SAP EWM implementation

Wydawnictwa Szkolne i Pedagogiczne (WSiP, School and Pedagogical Publishing House) is one of the most recognizable brands in Poland. The company operates in all educational sectors. Its portfolio includes traditional books for students and teachers, as well as digital materials. In its online store, it offers over 4,000 products, and in 2023 alone, it sold over 4.7 million textbooks.

The company places a very strong emphasis on digital development. In recent years, a number of new systems have been launched, such as an educational platform to support children’s online learning, a new e-commerce store, and an ordering platform for schools and teachers that handles both subsidized and kindergarten textbooks.

The next step was the implementation of an integrated ERP system, which will be the central place to manage the company’s operational activities while guaranteeing security and stability. In addition, it will be integrated with the automation operating in the warehouse and with the applications of shipping companies.

The SAP S/4HANA system meeting all the company’s expectations was chosen. The scope of the implementation included the finance and controlling areas, materials and warehouse management, as well as sales and distribution. The project also included the preparation of interfaces to integrate the S/4 system with other solutions. WSiP’s implementation partner was All for One Poland.

One of the most important distinguishing features of SAP systems is the implementation methodology with SAP Best Practices as its integral part. These are pre-defined, ready-to-run analytical, operational and integration processes for all business areas (e.g. the entire purchasing or production process). Once these are uploaded to the system, we get ready-made and configured environments, which we can customize according to the company’s needs. This greatly simplifies and reduces the time needed to prepare the concept and launch the system.

Another important project accelerator is the provision of ready-to-use test environments for processes and pre-configured test scripts that guide users step-by-step through the testing phase. The scripts describe and test the entire process of, for example, purchasing, encompassing offer preparation, ordering, scheduling deliveries, receipt into the warehouse, warehouse putaway, up to settlements with suppliers and purchase invoices.

Business Sets are another useful element of accelerators in SAP. It is a set of business configuration, a management tool that helps users record, save and share standard system settings. It’s a big help for consultants and a tool that enables users to see the system tailored to their requirements “live” at an early stage.

In the remainder of this article, we will focus on a description of the SAP EWM solution implemented in the warehouse management area, which was crucial to the project at WSiP.

A key element in any modern warehouse is a scanner. SAP provides such a solution in a mobile version using RFID. It allows you to perform transactions in the warehouse in two simple steps, as well as to check inventory. Several warehouse operations can be performed, including: printing labels and labeling the pallet at receipt and issue.

Previously, many activities in the WSiP warehouse were performed manually. During a delivery to the warehouse, an employee drew up a document in which they added information about the delivery, including the weight of the product, and then forwarded it to the warehouse administration. Now they perform all activities directly from the cart. The printer prints the labels, and the system directs it to the appropriate place in the warehouse.

Previously, more than a dozen warehouse employees worked with a large number of paper documents and were responsible for distributing them internally. Now they work with mobile terminals, which have significantly reduced the number of printouts and are integrated with the central system.

SAP communicates with the mobile devices to generate reports that cover all operations. Previously, it was almost impossible to obtain similar reports.

The terminals have dedicated transaction menus for specific groups of employees, for example, people who only handle receipts or issue, work in the production area or deal with order picking. Warehouse tasks are added to the system and assigned to the appropriate groups and employee queues. This is where other resources come into play, such as equipment in the warehouse, including high lift trucks and picking carts. Tasks in the system are appropriately distributed and automatically matched to the user and the device they log in or work on.

In the WSiP warehouse, the receiving process is divided into three parts.

The first one is the receipt of purchases. These are mainly goods from other publishers, especially language textbooks. Thanks to the implementation of SAP and automation, we no longer have to manually add received goods and upload invoices. Everything is done through the system, allowing the warehouse employee to immediately place the goods on the shelves upon their arrival. This process has significantly reduced the time it takes to receive a pallet into the warehouse.

The next part is the receipt of external production from the printing house. It is done in reference to inbound deliveries. On the S/4 side, a purchase order is created. After accepting purchases from external contractors, an inbound delivery is created and replicated to EWM. Based on the data displayed on the terminal, the warehouse employee decides what types of units will be used to receive materials (taking into account pallet sizes).

In the warehouse, there are different sizes of storage bins and it is important which carrier is used to receive the delivery. During unloading, a label is printed for each pallet. We can enter individual pallets individually and prepare multiple printouts for pallets (if the transport contains different types of pallets) or collectively (for homogeneous pallets).

For internal production, we created a BOM in SAP. The warehouse employee transports the components for production to the designated warehouse zone (production supply zone), and then, after picking, the manufactured products are received on the radio terminals, which automatically leads to deducting the appropriate quantity of each component from the inventory. Previously, it was necessary to manually deduct components from the ERP and the previous WMS system.

Production is received with reference to the production order. In the printing house, all transport units (pallets) are tagged with special labels. These labels contain information important for production, and for logistics, the production order number stored in the barcode is printed in addition. SAP also supports QR code technology.

We use Adobe solutions available within the SAP standard for printing various types of labels. Based on the scan, the operator receives all the information regarding the quantity of the received goods and divides them into units. Then, logistics labels are printed, and the materials are placed in designated storage bins in the warehouse.

Both for receiving from the printing house and for internal production receiving, advanced integration with production was used.  Production Material Requests (PMR) are generated for production orders, enabling the phased delivery of materials to individual production lines. This approach helps avoid the so-called single-hit situation where all components must be delivered to the production supply area at once. We manage this process accordingly.

The receipt and automatic consumption of components are carried out in reference to the order. Terminals are used for all operations.

Returns to warehouses are categorized into two types:

At WSiP, the return season occurs immediately after the purchasing and shipping season (in the autumn, according to the school year calendar).

We have implemented several custom solutions to manage the return process, yet leveraging standard SAP tools such as BADI and BAPI.

Parcel shipments are the main method of shipping from the WSiP warehouse. Previously, there was no direct integration with shipping carriers. Shipments were based on a pool of parcel numbers provided by courier companies and maintained in a database. However, couriers frequently change routes, new parcel lockers or hubs are set up. As a result, parcels had to return to the WSiP warehouse because the courier’s sorting facility was unable to forward them to another branch.  Another challenge was the manual generation of shipping files and their uploading to the operator’s FTP server.

The integration helped us streamline the process, resolving issues with cash-on-delivery parcels as well.

Currently, SAP EWM is interfaced with courier company systems via APIs. The process begins with entering a sales order, followed by delivery preparation and the generation of necessary information to create a shipment (various data sets depending on whether the delivery is to a postal address or a parcel locker). The integration consists of several steps. If the data is correct, feedback from the courier company is sent to EWM.

In the next step, the courier label is transmitted in the format required by logistics operators, but with additional information for the picker about collection locations, box types, etc. Only after combining the information required by the courier with the data needed to pick the shipment is the label printed online.

The bottleneck of the entire shipping process is automated quality control in the warehouse. Products like books are characterized by weight deviations. In the previous system, weight was maintained at the index level. SAP integration with weight automation and shifting weight information to a material batch (control of already picked shipments) enabled a higher degree of process automation and improved accuracy in weighing shipments, thereby reducing warehouse complaint rates.

It is worth noting that in SAP EWM, we utilize a multi-stage process for creating warehouse tasks, known as layout-oriented and process-oriented storage control, which are applied alternately.

Following typical picking, the employees receive a message to place the parcel on the roller conveyor. In the system, this warehouse task is closed and the next task is activated when the parcel is placed on the scale. By scanning the shipment number, we access information about the system weight, which is then compared with the physical weight of the shipment (communication between roller conveyors, scale, and EWM S/4 was prepared by All for One consultants). If the weight data from the scale and the system do not match, a visual inspection of the parcel is conducted. In case of shortage or surplus of goods, the contents are replenished or additional books are removed. The next step involves rechecking the weight or directly releasing the parcel to the next stage in the shipping process.

All shipment weights are recorded, allowing for historical verification.

The next step is to finalize the shipment and print the necessary documents, depending on the customer’s requirements (invoice or receipt). In communication with the courier company, the parcel status is updated to “ready for pickup.”

The peak shipping season of the WSiP warehouse is from July to September. Given the high volume of shipments and based on our understanding of typical orders from students and teachers, we have created the Set solution.

Customers place orders for individual items, and in SAP EWM, warehouse tasks are generated for prepacked sets. A set consists of a maximum of 21 SKUs (Stock Keeping Units), which are prepared on separate pallets. In the process of creating a set, repicking and repackaging from 21 handling units to one multi-item handling unit (21 SKUs) with a newly assigned packaging material number take place. The set form facilitates the preparation of this material for shipment. The warehouse employee does not have to go to multiple locations, but picks everything from one location. As a result, the picking path has shortened significantly, even by a dozen times.

In addition, to further reduce picking time, we have created in SAP a so-called Set Prepack, in which a certain number of sets are put into a carton. Warehouse tasks for Set Prepacks are handled with a different type of warehouse process, in which the Set Prepacks prepared in this way are tagged with a courier label, followed by the final loading of shipments onto transport units. Prepacks are picked from a separate warehouse zone.

The main recipients of shipments from the WSiP warehouse are schools. Typically, several to a dozen or so teachers from one school place orders. To reduce distribution costs, we introduced a so-called teacher multipack – a collective package containing orders from teachers at a given school. We pack separate envelopes with orders for individual teachers into one carton (one courier shipment).

Implementing this process in SAP EWM was quite a challenge. All envelopes with individual orders from a multipack are packed with one collective courier label. The system required to take into account the weight of individual orders (ensuring the total does not exceed the maximum weight of 29.5 kg) and select a carton of appropriate size and capacity. The next step is to break down the multipack into individual orders and print separate documents for each order.

Of course, a separate type of warehouse process is used. During this process, all textbooks are gathered in a special warehouse area dedicated to packing a multipack and, once packed, are ready for shipment.

Elementary schools buy textbooks with funds received from subsidies paid by local governments. Schools place orders in the WSiP system well in advance and specify shipping dates in them in line with the planned dates for receiving the subsidies and thus making payments.

To spread the warehouse workload over time and reduce variable costs, a delayed shipment, the so-called deposit, has been introduced.

The deposit is based on the preparation of shipments before the scheduled shipping date. This ensures that textbooks arrive to schools before September 1.

On the system side, the process of deposit shipments is similar to the basic retail shipment. In the final step, after preparing, packing and printing the package contents and sealing the package, the warehouse operator receives information that this is a deposit shipment, involving additional warehouse tasks. These include stacking packages onto pallets, categorizing them by shipping carriers, and then storing them in the warehouse, where they await a specific shipping date. Loading is very simplified, the warehouse operator provides the shipping date and logistics operator details, then receives instructions on which locations in the warehouse they are to pick the pallet units from and which loading locations these pallet units are to be transported to.

A modern warehouse system like SAP EWM, tailored to the company’s logistics processes and integrated with warehouse automation and courier company applications, is a value in itself.  Implemented optimizations have reduced the handling time for receiving and issuing goods. Managing seasonal peaks and improving delivery timeliness during periods of increased order volumes result in higher customer satisfaction and reduced variable costs.

In addition, significant benefits include improved security and stability through the elimination of unsupported systems and system overlays. Furthermore, system performance has improved. Additionally, as part of SAP application management services, Wydawnictwa Szkolne i Pedagogiczne has gained consistent support from All for One consultants.