4 variants of production integration with SAP S/4HANA EWM – which one is right for you?

Dennis Lauton

Dennis Lauton

Introduction to Production Supply with SAP S/4HANA Extended Warehouse Management

Production integration – or often also called production supply – describes the process of picking goods from the warehouse and making them available to assembly and production lines, which at first seems quite simple. The crux behind this, however, is finding the integration process that suits the customer and mapping it in the system. 

I am often asked in the course of projects what is the right way to integrate production into SAP EWM. The answer, as so often in the consulting business, is “It depends.” With S/4HANA, however, SAP gives us many tools that just need to be used effectively. In this article, we would like to present four options. 

01_Process Overview_EN
General process of picking and staging to the assembly lines

Ad-hoc production supply

For some customers, it is not important or even possible to effectively plan the production supply due to various external influences. In this case, it is a good idea to place the responsibility for production supply completely in the hands of one employee. This means that the person identifies by means of visual inspection whether there is physically still sufficient stock in the production supply area (PSA) in front of the line to ensure smooth production.

02_Ad-hoc_EN
Simple example based on a shelf in the production supply area that contains three different materials

In our case, the employee has identified that a compartment of the screws has become empty and requests the missing material via scan using a mobile application. The scan triggers the creation of warehouse tasks taking into account the stored retrieval strategy (e.g. first-in-first-out, first-expired-first-out, batch characteristics, etc.) and places them in the worklist for the pickers in the warehouse. The disadvantage of this solution is clearly that the production personnel must act in a very disciplined manner, as otherwise a standstill can occur if there is not enough material in the supply area.

Minimum quantities in the production supply area

03_Minimal_Quantities_EN
Example of production supply based on minimum quantities in PSA

As an alternative, production supply with minimum quantities can be used. In the EWM master data, a quantity is stored for the product and production supply area, which must be kept in stock as a minimum or for which a warehouse task is created for supply.

The prerequisite for this, however, is that the consumption of the components is posted either automatically via MES integration or manually via a mobile application close to the process order. Otherwise, the system quickly reaches its limits, as the physics do not match the inventory available in the system and production in turn comes to a standstill.

Production supply via Kanban

04_Kanban_EN
Production supply with Kanban illustrated

If the effort of master data maintenance for the minimum quantities is not in relation to the result and a short waiting time for production is not a problem, a Kanban process can be used. When the kanban container becomes empty, the system triggers a request for production. In the S/4HANA embedded EWM scenario, SAP accommodates us by eliminating dispatch for staging and creates the warehouse tasks directly. Another disadvantage to the above-mentioned waiting time for staging is in this process variant, just as with ad hoc or minimum quantity production supply, is also that the warehouse activities cannot be effectively planned.

Staging on process order

05_Single_Order_EN
This is how staging to individual process orders works

In order to be able to plan picking and staging depending on the availability of resources in the warehouse, staging for the process order can be used. SAP EWM offers the possibility to create warehouse tasks automatically in the background based on the planning data and scheduling from SAP PP or to create the warehouse tasks manually via a web application. The staging process can also take into account whether it is picking parts (single order staging), which are only used for this production order, or crate parts (multi-order staging), which may be staged and consumed cumulatively.

This process variant has the appeal that you can plan and execute picking and staging detached from the consumption posting from production. In this way, both resource availability and supply to production can be ensured. To ensure the best possible inventory transparency, it is also a good idea to have the consumption from production posted automatically via an MES system or promptly via a mobile app by the staff on the line. 

We are here for You!

As you can see, the answer to the initial question of which type of production supply is the right one cannot be made in a general way, but must be examined together with the customer in intensive discussions and by weighing up all the parameters of the process. For the optimum result, the process must be analyzed independently of the behavior of the warehouse management system currently in use. In any case, it is worthwhile to think outside the box.

Are you also facing the challenge of optimizing the supply of production in the course of your digitization strategy or the move to SAP S/4HANA? We would be happy to support you. Please, get in touch with us. If you have any questions, feel free to contact blog@leogistics.com.

Dennis Lauton
Senior Consultant SAP Logistics

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