Re:

Inbound
and
outbound
delivery
in
MM??

Reply

Posted: Aug
9, 2010 8:38
AM
in
response
to: MM group

*Inbound processing* Goods Receipt Is a follow-on activity to a purchase order. It forms

the basis for updating the financials and inventory records and can trigger warehouse
management and quality management processes. With the warehouse management
system, you can control the goods receipt and goods issue processes at a physical level.
Goods receipts are possible from purchase order, inbound deliveries (advanced shipping
notice), stock transport orders, or from production orders. Goods receipt begins the
putaway process, which is supported by different advanced strategies. Determination of
External Demands Determines the data describing a demand for a material that is
procured externally. This data includes the quantity that is required, the release-tosupplier date of the demand, the goods receipt date for the delivery, and the location to
which the material has to be shipped. Advanced Shipping Notification Comes from the
vendor and contains the exact materials, quantities, and the delivery date with reference
to a purchase order. This document becomes the Inbound Delivery in the receipt process.
Delivery Monitor Provides an overview of deliveries in working processes. Gives an
overview of the workload in different areas, for example shipping, transportation, or
invoicing, while also allowing you to collectively process documents that have the same
selection criteria. Specialists in different execution areas of the organization can use this
tool to gain a quick overview of their workload, drill down to single documents, and
trigger follow-up activities. Yard Management Gives the warehouse an overview of
stocks located on trailers, trucks, or railcars in the yard. Sequencing functions decide
which stock should be received into the warehouse at which point in time. Yard
Management also manages the vehicle from the check-in to check-out, including in-yard
activities such as sealing, weighing, and directing the vehicle to a door or parking place
within the yard. Registration of the start and finish of loading or unloading activities is
also supported. Yard Management is integrated with Mobile Data entry *Outbound
processing* Goods Issue The outbound delivery forms the basis for goods issue posting.
The data required for goods issue posting is copied from the outbound delivery into the
goods issue document. When you post goods issue for an outbound delivery, the
following functions are carried out on the basis of the goods issue document: Warehouse
stock is reduced by the delivery quantity. Value changes are posted to the balance sheet
account in inventory accounting. Requirements are reduced by the delivery quantity. The
serial number status is updated. The goods issue posting is automatically recorded in the
document flow. Stock determination is executed for the vendor's consignment stock. A
worklist for the proof of delivery is generated. After goods issue is posted for an
outbound delivery, the scope for changing the delivery document becomes very limited.

This prevents discrepancies between the goods issue document and the outbound
delivery. Delivery Processing & Distribution Controls the actual fulfillment of sales
orders and purchase orders as well as stock transport orders. The execution of logistics
tasks is handled here. With delivery processing, the goods are shipped and relevant
documents are printed out. The sales requirements can be distributed to alternative
locations. The delivery might be shipped to the customer directly from the fulfilling
locations (more than one delivery), or consolidation may occur at one location before one
complete shipment is transported to the end customer. Proof of Delivery Proof of delivery
(POD) is an instrument involved in business processes in which an invoice is issued only
after the customer has confirmed the delivery's arrival. In addition to the POD itself, you
can also record the POD date, time, actual quantity, and the reason for possible
differences in quantities. This is especially important for deliveries where the delivery
quantity varies because of the nature of the goods or for which the exact delivery quantity
is unknown from the start. You are now in a position to issue an accurate invoice based on
the customer's confirmation of goods received. You no longer need to create credit
memos. The reasons for deviation that occur most frequently in real-world scenarios,
such as stock shrinkage, theft, certain characteristics of goods (volatility, for example),
and transportation damage, are recorded and analyzed in the system. This analysis is
especially valuable when you are negotiating with forwarding agents vendors, or
customers, since all deviations can be reflected. Value-Added Services Value-Add
activities in the warehouses need to be managed and monitored. Using the VAS
functionality, you are able to manage and control the execution of services in the
warehouse. VAS is fully integrated into Warehouse Management, Handling Unit
Management, Task and Resource Management, and Mobile Data Entry. Delivery Monitor
Provides an overview of deliveries in working processes. Gives an overview of the
workload in different areas, for example shipping, transportation, or invoicing, while
allowing you to collectively process documents that have the same selection criteria.
Specialists in different execution areas of the organization can use this tool to gain a
quick overview of their workload, drill down to single documents, and trigger follow-up
activities
Inbound and Outbound delivery are not the same as GR and GI.
Inbound is related to MM module and Outbound is related to SD module.
Inbound delivery is part of vendor confirmation and is used for optimised
purchasing. It is a notification of delivery of goods from a vendor against
a PO at a specific date.
Basically it denotes that the material has been shipped from the vendor's
location and is in transit. In the system, Inbound is made with reference to
a PO when the vendor sends his shipment notification. This Inbound is
referenced while making the GR. You can control inbounds by the Confirmation
Control Key. This can be set in the Vendor master so that all Pos for that
vendor will be inwarded by referencing an inbound. This key can be
seen/changed in the Confirmations Tab in Item Detail in ME21N. You can
customize and set whether the inbounds are considered ffor MRP or not. The
inbound dates will be helpful in planning more efficiently for the material

If you want to send the material to customer Outbound delivery is required .The flow is in Sales
process.
Sales order --> delivery -->Shipment-->Billing against delivery.
To crete outbound delivery against Sales order VL01N or you can use VL10A
In PO STO process outbound and inbound delivery required to send the material one plant to
another plant .
To crete outbound delivery against STO VL10B transaction used.
To create inbound delivery VL31N transaction is used.
Inbound delivery is required to receipt the material against PO from vendor.
To get more information on deliveries

Re: why use to

WM storage
unit
management

Reply

Posted: Aug 17, 2011

8:22 AM
in
response to: tuffy

Hi,
In some industry they will receive and ship materials based on pallets, to track the pallet
inside the WM you can use SU management.
You can also have different pallets and different storage bins for the pallets, you can use
storage bin type and storage unit type to place the correct pallet in the correct location.
Thanks,
JK
Re: why use to
WM storage
unit
management

Reply

Posted: Aug 17, 2011

3:53 PM
in
response to: tuffy

Hi,tuffy :
Please refer to the below information from SAP:
Storage unit (SU) management in Warehouse Management (WM) enables you to
optimize warehouse capacity and control material flow by utilizing storage units within
the warehouse.

A storage unit is a logical grouping of one or several amounts of material such as a pallet
or a container that can be managed within a warehouse as a unit that belongs together.
Storage units can be either homogeneous (containing one material item only) or mixed
(containing two or more material items).
All storage units, whether the materials are stored on standard pallets, wire baskets or
other containers, are assigned an identifier a number which is maintained in the
system as the storage unit number. Therefore, it is possible at any given time to know
where each storage unit is located in the warehouse complex, the amount of material
contained in it, and which operations have been processed or planned for it.
When SU management is not active in a storage type, all stock is managed as separate quants at
the storage bin level. With SU management, stock is managed at the pallet or storage unit level.
A storage bin can have one or more storage units. Similarly, each storage unit can consist of one
or more quants.

Replenishing Fixed Bins in the Warehouse

When you use the replenishment task, the system calculates the replenishment quantities that
are necessary to maintain appropriate stock levels based on the current stock situation for each
storage bin and entries in the material master record. The system then creates transfer
requirements for the quantities needed. Afterward, you process the transfer requirements to
create transfer orders according to the procedures you would normally use to carry out stock
movements in WM.

To replenish stock to fixed bins in the warehouse, choose TransRqmt Create Replen.for
fixed bin from the WM menu bar. This calls up the report RLLNACH1.

Setting Up the Replenishment Task

To implement the replenishment task, you must first define a WM movement type for storage
types that use the fixed bin stock placement strategy. In the standard system, you can use WM

movement type 319 (Replenishment to Production) as a copy template. For more information
about movement types, see Activities Transfers in the Warehouse Management
IMG documentation..

When you define the movement type, if you make an entry in the Automatic
TO data field, the system will create transfer orders automatically from the
transfer requirements. This field is linked to a control table that can be maintained
to customize the automatic creation of transfer orders.

You can also process the report RLLNACH1 in batch input mode to replenish fixed bin storage
types at regular predefined time intervals.

Maintaining the Material Master Record

In addition to changes in the customizing application, you must also maintain the material master
record for each material concerned. To do this, you need to enter the data in the Storage bin,
Maximum bin quantity, Minimum bin quantity and Replenishment quantity data fields at the
storage type level in the Warehouse Management view of the material master record.
To change a material that has already been maintained for fixed bin storage, choose Master
data Material Change from the WM menu bar and enter the appropriate data.

If you have not assigned a specific fixed bin for a material, you must modify
(create) the fixed bin storage information for this material in the material master
record.
See also:

Automatic TO Creation in the Warehouse Management IMG documentation

Creating a Transfer Order for a Transfer Requirement Manually
Automatic/Immediate Transfer Order Creation

Automatic/Immediate Transfer Order

Creation
Automatic TO Creation for Transfer Requirements
You can set up the Warehouse Management system to create transfer orders automatically as a
background process. You set up the system to carry out this process by setting an indicator in
each movement type separately. When you create a transfer requirement, the system copies this
indicator into the transfer requirement header.
To activate the automatic creation of transfer orders for these transfer requirements you must
start the report RLAUTA10 as a batch job. For this process you define a variant for each different
indicator. This makes it possible for you to define different starting times and time spans to repeat
each task periodically.
To create transfer orders automatically, three processes are available:
1. The system creates a transfer order for each transfer requirement
2. The system creates transfer orders only for transfer requirements that meet certain
criteria (for example, date or time). You enter these criteria individually into a user exit.
3. Using criteria as described in point 2, you can also set up the system to assign a
reference number to combine the transfer requirements for multiple processing. The
assignment of the reference number can take place separately in a user exit.

Creating Transfer Orders for Posting Change Notices

You can create transfer orders automatically for certain classes of posting change notices. Using
the indicator Automatic transfer order creation, you can select certain movement types for this
processing. To activate automatic transfer order creation for these posting change notices, you
need to plan the report RLAUTA11 as a batch job. Here you define a separate variant for the
different indicators. This way, different starting times and repetition cycles can be defined for the
different indicators.
When the transfer orders are created, you can activate two processing types:

A transfer order is created for each posting change notice.

A transfer order is created only for posting change notices that fulfill certain criteria (for
example, date, time). The criteria can be defined individually using an SAP customer exit.

If needed, you can generate a log to be sent to the inbox of a selected user.

Setting up the System to Create Transfer Orders Automatically

For instructions on how to set up automatic TO creation for transfer requirements and posting
change notices, see the Warehouse Management IMG documentation
under Activities Transfers Set up autom. TO creation for TRs/post.chge notices.

Immediate TO Creation for IM Posting

Whether the system creates a transfer order immediately for a material document posting in IM is
based on several factors. These are illustrated in the figure below:

If a transfer requirement is defined for immediate transfer order creation, the

system selects the field Immediate TO creation in the header. If the system does
not create a transfer order immediately, you should activate the mail control. This
way, you can determine whether the problem lies in the actual TO creation (a
mail message is generated) or in the way the system processes the material
document as shown in the above graphic.

Automatic/Immediate Transfer Order Creation for Deliveries

For the interface between SD shipping and WM, you can also set up immediate or automatic
transfer order creation for deliveries.
This process is controlled by the message control function in the SD Shipping component. The
condition technique can be used to initiate message type "WMTA" when the delivery is created.
The prerequisite for this is that at least one item of the delivery is relevant to WM. The
combination "Shipping point / Delivery type" is used to determine the message type.

Depending on the processing time of the message type WMTA, there can be different processing
types:

Time 1 - 3 (processing later)

In this case, the message is processed either via a program set in batch mode or
manually via the transaction "Messages for delivery".
Since this processing is executed independently of delivery generation, we refer to it
as automatic transfer order creation.

Time 4 (processing immediately)

Here message processing is initiated immediately after the delivery has been created.
Therefore, we call this immediate transfer order creation.
If you want the system to generate transfer orders in the background without any additional
activity necessary by the user, we recommend that you use processing times "1" or "2". You can
then plan to periodically execute the report RSNAST00 (Selection Program for Issuing Output)
with a corresponding repetition time for the message type WMTA.
This variant of processing transfer orders in the system provides significant advantages in system
performance in comparison to processing time "4" and is by far the preferred method to use for
this activity.
If you choose an appropriately small repetition time period when you set up the system to use
report RSNAST00, the time required to create transfer orders is nearly the same as when using
time period "4" for immediate transfer order generation.
To maintain the message determination for deliveries, see Sales and Distribution Basic
Functions Output Control Output Determination Output Determination Using the
Condition Technique Maintain Output Determination for Deliveries Maintain Condition
Tables in the SD Shipping IMG documentation.
See also:
Transfer Requirement Generation
Creating a Transfer Order for a Transfer Requirement Manually
Posting a Goods Receipt Based on a Purchase Order
Customer Exits for Creating and Confirming Transfer Orders

Handling unit Management and Storage unit

Management

Reply from billblanton | posted Nov 1, 2005 | Replies (4)

Your understanding is correct. The best way to think of this is to think of

a Pallet structure where your normal means of shipping is by cartons. The
pallet is the SU and the cartons are the HU's. In some circumstances, the HU
can equal the SU meaning in the above example, you ship by the pallet
quantity instead of the carton quantity.
Hope this helps.

Order Picking: Methods and Equipment for Piece Pick, Case

Pick, and Pallet Pick Operations.

By Dave Piasecki
Of all warehouse processes, order picking tends to get the most attention. Its just the
nature of distribution and fulfillment that you generally have more outbound transactions
than inbound transactions, and the labor associated with the outbound transactions is likely
a big piece of the total warehouse labor budget. Another reason for the high level of
importance placed on order picking operations is its direct connection to customer
satisfaction. The ability to quickly and accurately process customer orders has become an
essential part of doing business.
The methods for order picking vary greatly and the level of difficulty in choosing the best
method for your operation will depend on the type of operation you have. The
characteristics of the product being handled, total number of transactions, total number of
orders, picks per order, quantity per pick, picks per SKU, total number of SKUs, value-added
processing such as private labeling, and whether you are handling piece pick, case pick, or
full-pallet loads are all factors that will affect your decision on a method for order
picking. Many times a combination of picking methods is needed to handle diverse product
and order characteristics.
Key objectives in designing an order picking operation include increases in productivity,
reduction of cycle time, and increases in accuracy. Often times these objectives may conflict
with one another in that a method that focuses on productivity may not provide a short
enough cycle time, or a method that focuses on accuracy may sacrifice productivity.
Productivity. Productivity in order picking is measured by the pick rate. Piece pick
operations usually measure the pick rate in line items picked per hour while case
pick operations may measure cases per hour and line items per hour. In pallet pick
operations the best measure is actual pallets picked per hour. Since the actual
amount of time it takes to physically remove the product from the location tends to
be fixed regardless of the picking method used, productivity gains are usually in the
form of reducing the travel time.
Cycle Time. Cycle time is the amount of time it takes to get an order from order
entry to the shipping dock. In recent years, customers expectations of companies
to provide same day shipment has put greater emphasis on reducing cycle times
from days to hours or minutes. Immediate release of orders to the warehouse for
picking and methods that provide concurrent picking of items within large orders are
ways to reduce cycle times.
Accuracy. Regardless of the type of operation you are running, accuracy will be a
key objective. Virtually every decision you make in setting up a warehouse will have
some impact on accuracy, from the product numbering scheme, to the design of
product labels, product packaging, the design of picking documents, location
numbering scheme, storage equipment, lighting conditions, and picking method
used. Technologies that aide in picking accuracy include pick-to-light systems,
counting scales, and bar code scanners. Beyond the design aspects of an order
picking operation, employee training, accuracy tracking, and accountability are
essential to achieving high levels of accuracy.

Piece Picking
Piece-picking methods. Piece picking, also known as broken case picking or pick/pack
operations, describes systems where individual items are picked. Piece pick operations
usually have a large sku base in the thousands or tens of thousands of items, small
quantities per pick, and short cycle times. Mail order catalog companies and repair parts
distributors are good examples of piece pick operations.

Basic order picking. In the most basic order-picking method, product is stored in
fixed locations on static shelving or pallet rack. An order picker picks one order at a
time following a route up and down each aisle until the entire order is picked. The
order picker will usually use some type of picking cart. The design of the picking
flow should be such that the order picker ends up fairly close to the original starting
point. The picking document should have the picks sorted in the same sequence as
the picking flow. Fast moving product should be stored close to the main cross aisle
and additional cross aisles put in to allow short cuts. Larger bulkier items would be
stored towards the end of the pick flow. This basic order picking method can work
well in operations with a small total number of orders and a high number of picks per
order. Operations with low picks per order will find the travel time excessive in this
type of picking and operations with large numbers of orders will find that the
congestion from many pickers working in the same areas slows down the
processing.
Batch picking / Multi-order picking In batch picking, multiple orders are grouped
into small batches. An order picker will pick all orders within the batch in one pass
using a consolidated pick list. Usually the picker will use a multi-tiered picking cart
maintaining a separate tote or carton on the cart for each order. Batch sizes usually
run from 4 to 12 orders per batch depending on the average picks per order in that
specific operation. Batch picking systems may use extensive logic programmed to
consolidate orders with the same items. In operations with low picks per order,
batch picking can greatly reduce travel time by allowing the picker to make
additional picks while in the same area. Since you are picking multiple orders at the
same time, systems and procedures will be required to prevent mixing of orders. In
very busy operations, batch picking is often used in conjunction with zone picking
and automated material handling equipment. In order to get maximum productivity
in batch pick operations, orders must be accumulated in the system until there are
enough similar picks to create the batches. This delay in processing may not be
acceptable in same day shipping operations.
Zone picking. Zone picking is the order picking version of the assembly line. In
zone picking, the picking area is broken up into individual pick zones. Order pickers
are assigned a specific zone, and only pick items within that zone. Orders are
moved from one zone to the next as the picking from the previous zone is completed
(also known as "pick-and-pass"). Usually, conveyor systems are used to move
orders from zone to zone. In zone picking its important to balance the number of
picks from zone to zone to maintain a consistent flow. Zones are usually sized to
accommodate enough picks for one or two order pickers. Creating fast pick areas
close to the conveyor is essential in achieving high productivity in zone
picking. Zone picking is most effective in large operations with high total numbers of
skus, high total numbers of orders, and low to moderate picks per order. Separate
zones also provide for specialization of picking techniques such as having
automated material handling systems in one zone and manual handling in the next.
Wave picking. A variation on zone picking and batch picking where rather than
orders moving from one zone to the next for picking, all zones are picked at the
same time and the items are later sorted and consolidated into individual
orders/shipments. Wave picking is the quickest method (shortest cycle time) for
picking multi item orders however the sorting and consolidation process can be
tricky. Operations with high total number of SKUs and moderate to high picks per
order may benefit from wave picking. Wave picking may be used to isolate orders by
specific carriers, routes, or zones.

Basic Order Picking

Total Orders:
Low
Picks Per Order: Moderate to High

Batch Picking

Total Orders:
Low to High
Picks Per Order: Low

Zone Picking

Total Orders:
Moderate to High
Picks Per Order: Low to Moderate

Wave Picking

Total Orders:
Low to High
Picks Per Order: Moderate to High

Piece-picking equipment: As with the picking methods, the picking equipment used will
also depend on a variety of factors.
Static shelving. The most common equipment for storage in piece pick operations,
static shelving is designed with depths from 12 to 24. Product is either placed
directly on the shelving or in corrugated, plastic, or steel parts bins. Static shelving
is economical and is the best method where there are few picks per SKU or where
parts are very small.
Carton flow rack. Carton flow rack is similar to static shelving with the exception
that rather than shelves, there are small sections of gravity conveyor mounted at a
slight angle. Product is stocked from the rear of the flow rack and picking is done
from the face. Product can be stocked in cartons or small totes or bins. As a carton
or tote is emptied, it is removed from the rack and another one will roll into
place. Carton flow rack is most useful where there is a very high number of picks
per SKU.
Carousels. Horizontal carousels are a version of the same equipment used by
dry cleaners to store and retrieve clothing. They have racks hanging from them that
can be configured to accommodate various size storage bins. Generally an
operator will run 2 to 4 carousels at a time avoiding the need for the operator to wait
while one unit is turning. Picking is usually performed in batches with orders
downloaded from the host system to the carousel software. Horizontal carousels
are most common in picking operations with very high number of orders, low to
moderate picks per order, and low to moderate picks per sku. Horizontal carousels
provide very high pick rates as well as high storage density. Pick-to-light systems
are often integrated into carousels. Vertical Carousels are frequently used in
laboratories and specialty manufacturing operations and are rarely used in regular
order picking operations.
Automatic storage and retrieval systems (ASRS). An ASRS is a system of rows
of rack, each row having a dedicated retrieval unit that moves vertically and
horizontally along the rack, picking and putting away loads. ASRS systems are
available in mini-load types that store and transfer product on some type of tray or in
bins, and unit-load types that transfer and store pallet loads or other large unitized
loads. In addition to the automation features, ASRS units can provide extremely high
storage density with capabilities to work in racking up to 100 feet
high. Unfortunately the high costs of ASRS equipment and the length of the retrieval
times make it difficult to incorporate into a piece picking operation.
Automatic picking machines. Fully automated picking machines (such as Aframes) are still pretty rare and are used only where very high volumes of similar
products are picked such as music CDs, or, where high volume in combination with
high accuracy requirements exist such as pharmaceutical fulfillment.
Pick-to-light. Pick-to light systems consist of lights and LED displays for each pick
location. The system uses software to light the next pick and display the quantity to
pick. Pick-to-light systems have the advantage of not only increasing accuracy, but
also increasing productivity. Since hardware is required for each pick location, pickto-light systems are easier to cost justify where very high picks per SKU

occur. Carton flow rack and horizontal carousels are good applications for pick to
light. In batch picking, put-to-light is also incorporated into the cart or rack that holds
the cartons or totes that you are picking in to. The light will designate which order
you should be placing the picked items in.
Bar-code scanners. Though very useful in increasing accuracy levels, bar-code
scanners in a fast-paced piece-pick operation tend to become cumbersome and can
significantly reduce your pick rates. With proper training, tracking, and
accountability, you can get very high accuracy rates in order picking without
scanners. I find they are better suited to case pick, pallet load, putaway, and order
checking operations.
Voice-directed picking. Voice technology has come of age in recent years and is now a very
viable solution for piece pick, case pick, or pallet pick operations.
Automated conveyor and sortation Systems. Automated conveyor systems and
sortation systems will be integral to any large-scale piece pick operation. The
variety of equipment and system designs is enormous.

Case Picking
Case-picking methods. Case picking operations tend to have less diversity in product
characteristics than piece picking operations, with fewer SKUs and higher picks per SKU.
Basic case-picking method. This is the most common method for case-picking
operations. Rather than product stored on static shelving, case-pick operations will
have the product stored in pallet rack or in bulk in floor locations. The simplest
picking method is to use a hand pallet jack (or motorized pallet truck) and pick cases
out of bulk floor locations however many operations will find that going to very
narrow aisle (VNA) pallet racking and using man-up order selectors or turret trucks
will provide high storage density and high pick rates.
Batch picking. Batch picking is rarely used in case pick operations primarily
because of the physical size of the picks. You are unlikely to have enough room on
a pallet to pick multiple orders.
Zone picking. Zone picking can be used in case-picking operations, however, like
batch picking, the size of the picks and the size of the orders in most case-pick
operations do not lend themselves well to zone picking. If you do have a case pick
operation where you have a large number of SKUs, and orders with small quantities
per SKU, or where you have enough cases per order per zone to fill a pallet, you
may find zone picking applicable.
Wave picking. Wave picking can be applied to case picking operations where you
have very large orders with many picks per order and are looking for ways to reduce
cycle time.
Case-picking equipment.
Pallet rack. Pallet rack is the most common storage system for case pick
operations.
Flow rack. Although carton flow rack rarely applies to case pick operations, pallet
flow rack or push back rack can be useful.
Carousels. Although you can incorporate unit-load carousels into a case pick
operation, it tends to be an unlikely match-up. If doing batch picking where you
have many picks per SKU and few pieces per pick you can pick from an ASRS unit
onto a unit-load carousel.
Automated storage and retrieval systems (ASRS). Unit-load ASRS systems can
be useful in case-pick operations, especially if you can provide storage heights of 40
to 100 feet.

Pick-to-light. Pick-to-light can be used in case-pick operations, however, its

application is significantly less than in piece pick operations.
Bar-code scanners. Bar-code scanners are frequently used in case-pick
operations. Since the time to physically pick the product is higher in case-pick
operations, the time spent scanning tends to have little impact on productivity and
therefore the accuracy benefits will usually outweigh any reduction in productivity.
Voice-directed picking. Voice technology has come of age in recent years and is now a very
viable solution for piece pick, case pick, or pallet pick operations.
Automated conveyor and sortation systems. If using zone or wave picking,
automated conveyor and sortation systems will likely be a part of your system. In
case picking, you may use standard conveyors to transport individual cases or unitload conveyors to transport pallets.
Lift trucks. As previously mentioned, motorized pallet trucks, man-up order
selectors, and man-up turret trucks are the vehicles of choice for case-pick
operations.

Pallet Picking
Full-pallet-picking methods. Full-pallet picking is also known as unit-load picking. The
systematic methods for full-pallet picking are much simpler that either piece pick or case
pick, however, the choices in storage equipment, storage configurations, and types of lift
trucks used are many.
Basic pallet picking. This is the most common method for full-pallet
picking. Orders are picked one at a time. The order picker will use some type of lift
truck, retrieve the pallet load and stage it in a shipping area in a staging lane
designated for that order, or just pick and load directly into an outbound trailer or
container..
Batch picking. Since the nature of pallet picking is a single pick per trip, batch
picking has no application in pallet-picking operations.
Zone and wave picking. Although the normal definition of zone picking where an
order is moved from zone to zone as picks are accumulated doesnt apply to pallet
picking, pick zones are used in wave picking in pallet-picking operations. The
storage area is broken into zones to eliminate multiple lift-truck operators from
picking in the same aisle. The lift truck operator may pick the pallet and deliver it
directly to the designated staging lane or place it on a unit-load conveyor that will
deliver it to the sorting/staging area.
Task interleaving. Task interleaving is a method of combining picking and
putaway. Warehouse Management Systems (WMS) use logic to direct a lift truck
operator to put away a pallet en route to the next pick.
Pallet-picking equipment.
Pallet rack. There are numerous pallet rack configurations used in full pallet
operations, from standard back-to-back single pallet depth configurations to doubledeep rack, push-back rack, drive-in/drive-thru rack, and flow rack. The best racking
configuration for your operation will be based on the total number of pallets per sku,
pallets per pick, and the length of time the product is in the rack prior to

shipment. There are a lot of tradeoffs in choosing a racking configuration including

storage density, picking productivity, equipment costs, and the ability to maintain
first-in first-out.
ASRS. Unit-load ASRS units when combined with unit-load conveyors and sortation
systems can provide fully automatic pallet picking operations. And again, the ability
to store product in racking up to 100 feet high gives excellent storage density.
Automated conveyor and sortation systems. Automated conveyor and sortation
systems can be combined with ASRS units or used in conjunction with manual
picking with lift trucks in zone/wave picking systems. Either the ASRS or the lift
truck operator delivers the pallet load to the conveyor. The conveyor system then
delivers the pallet to the shipping area where it is either manually sorted by lift trucks
into the designated staging lane, or a sortation system automatically sorts into a
staging lane. Staging lanes can be equipped with automated or gravity fed unit-load
conveyor.
Bar-code scanners. Bar-code scanners are very commonly used in pallet-pick
operations.
Voice-directed picking. Voice technology has come of age in recent years and is now a very
viable solution for piece pick, case pick, or pallet pick operations.
Lift trucks. The lift trucks used for pallet picking will depend upon the storage
configuration. Standard lift trucks are used in bulk floor storage and wide-aisle pallet
rack storage in singe-depth, push-back, drive-in/drive-thru, and flow rack. Reach
trucks are used in narrow-aisle storage in single-depth, double-deep, push-back,
drive-in/drive-thru, and flow rack. Swing mast and turret trucks are used in very
narrow aisle storage in single depth pallet rack.

General Information
Regardless of the product handled, or the picking method and equipment used, locating
product by the frequency of picks should be incorporated into the system design. The
fastest moving product should be stocked as close to the pick point as possible and at the
levels that are easiest to pick from. Even if you are using an ASRS unit, the retrieval time
will be less the closer the location is to the pick point, and in a horizontal carousel, the
picking time will be less if the order picker does not need to bend down or reach up to pick.
In fixed location picking, you designate a specific picking location for each SKU. Fixed
picking locations are most commonly used in piece-pick operations, however, they may also
be used in case picking and pallet picking where flow rack is incorporated. Slotting in fixed
picking locations needs to be reviewed on a regular bases to ensure high levels of
productivity. The frequency of review will depend upon product life cycles and
seasonality. In random storage operations, a WMS system can direct fast movers to the
closest open location to the pick point.
Operations using fixed picking locations will generally also have a reserve or overflow
storage area. The overflow storage area will usually use a system of random storage. A
replenishment system will need to be put in place to move product to the fixed picking
locations as inventory levels drop to predetermined levels.
Outbound shipments should always have some type of a check in place. The type of check
will vary from operation to operation. In a high-volume low-value shipping operation, a
simple "looking over" the shipment may be all that's feasible, while in a lower-volume highvalue shipping operation, I've had as many as three people performing redundant checks of

each shipment prior to loading.

Extensive data analysis is necessary in determining the best methods for order
picking. Historical data on picks per SKU, quantity per pick, picks per order, total picks, total
orders, orders received by time of day, etc. will be important in not only the initial plan, but
also in the ongoing operation of the system.
It will also be very important to project growth, especially in automated systems. While you
can throw more people into a manual system when transactions increase, automated
systems such as carousels and ASRS units will have capacity limits.
Order-picking systems can be very simple systems in small operations or become very
complex systems using a little bit of everything. In a large operation you may have totes
start as batch pick in a carousel picking area for your medium moving piece-pick items, and
then move individually to a manual picking area for slow moving small-parts piece picking
out of static shelving (possibly in a mezzanine). Then move to a carton-flow rack area for
your fastest moving items, and finally to a shipping staging/consolidation area where it is
matched up with cases and bulkier items from a case-pick ASRS unit and full pallets from a
racked warehouse.
Also visit Equipment Pics Pages for graphics of the equipment referenced in this article.
Related Articles I have written:
Warehouse Management Systems WMS
Inventory Accuracy
Cycle Counting
Recommended Reading:
David E Mulcahy, Warehouse Distribution & Operations Handbook, McGraw-Hill, .1994

Inventory Accuracy: People, Processes, &

Technology
Inventory Accuracy: People, Processes, & Technology is a
comprehensive treatment of Inventory Accuracy and Cycle Counting in
distribution, fulfillment, and manufacturing environments. I have long
known that many businesses struggle with accuracy and are often unclear
as to what they should be doing to improve operations. The interest I have
received on the articles I have written related to inventory accuracy inspired me to write
what I like to refer to as "the ultimate resource on inventory accuracy." Rather than just
writing a little book on cycle counting or bar coding, I decided to write a book that not only
comprehensively covers these topics, but also goes beyond bar codes and cycle counts to
cover many other key facets of accuracy.
For more detailed information, sample pages, and ordering information go
to www.accuracybook.com.

Return to Articles Main Page

Dave Piasecki, CPIM is owner/operator of Inventory Operations Consulting LLC, a
consulting firm providing services related to inventory management, material handling, and
warehouse operations to manufacturers and distributors in Southeast Wisconsin and
Northeast Illinois. He has over 15 years experience in warehousing and inventory
management and can be reached through his website (http://www.inventoryops.com), where
he maintains additional relevant information and links
Copyright 2001 Inventory Operations Consulting L.L.C.

Send mail to email@inventoryops.com with questions or comments

about this web site.
Last modified: June 16, 2011
Copyright 2000 - 2011 Inventory Operations Consulting L.L.C.

Warehouse Management Systems (WMS).

By Dave Piasecki

The evolution of warehouse management systems (WMS) is very similar to that of many other software solutions. Initi
system to control movement and storage of materials within a warehouse, the role of WMS is expanding to including lig
manufacturing, transportation management, order management, and complete accounting systems. To use the grand
of operations-related software, MRP, as a comparison, material requirements planning (MRP) started as a system for
planning raw material requirements in a manufacturing environment. Soon MRP evolved into manufacturing resource
planning (MRPII), which took the basic MRP system and added scheduling and capacity planning logic. Eventually MR
evolved into enterprise resource planning (ERP), incorporating all the MRPII functionality with full financials and custom
and vendor management functionality. Now, whether WMS evolving into a warehouse-focused ERP system is a good
or not is up to debate. What is clear is that the expansion of the overlap in functionality between Warehouse Managem
Systems, Enterprise Resource Planning, Distribution Requirements Planning, Transportation Management Systems, S
Chain Planning, Advanced Planning and Scheduling, and Manufacturing Execution Systems will only increase the leve
confusion among companies looking for software solutions for their operations.

Even though WMS continues to gain added functionality, the initial core functionality of a WMS has not really changed.
primary purpose of a WMS is to control the movement and storage of materials within an operation and process the
associated transactions. Directed picking, directed replenishment, and directed putaway are the key to WMS. The de
setup and processing within a WMS can vary significantly from one software vendor to another, however the basic logi
use a combination of item, location, quantity, unit of measure, and order information to determine where to stock, wher
pick, and in what sequence to perform these operations.
At a bare minimum, a WMS should:
Have a flexible location system.

Utilize user-defined parameters to direct warehouse tasks and use live documents to
execute these tasks.
Have some built-in level of integration with data collection devices.

Do You Really Need WMS?

Not every warehouse needs a WMS. Certainly any warehouse could benefit from some of the functionality but is the b
great enough to justify the initial and ongoing costs associated with WMS? Warehouse Management Systems are big,
complex, data intensive, applications. They tend to require a lot of initial setup, a lot of system resources to run, and a
ongoing data management to continue to run. Thats right, you need to "manage" your warehouse "management"
system. Often times, large operations will end up creating a new IS department with the sole responsibility of managin
WMS.

The Claims:
WMS will reduce inventory!
WMS will reduce labor costs!
WMS will increase storage capacity!
WMS will increase customer service!
WMS will increase inventory accuracy!
The Reality:
The implementation of a WMS along with automated data collection will likely give you increases in accuracy, reduction
labor costs (provided the labor required to maintain the system is less than the labor saved on the warehouse floor), an
greater ability to service the customer by reducing cycle times. Expectations of inventory reduction and increased stor
capacity are less likely. While increased accuracy and efficiencies in the receiving process may reduce the level of sa
stock required, the impact of this reduction will likely be negligible in comparison to overall inventory levels. The
predominant factors that control inventory levels are lot sizing, lead times, and demand variability. It is unlikely that a W
will have a significant impact on any of these factors. And while a WMS certainly provides the tools for more organized
storage which may result in increased storage capacity, this improvement will be relative to just how sloppy your pre-W
processes were.

Beyond labor efficiencies, the determining factors in deciding to implement a WMS tend to be more often associated w
the need to do something to service your customers that your current system does not support (or does not support we
such as first-in-first-out, cross-docking, automated pick replenishment, wave picking, lot tracking, yard management,
automated data collection, automated material handling equipment, etc.

Setup

The setup requirements of WMS can be extensive. The characteristics of each item and location must be maintained e
at the detail level or by grouping similar items and locations into categories. An example of item characteristics at the
level would include exact dimensions and weight of each item in each unit of measure the item is stocked (eaches, cas
pallets, etc) as well as information such as whether it can be mixed with other items in a location, whether it is rackable
stack height, max quantity per location, hazard classifications, finished goods or raw material, fast versus slow mover,
etc. Although some operations will need to set up each item this way, most operations will benefit by creating groups o
similar products. For example, if you are a distributor of music CDs you would create groups for single CDs, and doub
CDs, maintaining the detailed dimension and weight information at the group level and only needing to attach the grou
code to each item. You would likely need to maintain detailed information on special items such as boxed sets or CDs
special packaging. You would also create groups for the different types of locations within your warehouse. An examp
would be to create three different groups (P1, P2, P3) for the three different sized forward picking locations you use for
CD picking. You then set up the quantity of single CDs that will fit in a P1, P2, and P3 location, quantity of double CDs
fit in a P1, P2, P3 location etc. You would likely also be setting up case quantities, and pallet quantities of each CD gro

and quantities of cases and pallets per each reserve storage location group.

If this sounds simple, it iswell sort of. In reality most operations have a much more diverse product mix and will req
much more system setup. And setting up the physical characteristics of the product and locations is only part of the
picture. You have set up enough so that the system knows where a product can fit and how many will fit in that
location. You now need to set up the information needed to let the system decide exactly which location to pick from,
replenish from/to, and putaway to, and in what sequence these events should occur (remember WMS is all about dire
movement). You do this by assigning specific logic to the various combinations of item/order/quantity/location informat
that will occur.
Below I have listed some of the logic used in determining actual locations and sequences.

Location Sequence. This is the simplest logic; you simply define a flow through your warehouse and assign
sequence number to each location. In order picking this is used to sequence your picks to flow through the
warehouse, in putaway the logic would look for the first location in the sequence in which the product would fit.
Zone Logic. By breaking down your storage locations into zones you can direct picking, putaway, or replenish
to or from specific areas of your warehouse. Since zone logic only designates an area, you will need to combi
this with some other type of logic to determine exact location within the zone.
Fixed Location. Logic uses predetermined fixed locations per item in picking, putaway, and replenishment. F
locations are most often used as the primary picking location in piece pick and case-pick operations, however,
can also be used for secondary storage.
Random Location. Since computers cannot be truly random (nor would you want them to be) the term rando
location is a little misleading. Random locations generally refer to areas where products are not stored in
designated fixed locations. Like zone logic, you will need some additional logic to determine exact locations.
First-in-first-out (FIFO). Directs picking from the oldest inventory first.
Last-in-first-out (LIFO). Opposite of FIFO. I didn't think there were any real applications for this logic until a v
to my site sent an email describing their operation that distributes perishable goods domestically and overseas
They use LIFO for their overseas customers (because of longer in-transit times) and FIFO for their domestic
customers.
Quantity or Unit-of-measure. Allows you to direct picking from different locations of the same item based upon the qua
or unit-of-measured ordered. For example, pick quantities less than 25 units would pick directly from the primary picking
location while quantities greater than 25 would pick from reserve storage locations.
Fewest Locations. This logic is used primarily for productivity. Pick-from-fewest logic will use quantity informa
to determine least number of locations needed to pick the entire pick quantity. Put-to-fewest logic will attempt t
direct putaway to the fewest number of locations needed to stock the entire quantity. While this logic sounds g
from a productivity standpoint, it generally results in very poor space utilization. The pick-from-fewest logic wil
leave small quantities of an item scattered all over your warehouse, and the put-to-fewest logic will ignore sma
partially used locations.
Pick-to-clear. Logic directs picking to the locations with the smallest quantities on hand. This logic is great fo
space utilization.
Reserved Locations. This is used when you want to predetermine specific locations to putaway to or pick
from. An application for reserved locations would be cross-docking, where you may specify certain quantities
inbound shipment be moved to specific outbound staging locations or directly to an awaiting outbound trailer.
Nearest Location. Also called proximity picking/putaway, this logic looks to the closest available location to th
the previous putaway or pick. You need to look at the setup and test this type of logic to verify that it is picking
shortest route and not the actual nearest location. Since the shortest distance between two points is a straigh
this logic may pick a location 30 feet away (thinking its closest) that requires the worker to travel 200 feet up a
down aisles to get to it while there was another available location 50 feet away in the same aisle (50 is longer
30).
Maximize Cube. Cube logic is found in most WMS systems however it is seldom used. Cube logic basically
unit dimensions to calculate cube (cubic inches per unit) and then compares this to the cube capacity of the lo
to determine how much will fit. Now if the units are capable of being stacked into the location in a manner that
every cubic inch of space in the location, cube logic will work. Since this rarely happens in the real world, cube
tends to be impractical.

Consolidate. Looks to see if there is already a location with the same product stored in it with available
capacity. May also create additional moves to consolidate like product stored in multiple locations.
Lot Sequence. Used for picking or replenishment, this will use the lot number or lot date to determine location
pick from or replenish from.

Its very common to combine multiple logic methods to determine the best location. For example you may chose to us
pick-to-clear logic within first-in-first-out logic when there are multiple locations with the same receipt date. You also m
change the logic based upon current workload. During busy periods you may chose logic that optimizes productivity w
during slower periods you switch to logic that optimizes space utilization.

Other Functionality/Considerations

Wave Picking/Batch Picking/Zone Picking. Support for various picking methods varies from one system to another.
high-volume fulfillment operations, picking logic can be a critical factor in WMS selection. See my article on Order
Picking for more info on these methods.

Task Interleaving. Task interleaving describes functionality that mixes dissimilar tasks such as picking and putaway to
obtain maximum productivity. Used primarily in full-pallet-load operations, task interleaving will direct a lift truck operat
put away a pallet on his/her way to the next pick. In large warehouses this can greatly reduce travel time, not only
increasing productivity, but also reducing wear on the lift trucks and saving on energy costs by reducing lift truck fuel
consumption. Task interleaving is also used with cycle counting programs to coordinate a cycle count with a picking or
putaway task.

Automated Data Collection (ADC). It is generally assumed when you implement WMS that you will also be impleme
automatic data collection, usually in the form of radio-frequency (RF) portable terminals with bar code scanners. I
recommend incorporating your ADC hardware selection and your software selection into a single process. This is esp
true if you are planning on incorporating alternate technologies such as voice systems, RFID, or light-directed systems
may find that a higher priced WMS package will actually be less expensive in the end since it has a greater level of sup
for the types of ADC hardware you will be using. In researching WMS packages you may see references like support
easily integrates with, works with, seamlessly interfaces with in describing the softwares functionality related to
ADC. Since these statements can mean just about anything, youll find it important to ask specific questions related to
exactly how the WMS system has been programmed to accommodate ADC equipment. Some WMS products have cr
specific versions of programs designed to interface with specific ADC devices from specific manufacturers. If this
WMS/ADC device combination works for your operation you can save yourself some programming/setup time. If the W
system does not have this specific functionality, it does not mean that you should not buy the system, it just means tha
will have to do some programming either on the WMS system or on the ADC devices. Since programming costs can e
put you over budget youll want to have an estimate of these costs up front. As long as you are working closely with th
WMS vendor and the ADC hardware supplier at an early stage in the process you should be able to avoid any major
surprises here. Read my article on ADC.

Integration with Automated Material Handling Equipment. If you are planning on using automated material handli
equipment such as carousels, ASRS units, AGVs, pick-to-light systems, or sortation systems, youll want to consider th
during the software selection process. Since these types of automation are very expensive and are usually a core
component of your warehouse, you may find that the equipment will drive the selection of the WMS. As with automate
data collection, you should be working closely with the equipment manufacturers during the software selection process

Advanced Shipment Notifications (ASN). If your vendors are capable of sending advanced shipment notifications
(preferably electronically) and attaching compliance labels to the shipments you will want to make sure that the WMS c
use this to automate your receiving process. In addition, if you have requirements to provide ASNs for customers, you
also want to verify this functionality.

Cycle Counting. Most WMS will have some cycle counting functionality. Modifications to cycle counting systems are
common to meet specific operational needs. Read my article on Cycle Counting and check out my book on Inventory
Accuracy and Cycle Counting.

Cross Docking. In its purest form cross-docking is the action of unloading materials from an incoming trailer or rail ca
immediately loading these materials in outbound trailers or rail cars thus eliminating the need for warehousing (storage
reality pure cross-docking is less common; most "cross-docking" operations require large staging areas where inbound
materials are sorted, consolidated, and stored until the outbound shipment is complete and ready to ship. If cross doc

is part of your operation you will need to verify the logic the WMS uses to facilitate this.

Pick-to-Carton. For parcel shippers pick-to-carton logic uses item dimensions/weights to select the shipping carton p
the order picking process. Items are then picked directly into the shipping carton. When picking is complete, dunnage
added and the carton sealed eliminating a formal packing operation. This logic works best when picking/packing produ
with similar size/weight characteristics. In operations with a very diverse product mix it's much more difficult to get this
of logic to work effectively.

Slotting. Slotting describes the activities associated with optimizing product placement in pick locations in a warehouse. There a
software packages designed just for slotting, and many WMS packages will also have slotting functionality. Slotting software will
generally use item velocity (times picked), cube usage, and minimum pick face dimensions to determine best location.

Yard Management. Yard management describes the function of managing the contents (inventory) of trailers parked
outside the warehouse, or the empty trailers themselves. Yard management is generally associated with cross dockin
operations and may include the management of both inbound and outbound trailers.

Labor Tracking/Capacity Planning. Some WMS systems provide functionality related to labor reporting and capacity
planning. Anyone that has worked in manufacturing should be familiar with this type of logic. Basically, you set up sta
labor hours and machine (usually lift trucks) hours per task and set the available labor and machine hours per shift. Th
WMS system will use this info to determine capacity and load. Manufacturing has been using capacity planning for de
with mixed results. The need to factor in efficiency and utilization to determine rated capacity is an example of the
shortcomings of this process. Not that Im necessarily against capacity planning in warehousing, I just think most oper
dont really need it and can avoid the disappointment of trying to make it work. I am, however, a big advocate of labor
tracking for individual productivity measurement. Most WMS maintain enough data to create productivity reporting. S
productivity is measured differently from one operation to another you can assume you will have to do some minor
modifications here (usually in the form of custom reporting).

Activity-based costing/billing. This functionality is primarily designed for third-party logistics operators. Activity-based billing a
them to calculate billable fees based upon specific activities. For example, a 3PL can assign transaction fees for each receipt, and
shipment transaction, as well as fees for storage and other value-added activities.

Integration with existing accounting/ERP systems. Unless the WMS vendor has already created a specific interfac
with your accounting/ERP system (such as those provided by an approved business partner) you can expect to spend
significant programming dollars here. While we are all hoping that integration issues will be magically resolved somed
a standardized interface, we aint there yet. Ideally youll want an integrator that has already integrated the WMS you c
with the business software you are using. Since this is not always possible you at least want an integrator that is very
familiar with one of the systems.

WMS + everything else = ? As I mentioned at the beginning of this article, a lot of other modules are being added to
WMS packages. These would include full financials, light manufacturing, transportation management, purchasing, and
order management. I dont see this as a unilateral move of WMS from an add-on module to a core system, but rather
optional approach that has applications in specific industries such as 3PLs. Using ERP systems as a point of referenc
unlikely that this add-on functionality will match the functionality of best-of-breed applications available separately. If
warehousing/distribution is your core business function and you dont want to have to deal with the integration issues o
incorporating separate financials, order processing, etc. you may find these WMS based business systems are a good

Implementation Tips

Outside of the standard dont underestimate, thoroughly test, train, train, train implementation tips that apply to a
business software installation (read my article Software Selection and Implementation Tips) its important to emphasize
WMSs are very data dependent and restrictive by design. That is, you need to have all of the various data elements in
place for the system to function properly. And, when they are in place, you must operate within the set parameters.
Example #1
Customer
Service Person:
Warehouse
Person:
Customer

Why didn't part XYZ ship to customer 123

yesterday?
The warehouse management system couldn't find
it so it didn't produce an instruction to ship it.
Well my screen shows that we have 500 available

Service Person:
Warehouse
Person:
Customer
Service Person:
Warehouse
Person:
Example #2
Warehouse
Supervisor:
Lift truck
operator:
Warehouse
Supervisor:
Lift truck
operator:
Warehouse
Supervisor:
Lift truck
operator:
Warehouse
Supervisor:
Lift truck
operator:

in locaion 1A. Are you telling me that we don't

have them.
No, they're there all right.
If I can see them on my screen, why can't the
WMS find them.
I don't know. I think if you don't have everything
set up right , it won't let you ship it.
I thought I told you to stock those pallets in
location F12.
I tried but the warehouse management system
wouldn't let me.
Why wouldn't it let you?
It told me that they didn't fit.
Well do they fit?
Yes
Then why does the WMS think that they don't.
I think it's because they sometimes come in a
different size box.

These are some very real examples (if only I could draw cartoons) of what you can expect when working with systems
WMSs. As you run into instances such as these, you must remember that these are not flaws with the WMS. In fact, y
want your WMS to be restrictive, thats what gives you control over your operations. You should to be aware, however,
the cultural change required to work within the operational constraints provided by the WMS is often the most difficult p
a WMS implementation.

When implementing a WMS, you are adding an additional layer of technology onto your system. And with each layer o
technology there is additional overhead and additional sources of potential problems. Now dont take this as a
condemnation of Warehouse Management Systems. Coming from a warehousing background I definitely appreciate t
functionality WMSs have to offer, and, in many warehouses, this functionality is essential to their ability to serve their
customers and remain competitive. Its just important to note that every solution has its downsides and having a good
understanding of the potential implications will allow managers to make better decisions related to the levels of techno
that best suits their unique environment.

Also read my articles on Software Selection and Implementation Tips, Order Picking, and Cycle Counting.
Links to Warehouse Management Systems on Links Page.

Extra:

Industrial Data & Information, Inc offers several publications and RFI kits focusing on WMS selection. Products Inclu
Selecting Warehouse Software From WMS & ERP Providers. Reviewed on my Books Page
Standard Warehouse Management System RFP Bundle.
Warehouse & Logistics Software Directory, WMS
For additional IDII products check their web site at www.idii.com

Return to Articles Main Page

Dave Piasecki, CPIM is owner/operator of Inventory Operations Consulting LLC, a consulting firm providing services re
to inventory management, material handling, and warehouse operations to manufacturers and distributors in Southeas
Wisconsin and Northeast Illinois. He has over 15 years experience in warehousing and inventory management and ca
reached through his website (http://www.inventoryops.com), where he maintains additional relevant information and lin
Copyright 2001, 2002, 2003 Inventory Operations Consulting L.L.C.

Send mail to email@inventoryops.com with questions or comments

about this web site.
Last modified: June 16, 2011
Copyright 2000 - 2011 Inventory Operations Consulting L.L.C.

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SAP - WM Course Content

Introduction to Warehouse Management
Warehouse management overview in SAP R/3
Organization Data
Warehouse Structure
Organization Data / Define Warehouse Organization structure
Warehouse number
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Storage section
Storage Bin
Storage Bin Structure
Storage Bin Types
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Material Master
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Create Transfer requirement Automatically
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Create Posting change Notice Manually
Creating PCN Automatically

Convert PCN to TO

Transfer Order
Number Range for TO
Create Transfer Order Manually
Create TO w.r.t Transfer Requirement
Create TO w.r.t Posting change notice no
Create TO w.r.t Material document
Create TO w.r.t Inbound delivery with ASN Advanced Shipping Notification
Confirm the Transfer Order
Cancel the Transfer Order
Delete TO
Block and Unblock Storage Bins, Quants, Storage Types
Print TO
Set Up Auto T.O. Creation for TRs and PCNS
Set Up 2 Step Picking for TRS
Automatic TO Creation and Confirmation
Put away Strategies
Next to empty bin
Addition to existing bin
Open Storage
Fixed bin strategy
Picking Strategies
Shelf life expired -SLED
FIFO
Stringent FIFO
LIFO
Warehouse Management Business Scenario's (MM)
MM Flow with Interface with WM
Material Documents Processing in WM
GR and GI with WM
Transfer Posting in WM
o Plant to Plant
o Sloc to Sloc
o Stock TO Stock
o Schema Group Vendor
STO Stock Transport Order using WM (MM-SD-WM Interface)
Physical Inventory Processes in WM
Create Physical inventory record
Enter count results
Clear the difference in WM
Clear the difference in IM
Interfaces

Define Movement types

Define Posting Changes
Generate Interim Storage Bins
Activate Automatic T.O. Creation
Allow Negative Stocks in Interim Storage types
Goods Movement (IM) not allowed for storage types
2 Step Picking Process in SD

Batch Management in WM
Condition Tables
Access Sequence
Strategy Types
WM Batch Search Procedure
Batch Status in WM
Characteristics and class
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Manual And Automatic Batch Display In WM
Integration
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Outbound Processing with WM

Purpose
You can use this business process for your outbound processing with warehouse management
(WM). Outbound processing comprises of the preparation of goods to be delivered from a
warehouse to a receiving location.
Outbound processing starts with an outbound delivery that has been created either on the fly, or
that is more typically based on reference documents such as sales orders or stock transport
orders.
Outbound processing in warehouse management typically comprises the following activities:

The notification of goods to be supplied from a warehouse to a customer for which the
outbound delivery serves as the reference document

Picking (with the WM transfer order in this example)

Packing

Physical Goods Issue in warehouse (that is movement to the Goods Issue Zone)

Loading

Goods issue and goods issue posting to Inventory Management (IM)

Advising of advanced shipping notifications to business partners

Obtaining a Proof of Delivery (POD) from the receiving business partner

Process Flow

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1.

Create delivery (SAP ECC)

The outbound delivery contains essential information to enable the warehouse to meet
outbound fulfillment objectives. It also contains business partner information, data as to
materials required and their quantities ordered. The outbound delivery also stipulates
delivery deadlines, delivery points and conditions, mode of transport and delivery terms.
An outbound delivery is typically created based on a reference document, such as a sales
order (see also Sales Order Processing Process Master), purchase order, and stock
transport order, but may also be created on the fly (that is without reference to a reference
document).
In its role as central object of the goods issue process, the outbound delivery supports all
shipping activities including picking, packing, transportation, and goods issue. During the
outbound delivery process, shipping-planning information is recorded, status of shipping
activities is monitored, and data accumulated during shipment processing is documented.
When the outbound delivery is created, the shipping activities, such as picking or delivery
scheduling, are initiated, and data that is generated during shipment processing is included
in the delivery. For more information, see Delivery Creation.
2. Pick with WM transfer order (SAP ECC)
Based on the outbound delivery data and subject to the configured picking strategies and
activities, a pick transfer order (TO) is created that stipulates which materials in which
quantities are to be moved from which source to which destination location. For example, a
material required may be subject to a Value Added Service (VAS) if so determined by
applied conditions.
In the simplest case, this entails the movement from a storage bin location to the Goods
Issue Zone. A simple pick execution in a Handling Unit managed warehouse could create a
pick transfer order from a storage bin, assign a pick handling unit, and then move the
picked items to the Goods Issue Zone or Area.
For more information, see Picking.
3. Pack (SAP ECC)
Packing the picked items and repacking is frequently required if, for example, an outbound
delivery mandates items to be picked:

Delivery items have either more or less quantity than the storage units of these
items in the warehouse

Delivery items of different material are to be packed together on to one pallet for
transport

The delivery quantity does not fit one pallet and needs to be split over several
pallets of equal quantity, with the remaining quantity to be packed in a carton
Packing is part of delivery and shipment processing. When you process a delivery, you can
select delivery items for packing and assign them to handling units. You could, for instance,
pack delivery items in boxes, pack the boxes on pallets for delivery to the customer, and
load the pallets onto a truck.
For more information, see the SAP Library under mySAP Business Suite SCM
Processes and Business Scenarios Generic SCM
Processes Warehousing Outbound Processing Packing.
4.

Confirm goods issue in warehouse (SAP R/3 Enterprise).

Upon transfer order confirmation of the picked or picked-and-packed items contained in the
delivery to the Goods Issue Zone (916), Goods Issue is confirmed. Upon Goods Issue,
confirmation, and posting of the outbound delivery is updated.
For more information, see Packing.
5. Load (SAP ECC)
The delivery items in the Goods Issue Zone can now be moved onto a truck or into
transport equipment, such as a container using an RF (LE-LMOB) loading transaction.

Using an RF device, you can do the following:

Load handling units (HUs) on or unload HUs from a means of transport, if you
know the number of the shipment to which the HUs are assigned.

Load HUs on or unload HUs from a means of transport, if you know the number
of the delivery to which the HUs are assigned.

Perform system-guided loading. You enter a shipment number and the system
proposes the load sequence of the HUs assigned to it. In the case of nested HUs,
you can enter the higher-level HU, and the respective lower-level HUs are loaded
automatically.
Vehicle or transport equipment sealing activity is also supported.
For more information, see Loading.
6. Post goods issue to inventory management (IM) (SAP ECC)
Upon transfer order confirmation of the picked or picked-and-packed items contained in the
delivery to the Goods Issue Zone (916), Goods Issue is confirmed and posted to Inventory
Management (IM). Upon Goods Issue, confirmation and posting of the outbound delivery is
updated. As soon as the goods leave the company, the shipping business activity is
finished. This is illustrated using goods issue for outbound deliveries.
For more information, see Goods Issue.
7. Send ASN to business partner (SAP ECC)
Following the Outbound delivery update based on loading confirmation, the business
partners (receiving customer, logistics service provider, and trucker or shipping company)
can receive an Advance Shipping Notification (ASN) announcing the dispatch. It advises
the impending arrival of the delivery. An ASN can be either sent electronically by EDI, XML,
or non-electronic means.
In the EDI scenario, you create a message with the delivery which is sent to the customer
via EDI as a shipping notification. On your side, the delivery can be initiated automatically
by a forecast delivery schedule from the customer, for example.
An Advanced Shipping Notification (ASN) contains logistically relevant data, such as date
and time of delivery, material, quantities, and packing information.
For more information, see ASN to Business Partner.
8. Receive POD from business partner (SAP ECC)
The receipt of a Proof of Delivery (POD) marks the end of outbound processing and has
the objective of confirming the arrival of the dispatched goods and their associated
conditions (damage, differences in orders shipped, ordered, and so on).
A POD is also an instrument involved in business processes in which an invoice is issued
only after the customer has confirmed the delivery's arrival. In addition to the proof of
delivery itself, you can also record the POD date, POD time, the actual quantity that
arrived, and the reason for possible differences in quantities. This is especially important
for deliveries in which the delivery quantity varies because of the nature of the goods or for
which the exact delivery quantity is unknown from the start.
You can record proofs of delivery in inbound deliveries for which your vendor has sent
shipping notifications and send them via IDoc. You have three different options for
recording differences and reasons for deviation:

Automatic creation
When you change quantities in an inbound delivery, the system generates the POD
data, including the difference quantity, and standard reason in the background. In
this case, you cannot change this data or create other data manually.

Partially-automated creation

When you change quantities in an inbound delivery, an input screen appears with
the POD data that was generated by the system as suggested values. You can use
this screen to add other data or change the reasons manually.

Manual creation
When you change quantities in an inbound delivery, an input screen appears in
which you must enter all POD data manually.
For more information, see POD from Business Partner.
9. Track and evaluate process with SCEM (SAP SCM) (optional).
Optionally, you can track and evaluate the process in the Supply Chain Event Management
(SCEM) as explained
For more information about SCEM, see Fulfillment Visibility as well as the SAP Library
under mySAP Business Suite SAP Event Management (SAP EM) Supply Chain
Coordination Uses of Supply Chain Event Management and Processes in Supply Chain
Event Management.

Delivery Creation
Use
The outbound delivery contains essential information for enabling the warehouse to meet
outbound fulfillment objectives. It also contains business partner information, information on
materials required, and material quantities ordered. The outbound delivery also stipulates delivery
deadlines, delivery points and conditions, mode of transport and delivery terms.
An outbound delivery is typically created based on a reference document (such as a sales order,
purchase order or stock transport order), but may also be created without reference to a
reference document.
In its role as a central object of the goods issue process, the outbound delivery supports all
shipping activities including picking, packing, transportation and goods issue. During the
outbound delivery process, shipment planning information is recorded, status of shipping
activities is monitored, and data accumulated during shipment processing is documented. When
the outbound delivery is created, the shipping activities (such as picking or delivery scheduling)
are initiated, and data that is generated during shipment processing is included in the delivery.

Features
An outbound delivery can be created as follows:

With reference to a specific sales order

With reference to a sales order by running the Collective Processing of Documents Due
for Delivery Sales Order function

Without any reference

With reference to a stock transport order

With reference to a subcontract order

With reference to a project

Depending on your requirements, you can create outbound deliveries automatically using work
lists, or manually. You can make agreements with your customers for

complete and partial

deliveries and for

single

order combinations. Outbound deliveries can be combined to form a

group of deliveries.

Overviews allow you to

monitor created outbound deliveries and outstanding sales activities.

Outbound deliveries can only be created under certain

For more information, see

conditions.

Delivery Processing.