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Editors Note: RFID gets all the press
these days, but the truth is that for
most companies, the costs (and risks)
of being an early adopter of RFID
are not viable. But theres good news:
Virtually all R/3 users running 4.6C
or higher can take immediate advan-
tage of SAP

s existing RF barcoding
functionality. In this enlightening
cover story, SAP Warehouse Manage-
ment and RF expert John Lenhardt
explains how his team installed RF
and achieved a measurable return on
investment - and he has the numbers
to prove it. The good news continues:
John reports that companies already
running SAPs Warehouse Man-
agement (WM) module have done
most of the heavy lifting already.
The conguration needed for RF is
simple by comparison. However, as
always with SAP, this comes with
a disclaimer: the more your devi-
ate from SAPs standard elds and
functionality, the more complex the
implementation becomes. Using
anecdotes from his own project expe-
rience, John illustrates the basics of
RF conguration and the pitfalls to
avoid. He tells about when his com-
pany decided to use non-standard
elds and what the tradeoffs were.
John wraps up this cover story with
a run-down of the actual ROI num-
bers and benets of the RF install.
Given Johns ability to tie Warehouse
Management issues into the big
picture, were glad to announce
that John will be writing regularly
on RF, WM, and RFID for SAPtips.

Introduction
You have the SAP warehouse mod-
ule up and runningthats great.
How about squeezing some more
productivity out of your operation
by implementing Radio Frequency
(RF) functionality within your ware-
house?
This document will show the steps
taken, improvements gained, prob-
lems encountered and the ROI for
an RF project recently completed on
SAP 4.6c. With an outlay of hard
costs of approximately $140,000
for an RF implementation over a 6-
week period, a distribution company
gained an estimated annual sav-
ings of $146,000. Rollouts to other
warehouses had an estimated cost of
$53,000 and an annual cost savings
of about $75,000.
Using Radio Frequency (RF) and
SAPConsole within the SAP Ware-
house context gives you the ability
to process business transactions with
mobile devices by scanning barcodes
that represent data such as material
numbers, quantities, and bins. The
RF benets include real-time pro-
cessing by the clerks, more accurate
data input through scanning, and a
more productive labor force.
Got RF?
How to Add Value to Your Warehouse Management System
with RF and SAPConsole
By John Lenhardt, Tranzation
So how does this differ from RFID
(Radio Frequency Identication)?
The primary difference is that the
RFID concept includes a barcode tag
that stores code on a small micro-
chip and this information can be
transmitted wirelessly to a reader.
This barcode tag provides companies
the ability to scan items much more
quickly while providing a unique
identier for each product which can
detail specic information about the
product, such as where it has been
and when it was produced.
RFID benets include further gains
in reducing costs in the supply chain,
more accurate inventory manage-
ment, and reduction in theft. For
now, however, RFID is in the early
adoption stage and has several hur-
dles to overcome such as cost of tags
and privacy concerns. Unless you are
being mandated by a customer to use
RFID or you like to be on the leading
edge of business concepts, it is prob-
ably best to wait a few years until all
the early problems get worked out
before considering RFID. Until that
time, you can still gain great improve-
ments using RF with SAPConsole.
This article serves as a primer on
how to best utilize the RF function-
ality. At the end, well take a look
at some real ROI numbers from one
of my recent RF projects to see just
what RF can do for the bottom line.
Background
The information and numbers for
this document come from a mid-size
company that has been running SAP
for 3 years and decided to implement
RF functionality using the SAPCon-
sole solution. This distribution com-
pany rst decided to implement RF
With an outlay of
hard costs of
approximately
$140,000, a
distribution company
gained an annual
savings of $146,000.
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in one 150,000 square foot ware-
house with the idea of rolling out the
RF solution to its four other distribu-
tion centers across the Unites States
over the next 9 months. The initial
warehouse being implemented with
RF has 30,100 bins, does about 500
pick orders a day with an average
of 2.3 lines per order, and receives
a daily average of 23 inbound deliv-
eries with about 8.6 lines items per
receipt. The project team consisted
of a project manager and two subject
matter experts from the company,
one functional WM consultant, and
one ABAP programmer.
Getting Started
Once you have the SAP Warehouse
Management module in production
and stable, adding the RF functional-
ity is a snap in comparison to the ini-
tial implementation of the warehouse
functionality. By this point, you have
already completed the hard part
for the warehouse implementation,
which probably included integrating
to other SAP modules, dening new
business processes, converting data,
and developing labels.
Just like your original SAP imple-
mentation, you can make your RF
implementation as simple or as com-
plex as you choose to inict upon
yourself. We chose the simple route.
This primarily consisted of using the
SAPConsole solution with as many
standard SAP RF transactions as pos-
sible. We did not have batch man-
agement, serial numbers, or handling
unit management functionality in
this implementation, which allowed
for a less complex project. Another
item we beneted from was that most
products were already bar-coded by
vendors, so labeling products with
barcode labels was not an issue.
There are several infrastructure
pieces that you will need to plan for
in order to automate your warehouse
with RF. Here is a list of items that
you will have to address:
SAPConsole software You most
likely already own this SAP soft-
ware. The SAPConsole software is
included in the standard distribution
of SAPGUI version 4.6b and higher,
and can be installed via the standard
install application. This SAPConsole
software converts standard SAPGUI
screens to character-based screens
that can be displayed on an RF unit.
In other words, it connects SAP to
the barcode readers. The SAPCon-
sole software will need to be installed
at each warehouse that uses RF.
There is a Web-enabled SAPCon-
sole solution now too. This can be
installed from the front-end R/3
Enterprise installation CD. We did
not use the Web-enabled solution in
the production environment since it
was in beta, but we did load the soft-
ware in a development environment
to review the functionality. We found
that our guns stopped scanning and
some elds were not showing in the
transactions when we used the Web
version of SAPConsole. Since the
Web version was not available for
production usage, we expected some
bugs and did not pursue resolving
the issues.
Telnet software This software
allows you to connect scanned data
from the scanners to the SAPConsole
software. We used telnet software
from Georgia SoftWorks. For 40
users and 3-year maintenance sup-
port, the costs ran about $1,100.
SAPConsole/Telnet server You will
need to load the SAPConsole and
Telnet software on its own server.
For the volume in this implementa-
tion, we purchased a server for about
$4,000. It was a NT machine with a
P3 processor and 512 MB of RAM.
Wireless Local Area Network
(WLAN) You will need to install
scanner access points throughout
the warehouse. When doing this,
you will need to consider issues such
as security, roaming, standards,
interoperability, cost, speed, and cov-
erage. The company that does the
cabling for you will most likely have
the expertise to work through these
issues. Each warehouse is different,
but you can expect to spend about
$8,000 per 50,000 square feet.
RF scanners These are the devices
that the warehouse clerks will use
to scan the barcodes. There are sev-
eral different vendors and models to
choose from when selecting scanners.
Scanners seem to be the most expen-
sive part of the implementation.
RF scanners units average around
$3,000 per unit. We used scanners
with Windows CE operating systems
which are nice to work with.
Label Printers We already had label
printers from the original implemen-
tation. However you can get label
printers for about $2,500 each.
Figure 1 illustrates how all the
pieces of the SAPConsole setup t
together.
Now that we have the RF infra-
structure dened, lets move on to the
business process part of the imple-
Adding the RF
functionality is a
snap in comparison
to the initial
implementation of
the warehouse
functionality.
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mentation. As mentioned
earlier, it is best to keep a
simple plan and use the stan-
dard delivered RF transac-
tions. You will probably see
other software companies at
SAPPHIRE or ASUG that
have prettier RF transac-
tions than SAP, but they all
get to the same destination.
Our distribution company
did an analysis and decided
they were nancially better
off sticking to the standard
SAP RF transactions with the
less pretty screens. After see-
ing the Web version of SAP-
Console though, we felt that
the look and feel of the SAP
transactions was on par with
some of the RF-centric soft-
ware packages.
Most of the problems expe-
rienced during RF implemen-
tations center around custom
RF transactions. So the tip here is to
use the standard delivered RF trans-
actions whenever possible, and care-
fully evaluate the need for any custom
RF transactions before proceeding.
Sometimes, it just is not possible to
use the standard transactions, and
you will need to create a custom one.
In the long run though, you will save
time, money, and heartache by stick-
ing to the standard delivered solu-
tion even if you have to modify your
process a bit. Sometimes the problem
with the standard SAP transactions
is less of a functional issue and more
of a screen layout issue. In this case,
you can use screen variants to move
around and delete elds to be more
customized to your business pro-
cesses. At the distribution company,
we changed the picking and putaway
screen to better accommodate the
clerks performing the activities.
Here is something you will nd odd
though. SAP does not deliver an RF
bin-to-bin transaction. You will have
to program your own RF bin-to-bin
transaction, which should take a day
or two. You would think SAP would
deliver a bin-to-bin transaction, but
they do not deliver this RF function
due to the fact that so many people
use this transaction so differently.
The great thing about already hav-
ing your warehouse up and running
on SAP is that your processes have
already been dened. So now you
just need to decide if you are going to
RF-enable all the business processes
in the warehouse or just a specic
function. For example, you may nd
you will save a huge amount of time
using RF in the shipping area, but
for the receiving function, it may be
more effort than it is worth. When
you implement RF, you decide which
processes to automate and which to
leave alone to continue processing as
you currently do on your computer
desktop. It is not an all-of-the-ware-
house or none-of-the-warehouse
decision when implementing RF.
Once you decide which processes
you will use with the RF, you will
need to determine what products and
documents need to have barcodes.
You should check your printers early
during the implementation process
too, in order to make sure they print
barcodes. Several companies use
laser printers that do not produce a
barcode. There are a few options for
solving this problem, such as pur-
chasing SIM chips for each printer.
In our case, we were lucky enough
to have printers that produced bar-
codes.

One task that is tedious is the label-
ing of bins and materials. The prob-
lem gets compounded if you use the
batch management or handling units
within your operations. It should be
noted that you do not have to have
everything barcoded to go-live with
RF. Although not optimal, you could
type in the material part number in
the RF device instead of scanning a
barcode. I am highlighting this issue
Figure 1: A Typical Network Setup for SAPConsole
SAP Console
and Telnet
Server
SAP Console
and Telnet
Server
Application
Server
Application
Server
Application
Server
Database
Server
The SAP Network located at
the Corporate Data Center
The SAPConsole servers are
deployed
at the warehouse or plant level
RF
Devices
WAN
OR
LOCAL
What is a typical network setup for
SAPConsole?
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because you may nd that every-
thing you primarily use is barcoded,
and you may want to go-live with RF
to start realizing some benets while
labeling the balance of the products
and bins in parallel.
SAP RF Conrguration
From a conguration standpoint,
there are just a few items that need
to be completed to start using the RF
functionality. For this implementa-
tion, we had 14 items that needed
to be changed in conguration, with
about half of the items being new
conguration items and the rest being
reconguring existing functionality.
Figure 2 shows the items we con-
gured to light up the SAPConsole
functionality. All of these items are
located in the implementation guide
under Logistics Execution/Mobile
Data Entry.
The following bullet points note
the key factors to consider during the
RF conguration process:
Dening RF queues to feed clerk
work
RF queues allow you to send trans-
fer orders to the RF units. Upon
completing a transfer order, the
clerk would have another transfer
order show up on the RF device to
continue working and would not
have to walk back to a basket to
get the transfer order to work on.
In theory, this is a great idea. In
practice, not too many compa-
nies have implemented this fea-
ture. Reasons vary, but the com-
mon thread seemed to be that the
logic on how SAP distributes the
transfer orders was not sufcient,
or the company preferred to have
the transfer order assigned in a
manual fashion for various busi-
ness reasons. The 4.7 functionality
of Task and Resource Management
(TMW) may be a possible solution
for this problem of dividing the
work. Examples of queues could
be picking2 and putaway 4.
You can send transfer orders based
on the movement type and storage
type to a specic queue, and have
a specic clerk responsible for the
work in the queue. For this distri-
bution company, we decided to just
have one queue and not feed the
transfer orders automatically.
Identify which warehouse users will
be able to log on to a RF unit.
Even though each clerk may have
an SAP user name already, there
is a specic table that needs to be
populated in order for users to use
the SAPConsole functionality. This
table also assigns the user to a work
queue, denes the screen size of the
RF unit, and the initial transaction
they will arrive at once logged in.
This is a pretty straightforward
task of gathering names and enter-
ing in a table. However, it becomes
a bit of a repetitive overhead activ-
ity if you have new clerks arriving
frequently in the warehouse that
need to use the RF devices. The
owner of this table in your orga-
nization will tell you it is not hard
work but more of a hassle to set up
the data, create a transport,
and move it through to your
production environment.
On top of that, you may have
to coordinate with the security
team in order to get a new SAP
user name added rst. I have
seen this issue handled differ-
ently on the RF projects I have
been on. There was one high
volume company that created
a custom program that would
just add a new name directly in
their production environment
so they could bypass the usual
conguration path. Anoth-
er company decided to user
generic names, so if one person
left and another was added,
they could keep using the same
name such as PICK03.
Figure 2: Mobile Data Conguration
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need to process an RF transaction on
the desktop. For example, if all the
RF devices are in use and you need
to process a document, the user could
go to the desktop to continue with
the work.
Verication elds to scan within the
RF transactions
Verication elds are elds in the
RF transaction that the clerk needs
to scan to complete the transaction.
For example, when picking the
material, you may want the clerk
to actually scan the material on the
product to ensure that the product
she is pulling is indeed what the
transfer order denes. If she does
not scan the material or scans the
wrong material, the transaction
will not process and will alert the
clerk to complete this verication
process correctly. The verication
elds are another feature to help
keep your inventory accurate, by
placing product into the correct
bin and lowering deliveries of the
wrong product.
You can congure different veri-
cation elds for different transac-
tions. The verication elds could
be a bin, quantity, material, or stor-
age unit on either the source bin or
the destination bin. You create a
verication prole for what you want
to check in the RF transaction and
assign the verication prole to goods
movements.
One large company that I imple-
mented RF for wanted to make sure
their clerks were pulling product
from the right bin instead of pulling
the product from a more convenient
bin. So they made the bin eld a
verication eld on the picking pro-
cess. However, that would not nec-
essarily stop the clerk from entering
the intended bin manually in the gun
to complete the transaction. So to
further ensure the correct bin was
visited, the bin verication eld in
the bin master was set to a unique
check digit number that was barcod-
ed on the bin label. As a result, the
clerk would have to enter this unique
number in order to complete the bin
verication. The check digit number
was only in barcode format and not
human readable making a tight veri-
cation process.
The distribution company we were
working with made both the put-
away and picking processes have a
bin verication and material veri-
cation. We let the bin verication
value be equal to the bin number for
two reasons. First, we already had
labels with the bin number barcoded
on them, and we would have had to
relabel all the items in the warehouse.
Second, most items only existed in
one or two bins, which made the like-
lihood of pulling stock from another
bin very small.

Application Identier functionality
Most companies do not use the
Application Identier functionality,
but it was used at the distribution
company. This also caused more
Dene the layout of the menus on
the RF devices
When clerks log on to the RF
device, they will encounter a menu
of transactions to choose from.
This menu is fully congurable and
can be grouped in terms of how
you see it being used most logically
for your company. Typically, there
are menu categories of the inbound
process, the outbound process,
cycle counting, and internal ware-
house activities such as bin-to-bin
and stock look-up transactions.
Most companies make one menu
for all warehouse clerks to use, but
you could make a specic menu
for warehouse functions. This may
useful in the instance a clerk only
does three transactions of pick-
ing, stock look-up, and bin-to-bin.
Instead of making the clerk navi-
gate through menus and submenus
to get to his transactions, you may
just want his RF menus to pop-up
only with his heavily used transac-
tion on the rst screen to facilitate
more productivity. Again, you can
assign different menus to different
users. For this implementation,
we chose one RF menu due to the
fact that the warehouse clerks were
crossed-trained to do other roles
and we wanted one consistent look
for everyone.
Figure 3 shows what an RF menu
could look like. This gure shows
both the menu from the RF device
and from the SAPGUI. It is important
to note that the transaction you use
on the RF device can also be used on
the SAP desktop you are used to now.
To access the RF logon from the SAP
desktop, use transaction LM00. It
is convenient to use this transaction
when you are developing and testing.
You could even use the RF transac-
tion on the desktop in the ware-
house in a production environment.
Of course, you would not want to
model your process around using the
RF transaction on the SAP desktop,
but there are occasions when you do
Figure 3: SAP Menu on Desktop
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confusion than any other issue.
Application identiers dene the
type and structure of the barcode
value you are reading. The best
way to explain is to give an exam-
ple. You may scan a barcode and
get a return of the value of M4353.
The prex M may represent that
the item is a material. The actual
materials number is 4353. This
ensures that the item you are scan-
ning is the correct object.
The distribution company I worked
with used Application Identier func-
tionality for material, quantities, and
the batch number.
When its fully operational, this
concept is pretty neat, but it takes
some coordination. First, you have
to get the vendors to label the bar-
code with the prex. Most likely,
they are barcoding your product, but
they are not putting on prexes for
materials, quantities, and batches.
Also, your customers may not want
those prexes on the barcodes, so
you may have to relabel the barcodes
when shipping out.
There is a universal standard for
the Application Identier function-
ality, but it was not followed in this
scenario, since the concept was put
into practice at the distribution com-
pany a few years ago.
Another problem was that we had
to integrate the Application Identi-
er functionality to the custom RF
transactions we did. There were
some function modules we had to
insert into our library bin-to-bin and
warehouse bin look-up transactions.
This was not a huge undertaking, but
again, it highlights what was men-
tioned earlier about customer trans-
actions. This may seem like it is just
a simple customer program, but there
always seems to be new requirements
that have to be integrated into the
custom code.
following issues on this distribution
companys project.
Usage of application identiers
This is standard functionality
within SAP, but we had to integrate
the functionality into some of the
custom transactions we created.
Also, the vendors sending material
with barcodes didnt always com-
ply with the nomenclature dened
(e.g., a prex in front of the mate-
rial number). The standard func-
tionality in the RF transactions
only allows for one character length
for the verication. The users did
not like the small amount of allo-
cated space and wanted the eld to
be expanded. We had to create a
screen variant to solve this prob-
lem.
SAPtip: Unless there is some com-
pelling reason to use Application
Identiers (e.g., your largest cus-
tomer requires it), do not use the
functionality.
Usage of elds for unintended
purpose The distribution com-
pany used a eld on the transfer
order to represent a batch number,
although they did not really use SAP
batch management. This caused
a problem in automating the con-
version of transfer requirements to
transfer orders, since we needed to
update this eld, but the eld they
were populating was not included
on the transfer requirement, and it
was being entered manually on the
transfer order. As a result, we took
the standard transfer requirement
to transfer order conversion pro-
gram RLAUTA10, copied it, and
modied some logic to populate a
few elds that were not being used
for their intended purpose.
SAPtip: Do a cost/benet analysis
of correcting the process to use the
proper elds. Sometimes it is better
to continue with the non-standard
usage of the eld and work around
Improvements
As a result of the RF implementa-
tion in the warehouse, the distribu-
tion company gained the following
improvements:
No more faxing of inbound deliv-
eries from purchasing to ware-
house, since information will be
available on the RF gun.
Real-time receiving; no double-
handling of receiving paperwork;
streamlined process to remove
one person from process.
Directed putaway instead of clerk
searching for bin in warehouse;
directed putaway strategy facili-
tates faster picking cycles.
Optimized picking strategy to
minimize clerk travel time to
bins.
Real-time picking TO conr-
mation; scanning verication of
correct product against order;
no double handling of pick-
ing paperwork; streamlined to
remove one person from process;
increased inventory accuracy
leading to less research time to
x problems; no printing of TOs.
Streamlined PGI process with
background job to remove 50%
of one person from process.
Real-time bin-to-bin moves; no
manual moves on the computer;
streamlined process.
Cycle counts data entry can be
completed real-time, and we
were able to removing a data
entry person from the process.
Problems and SAPtips on
How to Avoid Them
Each implementation is different,
and as a result, each has its own set
of problems. We encountered the
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any downstream problems. You will
have to decide for each case. In this
case, it did not make sense for us
to turn on batch management and
increase the complexity of inven-
tory and warehouse moves.
Relabel warehouse bins New
labels were being applied to the
bins since some of the old labels
were damaged or too small. This
problem t more into the took
more time than we estimated cat-
egory. This was just a tedious pro-
cess. Some bins were bulk location
where we wanted to hang a bin
number from the warehouse ceil-
ing, so this took effort to hang the
bin labels.
SAPtip: Be cognizant that labeling
bins and products is not a trivial
task. Do a quick time study of how
long it takes to do a row and then
allocated the proper time for this
activity.
Update of material master and
bin data The actual conversion
effort in itself was straightforward.
However, team members debating
on what constitutes a fast-mov-
ing material, and the best way to
segregate the bins into 7 different
sections proved to be a time-con-
suming task.
SAPtip: Set up a work session with
the appropriate team members
(e.g., warehouse clerks, warehouse
manager, inventory manager) that
can access SAP data such as inven-
tory turns during the meeting.
Make quick but educated decisions
and update the data. You can and
will tweak the master data as your
business evolves.
ROI Details
A key consideration in any SAP
install is the all-important return on
investment.
Following are the basic cost and
improvements numbers:

Crunching the numbers, you can
see it will take about 12 months to
get our ROI for this project. Now,
you can argue several factors on both
cost and benets were not included
to arrive at this ROI number, but at
a high level, you can see the payback
comes sooner than later. One of the
better benets not calculated here is
for the organization to focus more
on the value-added tasks instead of
double-handling paperwork or try-
ing to nd where a data entry error
occurred.
These ROI numbers are a great
story to support the implementation
of RF in a warehouse. Needless to
say, each warehouse is different and
the benets will vary. One thing,
however, is certain: RF has real and
immediate benets that are easier to
validate than other logistic initiatives
such as APO.
Conclusion
Implementing RF after you have
been live and are stable with the SAP
Warehouse Module is pretty straight-
forward, with a nice upside nan-
cially and operationally. Companies
always talk about getting the stan-
dard SAP functionality running and
then automating the processes. RF
is one of those bells and whistles of
functionality that you can now take
advantage of. The trick is to keep it
simple by using SAPConsole and use
as many standard RF transactions as
possible. If you stay on the straight
and narrow path and avoid biting off
more than you can handle, your com-
pany can leverage SAP to streamline
your warehouse operations and get a
nice return on your investment with
minimal effort and little risk.
John Lenhardt, Tranzation. John
specializes in warehousing, logistics,
and supply chain consulting to clients
in consumer products, retail, distribu-
tion, and manufacturing industries.
He has 11 years SAP implementation
experience and has served in various
positions onprojects, from consultant
to project manger. He has worked
with over 50 SAP companies on their
implementations. John spent 4 years
at SAP America as a Platinum consul-
tant before branching off and found-
ing Tranzation. Tranzation provides
personalized SAP solutions for com-
panies committed to improving their
business. John can be reached at
john.lenhardt@SAPtips.com
Cost:
SAPConsole 0
SAPConsole servers (2) $8,000
Georgia software $1,100
Access points $22,000
Guns (15) $54,000
Label printers (2) $5,000
Labels $1,000
SAP RF Consulting $40,000
SAP Development $15,000
Total Cost $146,000
Daily Savings: $585
per day (39 hours * $15)
Annual Savings $ 146,250
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