SAP WM

Warehouse Management

Complete Guide to Warehouse Operations in SAP

SAP ERP | S/4HANA Extended WM Edition

© 2024 SAP Reference Series

Table of Contents
1. SAP WM Overview ...................... 3
2. Organizational Structures ............ 5
3. Master Data .......................... 9
4. Goods Receipt Process ................ 14
5. Goods Issue Process .................. 20
6. Stock Transfers ...................... 25
7. Putaway Strategies ................... 29
8. Pick Strategies ...................... 33
9. Inventory in WM ...................... 38
10. SAP EWM Overview .................... 43
1. SAP WM Overview
SAP Warehouse Management (WM) is the sub-module of SAP IM/MM that manages physical stock
movements within a warehouse at the storage bin level. While SAP MM tracks stock at the storage
location level, WM provides bin-level visibility and control over put-away, picking, and internal transfers.

1.1 WM vs IM vs EWM
Feature Inventory Mgmt (IM) Warehouse Mgmt (WM)
Extended WM (EWM)

Stock granularity Storage Location Storage Bin Storage Bin + HU

Transfer Orders No Yes Yes (enhanced)

RF/Mobile No Basic Full RF/voice

Labor Mgmt No No Yes

Slotting No No Yes

Wave Picking No Limited Full

2. Organizational Structures
The WM organizational hierarchy extends below the MM plant/storage location structure.

Level Description

Warehouse Number Top WM level; corresponds to a physical warehouse complex

Storage Type Zones within warehouse: GR area, bulk, high rack, picking, staging

Storage Section Sub-division of storage type (e.g., fast/slow movers)

Storage Bin Exact physical location (row-column-level); smallest WM unit

Quant Stock in a bin with same material, batch, and stock category

2.1 Linking WM to MM
A storage location is assigned to exactly one warehouse number. When a goods movement occurs in MM
(e.g., GR via MIGO), SAP automatically creates a transfer requirement (TR) in WM if the storage location
is WM-managed. The warehouse team then converts the TR to a Transfer Order (TO) for physical
execution.
3. Master Data

3.1 Warehouse Structure Master Data

Object Transaction Description

Storage Type LS01N Define type: fixed bin, bulk, open storage

Storage Section LS02N Sub-zone within storage type

Storage Bin LS01N Create individual bins with coordinates

Bin Type LTMC Physical dimensions of bin

3.2 Material Master WM Views

• Warehouse Management 1: Storage unit type, bulk storage indicator, WM putaway strategy.
• Warehouse Management 2: Total capacity, maximum bins, rounding quantity for bin replenishment.

3.3 Storage Bin Types

Bin Type Description

Standard Fixed-size bins; most common

Dynamic Created on-the-fly for bulk/floor storage

Fixed Specific material always stored here

Interim GR zone, GI zone, staging area — temporary holding

4. Goods Receipt Process in WM

4.1 GR Process Flow

Step Transaction Description

1. MM GR Posting MIGO Post goods receipt; creates Transfer Requirement

2. View Transfer Req. LB10 Display open TRs awaiting TO creation

3. Create Transfer Order LT0A Convert TR to TO; system finds putaway bin

4. Print TO LT31 Print picking/putaway instruction for warehouse

5. Confirm TO LT12 Confirm physical putaway; updates bin stock

4.2 Transfer Requirements (TR)

A Transfer Requirement is an instruction to the warehouse to move goods. It is created automatically from
MM goods movements or manually in WM (LB01). TRs are not stock-relevant — only confirmed Transfer
Orders update bin quantities.

4.3 Goods Receipt Areas

Incoming goods are first placed in the GR interim storage area (usually storage type 902). After putaway
TO confirmation, stock moves to the final destination bin. This two-step process enables quality inspection
before final storage.
5. Goods Issue Process in WM

5.1 GI Process Flow (Outbound Delivery)

Step Transaction Description

1. Outbound Delivery VL01N SD delivery triggers transfer requirement

2. Create Pick TO LT0A System determines source bin via pick strategy

3. Print TO / RF Pick LT31 Picker receives instruction

4. Confirm Pick TO LT12 Update bin; stock moves to GI staging area

5. Post Goods Issue VL02N MM GI reduces unrestricted stock; billing enabled

5.2 Two-Step vs One-Step Picking

• One-step: Pick and goods issue in a single transaction (common for simple operations).
• Two-step: Pick to staging area first, then post GI separately (enables loading/consolidation).
6. Stock Transfers in WM

6.1 Transfer Order Types

Transfer Type Transaction Description

Bin-to-bin transfer LT01 Move stock within warehouse

Replenishment LT10 Fill picking bins from reserve storage

Posting Change LT08 Change stock category (e.g., QI to unrestricted)

Warehouse consolidation LT0B Combine partial bins

6.2 Stock Transfer between Plants (STO)

When a Stock Transport Order (STO) is created in MM and GI is posted at the issuing plant, WM creates a
picking TR. After outbound delivery and GR at the receiving plant, WM creates a putaway TR. Both plants'
WM bins are updated accordingly.
7. Putaway Strategies
Putaway strategies determine which storage bin is selected when goods arrive in the warehouse. The
strategy is configured per storage type.

Strategy Code Description

Next Empty Bin A Put into next available empty bin

Fixed Bin B Material always goes to designated bin

Open Storage C Combine with existing stock in any bin

Addition to Stock D Add to existing stock of same material

Bulk Storage E Place in bulk area based on capacity

Near Picking Bin F Store close to fixed picking bin

Shelf Life I FEFO — nearest expiry first

Palletization L Optimized by pallet quantity

Putaway control is further refined by capacity check settings: unlimited, pallet, total weight, or total
quantity. SAP checks the bin's defined capacity before confirming the TO destination.
8. Pick Strategies
Pick strategies control which bin SAP selects as the source when creating a picking Transfer Order.

Strategy Code Description

Fixed Bin A Always pick from designated fixed bin

FIFO B Pick from bin with oldest goods receipt date

LIFO C Pick from bin with newest goods receipt date

Fewest TOs D Minimize number of transfer orders

FEFO E Pick soonest-expiring stock first (batch mgmt)

Stringent FIFO F FIFO by quant creation date across storage types

Partial Bins First G Empty partial bins before full bins

FEFO (First Expiry First Out) requires batch management to be active in MM and shelf life fields maintained in the
material master.
9. Inventory in WM
WM inventory counts are conducted at the bin level. Count results are transferred to MM to post any stock
differences.

Step Transaction Description

Create Inventory Doc. LI01N Block bins and create count document

Print Count Sheet LI04 Print bin list for counters

Enter Count LI11N Record physical count per bin

Check Differences LI20 Review variances before posting

Post Differences LI21 Transfer WM differences to MM

Clear WM/IM Diff. LI22 Clear interim storage types

9.1 Inventory Methods

• Annual Inventory: All bins counted once per fiscal year.
• Cycle Counting: Continuous counting by ABC classification.
• Continuous Inventory: Bin counted each time it becomes empty.
• Inventory Sampling: Random statistical sample of bins.
10. SAP EWM Overview
SAP Extended Warehouse Management (EWM) is the next-generation warehouse solution, embedded in
S/4HANA. It extends classic WM with advanced features for high-volume, complex warehouse operations.

EWM Feature Description

Handling Units (HU) Manage pallets, cartons, and packaging hierarchies

Wave Management Group deliveries into picking waves by route/time

Labor Management Measure warehouse staff performance vs. standards

Slotting Optimize bin assignment based on pick frequency

Yard Management Track trucks and trailers in the yard

Voice Picking RF/Voice-directed picking for hands-free operations

MFS Integration Direct connection to conveyor and sorter systems

Value-Added Svcs Kitting, labeling, quality inspection within EWM

10.1 EWM vs Classic WM Migration

SAP announced that classic WM in ERP will be supported until 2030. Customers migrating to S/4HANA
must choose between Basic WM (embedded in S/4HANA, functionally equivalent to classic WM) or full
EWM for advanced scenarios.

This guide covers SAP WM fundamentals applicable to SAP ERP and S/4HANA environments. For EWM
deep-dive, refer to SAP Help Portal EWM documentation and SAP Learning Journey 'Warehouse Management
with SAP S/4HANA'.