• Safe: Keeping heavy items in the “golden” zone (waist height) avoids bending over and back injuries. Enforcing maximum stack heights can keep pallets from becoming so high they collapse.
  
  
• Rapid: Placing fast-moving items in the locations closest to shipping areas allows for faster picking for the items that are most frequently required.
  
  
• Low-cost: Effective placement of materials can reduce replenishments or other non-value-added moves.
  
  
• Accurate: Using radio frequency (RF) technology to confirm locations coupled with strategies to isolate items likely to be pilfered allows confidence that you can locate materials when they are needed.
  
  
• Damage-averse: Enforcing stack heights or placement into locations suited for certain material storage reduces product damage.

Solid placement and removal strategies are usually the result of observing these principles. The Warehouse Management (WM) module in SAP R/3 and ECC can assist in these areas. This article examines some of SAP’s placement strategies and how they can help enforce wise storage of materials. In a subsequent article, I’ll examine removal strategies.

Understand the Control Elements

Learning how to manipulate SAP’s standard-delivered warehouse management strategies requires an understanding of how SAP organizes the warehouse. The strategies work within SAP’s organizational elements and can influence how a warehouse is systematically defined. The few terms detailed in Table 1 are just a subset of the control elements SAP WM provides; others are relevant only for picking and I’ll address them in a follow-up article. For now, I’ll look at how SAP uses these elements, along with strategies, to place materials into a warehouse.

Step 1. Locate a storage type. WM allows users to define putaway indicators on the material master. The putaway indicator is a pointer to IMG configuration that defines the sequence in which storage types (zones) should be searched when seeking a putaway location. These putaway locations can be influenced by a variety of factors, such as the type of receipt being performed. Figures 1 and 2 show the Warehouse mgmt 1 view of the material master (transaction MM02) and the WM configuration (transaction OLML then Options>Warehouse Management> Strategies>Activate Storage Type Search) governing the putaway sequences. Notice that the Stock placement indicator showing 002 is referenced in the placement table in Figure 2.

Figure 1

Locate a storage type in WM view 1 on the material master

Figure 2

Find the storage type in the Storage Type Search sequence

The storage type search sequence table has a significant number of key fields. The first three shown in Figure 2 are the simplest to understand and most commonly used. The warehouse number (Whse) allows different warehouses to have different strategies, potentially even for the same material. This is important because it is unlikely that any two warehouses, even within the same distribution network for the same company, will be set up in the same way.

The second column, operation (Operat), is generally either A or E: A for the strategy for picks and E for the strategy for placements (an easy way to remember that is A for “away from the bin” and E for “entering the bin”). The need for A or E may not be apparent, as you may think different indicators could be used for placements or removals versus a combination of indicators and operations. Once you engage in more advanced placement scenarios, the ability to define custom operations beyond the standard A and E and link them to specific movement indicators becomes valuable.

The third column shows the linkage between a strategy and the item (TyIn). The material master in Figure 1 referenced strategy 002 and is the warehouse management view for warehouse 600 (the WM views are warehouse-specific). This means that for a placement in warehouse 600, the system looks first in the warehouse column for 600, then in the operation column for E, since this is a putaway, and lastly in the indicator column for 002. The non-key fields (white area with column heading 1 and moving to the right) indicate the storage types (zones) where the material should be placed and the preference for placing into each storage type. The most preferred zone is on the left and the least desirable zone is on the right. You can define up to 30 zones within the search sequence. The remaining columns can influence the putaway if the material is in a specific status or based on the type of inventory management movement causing the warehouse placement.

In Figure 2, you can see the material should be placed in storage type 025. However, if no suitable bins are found, then the system searches in storage type 005. Other items in the warehouse might have completely different putaway strategies. For example, if the strategy assigned to a material was 001, in this example the system would look in storage type 003 and then 001.

Step 2. Identify an appropriate storage section. Another of the WM organizational elements is a section indicator. Storage sections are similar to storage types in that you can define an indicator and a sequence of sections searched. The method for defining a search through storage sections is similar to the method for defining a search through storage types: create the strategy and link an indicator to that strategy to the material on the material master. Figure 3 shows the section indicator on the material master. In Figure 4, you can see how that indicator is telling the system what sections to search in storage type 025.

Figure 3

Set the storage section indicator on the Warehouse mgmt 1 view to search

Figure 4

Find the section in the Storage Section Search sequence

In this example, the system looks first for bins within the FST (fast) section and then in the SLW (slow) section. A different item that is not ordered as often could be placed in the same storage type but go into the SLW section simply by copying the existing search sequence into a new search sequence and reversing the FST and SLW sections.

Step 3. Understand how a specific bin is identified. Most people may think of “addition to stock” or “next empty bin” as strategies, but they are actually attributes of the storage type. After SAP finds the appropriate storage type and section for a material, it runs the strategy associated with that storage type to actually identify a bin. This may seem straightforward, and I’m identifying bins in the simplest of terms for the sake of this article, but many considerations beyond the strategy can come into play. For example, available bin capacity, the maximum weight allowed within the bin, and even the container in which the goods are transported (wire basket, industrial pallet, plastic tote) can influence which bin is selected. In fact, you can classify bins via a Storage bin type attribute to be more inclined to accept European-sized pallets than American. This seemingly trivial distinction can actually be very useful for warehouses with both European and American manufacturing plants supplying products.

Apart from such complexities, any company using WM must address certain strategies when locating a bin. Table 2 shows the most common strategies.

Figure 5 where the Putaway strategy is indicated. This is defined at OLML>Warehouse Management>Master Data>Define storage type.

Figure 5

Storage type definition, where a Putaway strategy is assigned to a storage type (zone)

How It All Works Together

Figure 6 shows how WM finds an appropriate storage type, looks for an appropriate storage section, optionally looks for an appropriate bin type (e.g., the European pallets vs. American pallets issue), and then ultimately looks for an appropriate storage bin.

Figure 6

How the system searches within WM organizational elements for an available bin

Remember that the search process is nested. When a storage type is identified, all possibilities within that storage type are searched. Likewise within a storage section, all possibilities within that storage section are searched. Figure 7 shows how an SAP system searches all permutations within a storage type and then moves to the next storage type where it again searches all permutations before looking to yet another storage type, and so on.

Figure 7

The system searches within a storage type for all permutations, then looks to the next storage type and search all permutations, and so on until a bin is found

Troubleshooting

Despite the robust ability of WM to identify appropriate bins for placement, any project can have an “But I cannot do…” moment. Frequently, the strategy is blamed, but a couple considerations to remember are:

• If the strategy does not seem flexible enough for your storage type, perhaps you need to split your storage type into two and assign different strategies to each.
  
  
• Through the use of storage sections, can you subdivide storage types, enabling more granular placement of material?
  
  
• Could one of the more complex areas this article alluded to, such as a capacity check, enforce required constraints on the bin?

Unfortunately putaway rules and the warehouse structure supporting the putaway process sometimes interact unfavorably. For example, retrieval strategies follow a similar process to find the removal bin, and you may find that configuring the warehouse for an optimal putaway strategy occasionally interferes with the desired warehouse structure for an optimal retrieval strategy. In this case, WM allows custom placement strategies, which can enhance what SAP provides. For more information, it is worthwhile to investigate user exit MWMTO003. Refer to the SAP-provided documentation for that user exit and the article, “Develop Custom Placement Strategies in WM” by Ali Sarraf in the September 2005 issue of SCM Expert.

While SAP WM provides significant flexibility, it is best not to become more sophisticated than necessary (or than users can understand). An overly sophisticated putaway strategy can lead to overly complex placement processes, in which problems can take a long time to diagnose. In this case, the best alternative is to simplify the strategy. Troubleshooting assistance is possible via an SAP-provided tool in the transfer order generation screen (Figure 8). To view the search log, create the transfer order in the foreground (for example, via transaction LT01), and select Environment>Storage bin search log.

Figure 8

Review the rules SAP considered when generating a problematic putaway

Chris Moose

Chris Moose is a partner in IBM's Global Business Services organization where he is the sponsor of SAP warehouse management and transportation management offerings. With worldwide responsibility for these offerings, he has helped expand IBM's delivery capabilities globally and has personally delivered projects on four different continents. His specific interests include the use of technology to address the historical fixed cost nature of supply chains enabling flexibility and then quantifying that business value with a benefits realization focus. In addition to his practice management and delivery focus, Chris is a frequent speaker at industry events as well as an author for industry magazines.

You may contact the author at chris.moose@us.ibm.com.

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