Back to blog
Written by Marjorie Philippon

SAP EWM – Basic Notions, Embedded vs. Decentralized, and Advanced Features

Warehouse management systems have significantly changed in the last 30 years. Look back 30 years and the basic warehouse was in appearance the same as today’s. But with a closer examination of the front of pallet racks and even individual items themselves, one will see a proliferation of UPC and QR codes, as well as labels.

Everyone is looking for unparalleled efficiency, which is now possible thanks to the power of IT. This translates to the need of better logistical control utilizing automated advanced management systems. The growth of open-source technologies and cloud-based services means these management systems are getting better than ever before, and allow for greater visibility on operations.

The reasons for efficiency maximization are numerous. Industrial warehousing has switched to just-in-time delivery for raw materials. Only critical equipment and maintenance supplies are kept in stock.

E-Commerce has caused an exponential growth in smaller warehouse units for smaller companies. Supply chain automation and hyper-effective robotic technologies are evolving like well-fed bacteria in a Petri dish. Stores are shrinking, which translates to an increase in the number of warehouses providing just-in-time deliveries.

And to compound the issues of all the above is a shrinking and aging labour pool where new hires expect exciting and engaging careers, with many of them not used to actually being responsible for quick response times to accomplish tasks.

For all the reasons mentioned above, we would like to elaborate on the SAP module that helps businesses improve their logistics chain: SAP EWM.

What is a WMS (Warehouse Management System)?

It is a software system that can drill into a business's entire warehouse inventory, and control and optimize everything from receiving, storing, picking products and shipping out orders. It provides not only a total holistic view, but can zoom in to find the exact location of one particular item amongst millions.

What is a WMS (Warehouse Management System)?_Warehouse worker scanning barcode on box in a large warehouse

What Is SAP EWM (Extended Warehouse Management)?

SAP EWM is an integral part of SAP SCM (Supply Chain Management) and provides support for a full inventory analysis. It has a lot more capabilities than a standard WMS. SAP EWM finds its place where there is a need for a high level of integration between the warehouse (in and out), production, quality control and shipping.


Obstacles generally found during the deployment of EWM are often based on misconceptions which lead to think that SAP EWM has been exclusively built for large businesses, or companies with complex logistic flows, and massive labour inputs. Many believed that it was not the best solution, although it has now become almost an industry standard. Apps that were developed for mobile devices to simplify SAP did not work well for applications such as actual warehousing.

SAP EWM is now more affordable and boasts various deployment models that can adapt to the reality of different business environments.

Embedded vs. Decentralized SAP EWM

In SAP there are up to six servers that encompass the tasks needed, with the three main servers being detailed below:

  1. The Development system (also known as “DEV”), which allows analysts to customize the system according to the client’s needs. This system is used for basic configuration, object development, and unit testing to create the technical solution, and allow the client to view a preliminary version of the final solution.
  2. The Quality system (commonly known as “QA” or “QAL”), which allows team members and end users to test the customized solution. This system can be used to conduct integrated tests, acceptance tests, performance tests, and to use the environment for training purposes.
  3. The Production system (commonly known as “PROD”), which is used on a daily basis, and contains all the live data.

With embedded systems, there is reduced data replication. There is a smaller database and hardware footprint. Transaction data like purchase order data or production order data can be read directly. There is also a real-time analysis. The SAP EWM that is embedded to S/4HANA also has additional benefits.

  • It allows for master data management in one single system.
  • It provides a simple, interface-free solution for goods receipt, production, staging and consumption.
  • It allows for replication of document numbers (such as on shipping documents) to simplify the use of SAP EWM.
  • It can support both global and plant-level batch controls.

Embedded SAP EWM controls both products in transit and actual warehouse billing for in-house accounts tracking and for the final customers.

Decentralized systems have many of the same capabilities as embedded systems with a few differences. The decentralization itself brings about the need for server duplication, each system requiring its own environment. So, even though there are twice as many servers compared to an embedded system, large volumes of transactions can be handled for multiple warehouses. They are better able to handle material flow systems. They can keep running even if the ERP system goes down. Returns process is available both from in-house departments and from external customers.

We will now address two EWM versions: basic and advanced. Both exist within the Embedded version of SAP EWM. The main difference between them is that the basic version is part of the basic S/4HANA licences, while the advanced version means additional costs.

New call-to-action

Basic SAP EWM Features

Basic SAP EWM features allow you to implement inventory management functionalities in your warehouse in a simple and timely manner. If we were to draw a parallel, it would be like using a rich version of the late WM version of SAP ECC.

And thus, all features related to goods receipt, movement, exit, inventory, and RF are an integral part of basic EWM. The most valuable aspect of this version lies in the graphical warehouse layout. After inserting geographical data in SAP, the warehouse manager can benefit from a graphical rendition of his warehouse, directly in SAP. At a glance, he will see blocked locations, empty locations, types of existing locations, as well as their actual position.

And so, access to the EWM screen facilitates warehouse management. All warehouse operations can now be carried out using a single central transaction (no need for 20 transaction codes corresponding to 20 different actions).

And finally, this version allows you to leverage the benefits of the integration with the Production Planning module, namely for the optimization of warehousing and production activities.

Advanced SAP EWM Features

SAP EWM allows for multiple handling units to be processed in one transaction. Kitting allows it to store/pick a group of parts/items/products that are part of a bill of materials in the production process. On the other hand, Reverse Kitting can be used to put back items into the warehouse stock.

This advanced system also allows Slotting, which optimizes the positioning of warehouse products to ensure items are actually returned in place and that moving stocks are tracked using real-time analysis in SAP EWM. It controls the grouping and release of orders to help optimize pick-ups. Its Cartonization function inspects the order and allows for packaging optimization before shipping.

Control of efficient material flow through the warehouse is maximized. It is designed to reduce bottlenecking on the dock. The system also comes equipped with an improved RF solution that facilitates real-time communication between the warehouse workers and the EWM system. The user can benefit from a Fiori interface without the use of SAP ITS (new in S/4HANA 2021), which makes available a range of applications to be used in warehousing activities (reception, storage, replenishment, picking and shipping).

SAP EWM also boasts the Labour Management feature which optimizes travel throughout the warehouse based on geographical data and powerful algorithms that, once defined, can prioritize tasks.

SAP EWM fully integrates with other solutions such as TM, PPE, QM and GT and manages automation and third-party integration.

Some complex SOPs (standard operating procedures) are supported and automated by SAP EWM. It makes stock management and reporting tools faster with better decision-making flexibility.

Bottom Line

SAP EWM changes a system’s paradigm. It is a change from managing stocks to controlling the entire process. It is a true supply chain management system and not just a modified logistics execution or warehouse management system.

It allows total control for a company of its inbound and outbound processes while controlling the movement of goods inside the warehouse.

It is suitable for small, medium and large businesses. It is even suitable for small warehouses that want to maximize warehouse efficiency. All businesses can benefit from this program integration. If you are interested by this module, contact an expert right away!

These Articles Could Also Interest You