Services:

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