Introduction

Warehouse management has been a key process in the supply chain organization in
controlling the storage and movement of materials within a warehouse or warehouses
as well as the many processes that has been associated with it.

What is Warehouse Management?

Ten Hompel and Schmidt (2007) describe warehouse management as the art of
operating an effective and efficient complex warehouse and its distribution system. This
involves managing the elementary functionality such as managing large quantities of
inventories and storage locations, as well as controlling and scheduling transportations
of incoming and outgoing goods.
Emmett (2005) meanwhile describes warehouse management as an operational day-to
day job that has an impact on the strategic position of the organization. Emmett (2005)
argues that warehouse management plays a critical part in supply chain management, if
it is involved in the organizations business strategic aspects. By involving warehouse
management to the organizations supply chain management, organizations could
expect future developments of its business in terms of product, production, customers,
suppliers and not forgetting all its associated throughputs and volumes.
Bowman (2009) mentions warehouse management as being involve in managing all the
required software and system management utilities such as cleaning and transforming
data, de-normalizing data for performance purposes, archiving data on individual
warehouse environments, handling backups for example complete incremental or full
backups, to name a few.

The benefits of Warehouse Management

Emmett (2005) mentions that warehouse management help organization to reach a

level, which is of high customer value.
Emmett (2005) states that when an organization oozes quality, it is through performing
right, first time, every time. It involves matters like meeting requirements; eliminate
waste, cultivating a continuous improvement culture and practicing minimum variance.
By attaining a service level, Emmett (2005) states that organizations would be able to
constantly meet customer needs prior to changes in market. This is done through
support availability, product availability, being flexible, consistent and reliable. Emmett
(2005) argues that warehouse management also helps organization maintain its costing,
through helping them aware what the costs are, and ways in helping them to reduce
these costs, usually product design, managing stock levels, and the many processes
within the organization, such as manufacturing, distributing and administrating.
Emmett (2005) also mentions that warehouse management help equip organization
with the know-how of cycle lead time, thus able to find ways to reducing these cycle lead
times, through responding to market forces, time to market, days to stock cover, time
from order placement and to time available with the customer.
 SAPs WM solution

SAP warehouse management, also called SAP WM, is an application that provides
organization with a flexible, automated support, which could assist organizations in
maintaining current stock and processing goods movements in their warehouse
complex. As computer support and usage for warehouse management are vital for
effective, timely processing of logistic requirements within an organization, thus the
requirement to use SAP warehouse management system is very important. This is
because SAP warehouse management maintains warehousing processes by ensuring
that organizations could manage and define its own complex warehousing structures.
SAP WM could also help in optimizing material flow by incorporating advanced put
away and picking techniques, and not forgetting processing goods receipts, goods issues
and stock transfers efficiently and effectively.

Benefits of SAP WM

Wilson (2007) mentions that SAP Warehouse Management system gives organization a
flexible, efficient and automated support. It helps organizations to manage its very
complex warehouse structures and several types of warehousing facilities. This includes
custom-designed storage areas, automatic warehouses, block storage, high rack storage,
and fixed bin storage to name a few.
Wilson (2007) argues that SAP Warehouse Management system not only able to define
and adapt varieties of storage bins for organization to use on their specific warehousing
complex, but also process all relevant warehousing activities and movement tasks.
These tasks include external and internal stock transfers, goods receipts, goods issues,
automatic replenishment of fixed bins, material staging to production areas and stock
difference handling.
Wilson (2007) describes SAP Warehouse Management system as a system that could
help organization to utilize random slotting for multiple owners of goods, display
summary evaluations of every goods movement within the complex warehouse system.
Organizations, through SAP Warehouse Management system, are able to implement
varieties of readily available strategies such as put-away, self-designed and picking
strategies. With SAP WM, organizations, through using real-time continuous inventory
techniques, are able to maintain up-to-the-minute inventory records at the storage level,
able to handle massive stock movements by using RF technology and automated
barcode scanner.
Organizations can also benefit by using SAP WMS as an interface to connect to external
non-SAP warehousing systems as well as integrating it for instantaneous
communications to other SAP components such as Sales and Distribution (SD), Quality
Management (QM), Production Planning (PP) and Materials Management (MM).
 Case Studies of 2 organizations that implemented SAP WMS

Case Study 1

Nippon Paint (Thailand) Co., Ltd, a large paint manufacturing organization, engaged
Intermac, to implement barcode systems to seven of its warehouses in two factories
located at two industrial estates. The Intermac barcode system replaced its human
record system that was very slow in workflow and consisted of many human errors to
the organizations warehouse activities; manage the quality assurance system through
shipping products based on first in, first out, or FIFO in short. By practising FIFO, the
organization has managed to efficiently control its chemical substances, which normally
are often proscribed by expiration and usage periods.
Nippon paint also benefitted from its experience with Intermac as it has now greatly
improved its Goods return system, a crucial customer relationship system, that helps
classify product category and process necessary steps for returned goods.
By integrating Intermac barcode systems with SAP WMS, Nippon paint (Thailand) found
that it was much easier to manage its workflow. It has since eliminate its many manual
processes through automation, make do without the need for paper by
computerization, where its products are placed online and data records completed from
racks and transferred to the records of its SAP Warehouse Management system in real
time and without errors.

SAP WMS integrated with Intermac barcode system has greatly transformed Nippon
Paint (Thailand) in terms of processes, from an office operation which used to require
data key-in after stock, into one that is of an on-site operation outfit that records
instantly data onto an automatic system on site. Nippon Paint (Thailand) has seen its
working processes improve by 70% and eliminate many human errors of data entry to
nearly 100%. Accurate data from its many product groups, warehouses and remaining
stock space are now easily managed, and as a result, its employees performances in
quality assurance which are done before shipment has greatly improved.

Case Study 2
Techtronic industries (Australia) are an organization that market and distributes many
quality power tool products to the DIY buff such as professional tradesman and
homeowners.
It successfully implemented SAP WM to help on its expansions, which required more
powerful warehouse management tools to garner better efficiencies, where after 2
months prior to SAP WMS implementation, Techtronic Industries (Australia)
experienced a return on investments whereby some of its key cost indicators was
reduced by over an impressive 200%.
This was done by eliminating picking, receiving and shipping errors; shorten search
times because of lost or misplaced stocks, recording of bulk stock movements that was
previously done manually, poor inventory accuracy, enhancing search capabilities to
track storage bins, increase efficiency on space utilization, increase usage of third party
storage, lowering shuttle costs, simplifying the time consuming stocktaking processes
and improving its performance measurements to a quality level.

References

(1)www.lodestonemc.com/images/img/Techtronic_WM_CaseStudy.pdf

(2) www.intermec.com/public-files/case-studies/en/NipponPaintThailand_cs_web.pdf