These are the options for warehouse management with SAP S/4HANA

Warehouse management is a central component of modern logistics processes. With the right warehouse management software, all movements and processes within a warehouse can be controlled, coordinated and optimized. Under SAP ECC, SAP Warehouse Management (WM) was the standard solution in many companies. However, the move to SAP S/4HANA requires a new approach: SAP WM will only be supported in compatibility mode until the end of 2025 – after that, a changeover is unavoidable.

This raises two crucial questions for the companies affected: Which alternatives are available? Which solution best suits my individual requirements? We provide an overview of the most important options for on-premise or private cloud deployment and explain the scenarios for which each option is suitable. It is also possible to obtain the warehouse management solution from the public cloud. Depending on the scenario, the different options can be used in combination.

Warehouse management with SAP S/4HANA: the (dis-)advantages of the various options

The pragmatic successor to SAP WM: SAP Stock Room Management

SAP Stock Room Management (SRM) is the official successor to SAP WM and has been available since SAP S/4HANA release 1909. The solution is based on the familiar LE-WM objects and is suitable for companies that want to manage simple, manually operated warehouses.

Due to the LE-WM objects, the effort required for a continuation as part of an SAP S/4HANA transformation, for example with the help of a system conversion, is low. Nevertheless, companies should be aware that SAP SRM is not associated with any future innovations and is not SAP’s strategic solution. Nevertheless, SAP SRM is a very good option for warehouses that tend to be less complex. For more complex requirements, SAP offers a better alternative with the strategic solution SAP Extended Warehouse Management (EWM), which is available in various deployment options.

The integrated future-proof solution: SAP Embedded Extended Warehouse Management

SAP Embedded Extended Warehouse Management (EWM) is an integral part of SAP S/4HANA and is available in two versions:

• SAP Embedded EWM Basic (free of charge)

• SAP Embedded EWM Advanced (subject to license)

Compared to SAP Stock Room Management, SAP Embedded EWM offers a wider range of functions and is particularly suitable for medium-complex warehouse processes with a low to medium degree of automation if companies want a solution integrated into the SAP S/4HANA core and want to benefit from innovations in the future.

SAP Embedded EWM is fully integrated into SAP S/4HANA in the same way as SAP SRM. This means that the same master data and transactional data is used that other lines of business such as sales also use. No interfaces are therefore required to replicate or synchronize this data, which avoids data redundancies. SAP Embedded EWM is constantly being expanded with additional functionalities, as it is the strategic SAP solution for warehouse management. This means that companies will benefit in future from functions that are not even known today – without any development work of their own. As for other areas, best practices are also available for SAP Embedded EWM, enabling rapid initial implementation for further activities. Even the Basic version supports all core processes. For more complex requirements, the Advanced solution is recommended if companies wish to remain in the SAP S/4HANA core. The question of whether the Basic or Advanced version is more suitable can be answered by a precise analysis of the individual requirements.

SAP Embedded EWM is characterized by a higher level of complexity compared to SAP SRM. However, what is generally an advantage can also prove to be a disadvantage if a company only has minor requirements for warehouse processes – in this case, the solution may be oversized. Furthermore, additional costs are incurred if the Advanced version is required. In contrast to a decentralized SAP EWM solution, SAP Embedded EWM is not ERP system-independent. This means that it is not possible to connect an SAP Embedded EWM system to a large number of ERP systems.

For highly complex warehouse processes: Decentralized SAP EWM on SAP S/4HANA

Decentralized SAP EWM on SAP S/4HANA is the successor to SAP EWM 9.5 and is a stand-alone instance that is operated independently of the ERP system. This makes the solution highly scalable and ideal for automated, complex warehouse locations. It is suitable for requirements regarding high warehouse complexity as well as maximum flexibility and performance.

There are no dependencies on an ERP system for the deployment of a decentralized SAP EWM. This means that companies can connect several SAP and non-SAP ERP systems to a stand-alone SAP EWM. As a result, possible downtimes of the ERP system, for example during a release upgrade, do not affect the decentralized SAP EWM. Functionally, a decentralized SAP EWM corresponds almost completely to the advanced version of SAP Embedded EWM. Only subtleties such as synchronous material stock posting are not supported in a decentralized SAP EWM solution. Further innovations are also expected for this option in the future. However, additional license costs are incurred for decentralized SAP EWM. The fact that decentralized SAP EWM operates independently of the ERP system is generally associated with higher implementation and operating costs – for example, for the interfaces for master data and transactional data.

Flexibility with restrictions: SAP S/4HANA Cloud Public Edition, Warehouse Management

SAP also offers a warehouse management solution for the public cloud, which is referred to as “SAP S/4HANA Cloud Public Edition, Warehouse Management”. Compared to a private cloud deployment, this solution differs from the scenarios described above in two key aspects:

• SAP S/4HANA Cloud Public Edition, Warehouse Management is limited in terms of functional scope compared to the other SAP EWM variants and cannot be deployed as a stand-alone solution.

• All SAP EWM functionalities are available in the private cloud. It is therefore a valid option, for example, to use the logistics processes in the private cloud in combination with SAP S/4HANA Public Cloud.

In addition to the fundamentally limited functionalities (for example, SAP S/4HANA Cloud Public Edition, Warehouse Management offers no pack specifications and no work-in-process support), there are also no AI-supported features available. While AI functionalities such as intelligent work demand planning are provided in the private cloud, they are not included in the public cloud.

Conclusion: The best option depends on individual requirements

Overall, SAP S/4HANA offers a wide range of options for warehouse management, some of which differ considerably in terms of functionality. The best individual option for a company’s warehouse or the ideal combination of the various available options depends on the system requirements and the company’s demands in terms of functionalities and deployment.