Optimizing Beverage Distribution with Picking Strategies in SAP EWM

Introduction

For large beverage distribution centers, managing a wide range of products with different packaging forms and storage requirements can be challenging. SAP EWM provides picking strategies—also called stock removal strategies—to streamline the process of retrieving products from the warehouse. By choosing the appropriate picking strategy, a beverage warehouse can improve order fulfillment speed, reduce waste, and efficiently manage stock rotation.

This article will explore each picking strategy in SAP EWM using the example of a beverage distribution warehouse, detailing how it can improve operations and enhance efficiency.

1. FIFO (First In, First Out)

Description: FIFO ensures that the oldest stock is picked first. This strategy is essential for products that need frequent rotation to maintain freshness.

Beverage Warehouse Example:

• Application: For beverages like bottled water and juice with specific expiration dates, FIFO ensures that the oldest stock is picked first to maintain quality and prevent outdated products from sitting too long in storage.
• Benefit: Reduces the risk of expired products and ensures that customers receive fresh stock, enhancing customer satisfaction.

2. Stringent FIFO Across All Storage Types

Description: Stringent FIFO extends the FIFO principle across all storage types, ensuring that the oldest products are picked first, regardless of their storage location.

Beverage Warehouse Example:

• Application: For highly sensitive products like organic juices or beverages with no preservatives, stringent FIFO guarantees that the oldest stock is always shipped first, even if these products are stored in different sections (e.g., refrigerated vs. ambient).
• Benefit: Helps maintain consistent stock rotation across the entire warehouse, especially important for products with shorter shelf lives.

3. LIFO (Last In, First Out)

Description: LIFO is ideal for stacked items or those that are stored in a way where the last items stored are the most accessible.

Beverage Warehouse Example:

• Application: Cans of soft drinks are often stacked on pallets. Using LIFO allows the warehouse to access the most recently stacked pallets without having to unstack other items.
• Benefit: Simplifies operations by allowing easy access to stacked products, minimizing the need for additional handling, and making it easier to manage bulk storage.

4. Partial Quantities First

Description: This strategy prioritizes picking partial quantities before full units to free up space in partially filled bins and to keep inventory organized.

Beverage Warehouse Example:

• Application: If a bin contains an incomplete pallet of bottled iced tea, this partial quantity will be picked first to clear the space and simplify storage management.
• Benefit: Reduces clutter by freeing up bins with partial quantities and ensures that full pallets are kept intact until needed.

5. Stock Removal Suggestion According to Quantity

Description: This strategy suggests stock removal based on the order quantity, helping to optimize retrieval by selecting appropriate storage areas.

Beverage Warehouse Example:

• Application: For small retail orders, smaller quantities of energy drinks are picked from lower-level bins that are easily accessible. For larger wholesale orders, bulk quantities are picked from higher racks or pallet storage areas.
• Benefit: Increases picking efficiency by directing pickers to storage areas that match the order quantity, reducing retrieval time for different order sizes.

6. SLED (Shelf Life Expiration Date)

Description: The SLED strategy prioritizes items with the nearest expiration dates, ensuring that products close to expiration are shipped first.

Beverage Warehouse Example:

• Application: For perishable products like fresh juices or dairy-based beverages, the SLED strategy ensures that items nearing their expiration date are picked first, reducing waste and ensuring product freshness.
• Benefit: Ensures products are shipped in order of their shelf life, reducing the chances of expired stock and maintaining product quality.

7. Fixed Storage Bin

Description: Fixed storage bin picking assigns specific, easy-to-access locations for high-demand or frequently picked items.

Beverage Warehouse Example:

• Application: Popular soft drink brands are stored in fixed bins near the dispatch area to allow for quick access during high-demand periods, like holidays or promotions.
• Benefit: Speeds up picking times by minimizing travel distance, making it ideal for high-turnover products frequently requested by retailers.

8. Preferred Unit of Measure Last

Description: This strategy picks units that do not match the preferred unit of measure, ensuring that units in preferred packaging remain intact until necessary.

Beverage Warehouse Example:

• Application: The warehouse has bottled beverages stored in both individual units and full cases. For smaller orders, individual bottles are picked first, while cases are left untouched to fulfill large orders efficiently.
• Benefit: Keeps full cases available for bulk orders and maximizes storage efficiency by preserving packaging until it's essential to break it down.

Implementing Picking Strategies in the Beverage Warehouse

To effectively implement these strategies in a beverage warehouse, here are key steps:

1. Define Stock Removal Rules: Configure the stock removal rules for each strategy in SAP EWM under Goods Issue Process → Strategies → Specify Stock Removal Rule.
2. Set Storage Type Search Sequences: Arrange the storage types in sequence to control the search order for stock removal, directing pickers to the correct bins.
3. Map Search Sequence to Stock Removal: Ensure that the correct storage type sequence applies to each picking strategy, aligning it with warehouse layout and operational needs.

Selecting the Right Strategy for the Beverage Warehouse

When selecting a strategy for the beverage warehouse, consider the following factors:

• Product Shelf Life: Use FIFO or SLED for products with expiration dates to ensure freshness.
• Order Size and Demand: Fixed Storage Bin or Stock Removal Suggestion by Quantity can improve efficiency for high-demand items.
• Space Optimization: Partial Quantities First or Preferred Unit of Measure Last can maximize available storage and prevent clutter.