Operational challenges in maintaining SKU visibility for a SAP powered, utility warehouse function

1. Study on Operational challenges in maintaining SKU
visibility for a power utility warehouse
An SAP Perspective
By:
Sayyed Zakir Ali Rizwe [19131]

2. Power Utility – Role of Supply Chain
 Utility Supply Chain vs. Conventional Supply Chain
 Electricity the product is available vs. shelved
products that are put for customer purchase
 Supply invoiced Vs. conventional product
demand/ supply cycles & shifts
 Utility Supply Chain
 Guarantee fuel-supply for monopolistic,
regulated public/private companies
 And role to deliver demand management
 Demand Management – Maintenance, Efficiency,
Compliance & Service Expansion
 Preventive & corrective maintenance inventories
 NEPRA compliance (project-based)
 Efficiency gain initiatives: Project based inventory
 Service expansion; increasing customer foot-print

3. Demand Management Process – Integrated Utility
 Demand Road Map
 Requirement Generation,
Costing, Material
Requirement
 Consolidation, Review &
Approval Cycle
 Vendor Management
 Material & Service
Procurement
 Good Receipt, Inspection &
Storage
 Centralized & Decentralized
Storage, Warehouse Facility
 Issuance, Logistics &
Installation
 Commissioning
 Cutover for Operations
 Generation
 Transmission
 Distribution
 Support
Functions
 User Department
 Finance Department
 Project Department
 Procurement
Department
 Inventory Management
 Central Store &
Warehouse Facility
 Asset Department

4. Utility – Business Objectives
 Eliminate manual
interface to optimize
processing and increase
visibility
HOW?
 Deliver material per
bin/card through SAP for
increased visibility
 Establish SKU traceability
& visibility
 Perpetual or Periodic
inventory count at bin
level reduce pilferage
 Track movement of goods
movements to optimize
business process
execution
 Replenish
Stores
 Distribution
Maintenance
Stores
 Transmission
Stores
 Generation
Plant Stores
 Material Process
 Warehouse Design
 Warehouse Master Data
 Warehouse Operations
& Physical Inventory
 Integration with SAP
Materials & Plant
Maintenance

5. Warehouse Management Vs. IM & Requirements
 Flexibility & automation in processing
goods movements & managing stocks
in a warehouse complex that stroll
down a stock at the bin level
 Compared to Inventory Management
(IM), limited to recording quantity at
storage location, WMS record
SKU/material quantity at a physical
location
 Movements within WMS are
controlled through ‘transfer orders’
whereas goods received & issuance at
IM are processed per WMS ‘put away’
or ‘pick-up’ technique using interim
storage area
 SAP WMS & Extended WMS can work
with RFID & bar-code solutions to
track order & SKU/stock
 Physical-inventory at bin level
Required for a WMS Implementation:
 Warehouse structure & master data
 Put-away & pick-up techniques
 Stock Placement for Inventory Movements
 Manual Confirmation
 Stock Transport Order
 Warehouse Physical Inventory

6. SAP Warehouse Design
 Plant is an organizational unit
 Storage Location: Location of
physical deposits of stocks within a
plant.
 Warehouse Number
 Storage type is a storage area or a
WH zone defined in WMS for a WH
number
 Storage Section is an organizational
subdivision of a storage type that
group’s together storage bins with
similar features for the purpose of
putting away stock
 Storage Bin is the smallest
addressable unit of space in WM.
Storage bins are identified by
coordinates that refer to the exact
location where goods can be stored
in the warehouse

7. SAP Warehouse - Master & Transaction Insight
 Storage type defined as:
 Goods receipt area
 Goods Issue area.
 Bulk storage
 Open Storage
 High rack storage
 Picking area
 Shelf storage
 Interim Storage types (staging)
 Goods receipt area
 Goods issue area
 Interim storage area
 Posting change zone
 Storage Section - Grouping bins
into sections per characteristics
include but not limited to fast
moving items, slow moving
items etc.
 Storage Bin type - grouping
bins of similar nature (pallets/
ground/rack etc.)
 Warehouse Master Data
 Create & Extend WM View in Material Master
 SAP T-code MMO1 & MMO2
 SAP T-code for bin-creation (LS01N)
 Defined Storage-section
 Define storage types & interim storage types
 Define Bin Type
 Transactions (Good Receipt & Good Issuance)
 SAP Material (MIGO/ Material-In-Goods-Out) movements for
inspection, receipt, issuance
 With SAP Material/MIGO – SAP WM/Transfer Request
 LT01, LT1D, LT1E
 Transfer Request to Transfer Order - Relationship
 Auto & Manual Transfer Order – Material QTY posting
 Put-away (receipt) & Pick up (issuance) Strategy
 Fixed-bin
 Flexible-bin Strategy
 Warehouse Transactions (Internal Stock Transfer)
 WH Location to a WH &/ Non WH location
 bin-to-bin material quantity transfers
 QUANT: First-In-First-Out (FIFO)

8. SAP Warehouse: Put Away & Pickup Strategies – Challenges
 SAP Warehouse Material Put-away & Pick-up Strategy
 Fixed-bin / No Fixed-bin Strategy
 Near Fixed-bin Strategy
 Fixed-Bin (merits)
 Traceability moved-to &
from the bin (No bin-to-bin
transfers)
 Drive automation from SAP
MM to SAP WH
 Efficient physical inventory
 Fixed-Bin (de-merits)
 Space is ‘Premium’ , some
of the space, ‘all of the
time’ not viable
 Managing seasonal swings,
supply demands, shifts for
safety stock
 SAP Warehouse: Near Fixed-bin Strategy
 Near Fixed-Bin Strategy
(merits)
 Proximity to QTY
traceability
 Automation require geo,
space, material dimensions
 Near Fixed-Bin Strategy
(de-merits)
 Operation challenges
 Design flexibility; does not
work for retrofit WH
installations

9. SAP Warehouse: Barcode Solution & Challenges
 Warehouse Business
Process
 SOP & SAP -
Process
augmentation
 Physical Training
(ADC handling &
printing)
 System training &
change
management
program
 Identify & test-bed
barcode solutions
 Off-the shelf
solutions
 Integration of ADC
or barcode
scanners to SAP
 SAP provision &
flexibility
 Challenges
 Vendor development
 Resourcing requirement, maintain
transactional efficiency & develop
customers
 Manage replenishment recording
and reverse logistics
 SAP Integration & implementation
expertise
 Align business SOP, user-manuals
& reporting requirements
 Process governance & control
 Retrofitting solution challenges
 Strengthening batch processing
and connect a bin to a unique
barcode
 On site SAP Access