by Ken Murphy
I recently spoke with a panel of distinguished guests about their experiences with SAP Extended Warehouse Management (SAP EWM) for a sneak preview of what they’ll discuss in greater detail during a panel discussion at the SAPInsider Logistics & SCM, PLM, Manufacturing, and Procurement conference in Las Vegas March 5-8. I was joined by:
- Bill King, SAP Director, Solutions Management, Supply Chain Execution.
- Kyle Sorensen, Director of SAP Solutions for LogiStar Solutions
- Spencer Farr, Global Director of LogiStar
- Brad Knauf, Senior Manager, Aftermarket Operations at Dana Holding Company
- Steve Ivanovics, Project Manager at Kimberly-Clark
LogiStar consulted with Kimberly-Clark on their recent SAP EWM implementation. Dana Holding Company went live with their first implementation of SAP EWM in January of 2012, and are planning additional roll-outs throughout 2013 and 2014.
Below is an edited transcript of our conversation. More information on the speakers and the SAP EWM panel discussion are available at the SAPInsider Logistics & SCM, PLM, Manufacturing, and Procurement conference homepage.
Insider Learning Network: Bill, can you share a brief overview of SAP Extended Warehouse Management (SAP EWM)?
Bill King: SAP Extended Warehouse Management is a comprehensive best-in-class warehousing solution which helps customers across many industries improve their logistics operations. The challenges of making business run “better” are influenced by how well supply chains are able to execute, and deploying a world-class warehousing solution can definitely contribute to a better run business. As part of the SAP Suite, Extended Warehouse Management offers native integration and support of end-to-end processes which are difficult to achieve with disparate systems. Extended Warehouse Management focuses on three main functional areas: inbound processing which addresses issues in goods receipt management and yard management; storage and operations which covers areas such as replenishment, physical inventory, kit management, and other activities; and finally outbound processing which includes functions such as outbound planning and picking optimization. With these rich optimization, analytical, and execution support capabilities, customers no longer have to sacrifice rich functionality to get an integrated system.
ILN: Steve, it’s my understanding that Kimberly-Clark recently implemented the solution and is in the process of a much larger roll-out. Can you tell us the main business driver behind adopting this solution? What business challenge was Kimberly-Clark looking to address?
Steve Ivanovics: Our sector of Kimberly-Clark is the Health Care business and our main driver was inventory control and visibility. Kimberly-Clark Health Care has grown through acquisition by about 150% over the last 7 to 10 years and much of that growth has occurred in the highly regulated Class 2 Medical Device market. The demands of that industry require that we maintain strict control over inventory at all stages of the supply chain process from when the raw material comes into the production plant through when the finished product ships to the customer. We have also combined the implementation of SAP EWM with the activation of SAP’s Global batch management to
aid in this capability. We selected SAP EWM because of its ease of interoperability with SAP ECC and its scalability to operate with our smallest to our largest facilities. Not only is the Health Care Sector of Kimberly-Clark implementing SAP EWM, but the Global NonWovens Sector is just about to launch a project and other sectors are looking at this product as well.
ILN: Brad, could you tell us about what led Dana Holding Company to explore SAP EWM?
Brad Knauf: Our top objective was to bring our European aftermarket business in-house after 10 years of outsourcing to improve service control and reduce costs. This was part of our plan to replace disparate systems with a single solution in support of our aftermarket strategy
ILN: Also, Brad, my understanding is that you participated in a rapid deployment of this solution. What led to that decision? Also, can you describe the key benefits Dana derived from this implementation?
Brad Knauf: Our project from start to finish was completed in six months. Dana was faced with certain business conditions in Europe which dictated our window of time. In addition to the deployment of SAP ECC and EWM, we had to determine a new location in Europe for our DC, hire a new salary and hourly workforce, build a new facility, and establish an IT infrastructure which would support our new location and be the backbone for future deployments. We had to do this with zero unplanned down time with our customers. The key benefits we realized in doing this successfully were:
- A single, integrated system to support the entire international aftermarket distribution network from warehousing through distribution.
- Closer relationships with customers that improve satisfaction and sales.
- Greater visibility of operations to better match supp
ly with demand, reduce costs, and enhance service-level performance.
ILN: LogiStar was an implementation partner with Kimberly-Clark. Spencer, can you give us a brief run-down of where Kimberly-Clark is today, and what the roadmap looks like moving forward?
Spencer Farr: Kimberly-Clark went live with SAP EWM in October 2012 with their first Healthcare manufacturing facility. This site was chosen for the initial implementation since they were the most diverse in their processes and would allow for a base model for future rollouts. This allowed for a successful initial EWM implementation for the KCC Healthcare business and provided the foundation for a more aggressive implementation schedule for the remaining healthcare facilities in 2013 and 2014. Additionally Kimberly-Clark’s Global NonWovens business has decided to implement SAP EWM for two of their distribution centers with a go-live for their first site targeted for late 2013, early 2014.
ILN: Also, as an SAP partner, can you tell us one or two of the biggest concerns from the customer standpoint where implementation is concerned? Are customers worried about having to take the business offline? Do you see a particular warehouse business function get the most attention or concern?
Kyle Sorensen: We see more and more customers asking for compressed implementation timelines. With various Rapid Deployment Solutions (RDS) toolkits available, we are able to streamline implementation time while still keeping project risk low. Normally, the only downtime to business is during the system cutover weekend. SAP offers standard inventory conversion RDS tools to shorten that downtime. We are also seeing more attention in the marketplace around Labor Management. This makes sense since a lot of ROI can be achieved by deploying Labor Management.
ILN: And lastly, what implementation advice would you give to someone looking to explore SAP EWM in the future? Is there a pitfall that trips up a lot of these implementations that can be avoided?
Kyle Sorensen: Depending on your business requirements, a “crawl, walk, run” approach may be best for certain pieces of functionality within SAP EWM. For example, if the client isn’t using Labor Management today but needs it in the future, we plan for it during our design and construction phases. By activating labor and letting it collect data is a great crawl approach to getting the foundation established. As a Phase 2, go back and layer in real Engineered Labor Standards as a walk. For the run, enable incentive based pay. Also, encourage the customer to perform and upfront assessment where they can gain a base understanding of EWM and its capabilities. This is where the implementation partner would come in and provide an assessment and fit analysis with EWM what the customer is looking to gain from implementing EWM. Last, it’s important to understand the integration points between SAP EWM and other SAP modules (SD, production, QM, etc.) and that necessary resources participate in the design.
- To register for the conference or to learn more about the speakers, please visit the SAPInsider Logistics & SCM, PLM, Manufacturing, and Procurement conference homepage.