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A comparison of the SAP WM and EWM solutions | Page 1
A comparison of the SAP® warehouse management and extended warehouse management solutions
Page 2 | A comparison of the SAP WM and EWM solutions
Executive summary
Introduction
A framework for decision-making
Today’s complex supply chain realities and diffi cult economic conditions are making it more important than ever for executives and managers to feel confi dent in their decisions regarding IT investments. Understanding the many options in selecting a suitable warehouse management system (WMS) is critical for meeting both present and future business requirements.
This white paper aims to provide a framework for understanding and assessing two of those options: SAP’s WM and EWM solutions.
SAP offers two different WMSs to its customers.
The SAP WM application was fi rst introduced as a sub-module of its materials management application within the R/3 enterprise software releases. Functionality enhancements were provided with each new release, up to and including the current release of the enterprise resource planning (ERP) software.
The SAP EWM was developed as a component of the Supply Chain Management (SCM) business suite. It is separate and distinct from the ERP WM system, in terms of its architecture and functionality.
The differences between these systems, and a rationale for assessing and choosing one or the other, is presented in the following sections.
A framework for gathering relevant information is depicted at right.
An initial assessment of the company’s business model, focusing on the supply chain, is a necessary fi rst step. While it is important to create metrics based on current volumes and the existing supply chain network, any future changes to the model must also be considered.
A high-level description of business requirements should follow the assessment. At this point, the company’s needs for system support in key warehouse process areas should become apparent. Weightings can be applied to various requirements to provide a more complete target vision. The documentation and approval of these requirements will speed up the decision-making process and will also increase the believability of the ensuing business case.
A comparison of the SAP WM and EWM solutions | Page 3
Understanding your supply chain business model
Any decision on a WMS must be preceded by a thorough analysis of your as-is and future business models. Here is a list of suggested business process attributes that should be measured and understood fi rst.
VolumesThe number of receipts, putaways, picks and transfers within a warehouse must be measured in terms of order lines per day or units per day. Are these volumes expected to increase over time? Does seasonality cause fl uctuations in the supply chain at different times of the year? The number of stock-keeping units (SKUs) is also a relevant indicator of volume.
FacilitiesThe number of facilities, and the types of activities carried out at each facility, needs to be considered.
The emphasis on pick-and-pack activity is typically much higher at distribution center facilities than at manufacturing sites, for example, while manufacturing
sites require support for the staging of materials to production areas. The supply chain network may also include one or more third-party logistics providers (3PLs). The number and type of facilities will give you a sense of the overall complexity of your supply chain and provide a starting point for developing your functional requirements for a WMS.
Warehouse process complexity Warehouse processes can vary from simple to highly complex. In goods receipt, for example, materials may simply need to be offl oaded from trailers or rail cars and forwarded directly to storage areas with no intermediate handling, while other inbound materials may require a sequence of process steps, such as quality inspection, deconsolidation, sorting, relabelling and putaway. Be sure to review all of the processes that are carried out at all the sites: inbound, outbound and internal processes, such as inventory counting and replenishment.
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Understanding your supply chain business model (cont’d.)
Labor complexity Smaller warehouse facilities can be operated by a few skilled and knowledgeable employees while larger ones can require the efforts of dozens or hundreds of individuals. With higher numbers of workers, it is more important to understand the time and effort expected to be spent on specifi c warehouse tasks. In order to maximize employee productivity, you need to be able to gauge actual efforts against standard measurements, and to dynamically adjust the fl ow of the operation according to unique events. A robust labor management system, integrated within the WMS, is necessary to realize these benefi ts.
Automation and technologyMany modern warehouses feature automated storage and retrieval systems (ASRS), conveyor systems or other advanced material-handling technologies. Often, this type of system can be operated as a “black box,” utilizing interfaces that are designed to exchange master data and business transactions with a “host” system. But sometimes it’s preferable to connect these sub-systems to your WMS directly to provide the ability to manage the equipment as another type of warehouse resource. In
addition, most warehouses today require real-time data collection and entry using handheld or vehicle-mounted portable computing devices, such as radio frequency (RF) terminals. Radio frequency identifi cation (RFID) may also be part of your current or future plans; your decision on a warehouse system and platform will be infl uenced by this.
Understanding the capabilities of the different WMS options will allow you to quickly assess the suitability of these systems to the needs of your company’s supply chain and warehousing operations. The following section highlights and compares the functional abilities of the two SAP warehouse management applications, WM and EWM.
Functional capabilities: SAP WM and SAP EWM
The WM and EWM capabilities for key functional areas are reviewed and compared below.
WM EWMWarehouse structure and organizationBasic warehouse structure
Storage types, storage sections, storage bins are used to model the physical areas of the warehouse
Same structures as in WM
Storage type and section may be up to 4 characters in length, as opposed to 3 characters in WM
Storage bin numbers may be up to 18 characters in length, as opposed to 10 characters in WM
Each storage bin is unique at the warehouse level in EWM
Additional warehouse structures
Doors, material staging areas, pick areas
Structures related to yard management structures like yards, parking spaces and checkpoints are modeled outside of WM, in the LES change to yard management (YM) component
Doors, work centers, yards, parking spaces, staging areas are modeled using EWM storage types and storage bins
Activity areas are groupings of storage bins and allow optimal creation of warehouse orders and assignment to work queues
A comparison of the SAP WM and EWM solutions | Page 5
Functional capabilities: SAP WM and SAP EWM (cont’d.)
WM EWMWarehouse structure and organization (cont’d.)Organizational structure features
More than one inventory management (IM) storage location can be warehouse-managed under the same warehouse number
Similar to WM — multiple IM storage locations can be managed using one EWM warehouse number
Stock managementStock types Warehouse stocks, vendor consignment
stocks, project stocks and customer stocks are supported
Stock can be managed in various statuses (unrestricted use, blocked, quality inspection and returns)
Rules for mixed storage are applied at the storage-type level
Same stock categories as in WM
Additional stock types are used to distinguish between stocks that have been received and stocks that have been put away within the warehouse
Stock types in the EWM and ERP systems are synchronized using the logistics inventory management engine (LIME)
Units of measure Multiple units of measure are allowed per material, including preferred WM unit of measure
All units of measure are also supported in EWM. EWM also supports stock-specifi c unit of measure, which allows for multiple units of measures of the same material to be stored side by side, i.e., different case/pack size
Storage units and handling units
Storage units (intra-warehouse capability) and handling units (HU) are supported
Only handling units are used in EWM. HU tracking is activated at the storage-type level. Handling units are more fl exible and easier to use in EWM than in WM
It is not necessary to activate handling unit management (HUM) in the ERP system when using handling units in EWM
Batch management Batches and management on the basis of shelf life are supported
Batch and SLED management are also supported in EWM
Batch determination can be carried out in EWM if batches are not specifi ed in the source ERP documents
Serialized materials Limited functionality available for serial numbers. Requires the use of storage units
RF serial number capture possible in outbound delivery only
No direct bin-level visibility of serial numbers
Full support for serial numbers, including tracking to the storage bin level, with or without handling units
Hazardous materials Support of hazardous materials is provided Hazardous materials are also supported in EWM
Catch weight management
Catch weight materials are supported when using the IS-CW industry solution in the SAP ERP system
EWM supports catch weight materials in conjunction with an IS CW ERP system, as well as managing CW products directly in EWM without requiring IS-CW in ERP
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Functional capabilities: SAP WM and SAP EWM (cont’d.)
WM EWMInbound processingPutaway strategies One putaway strategy available per storage
type:
• � Bulk storage
• � Open storage
• � Fixed bins
• � Addition to existing stock
• � Near picking bin
• � Next empty bin
• � Storage unit type (up to 99 bin positions)
• � Dynamic coordinate quant number
• � Dynamic coordinate reference number
• � Manual bin selection
Up to 30 storage types, sections, bin types and storage unit types can be defi ned in bin searches
Same strategies are supported
No limit on the number of storage types, sections and bin types in bin searches
Capacity checking Capacity checking possible, based on weight, volume and dimensionless capacity fi gures (material and storage unit type)
Capacity checking possible, based on weight, volume and dimensionless capacity fi gures (material and handling unit type), as well as maximum quantity capacity. This is new in EWM 9.1
Complex (multi-step) inbound processing
Not supported Supported with the use of process-oriented storage control
Quality inspection Inspection lot sample-handling during putaway (place into stock, leave at dock or send to inspection area)
Can execute warehouse inspection during putaway. Also possible to integrate sample-handling with QM system (inspection lots)
Exception handling in putaway
Possible to change destination bin during putaway confi rmation, as long as the new bin is within the same storage type as the original putaway bin
Possible to change the destination bin to any storage bin in the warehouse (including other storage types)
Deconsolidation of mixed pallets
Not supported Mixed pallets can be deconsolidated at a work center prior to putaway
A comparison of the SAP WM and EWM solutions | Page 7
Functional capabilities: SAP WM and SAP EWM (cont’d.)
WM EWMOutbound processingPicking strategies One picking strategy available per storage
type:
• � Partial quantity management
• � FIFO (fi rst-in, fi rst-out) or stringent FIFO
• � Shelf-life expiration date
• � LIFO (last-in, fi rst-out)
• � Large/small quantities included (with rounding)
• � Fixed bin from material master
• � Dynamic coordinate reference number
• � FIFO, GUID based
• � Manual selection of source bins
Up to 30 storage types can be searched in source bin selection
Same strategies are supported. EWM supports unit of measures specifi c picking strategies, as well as the ability to optimize picking of different size multi-pack combinations to meet customer order quantities while minimizing the need to break packaging stock specifi c unit of measure
No limit on the number of storage types in source bin searches
Complex (multi-step) outbound processing
Not supported Supported with the use of process-oriented storage control
2-step picking Possible to pick cumulative quantity for several orders in one step and distribute to individual orders in a second step
Same 2-step picking capability is available in EWM
Picking into shipping containers
Can pick into handling units, which become the shipping handling units. WM supports only a single packaging material to be used per storage type, which is well-suited for pick-to-pallet or pick-to-tote operations
Pick-HUs are supported in EWM. EWM also has built-in cartonization capability to enable optimized selection of packaging materials for pick and pack
Packing Packing of picked items at a packing station. Weigh-scale integration
Packing of picked items at a work center. Weigh scales can be integrated
Wave picking and multiple processing
Possible to group open deliveries into waves for mass processing
Can combine requirements for multiple deliveries into one picking transfer order
Advanced wave management capabilities, including automatic wave creation using wave templates
Possible to assign items from the same delivery into multiple waves
Proof of delivery Possible to implement proof-of-delivery (POD) integration with relation to customer billing
Possible with use of POD functionality within ERP
Kit-to-order Not supported Can perform kitting during the picking step, or at a kitting work center, with or without a value-added services step
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Functional capabilities: SAP WM and SAP EWM (cont’d.)
WM EWMInternal processingWarehouse stock optimization
Optimizing is possible with offl ine analysis and manual stock transfers
Possible to perform slotting in order to determine optimal stock locations based on historical or forecast product movement. Can execute re-arrangement of existing stocks following the execution of slotting
Physical inventory Various inventory methods are possible:
• � Cycle-counting• � Continuous inventory• � Annual (wall-to-wall) inventory• � Zero stock check
Dynamic cycle-counting is available as of R/3 release 4.7 with Enterprise Extension Set 2.0
Same inventory methods are available in EWM
Also possible to perform low-stock checks during the picking process
Posting changes Can post stock to new material or new stock type from within WM
Can perform same posting changes from within the EWM system
EWM can automate posting changes during storage bin transfers to change stock type and/or storage location by storage type
Replenishment Can initiate fi xed bin replenishment based on material-specifi c min/max levels and bin assignments
Can also initiate replenishment based on picking requirements
Can initiate fi xed bin replenishments using scheduled jobs or based on picking requirements
Also possible to trigger (and execute) bin replenishment directly while picking stock from fi xed bins. Multiple fi xed bins per material are supported
Kit-to-stock Not supported Can execute kitting of components in stock to create stock in a new material
Complex (multi-step) internal processing
Not supported Supported with the use of process-oriented storage control
Production integrationMaterial staging to production areas
Various methods are supported:
• � Pick parts (pick list)
• � Release order parts
• � Crate parts
• � Manual staging
Possible to de-activate quantity reduction according to stocks already in production
Same staging methods are available in EWM
All provision is managed using outbound deliveries from the EWM warehouse
Kanban Possible to use Kanban technique to supply materials to production areas
Also possible to use Kanban in material staging
Receipts from production Back-fl ushing and receipt of produced materials are supported
Same capabilities as in WM
All receipts are managed using inbound deliveries into the EWM warehouse
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Functional capabilities: SAP WM and SAP EWM (cont’d.)
WM EWMCross-process functionalityRadio frequency (RF) support
Native support for RF processing available as of R/3 release 4.6B
Approximately 50 RF transactions are provided, including goods receipt, goods issue, transfer order confi rmation, inventory counting and serial number capture
Possible to work with system-guided selection of open transfer orders
Over 100 RF transactions are provided in EWM for goods receipt, goods issue, task confi rmation, packing, deconsolidation, loading, inventory counting and others
Can use system-guided selection of open/assigned warehouse orders
RF Wizard available for quick and easy changes to transactions
Printing and outputs WM print control settings are used to trigger printing of warehouse documents such as pick lists
Output control is available to initiate processing of outputs from delivery documents
EWM uses the post-processing framework (PPF) to trigger all printing and outputs based upon the status of warehouse tasks
Standard outputs are delivered in both SmartForms and Adobe forms
Environment, health and safety (EH&S)
Supported Tight integration with the EH&S component in the ERP system
Labor management Not supported
(Possible to enter planned and actual transfer processing times for basic workload planning and evaluation)
Supported with implementation of engineered labor standards and distance calculations
Can record time against many different task types, both direct and indirect
Radio frequency identifi cation (RFID)
Supported Can be implemented with SAP Auto-ID Infrastructure (AII) and SCM event management systems
Yard management YM capabilities provided as a separate LES component with R/3 release 4.7 with EE 2.0
Fully integrated YM functionality within EWM
Transportation units (TUs) are used to represent trailers, rail cars, airline containers, etc., and function similarly to handling units
Transportation cross-docking (TCD)
Not supported TCD in EWM supports the transfer of HUs among various warehouses or distribution centers to a fi nal place of destination, which can be a DC or a customer’s site
Opportunistic cross-docking
Using this functionality, the warehouse can detect and execute opportunities to match inbound materials to outbound requirements dynamically
Available only in R/3 release 4.7 with Extension Set 2.0
Fully supported within EWM
Task and resource management
Introduced as a separate LES component with R/3 release 4.7 EE 1.1
Functionality is included within EWM and can be activated or deactivated by task type
Interleaving Basic interleaving is possible as of R/3 release 4.6C
Task interleaving is possible with the activation of resource management in EWM
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Functional capabilities: SAP WM and SAP EWM (cont’d.)
WM EWMCross-process functionality (cont’d.)Task-splitting Possible to split a transfer order to re-
balance workload among usersWarehouse order creation rules enable automatic packaging of tasks into optimal work packages for users
Two-step confi rmation Possible to confi rm a single transfer with separate “pick” and “transfer” steps
All transfers can be processed as a removal followed by a placement. Processing times can be captured when processing with RF transactions
Quantity exceptions Possible to confi rm transfers with target/actual quantity differences
EWM exception codes are used within all RF transactions to facilitate exception reporting and to trigger follow-up activities
Integration to SAP ERP Transportation (LE-TRA)
Supported Supported
Reverse logistics Putaway of materials received on a return order is supported
Supported
Enhanced customer returns process can be activated via integration with SAP Customer Relationship Management (CRM)
Includes integration with advanced returns management
Direct Store Delivery Functionality available as of R/3 release 4.7 with Extension Set 2.0
Value-added services (VAS)
Repacking, tagging and other value-added steps can be performed at a work center or during transfer order confi rmation
Supported as of R/3 release 4.7 with Extension Set 2.0
VAS steps can be integrated seamlessly into inbound, internal and outbound processes
Reporting and graphical tools
Reporting capabilities Basic reporting of open/confi rmed transfers, stock overviews, bin lists, storage unit inquiries, etc.
Many reports available in ABAP List Viewer (ALV) format to allow advanced sorting and statistical functions
Logistics information system reports also available for summarized and detailed analysis of historical data
Warehouse activity monitor gives manager a view of open/overdue warehouse activities
RF monitor allows managers to view and reorganize activities and assignments to users
Warehouse management monitor provides reporting of all types of warehouse activities, as well as stock and storage bin lists
Advanced analytics, dashboards and reporting are possible using standard SAP Business Intelligence (BI) content
A comparison of the SAP WM and EWM solutions | Page 11
Functional capabilities: SAP WM and SAP EWM (cont’d.)
WM EWMReporting and graphical tools (cont’d.)Workload reporting and analysis
Rough workload estimator allows warehouse managers to perform labor planning for inbound and outbound processes
Labor planning and simulation cockpit permits estimation and reporting of labor time across all warehouse activity types
Graphical warehouse layout
Not supported EWM uses the easy graphics framework (EGF) to create visual representation of warehouse layouts
Shipping cockpit Not available in a single cockpit Ability to perform outbound delivery planning, monitoring and execution of all outbound processes in EWM, including trailer creation, check in/check out, wave management, task execution, print output and invoicing (prior to GI). Graphical sidebar analytics embedded into cockpit
General
Centralized/decentralized options
Can implement decentralized WM (dWM) as of R/3 release 4.5A
Several ERP systems can be linked to a single dWM instance
EWM can be run as a decentralized system on a SCM server or it can be centralized as an add-on within the ERP system (if using ERP ECC 6.0 and SCM 5.1 or higher)
Transportation planning Advanced transportation planning and vehicle scheduling can be implemented using SAP advanced planner and optimizer (APO), as of SAP ERP 2004 (ECC 5.0) or SAP ERP 2005 (ECC 6.0)
Can use freight documents and shipments in EWM
Transportation management module
Integration is available with SAP TM and EWM
Integration with external warehouse automation systems
“Black box” interfaces are possible using ALE/IDoc techniques
Optimized when used in conjunction with task and resource management (TRM) in the LES system
EWM includes material fl ow system (MFS) capability to connect directly to programmable logic controllers (PLCs) in external automation systems
ALE/IDoc integration is also possible to external WCS
Archiving Supported Supported
Authorizations Standard SAP authorizations are used to control access to data and transactions
Standard SAP authorizations are used to control access to data and transactions
Page 12 | A comparison of the SAP WM and EWM solutions
Other factors to consider
ScalabilityThe EWM solution has several advantages over WM in terms of scalability. If your environment requires a single WMS instance to be linked to multiple ERP systems, it is only possible with a decentralized EWM implementation. If there are high-volume conveyor systems or automated storage and retrieval systems that process thousands of packages per day, these can be integrated with SAP using the EWM MFS (material fl ow system) technology.
CostsSCM EWM is a separately licensed product from SAP. This differs from SAP WM, where it is included in the cost of the ERP license. It is important to note, however, that the SCM EWM license cost will be charged for using the advanced functions of ERP WM, such as cross-docking, value-added services or yard management.
Future functional enhancements from SAPNo further SAP development will occur within WM. All future investment will be within the SCM EWM product.
Some common questions (and answers) about WM and EWM
Is SAP going to discontinue its support for ERP warehouse management?
SAP will continue to support the deployment of ERP WM. SAP considers WM to be an important WMS option for customers not requiring the advanced functionality and scalability of the EWM system.
We are using ERP WM today. Will we be required to “upgrade” to EWM some day?
No, you can continue to use the WM system until you decide that a migration to EWM is warranted.
Why did SAP decide to build extended warehouse management “from the ground up,” instead of building on the existing WM system?
SAP needed a more scalable solution that could more easily compete with the “best of breed” WMS applications. It needed a solution that out of the box would have more robust features and an architecture that could address high availability and fast transaction processing.
Does the term “EWM” always refer to the SCM extended warehouse management solution?
The terminology can be confusing, but there are really two different forms of EWM, depending on how they are being used. When SAP warehouse management is being used with SAP release 4.7 Extension Set 2.0 or higher releases, it is referred to as ERP EWM. When SAP WM is being used in conjunction with the SCM module, it is referred to as SCM EWM.
What types of organizations should be considering EWM as opposed to WM?
Typically, SCM EWM is tailored to organizations that have high SKU and line-item volumes, very fast-moving product, complex product movement, cross-docking requirements, detailed packaging and shipping processes, and third-party logistics services on either the inbound or outbound side, or both.
A comparison of the SAP WM and EWM solutions | Page 13
SAP designed SCM EWM so that it could provide the most benefi t to warehouses with high activity levels, high volume and complex operations. These and other factors should be considered when determining which application is a fi t for your facility.
High level of distribution activity and materials movementDesigned to benefi t warehouse operations that are more distribution-oriented as opposed to material storage-oriented (e.g., a production supply facility), SCM EWM supports organizations with core competencies and critical success factors that rely on effi cient management, movement and distribution of materials. For such organizations, EWM could potentially be a good fi t and could allow you to signifi cantly enhance your labor effi ciencies and minimize your labor costs.
High level of volumeFacilities with a high level of material fl ow velocity (typically characterized by the number of transfer orders or line items), high transaction volume, a high number
of warehouse associates per shift and multiple types of material-handling equipment, are able to benefi t from SCM EWM functionality. Typically, the higher the number, the better the fi t. For example, if you have 50 trailer loads a day, you will experience much higher benefi t from the system than if you only have fi ve.
Operational complexityComplex material fl ows, such as the use of special equipment that cannot physically make certain material moves effi ciently, but instead uses pick and drop locations or other operational complexities, such as pallet deconsolidation and other warehouse work center operations, such as packing and repacking, are handled much better in SCM EWM.
Value-added servicesStrong functionality for value-added services is offered within SCM EWM. This includes pricing, labeling, packaging and hazardous materials notes on shipping documents. The higher the level of services offered, the better the fi t with these solutions.
Which WM application is right for your warehouse?
Summary
When determining which option is the right fi t for your operations, it is important to consider that EWM is more likely to benefi t warehouse operations with high levels of distribution activity, volume and operation complexity. Companies that decide to implement EWM and its inherent capabilities in labor management and resource management could gain the benefi ts of an accelerated supply chain and improved customer service.
A key point to remember is that no new signifi cant functionality will be developed in WM. All future investment will be within the SCM EWM product. It is advisable to always strongly consider your current and future business requirements carefully when making a decision on which WM application to use. If you require a true labor management system or slotting, then EWM may be your answer. If you don’t need these technologies but still have complex warehouse movements, WM may work well.
For more information on how EY’s SAP Supply Chain services can help organizations gain improved operational effi ciencies and manage supply chain operations cost, visit EY’s IT advisory supply chain services on www.ey.com.
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EY leads the way for supply chain execution and mobility solution services
Authors
Doug ScottSenior Consultant, Advisory Services, Ernst & Young LLP
Kyle SorensenExecutive Director, Advisory Services, Ernst & Young LLP
EY is an SAP global services partner that is fast becoming recognized as an industry leader in end-to-end supply chain SAP services. With focus on the logistics execution systems (LES) and the supply chain execution (SCE) components of the SAP application suite, coupled with EY’s already established SAP planning and procurement capabilities, EY offers our clients supply chain services that help organizations to gain operational effi ciencies and manage costs related to their supply chain operations. Our SAP and supply chain consultants share a wealth of experience and knowledge when it comes to designing and helping implement leading SAP logistics and supply chain services, with noted experience in SAP planning and optimization (APO and S&OP cloud solutions), LES, WM, EWM, transportation management (TM), procurement (including Ariba/SRM), and automatic data collection.
Our SAP consultants were, and continue to be, key players in SAP’s internal, pre-release testing stage for EWM in Walldorf, Germany. Our consultants also played an integral role with pre-release testing of SAP’s native radio frequency data collection product, SAP Console.
Our in-depth experience with SAP LES and EWM products and functionality — along with our close relationship with SAP — provides us with an intimate knowledge of the development vector SAP is applying to the LES and EWM product suite. This allows us to advise customers on strategic operational decisions, provide them with detailed information on key integration points, and quickly assist them in identifying fi t/gaps with current and future release levels.
EY can help you achieve:
• �Increased supply chain velocity and effi ciencies
• �Increased visibility into assets and data streams
• �Increased control over the entire mobility life cycle
• �Change management and business process optimization
EY has experienced SAP SCM consultants who can share insights and knowledge in order to assist clients with implementing leading approaches to meet client demands. With strong business-leading practices knowledge and acumen, our team can help to drive supply chain effi ciencies throughout your organization.
A comparison of the SAP WM and EWM solutions | Page 15
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