SAP – Logistic Execution

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Introduction

In this lecture we will cover the process of Picking. By the end of this
lecture you should be able to:
• Describe the picking process
• Explain the concepts of the picking process.
• Explain how SAP does the picking.

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Picking

Order picking can be

defined as the activity
by which a small
number of goods are
extracted from the
warehouse

Process flow - physical

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Picking Concept

Picking in SAP – Core Concepts

Picking is the activity of collecting materials from its current
storage location, and place them in a pre-designated area, usually
referred to as the packing area.
In its simplest form, the picking activity is represented by updating
the picking field in the SAP delivery document.
In its complex form, it can be the creation of a transfer order to
individual or consolidated picking.

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Picking Concept

Modelling the Process

• The consultant should seek to clarify the level of details to which these activities are to be
modelled in the system before designing any processed. For example, while the physical
activity of packing a customer’s order involves the use of packaging materials to create
containers for shipment, would the business actually benefit from recording this
information in SAP? Could this information be left outside of the system or not recorded at
all.
• Each new functionality will require time and resources to implement, both of which, as any
project manager will tell you, are in short supply.

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Picking Concept

Types of Picking*
• piece picking or picker to part : the order picker(s) move(s) to collect the
products necessary for one order
• zone picking : each order picker is assigned to one specific zone and will
only realize order picking within this zone
• wave picking : the order picker(s) move(s) to collect the products
necessary for several orders
• sorting systems : no movement of the order picker(s), the products are
brought to him by an automatic system (conveyor system, automatic
storage ...).
• pick to box : no movement of the order picker(s), the picking area is
organized so that there are a number of picking stations connected by a
conveyor. The order picker fills the box with the products from his station
and the box moves to the other picking stations until the customer order
is complete.
Taken from http://en.wikipedia.org/wiki/Order_picking

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Picking Concept

Picking Strategy
• The “Pick Strategy” represents the sequence in which each material appears on the pick
list. This drives the route in which the user must travel between bins or storage locations
with the goal of minimise the travel between these locations and is driven by how the
bins are arranged in the warehouse.

Consolidate Picking
• By grouping materials from multiple deliveries into a single pick list, a user can visiting a
single bin and pick, for that material for all deliveries at once. This is clearly more efficient
that picking each delivery on its own.
• In the illustration below, you can see three deliveries. The material from each delivery are
separated and re-consolidated in three pick list, with each list only picking a particular
group of bins. The sequence of each pick list represents the picking strategy, ensuring that
a bin is only visited once.
Picking Cycle
• A picking cycle is the act of picking a list of materials from the storage area and placing
them at a pre-agreed destination. The list of materials, commonly known as the “picking
list” can contain materials from one or many delivery documents.
• What is important is that a pick cycle is the completion of a single pick list.

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Picking to do

Delivery 123
F1
B1 D1

E1
Delivery 456 A1 C1

Delivery 456

Consolidated Picking

Pick List 1 Pick List 2 Pick List 3

Delivery 123 Material A1 Delivery 123 Material C1 Delivery 456 Material E1
Delivery 456 Material A1 Delivery 456 Material C1 Delivery 456 Material F1
Delivery 123 Material B1 Delivery 456 Material D1
Delivery 123 Material B1

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Types of Picking in SAP

On plant and Storage Location

Inventory Management Account posting
Interface Different stock Level

Warehouse Management On bin level

No account posting

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Types of Picking in SAP

Inventory Management Delivery - IM

Interface

Warehouse Management
Transfer Order - WM

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Types of Picking in SAP

SAP Picking - Generate Picking list in IM

The first step in the picking process is the creation of the “Pick List”, which is the list of materials that are to
be picked. The “pick list” can come in many forms, range from a printed document to list on handheld
devices.
The SAP pick list can be created via:

• Manually using transaction VL06P to determine the list of materials that are to be picked. The user
would execute the report, select the relevant deliveries and materials that are to be picked. This is a
user driven picking, as they will decide when and what to pick. For example this can be used in the case
of customer collection, as the user can generate the picking list when the customer has actually arrived
at the plant.

• Via the loading start button if the delivery is assigned to a SAP shipment.

• Automatically based on a number of business rules, the picking list is “created “for the user to pick. An
example is the automatic printing of the pick list when the delivery is created or the creation of TOs at a
pre-given time.

Note: The program RSNAST00 can be used to select and process message output that are
in status “1”. Executing this program at that pre-agreed time via a batch job to process the
outputs.

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Types of Picking in SAP

Picking with Warehouse Management (WM)

• The picking will be done in the WM module using the “transfer orders” (TO).
• A transfer orders is created with reference to an outbound delivery and allows the splitting of
items on the delivery into one or multiple TO, thus they can be picked separately. Thus, rather
than the pick materials on a delivery to delivery basis, TOs can be consolidated into more
efficient pick list.

The transfer order can be created in three ways :

• Manually via transaction LT01
• En mass via the picking button in transaction VL06P after you have selected the delivery.
• Automatically, via the message output WMTA in the delivery.

When the transfer order is confirmed via the transaction LT12, the system will also up date the
delivery with the quantities that were picked in the picking and delivery quantity fields.

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Types of Picking in SAP

Picking via an external system

• Quite a common scenario for the picking and warehouse activities to being managed by an
external system that interfaces the result of the picking back into SAP. The confirmation can
be done in IM where the whole delivery is confirmed at once, or in WM, where each
individual TO is confirmed by the external system.

• As a rule of thumb, if the external system is managing the warehouse, the picking in SAP is
done only in IM.

Note : SAP also has a functionality called “Lean WM” that allows the creation and use of
transfer orders, but not having to implement the full WM. The advantage is that you can
have picking via TOs but not have to implement the more complex functionality of WM..

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Introduction

Picking with Inventory Management

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Picking Config

Picking – Configuration Logistics

Picking
SAP Customizing Implementation Guide Execution

Shipping
The configuration points are:
• Define Relevant Item Categories. Item categories can be configured here as relevant for picking, or in the
overall configuration of the item categories.
• Define picking Requirements. In this configuration, you can determined when the picking can take place
by adding a picking requirement. In standard SAP, by default, only execute the pick when the credit
check is complete.
• Full WM or Lean WM, use this to configure the WM solution.
• Define Picking Location. Configure the rules for the delivery to determine the storage location
An integral part of the picking process is determining the storage location of the material, as SAP will generate
an error is the field is empty at the time of PGI.
• If the storage location can be determined in a number of ways
• Copied from the sales order if the value was populated in the document.
• Populated manually either by user or by an external system if it did the picking.
• Determined by SAP when the delivery document was created.
• For SAP to determined the storage location, carry out the following configuration
• Assign the rule to determine the storage location. By default, the SAP rule is MALA.

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Introduction

Storage Location Determination

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Picking Config

Picking – Configuration Logistics

Picking
SAP Customizing Implementation Guide Execution

Shipping
The configuration points are:
• Define Relevant Item Categories. Item categories can be configured here as relevant for picking, or in the
overall configuration of the item categories.
• Define picking Requirements. In this configuration, you can determined when the picking can take place
by adding a picking requirement. In standard SAP, by default, only execute the pick when the credit
check is complete.
• Full WM or Lean WM, use this to configure the WM solution.
• Define Picking Location. Configure the rules for the delivery to determine the storage location
An integral part of the picking process is determining the storage location of the material, as SAP will generate
an error is the field is empty at the time of PGI. The storage location can be determined in a number of ways
• Copied from the sales order if the value was populated in the document.
• Populated manually either by user or by a user exit.
• Determined by SAP when the delivery document was created if the storage location was blank.
• Assign the rule to determine the storage location. By default, the SAP rule is MALA.
• Manually populated by the user or external system after delivery creation.

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Storage location determination

The config items are

• Define Rules for Picking Location Determination
• Define Storage Conditions
• Assign Picking Locations

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Introduction

Picking with Warehouse Management

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Warehouse Management

Use of Transfer order

• Create document using LT03
• Confirm transfer order using LT12
• Ensure that Adopt Pick quantity is set

A Transfer order can also be created by

• Using the create TO button in VL06
• Using the message output WMTA

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Warehouse Management Configuration

Lean WM
• Allow the creation of transfer orders for inbound and outbound activates
• Stock are not stored on bin level
• Can be used if the picking is done in an external system and a Transfer
order is required in SAP.

Configuration
• Assign the combination of plant and storage location to a warehouse
• Control "Plant/Storage Location/Warehouse No." Assignment

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Introduction

Business Case

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Business Case

Widget Inc – SAP Process

In the case of Widget Inc, they warehouse is managed by an external IT system that manages
picking and packaging of material. In the previous process, the legacy system would send the
pick list to the external system for execution.

• The external warehouse system would then consolidate the picking with other deliveries
and confirm the results based on the document level rather than item by item.
• Implement SAP Warehouse Management module and replace the existing IT system.
However the implementing of WM is out of scope for the project
• Carry out the picking on the IM level in SAP, with an Idoc confirming the picking.
• Implement SAP Lean WM, which allows the creation of Transfer Orders.

In this case, the project decided to implement picking in lean WM as it has the least impact to
the project in terms of work and development and is a basis to allow the eventual migration into
SAP warehouse management.

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