Using SAP Extended Warehouse Management (EWM) to support high volume logistics in e-commerce

Hans Jørgen van Rijnbach, Komplett Group Bjørn A. Flatby, Senior SCM consultant, Ciber

Who are we?

Brief about us

• Komplett is a leading e-commerce player with

focus on selling products and services on the

internet

• Founded in 1991, started working with e-

commerce in 1996

• 10 webshops in Scandinavia

• Main office and warehouse in Sandefjord,

Norway

• Local offices in Gothenburg and Copenhagen

• 430 employees

• 2011 revenue MNOK 4 100

16 000 different products in stock

LARGEST IN SCANDINAVIA

• 30 000 PCs were manufactured in 2011

• First with new technology

• High flexibility regarding choice of config.

• Short delivery time = 1 - 3 days

• The best returns scheme “in the world”

• Repairs within 3 – 4 days

• 3 year guarantee

Build your own PC

• In 2011 we fulfilled 1.454 .776 customer orders, with a total of

4.547.226 products

• In average one customer order fulfilled in 21 sec, 24/7/365

• Peak hour: one order fulfilled every 1.9 sec

Logistics operations and application support

Appliction architechture at Komplett

PLC

55 robots

34 000

bins

16 bin

layers

Autostore: the main engine

Show demo

NY ORDREFLYT

Autostore Pre packed

Sorting to carrier / route

Warehouse 1 Warehouse 2

Customer order consolidation done by forwarder,

not in warehouse

The project: why and how?

The need for change, and the risk

• Former WMS was developed - step by step - over 10 years

• Legacy system, tailor made to our specifications

• “Narrow frame” and key competence on very few hands, giving

increased operational risk, as Komplett

s business were expanding

• Decided to implement SAP EWM

• even if few other customers were live

• and even if impl.partner Ciber had no real EWM experience

• In other words: not a risk free project..

• Project internally referred to as an “In-flight engine swop”

Risk mitigation: phased implementation

Phase 1: Manual

warehouse processes,

no PLC-integration

Phase 2: Automated

warehouse, PLC-

integration

Phase 3: EWM integrated

with Autostore

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2010 2011

De-

sign

Large products,

separate

warehouse area

Mid size products,

separate

warehouse area

Small products, in

Autostore

SAP ERP

Old WMS SAP EWM

Qubiqa PLC

(sorter)

Warehouse 2+3

ITO PLC

(sorter) AutoStore

WEB SHOPs

Warehouse 1

MFS

Risk mitigation: running two WMS against same ERP

At the same time driving complexity in integration

Risk mitigation: building strong internal competence

• We must understand and master our key business processes

• Day to day operations must be executed and supported by own staff

• Involve key personnel all the way

• Evaluation

• Decision

• Planning

• Implementation

• Testing and fixing

• Operation and support

• Ownership and proudness: “This is my baby”

• Consultants come and leave – competence has to be built and stay

How did it work out?

• Komplett ØK4 and ØK5/1

• TCG ØK5/2

Migrating to shared

systems and

warehousees

Go-live SAP EWM Go-live Autostore

Komplett ØK4

Warehouse productivity 2007 to 2011 No of order lines fulfilled / man hours (included management, testing and education)

Numbers taken from KPI-report

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Tuning and improvements

• Focus on productivity

• Focus on servicelevel

• Step-by-step improvements – close cooperation between inhouse

SAP-team and warehouse management

• Stabile systems operation – monitoring, maintenance and support

• Patching of SAP-installation once every year

• Issues will pop up – time to competence is key.

About EWM

What is SAP EWM, what does it compare to?

• Can be compared to systems from Witron, Swisslog and Astron

• Flexibility and richness in functionality, such as:

• Wave management

• Slotting/Rearrangement

• Resource- and Labour Management

• Cross Docking

• Yard Management

• Warehouse Monitor

• Serial Number at Bin Level

• Detailed information about warehouse processes

• Has scalability and performance (separated from SAP ERP)

• Standard integration to SAP ERP, TM, APO, GTS etc.

• Has built in Warehouse Control System: Material Flow System, for

integration to conveyors, scanners, printers, automatic storage and

retrieval systems (PLCs) etc.

Communication EWM - ERP

EWMs Material Flow System – what is it? Example: telegrams involved in simple chute destination determination

Life Telegram Scanner Telegram Task Telegram Task confirmation telegram

15 millisec. 70 millisec. 15 millisec.

Warehouse structure

• Start with defining the physical structure of the warehouse

• Storage type

• High-rack storage area, bulk storage area, picking storage area + +

• Storage section

• Bins with common attributes (fast movers + + )

• Storage bin

• Quant

• Inventory of bins

Activity Areas

• Groups storage bins together with regard to specific

warehouse activity (put away, picking and physical

inventory).

• Can be created automatically by EWM or manually

Activity Areas at Komplett

• Example of AA

s at one of the manual picking locations

Important document types

• Inbound Deliveries

• Outbound Deliveries

• Warehouse Tasks

• Document that uses EWM to execute goods movements

• Picks

• Putaways

• Internal goods movements

• Posting changes

• Goods receipt postings

• Goods issue postings

• Warehouse Orders

• Collection of warehouse tasks

Warehouse Orders and Tasks

A selection of important warehouse processes

supported by SAP EWM

Put away

• Inbound deliveries are sent the ERP system to EWM

• Warehouse tasks are created based upon

• Data on inbound delivery

• Master data on product (controls destination area)

• EWM (will find the best storage bin)

• As little as possible is placed in picking bins

• Open sales orders are used to prioritize GR to

picking locations

• All put away processes are based upon HU

s

• Goods are available for picking as soon as they are

placed in their destination bin

Manual picking

• Each delivery will have at least one Warehouse Order

• Warehouse supervisor distributes pickers to AA

s with

high demand based upon data in the warehouse monitor

• Pickers logs on to queue

• AA

s reflects the aisle

• Wireless PDA used to process the warehouse orders

• Each picker has a wireless printer

• No need to run back and forth to fetch print

• Everything is picked onto a handling unit

• Consolidation performed at designated areas

• Separate PLC chutes for consolidation orders

An example of the flexibility in EWM

• Normal deliveries are always picked separately

• One warehouse order contains tasks from only one

delivery

• PC orders are however picked together

• One warehouse order represents up to 6 outbound

deliveries

• The different orders must not be mixed up!

• The orders are seperated by unique internal HU

s

PC-production

• One of Komplett

s most complex picking processes

• A PC order will contain goods from all areas in the

warehouse

• Up to six PC

s are picked together

• The orders must be picked in a specific sequence

• Components used in production are picked first

• AS post production goods are released for picking after

the PC production has finished

• PC and post AS production items are consolidated

• Release of prepacked goods

• Not consolidated

Work centers

• Physical units in the warehouse

• Packing

• Unpacking

• (De) – consolidation

• Quality inspection

Workload Manager – not standard!

• Customer specific program originally developed to feed AS with warehouse tasks

• End result was a program which controls the release of all pick WO

s

• A tool used to control the workload and ensure that the correct deliveries are picked at the desired time

• Prioritation logic based upon wave types (gathering of specific WO

s)

• Gives Komplett the possibility to control the buffer size of pickable WO

s in different AA

s

• Ensures that deliveries are not picked until all tasks have been created

• Critical part of Komplett

s warehouse operations

Workload Manager

• Buffer levels are registered as watermarks (high and

low) in a master data table for each AA and WOCR

Autostore overview

• Autostore is feeded with tasks by EWM

• WLM decides how many tasks will be feeded into AS

• Continuous synchronization between EWM and AS to

ensure that picking tasks have the correct status

• XML interface between EWM and AS

• Users logs on to picking application, does no SAP

interface is used

• Automated packing material determination based upon

EWM standard

• Conveyor lane determination based on packing material

• Automatic counting of empty AS bins

ASAPP (Autostore application)

• Developed in Adobe Air by Ciber

• Different views based upon the AS task you would like to

process

Autostore simulator

• Very good emulation tool

• Enables efficient and reliable testing of all processes

• A success factor for the go-live

• Simplified the testing of Autostore processes

When to consider EWM?

• High transaction volumes

• Complex Warehouse Requirements

• Large warehouses/distribution centers with high volume and velocity

• Integration to PLCs (conveyors, Autostore, sorter scanners, printers etc)

• Several stock owners

• 3p warehouse, and several ERP against one WMS

• Requirements to track serial numbers on bin level

Lessons learned – general

• Alliances necessary when products are new – Very good cooperation with SAP Germany

– “try with a little help from your friends..”

• Risks can be reduced, not eliminated – “go ahead…”

• Strong company culture – underestimated benefit – “when the going gets tough..”

• And the classic: – never underestimate printer problems!

Lessons learned – technical

• Output determination was complicated – different from ERP – If the project team does not have experience with the PPF

framework a course might be a good idea

• Difficult to meet MFS requirements

• Easy to set up initial integration between SAP ECC and EWM

• CIF interface is not very good with large amounts of data – Komplett has over two million customers

Lessons learned – technical

• Error handling on CIF interfaces requires technical know-

how

– If possible avoid using batch management and serial number

registration

• Warehouse processes will be more complicated

• More errors, reduced flexibility

• Test development objects on live and high volume data

• Be careful when choosing pilot products

Strengths

• There are Badi

s for every known and unkown need

– High degree of flexibility makes it possible to realize advanced

business processes

• Flexible classification of the warehouse into activity areas

• Easy to configure the integration between SAP ECC and EWM

(very little need for development)

– Works more or less «out of the box»

• Integration with PLC

s

• Packing material determination based on product dimensions

• High degree of information available through logs and monitors

• Very good accessibility on experts from SAP when necessary

Questions?