Enabling

smart
warehousing
for an
intelligent
enterprise

February 2019
Warehouse management is
business critical for TMT
Warehouse management can be complex, but when done right it can reduce costs, increase warehouse
efficiency and improve customer satisfaction. To date, a large proportion of warehousing activities and
processes are still being performed manually, resulting in shipping delays, wrong products being picked
and additional costs that eat company’s bottom lines. Warehouse Management and enabling systems
have always been a cost center that is considered a necessary evil to meet customer service levels. With
changing customer expectations it is becoming business critical that planning prepares for client
expectations such as same day delivery, expedited shipping orders, etc. To augment effective planning it
is imperative that warehouses are equipped to meet shipping deadlines and expected throughputs.
Technology, Media and Telecommunication (TMT) as an industry has not been isolated from these
aggressive customer demands. Whether it is supplying parts urgently to the customer from a fabrication
plant, expediting orders through the warehouse, cross-docking critical parts or receiving and placing parts
into bins to keep the docks clear, warehouses are always looking for ways to be faster and more nimble.
Warehousing challenges across the TMT industry remain prevalent and should be addressed to be
competitive in an ever changing and ever demanding market environment.

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Key challenges in TMT

Challenges in TMT companies are very similar to

other industries. Improving productivity, inventory 1
accuracy, storage and resource utilization, and
5 Improving
inventory carrying costs are common areas that Data warehouse
companies are trying to optimize. Warehousing productivity and
efficiency

1. Improving Warehouse Productivity

and efficiency
Key
Warehouse efficiency plays an important role in Real-time
Challenges Reducing
customer satisfaction and company revenues. inventory
operating 2
Lost resources due to warehouse downtime can analysis
costs
increase both visible and hidden costs, safety
risks increase, overtime can accrue, and 4
customers may lose confidence because of poor
delivery times. Routine processes can affect Poor storage
warehouse performance, which include order utilization
picking, truck loading, and receiving verification.
To meet growing customer demands, companies 3
should develop strategies to improve warehouse
efficiency and productivity.

2. Reducing Operating Costs

In the TMT industry, the biggest expense in a typical warehouse is labor. A warehouse deconsolidates,
reorganizes, repackages and consolidates product. So, an important function of the warehouse is to
break down large packages of product and redistribute it in smaller quantities. Most labor time is spent on
picking, and the majority of picking time is spent on travel, thus, the key is to focus on reducing pickers’
travel time. To reduce operating costs, strategies to streamline core warehouse processes such as
picking, receiving, put away, and cycle counting become important for warehousing.

3. Poor Storage Utilization

Low storage utilization and poor throughput lead to low capital and operating efficiencies. For e-
commerce firms, disorganized warehouse space can cause unnecessary labor costs and result in full
warehouse shelves with no space for new inventories. Where and how to increase storage utilization,
including cleaning up storage inventory, increasing storage density, and adding new distribution centers,
remains challenging for companies.

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4. Real time inventory analysis:
Access to accurate inventory information is a fundamental requirement for detailed inventory analysis
through analytical systems like BW or Data Warehouse. Inventory reporting, such as inventory turnover
analysis, relies on periodic data processing instead of real time. This can lead to reduced
inventory accuracy.
In the Media & Entertainment industry, real-time bidding is an automated and dynamic way to buy and
sell online media. Media buyers can evaluate, bid on and purchase ad inventory on an impression-by-
impression basis, which can drive meaningful one-to-one connections to consumers with greater scale
and efficiency. However, there are some challenges with real-time bidding including mobile real-time
bidding and “traffic jam” during peak hours.

5. Data Warehousing
The Media & Entertainment industry is investing in data warehousing to help drive business success.
Volumes of data are collected from social media and IoT sensors. AI and machine learning algorithms
can be applied to provide and predict customized content for customers. As data size is growing at a
faster rate, improving data warehousing performance while simultaneously managing costs of things like
data storage, infrastructure, and data processing can create challenges for many companies.

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Warehouse trends that make smart warehousing
a reality

TMT industry customer profiles are ever changing. Customers prefer smaller order sizes to be delivered
faster. In some cases, the sales channel is moving to an e-commerce model where the customer is the
end user of the product, thereby eliminating the entire interim supply chain. This shift has pushed
companies to rethink their warehousing strategy and with these changing dynamics, flexibility in
warehousing becomes even more crucial.
To meet these demanding environments a responsive logistics function is necessary and a smart
warehouse contributes to making it real. In addition, emerging tech like IoT, Artificial Intelligence, Machine
Learning and advanced analytics are disrupting logistics and warehousing, and leading companies are
looking for creative means of leveraging technology to execute faster and leaner warehouses.

Trends Descriptions
Autonomous • Through AGV or autonomous on-site vehicles, goods are loaded, moved and
vehicles dropped off where needed in the facilities without human interference. These
vehicle are tightly integrated with the ERP system and can produce many benefits.
- Reduce labor cost, utility costs
- Eliminate damages to products or equipment.
- Increase workplace safety and lower cost
- Increase inventory efficiency and accuracy

Smart Robots • Warehousing robots will handle time consuming and labor intensive activities that
require flexibility, such as, the labor intensive packaging process for finished goods.
• Smart robot software will also control the internal warehouse environment, including
setting the proper temperature, light, and humidity according to predefined
requirements. By shutting off the lights and heat in areas where all the work is being
done by robots, for example, energy consumption can be reduced significantly.

Wearable and • Increase picking efficiency by augmenting picking of the right products. For
Augmented instance, equipped with smart glasses, employees can navigate the warehouse
Reality along optimized routes via the glasses’ graphics display, enabling them to find the
right quantity of the right item much more efficiently, and with reduced training time.
• Speed up picking process with accurate picking.
• Hands free operation

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Trends Descriptions
3D printing • Instead of maintaining huge inventories of spare parts in the warehouse, 3D
printing will allow companies to optimize storage and distribution of spare parts. In
other words, spare parts can be manufactured as needed at facilities maintained
locally — even on-site, if demand is high enough or critical enough.
- Reduce inventory cost
- Low-cost delivery
- Fast local delivery

RFID • RFID sensors will reveal what’s been delivered, and send the track-and-trace data
horizontally across the entire supply chain.
• The warehouse system will automatically allot storage space for the delivery’s
docking slot, and assign the appropriate autonomous equipment to move the
goods to the right locations.
• Through the use of sensors embedded in the goods and warehouse itself, real time
inventory will be constantly updated by assessing the whereabouts of goods and
mapping the entire facility.
• Increase visibility-capture real time movements of products and their location
throughout the supply chain
• Improve accuracy and speed up the receiving, shipping and handling processes.
• Time savings through faster inventory, goods receiving, loading and unloading as
well as reduced human errors through auto ID.
• Enhance real time inventory data and reduce asset losses

IoT & AI • IoT can direct pickers to the right spot in the warehouse faster and with
equipped more information
warehouse • IoT can upgrade to automated guided vehicles to retrieve items
• Warehouse sensors can detect and transmit locations of materials, people and
vehicles to warehouse management systems
• Employees using smartphones or tablets can load boxes or pallets on a truck in
the correct shipping order

Optimized • Real-time stock-level information and predictive analytics can be used to optimize
inventory by ordering quantities, reducing minimum safety stocks and overall inventory costs
data analytics • Sophisticated analytics software allows demand for spare parts to be forecast more
precisely, leading to optimized spare parts storage and distribution

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Trends Descriptions
IoT and Cloud • A growing set of IoT solutions manage supplies and inventory within
based warehouses and across a company’s operations
warehouse • RFID technology allows for increased tracking and traceability for all stock
items’ location and movement throughout the building. Sensors can alert to low
stock and expedite the process by automatically triggering purchase orders
• Cloud solutions allow data to be accessible around the globe facilitating a more
dynamic workforce

Pick to light • Pick-to-Light systems can dramatically increase the productivity of order
system and fulfilment while reducing operator errors
voice-tasking • Voice enabling technology can also help increase productivity, accuracy, safety
and employee satisfaction while reducing training time for staff

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How PwC can help improve warehouse
performance and enable Industry 4.0 “Smart
Warehouse” with SAP’s intelligent enterprise?
Re-imagining your warehousing processes and
enabling “Smart Warehousing” with SAP
S/4HANA will require more than new technology.
It requires broad understanding of the industry
challenges, evolving market and technology
trends and having the experience to implement it.
PwC | Enabling smart warehousing for an intelligent enterprise
With our deep experience in implementing
warehouse solutions and benchmarking
experience, PwC can assist TMT clients in solving
their warehousing problems: Leveraging
the full capabilities of SAP’s Intelligent suite of
applications including S/4HANA,Integrated
Business Planning, MII, MES and extending
the solution to leveraging IOT, ML, AI and
Blockchain to become an intelligent enterprise.
8
Intelligent Warehousing

Advances in technology are making smart and intelligent warehousing a reality, providing flexibility to
focus on smarter ways to manage resource skills and capacity to drive more throughput and efficiencies.
Though enablement is slow, adoption is picking up and the interest is immense. Companies are looking
for ways to leverage technology to automate and reduce dependency on human intelligence.
Below is a conceptual schematic of how a typical smart warehouse, enabled by IoT, Robotics, 3D printing,
RFID and advanced analytics would function:

Industry 4.0 Warehousing can help eliminate much of the inefficiency and integrate the process into the
entire supply chain. Leveraging the latest supply chain technologies and the Internet of Things (IoT),
a “smart warehouse” will serve as a hub to boost efficiency and speed throughout the entire supply chain.
The warehouse can become a strategic tool in how companies operate and generate value for their
customers. From wearables on workers to sensors and smart equipment, internet-enabled devices and
technology can improve efficiency and safety through the automation of virtually every ordinary
warehousing activity.

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Smart warehouse using SAP
S4HANA capabilities

Key innovations & capabilities that can help realize the vision of smart warehouse using SAP S4HANA
capabilities:

Technical Descriptions
Capabilities
Advanced Inbound • Native capability to process multi-step receiving and stock placement in the
Processing warehouse (Unloading, counting, deconsolidation, placement)
• Ability to schedule put-away tasks (automatically, at specified times or
manually) for multiple deliveries at the same time
• Seamless integration with quality management to ensure warehouse users
manage clean inventory for accurate allocation
Advanced Outbound • Similar to inbound processing, outbound process can manage multi-step
Processing and picking process (consolidation, re-packing, loading)
wave management • Ability to combine tasks and deliveries into waves based on route, product
or layout
• Ability to release and re-release waves automatically
Native Material Flow • S4 native capability to interface with automation technology like Automated
Systems (MFS) Storage and Retrieval Systems (AS/RS), Automated Guided Vehicles (AGV),
Pick to Light, etc.
• Pallet management to enable automated storage or diversion of faulty pallets
Built-in Labor • Labor management in S4 as part of EWM provides native capability that can
Management enable warehouse resource management, monitoring efficiencies and
Capability incentivize payments.
• Links to the HR systems so that planned vs actual performances can be
monitored to estimate bonus payments
Flexible Inventory • S4 provides robust capabilities that can help manage inventory using multiple
Management counting procedures (Annual inventory, Ad-hoc inventory, Continuous, low
Procedures stock and put-away physical inventory count)
Automated Yard • S4 has native and robust capability that can help manage warehouse yards
Management to facilitate truck and carrier management.
• Align picking and placement activities based on available yard capacity
Native Value Added • S4 EWM can enable planning and executing value added services like
Services and Kitting packing, labeling and kitting for both inbound and outbound processes.
• EWM in S4 HANA has ability to perform kit to order as well kit to stock and
reversal of the kitting process
Dock Appointment • DAC is a critical capability that can enable management of vehicle
Scheduling appointments, schedule resources and balance workload through work day.

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Technical Descriptions
Capabilities
Resource • Can enable optimization of warehouse resources by facilitating work
Management allocation and mapping availability with tasks to ensure balanced loads and
higher throughput
Slotting and • Can enable optimization of warehouse capacity and enhance put-
Rearrangement away/picking efficiencies by leveraging out-of-the-box S4 strategies.
• Slotting helps determine bin parameters, product parameters & strategies
Better user • Extensive list of SAP Fiori apps that can improve UX for both inbound and
experience through outbound processes and improve transaction speed and accuracy
FIORI Apps
Smart Cartonization • S4 HANA EWM allows for additional capabilities that can enable planning
Planning cartons and handling units to pick and pack efficiently
Better capabilities • Seal Management can enable better management of fraud and compliance.
for Compliance (Seal management involves multiple parties and EWM)
Integration with TMS • Seamless integration between EWM and TMS can help better monitor and
execute Inbound and outbound processes.
• Leverage yard management to manage precise check-in and check-out.
• Additional integration for carrier load planning and balancing.
• Can augment control towers that look at stock levels and in-transit delays
Out of the box • S/4HANA built in apps help analyze warehouse activities including info on
Analytical apps storage bins, resource capacity, planned and executed activities

As evidenced above, companies within the TMT space utilize a different type of operations & supply chain
model than traditional manufacturing companies. PwC possesses a unique blend of business experience
and technical expertise necessary to assist TMT organizations in solving their supply chain challenges
and transforming their business.
With our deep supply chain and benchmarking experience, PWC can help TMT clients solve their most
complex supply chain business problems, leveraging the full capabilities of SAP’s intelligent suite of
applications including: S/4HANA, Integrated Business Planning, SAP Ariba and extending the solution to
with IOT, ML, AI, Blockchain. Thus, enabling companies to build a Connected Supply Chain and become
an intelligent enterprise.

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Connected Supply Chain

The following chart illustrates how we can view the “Connected Supply Chain” as an end-to-end
operating model that provides real-time visibility, connectivity, and intelligence.

Supply chains operate along the traditional SCOR (Supply Chain Operations Reference Model)
processes — Plan, Source, Make, Deliver, Return and Enable. PWC’s TMT preconfigured solution
enables digitization across the SCOR processes.

For more information contact:

Suresh Veeraraghavan Ashish Punjabi

Principal, PwC SAP Technology Director, PwC SAP Technology
suresh.veeraraghavan@pwc.com ashish.punjabi@pwc.com

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pwc.com/sap

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