SAP EWM (Extended Warehouse Management) is a very sophisticated solution from SAP designed to help logistics leaders optimize their warehousing, distribution, and logistics processes. Many companies often chose this advanced warehousing IT solution to improve inventory accuracy, optimize warehouse space, increase picking and putaway efficiencies and get real time visibility to warehouse operations and exceptions. However, to get the highest ROI from the SAP EWM solution, it critical that the solution is implemented optimally as stakes are very high and if not done correctly this could cause massive business disruptions and significantly impact company revenue and profits. SAP EWM solution being rich in functionalities, adds a lot of potential complexity to the solution implementation which often results into SAP EWM implementation becoming an overwhelming and intimidating project for many customer IT teams.
We have often seen when SAP EWM is not integrated well with the organization’s procurement process, it results into extensive manual work to create inbound deliveries and handling units. The additional workload slows down warehouse operations, which is often mitigated by adding more manpower and leading to increased data entry errors. When warehouse layout and rack/ bin sizing is not done accurately often results into poor utilization of warehouse space resulting into increased storage costs. Lack of slotting to identify your fast-moving items, inaccurate put away and picking strategy results into too many put away and picking trips, reducing warehouse personnel productivity and reduced warehouse throughput per headcount. Lack of simplified Radio Frequency (RF) process and transactions often results into loss of inventory accuracy, mispacks and stock outs on production shop floor.
The SAP EWM solution, designed to offer a competitive advantage by streamlining your supply chain – when implemented inefficiently, can become a very expensive supply chain bottleneck.
Based on more than 23 years of his SAP warehousing experience & SAP implementations lessons learned, here is the list of Top 5 common & dangerous mistakes to avoid in SAP EWM Implementation by GBSI’s advisory solution architect, Shivaji Patil:
1. Lack of Strong Project Organization:
SAP EWM implementation should be treated as a strategic initiative with strong support from the business leadership as well as the IT leadership team. It is necessary to understand efforts needed for the implementation and staff project team with right expertise from implementation partner and company IT and business organization. Technology solution implementation without focusing people aspect of solution has higher chances of failure. So roles and responsibilities for each project team members such as project managers, solution architects, business process owners (BPOs), subject matter experts (SMEs), OCM managers, quality managers, training leads, operations support managers should be clearly articulated and documented.
2. Lack of Strong Project Governance:
Lack of project governance results into scope creep, missed deadline and cost overruns. If planning, scheduling, monitoring and controlling of the project plan and scope management, risk management and escalation is not done at all 3 levels including executive steering committee, business process owners and project management office, it could result into last minute changes creeping into tail end of the project, impacting quality of entire SAP EWM solution.
3. Underestimation of Solution Adoption efforts:
SAP EWM solution adoption efforts includes all efforts needed to design solution to meet business drivers for implementing EWM, organizational change management efforts to execute SAP EWM solution in warehouses and empowering people with right amount of training to use SAP EWM effectively.
4. Not clearly defining Business Drivers for the Implementation:
It is important for the business leadership team to articulate what are the main business drivers they are trying to achieve with the massive effort of implementing the SAP EWM solution. These business drivers act as controlling guidelines for the entire team to make right design decisions. Also, it is very important to measure these business drivers with right KPIs because what cannot be measured cannot be optimized. Some of the business drivers could be inventory accuracy targets, warehouse personnel productivity targets, warehousing cost reduction targets, etc.
5. Missing on simplification of business processes and master data requirements:
SAP EWM is rich in its functionalities. But that brings additional complexity with it. It is important to separate complexity and exception management from day-to-day business processes. Typically, less than 10% of transactions for inbound, outbound, and internal warehouse processes account for more than 80% warehouse movements. It is necessary to put extra efforts to simplify these transactions to achieve maximum efficiency. If master data in EWM such as packing instructions, HU types, Bin sizes, Storage type indicators, Bin capacities are not managed accurately, many automated processes could fail resulting into lot of manual work and exception handling.
With over 18+ years of SAP warehousing, distribution & supply chain experience, Genius Business Solutions has been helping marketing leading brands around the North America, South America, Europe and Asia pacific regions successfully implement and optimize their SAP warehousing solutions. GBSI teams have successfully delivered more than 100 SAP WM EWM implementations and more than 30 Radio Frequency (RF) projects in the automotive, high tech, healthcare, pharmaceuticals, oil & gas, retail, manufacturing and wholesale distribution industries. GBSI SAP EWM team has compiled more than 100 SAP warehousing how to guides, more than 50 solution design documents, 100s of pages of configuration documents, project implementation documents and case studies for perfecting each SAP implementation for a dramatic success.
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