SAP S4/HANA - The Future Looks “Embedded”
The SAP logistics suite already goes back a long way. Logistics processes were first covered in the R/2 ERP software up to the early 1990s, before being developed in the R/3 software when Warehouse Management (WM) and Transport Management (TRM) were introduced in their own modules as part of the ERP. This marked the launch of the first-ever embedded warehouse management and control system. WM is still maintained as an embedded module in the era of S4/HANA, although SAP will stop providing official support by the end of 2027. However, there is a delimited workaround available in the meantime with “Stock Room Management” that can be used beyond 2027.
SAP started to take a new approach when the company launched Extended Warehouse Management (EWM) in parallel with ERP ECC 6.0, even making the system available as a decentralized logistics solution. This made it possible to place even higher demands relating to improved performance on the logistics software given that there were no longer any negative effects brought about by bottleneck situations on the ERP. SAP even recommended the use of a decentralized EWM system for automated warehouses in particular to allow for communication with real-time controls with consistent latency.
EWM was included in the range of integrated modules alongside WM (still available) from 2015, when the new S4/HANA ERP product line was rolled out. The customer can still decide whether the embedded EWM option or the decentralized variant suits their requirements better. One advantage is full integration into the ERP with the corresponding internal interfaces. Another benefit is the ability to use the integrated solution without any extra license costs provided that an automated warehouse is not being run. This leads on to another issue: Embedded EWM can now be used to run small automated warehouses, although the relevant license does need to be purchased on top of the ERP software in this case. So why might it be worth leaning toward a decentralized solution? The main benefits are flexibility and security. Many customers who are still very happy with ECC 6.0 yet need to invest more in complex automation to keep up with requirements from their customers manage to gain a great deal of flexibility by opting for a decentralized EWM 9.5 solution or already a decentralized EWM on S4/HANA. This allows for EWM to be connected to the existing system via an interface without having to make a huge ERP leap. Logistics solutions will always be available on the decentralized system, even in the event of subsequent ERP updates or migration to S4/HANA, and can be operated independently for the most part. Switching over will involve fewer risks than if all modules had to be migrated at the same time.
And now SAP is taking the next logical strategic step. The difference between the coding for the integrated and decentralized solution has so far been that two systems have to be maintained in parallel. The last regular update to Extended Warehouse Management was launched in the form of EWM Version 9.5. With the new S4/HANA release, the decentralized SAP EWM comes in exactly the same embedded version, meaning that there is a copy of S4/HANA with EWM, just effectively without the ERP part. This means that identical coding is guaranteed for the future and all future features relating to cloud connectivity and so on apply to both scenarios.
Another plus point being pushed is a migration tool to move from decentralized SAP EWM 9.x to decentralized SAP S4/HANA/EWM. As a result, decentralized EWM structures that already exist or are currently being implemented can be ported to the future without too much effort being required.
About the author
Andreas Hampe has been Vice President of SAP Solutions within SSI SCHAEFER for several years. As the area manager for logistics software solutions he manages the SAP team at several company locations. For more than 30 years Andreas Hampe has been working in the logistics sector focusing on supply chain management in sales and IT development.