S/4 HANA Makes SAP WM Obsolete

Which strategy is the best for your switch to EWM?

Companies which use the SAP-Module Warehouse Management (WM) and are planning a switch to S/4 HANA On-Premise will have to deal with the question how to depict their warehouse management in the future. In most cases, there is only an unprecise idea that after 2025 SAP will drop their support for WM and companies should orientate towards EWM. But what does that exactly mean and which possibilities does S/4 HANA provide? The following article is supposed to give you a short but precise overview of the situation without getting lost in the often confusing terms of the SAP world.

WM in S/4 HANA On-Premise

The warehouse management tool WM which is already common to you from the actual SAP ERP system is also available in S/4 HANA. But it is on the so-called “Compatibility Scope Matrix for SAP S/4 HANA On-Premise” which you can have a look at in the OSS-Note 2269324. For all functionalities named there, the right of use expires on 31.12.2025. That means that not only the support is going to end but also that WM must not be used anymore in S/4 HANA after 2025.

At the end of June 2019, SAP modified its licensing strategy once again. Under the name "Stock Room Management", part of the WM functionalities will remain available after 2025. However, this module will not be further developed. You can read more details and omitted functionalities in this SAP blog post.

Decentral EWM

SAP calls the Extended Warehouse Management (EWM) as target architecture which is available in different versions in S/4 HANA. You can differentiate between a decentral EWM which runs on a separate system and the Embedded EWM which has been integrated into S/4 HANA since release 1610. If for performance reasons, decentralized EWM was still used in SAP ERP, this is at least partly offset by the use of the powerful HANA database. Still, there can be some good reasons for choosing a decentralized EWM such as being able to connect several ERP-Systems to a single EWM (recommended for warehouse service providers) or separating ERP and warehouse management for security reasons. But you have to be aware that you pay for the effort of the interface. So if the decision is made in favour of a decentralised EWM, you have two options: The so-called "decentralized EWM under SAP S/4HANA" and a SAP EWM 9.5. Since the differences between these two options would go beyond the scope of this article, please refer to OSS note 2840129.

Embedded EWM

If you choose the Embedded EWM you also have two possibilities. Companies that have been satisfied with the functions of WM are likely to choose the Basic EWM. No additional license fees apply. If you want additional functionalities such as a connection to a material flow system, Value Added Services or Yard Management, the customizing settings can be changed to Advanced EWM. Now the same license fees apply as when using a decentralized EWM.

 

Our Conclusion

With Stock Room Management, SAP has created an opportunity to at least partially continue to use WM's usual functionalities after 2025. If this is not enough for you, you will soon have to switch to EWM. Companies that are planning to switch from SAP ERP to S/4 HANA should then carefully consider if they really want to continue using WM until 2025. The only reason for this could be the spread of the implementation effort which you could also achieve with an early connection of a decentralized EWM to your SAP ERP. This is definitely the best strategy if you consider using a decentralized EWM in the future anyway. Choosing the Embedded Basic EWM, the overall effort is the smallest when implementing the EWM right in the introduction of S/4 HANA in order to avoid another migration of WM.

Finally, we can recommend OSS note 1606493, which provides a comprehensive overview of best practices for SAP EWM deployment options.

(Autumn 2019)

WM in S/4 HANA On-Premise

The warehouse management tool WM which is already common to you from the actual SAP ERP system is also available in S/4 HANA. But it is on the so-called “Compatibility Scope Matrix for SAP S/4 HANA On-Premise” which you can have a look at in the OSS-Note 2269324. For all functionalities named there, the right of use expires on 31.12.2025. That means that not only the support is going to end but also that WM must not be used anymore in S/4 HANA after 2025.

At the end of June 2019, SAP modified its licensing strategy once again. Under the name "Stock Room Management", part of the WM functionalities will remain available after 2025. However, this module will not be further developed. You can read more details and omitted functionalities in this SAP blog post.

Decentral EWM

SAP calls the Extended Warehouse Management (EWM) as target architecture which is available in different versions in S/4 HANA. You can differentiate between a decentral EWM which runs on a separate system and the Embedded EWM which has been integrated into S/4 HANA since release 1610. If for performance reasons, decentralized EWM was still used in SAP ERP, this is at least partly offset by the use of the powerful HANA database. Still, there can be some good reasons for choosing a decentralized EWM such as being able to connect several ERP-Systems to a single EWM (recommended for warehouse service providers) or separating ERP and warehouse management for security reasons. But you have to be aware that you pay for the effort of the interface. So if the decision is made in favour of a decentralised EWM, you have two options: The so-called "decentralized EWM under SAP S/4HANA" and a SAP EWM 9.5. Since the differences between these two options would go beyond the scope of this article, please refer to OSS note 2840129.

Embedded EWM

If you choose the Embedded EWM you also have two possibilities. Companies that have been satisfied with the functions of WM are likely to choose the Basic EWM. No additional license fees apply. If you want additional functionalities such as a connection to a material flow system, Value Added Services or Yard Management, the customizing settings can be changed to Advanced EWM. Now the same license fees apply as when using a decentralized EWM.