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Rambabu Yella

SAP Solution Architect – Logistics @YASH Technologies

Enterprise Services SAP

SAP EWM – Replenishment the Key to Proficient Warehouse Operation

Last updated on November 3, 2017

Replenishment is truly the most critical function of any warehouse. With the help of the right replenishment methods warehouses can not only deliver orders consistently on time but also save cost and manpower. Planning replenishment function for a warehouse is easier said than done.
Challenges with Replenishment
If not managed properly the task of replenishment becomes a time-consuming affair. It is crucial that the pickfront of the warehouse is timely replenished. Any failure to do so can lead to a shortage of stocks in the pickfront, leading to wastage of effort and time in finding the products in the warehouse and cause shipment delays and customer dissatisfaction. With the help of an efficient replenishment method in place; the right balance for picking efficiency and replenishment labor can be achieved. The replenishment methods supported by your WMS system should be flexible enough to account the type of products involved, warehouse lay-outand also the organizational needs.
Replenishment Methods
Broadly there are three different methods of replenishment available as out of the box in SAP EWM, which are as follows:
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Advanced / Preventative Replenishment
Here there is a dedicated forward pick area where the stock is replenished based on the velocity or the forecast of 2-4 weeks. This, in turn, increases productivity as the number of trips is minimized. Two types of SAP EWM functions are used for this replenishment method
1- On-demand/Periodic Replenishment
This method can be started in online or batch mode. Maximum and minimum replenishment quantity is set for every product individually. The system is triggered only when the product stock count gets lower than the set minimum quantity. The system then replenishes to the maximum set quantity.
Pros

  • Preferred method for filling up forward or primary picking area
  • Physical replenishment is done at off-peak hours
  • Efficient planning of resources is possible as volume of workload is available beforehand
  • No dedicated resources are required

Cons

  • There is a time frame where the stocks might dip below the minimum quantity mark

2- Immediate Replenishment
The mechanism of this system is similar to the previous method but as this is usually used for products that are fast moving replenishments can be triggered anytime during the day. To manage the system dedicated resource planning is required.
Pros

  • Usually used for filling up picking area of fast moving products
  • Stocks are always maintained above minimum quantity

Cons

  • Replenishments are triggered sporadically anytime of the day
  • Dedicated resources are recommended for this system

Demand Replenishment for a Day or Wave
Here only the specific quantity of stocks are moved that is required to fulfill the requirement of each wave or day. When stock on hand is less than the demand quantity the system triggers replenishment. At times, exceeding the maximum bin quantity is possible, depending on the order size. This replenishment method is well suited for industries that have fluctuating demand. The demand replenishment can be launched in batch or online mode. SAP EWM function used in this method is Order Based Replenishment.
Pros

  • Suits well for products with high fluctuating order demand
  • Improved picking time with availability of stocks

Cons

  • Capacity of the bin is not taken into account

3- Emergency Replenishments
This method of replenishment is used as the name suggests in case of emergency. A picker in certain situations triggers it manually. For instance, when the picker gets stuck in at a bin, as it does not have the correct product or quantity, this replenishment method is used on the fly. SAP EWM offers Picker Driven Replenishment function for this method of replenishment.
Pros

  • Ensure order picking process is not disrupted due to unavailability of certain stock
  • Can be triggered by the same operator who is picking

Cons

  • No lead time available for resource planning

You may also check out the following webinar link on the same topic.
http://www.yash.com/webinar/sap-extended-warehouse-management-ewm-part-2-customer-fulfillment-with-order-based-replenishment/
Rambabu Yella SAP Solution Architect – Logistics @YASH Technologies

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