Pre-allocation of Warehouse Inventory (Part 1 of 2)
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By: Team Krypt - June 13th, 2018

Apple iPhone

In our two-part pre-allocation of inventory posts we focus on pre-allocation of warehouse inventory using SAP LE-WM and the benefits of the feature. We also discuss how to create a customized pre-allocation for SAP EWM through utilizing the steps of LE-WM.

Part 1:

Pre-allocation is an action of blocking inventory or pre-ordering an item for a future predicted usage. Let’s look a real-life situation related to the release of a new Apple iPhone. Everybody gets into a mad adrenaline rush to get their hands on the new device and stores start taking pre-orders even before the product is officially launched. Once the product is launched customers’ orders are shipped in accordance with the pre-order date.

This built-in feature of SAP LE-WM ECC offering helps manage pre-order requests. We’ll briefly review how this works.

  1. The user first looks for a stock of a specific material in the warehouse.
  2. If the stock is not available, he then raises a pre-allocation request and updates the request with the details of the location where it needs to be dropped off, once the stock arrives. This is done by maintaining entries in the pre-allocation table.
  3. Once the stock arrives and goods receipt is posted in IM, during the creation of transfer order, in LE-WM, the system shows a warning message to the user that there is a pre-allocation request for the material.
  4. If the user proceeds to check the details, the system guides the user to the pre-allocation table, which the user has maintained (as mentioned in point 2) and then apportions the quantity to satisfy the pre-allocation request.
  5. A transfer order is then created in the system to guide a portion of the pallet to the drop-off zone as requested by the user.
  6. The rest of the quantity, if any, from the goods receipt, is then directed to the storage bin inside the warehouse, as guided by the system by the putaway strategy.

This useful SAP WM feature provides a way to immediately manage and fulfill any urgent requests. Major advantages of this feature include:

  1. Reduces lead time to process urgent requests where the stock must first go inside the warehouse and then to the drop off zone. This works more like an internal cross-docking.
  2. Production avoids unnecessarily spending time processing of request from the warehouse to the production. Orders can be staged directly to PSA for immediate consumption instead of waiting for replenishment run.
  3. Since the pre-allocation table is checked each time a transfer order is created, it is possible to configure this at movement type level; this ensures only specific movement types taken into consideration. It can be made specific to those movement types which are used to bring in stock into the warehouse; for example, GR against the purchase order.

Unfortunately, a feature such as this is not available in SAP EWM. The EWM process type and warehouse task creation does not support pre-allocation. There is no such concept of creating a pre-order request via the pre-allocation table.

If this feature is to be used in SAP EWM, it must be custom developed to ensure that it works in the same way as it does in SAP LE-WM.

SAP EWM Creation:

  1. Create a customized pre-allocation table with a custom transaction.
  2. The process type and warehouse task creation should check if there is any data maintained in the pre-allocation table and give a warning message to the user. This can also be done by setting up a customized PPF action that triggers when the warehouse order is getting created.
  3. The later steps would be executed the same way as it is done with SAP LE-WM.

Part 2 of our pre-allocation of warehouse inventory post.

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