How to Compare SAP EWM Versus WM - Brightwork Research & Analysis

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Executive Summary

We compare SAP WM to EWM.
EWM is a strange combination of functionality that is not designed around the requirements for shippers.

Introduction to EWM vs. WM

EWM is the most advanced WM offering that SAP has. It is far larger than SAP WM. You will learn how the two applications compare in this article.

Our References for This Article

If you want to see our references for this article and other related Brightwork articles, see this link.

Notice of Lack of Financial Bias: We have no financial ties to SAP or any other entity mentioned in this article.

This is published by a research entity, not some lowbrow entity that is part of the SAP ecosystem.
Second, no one paid for this article to be written, and it is not pretending to inform you while being rigged to sell you software or consulting services. Unlike nearly every other article you will find from Google on this topic, it has had no input from any company's marketing or sales department. As you are reading this article, consider how rare this is. The vast majority of information on the Internet on SAP is provided by SAP, which is filled with false claims and sleazy consulting companies and SAP consultants who will tell any lie for personal benefit. Furthermore, SAP pays off all IT analysts -- who have the same concern for accuracy as SAP. Not one of these entities will disclose their pro-SAP financial bias to their readers.

When WM Versus EWM is Normally Used

If a firm uses EWM, it typically will not use WM, and vice verse. WM has been around for some time, while EWM is the new kid on the block. Therefore, the question many executives want the answer to is what is EWM and how it is better or different from WM.

Why WM?

Many companies do not use software to manage their warehouses. For instance. they may only have an interest in managing inventories in the warehouse. For this, nothing more than IM within SAP ERP is necessary. The transfer order is what controls the movement (transfer order with transport order for lead times). Posting goods issue and goods receipt will keep the company up to date on material movement. Secondly, the goods receipt and goods issue areas connect or relate the storage location within IM to the warehouse number in WM.

The need for WM comes into play when the management of the physical layout of the warehouse becomes necessary. When a company wants to use the information to manage the warehouse, then WM (or another third party product which is bolted on to SAP ERP) is brought on-line. WM and IM are firmly integrated as movements of material in WM relate directly to IM. IM is then connected to the rest of SAP ERP, such as FI, SD, and PS. However, WM has a direct connection to IM, Delivery Processing, Production Control, and QM. WM adds value for clients who require the following:

Batch management
Medium to high volumes and medium to high numbers of different materials

Why EWM?

WM has been around for some time as part of SAP ERP. EWM can be seen as an attempt by SAP to go after the more specialized warehouse management market. The concept is that WM stabilizes from a development perspective, and more advanced functionality continues to evolve in EWM. Currently, the more advanced users go with other non-SAP warehouse management solutions.

What is the Prospective Client Market for EWM Versus WM?

This would tend to be clients who have very high warehouse management needs, such as Third party logistics providers. EWM was developed with Caterpillar Logistics, which is a third party logistics provider. It was also developed in conjunction with SPP (Service Parts Planning), which can manage small and numerous items. (to understand more about SPP, see this link)
Large volume clients (which includes 3rd party logistics providers within this)
Those that perform cross docking, slotting (this is how the material is pre-located in a warehouse based upon activity). See below for more on slotting, kitting, pick zones, and value added services.
Those that want a high degree of functionality in labor management

Catalyst on the Difference Between the Two

The consulting company Catalyst has an outstanding white paper on EWM versus WM entitled Comparison WM to EWM WhitePaper (This is not an endorsement of the company Catalyst. We have not idea if they offer excellent or bad consulting services).

“Extended Warehouse Management (EWM) was released with SAP’s Supply Chain Management module (SCM). The terminology can be confusing, but there are two different forms of EWM, depending on how they are being used. When SAP Warehouse Management is being used with SAP release ECC 5.0 or higher, in the centralized mode, it is referred to as ERP EWM.

They say that regarding EWM versus WM and EWM used as a decentralized versus centralized form.

When SAP WM is being used in the decentralized form in conjunction with the SCM module; it is referred to as EWM. In it,’s decentralized form, the capabilities of EWM are expanded.

ERP EWM is little changed from the functionality that exists in SAP 4.7.With EWM, the functionality includes what 4.7 xt. 2.0 can do as well as improved workflow, process integration, and the various other features mentioned above (under evolution). APO EWM offers increased flexibility and capabilities beyond ERP EWM. Typically,SCM is tailored to organizations which have high SKU and line item volumes, very fast moving product, complex cross docking requirements, nice packaging and shipping processes, and third party logistics services (3PL) on either the Inbound orOutbound side or both.” – Catalyst Global Services

Normal Warehouse Management Systems Versus 3PL Systems

The book Selecting Software from WMS and ERP Providers provides an interesting quote, not just on EWM versus WM but on normal warehouse management systems versus those designed from a 3PL perspective.

“3PLs need much more software functionality than the standard WMS. The additional logic and coding is twice as complex as a private warehouse WMS solution. Issues such as inventory ownership (3PLs do not own the inventory under the roof), customer contracts, rates, item setup, preferences for inventory allocation, – picking allocation, task workflows, exception and normal processing procedures, billing, manual billing of accessorial charges, client reporting and profits and loss reporting is expected by most 3PLs.” – Philip Obal

EWM’s Server

As far as the server environment, EWM can and, in most cases, run on its server for performance reasons. It is not recommended that it run on an SCM box that is running planning applications.

Quicknotes on EWM Versus WM

An organizational unit is the Supply Chain Unit for an EWM Warehouse Number
The organizational unit that represents the subdivision of a storage type is a storage section
Goods arrive and leave the warehouse through doors
A work center in EWM is represented by a storage type
An activity area defines storage bins
Integration Differences

While WM is part of SAP ERP, EWM is part of SCM. Therefore, master and transactional data must be brought across from SAP ERP rather than being inherent. This is a significant but not new difference. For instance, forecasting can be done in SAP ERP, but for those accounts that want to do more advanced forecasting that what is offered within SAP ERP, SCM Demand Planning can be used, which also sits on the SCM box and requires integration.

Integration Detail

One of the important items to bring over is storage bin data. When choosing EWM, you are choosing to exert more effort in integration than when going with WM.

Compatibility

While WM has been part of R/3 and now ECC for some time, EWM requires both SCM 5.1 (EWM existed before 5.1, but it has been dramatically enhanced in 5.1) and also requires R/3 4.6c with service pack 06 and up.