Systems, Applications, Products (SAP) Warehouse Management

Executive Summary

The purpose of this report is to detail the meaning of welfare management and the implications to the company using case examples. The methods used in the report entailed data analysis and the revisiting of case examples on the applicability to warehouse management. It is evident that use of warehouse management is a crucial factor for the success of logistics and supply chain operations in an organization (Berg 2007, p. 105). The most proficient company in the provision of warehouse management systems is SAP. A detailed warehouse management solution by SAP is given in the report alongside case examples. The report concludes by stating the importance of welfare management to a company.


The need for the development of stock control methods by business owners arose due to fluctuating demands caused by changes in prices and economic conditions. The fluctuations in demand led to the need to streamline operations and march the amount of information and data available to be able to decide when to augment inventory levels or issue materials (Geunes et al 2002, p. 317). Therefore, there arose a need among businesses to locate the supply-chain management functions of a company, tracking and location of goods in transit.

The need to have a greater understanding of the supply chain management in an organization has led to increased application of warehouse management. The main aim of this paper is to analyze the purpose of warehouse management in the current business environment and its implications.

Warehouse Management

Warehouse management is the process of ensuring the right amount of goods is delivered, having a high quality, at the required time and minimum costs. This will ensure the firm operates at a point where the minimum costs requirements by the owners for operations are met, hence high turnover rate (Ivanov & Sokolov 2009, p. 119). Warehouse management makes use of various channels for efficient operations in a business including software (Dreamtech Software Team 2006, p. 181).

Software keeps track of goods and materials in transit for efficient warehouse management. Warehouse management makes use of different platforms for the achievement of its objectives, which include cost reduction, people management, warehouse operations, and improved productivity. The platforms utilized for achievement of warehouse efficiency include warehouse management systems. Warehouse management systems are the systems and programs put in place to ensure efficiency in warehouse management for the increased efficiency in logistics, improving warehouse operations, and overcoming changing business needs (Sinha 2009, p. 130).

The warehouse management systems put in place in warehouse management ensures efficient organization, optimization of operations in warehouses and making warehouse operations a strategic constituent of supply chain management.

Advantages of warehouse management

Various advantages accrue with the use of warehouse management in an organization as the firm can be able to achieve its management objectives in inventory. The main advantage of warehouse management to an organization is the realization of the most efficient inventory levels that reduce the chances of stock out or overstocking (Bolten 1997, p. 41). This ensures the firm has a greater competitive advantage over competitors hence meet customer requirements comfortably and increase profit margin.

The capacity of the firm to meet order requirements on time is also another advantage of warehouse management due to efficient realization of optimum inventory levels (Cohen & Roussel 2004, p. 283. The other advantage of warehouse management is that it increases the ability of the company to provide efficient customer service. Further it helps in improving the rate of response to change in demand and supply, in the business environment.

The firm hence takes advantage of these changes or overcome challenges, therefore, have positive advantage over firms (Kappauf et al 2012, p. 99). Warehouse management also improves efficiency of operations in the warehouse leading to reduced losses in warehouse breakages, theft or accidents. Quick response to customer demands is also another main advantage of warehouse management in a firm.

SAP’s Warehouse Management solution

To achieve these objectives firms have utilized software systems in warehouse management. The warehouse management software systems are varied, developed and serviced by different companies (Mentzer 2000, p. 260). The main warehouse management systems providers are oracle and SAP. This report analyses the details about SAP’s warehouse management solutions to a firm that uses the SAP warehouses management system. SAP introduction of Extended Warehouse Management, aid in a company’s realization of its warehouse management practices (Radhakrishnan 2001, p. 261).

The SAP extended warehouse management incorporates latest inventory tracking methods, flexible and automated stock management and aids in optimum labor use, in warehouses. A company gains by use of SAP extended welfare management through the realization of high efficiency in warehouse management, accuracy of inventory calculations in the company, labor costs devoted for warehouses management reduced and improved customer service by the company (Richard 2011, p. 212).

The other detail about how SAP provides warehouse management functions to firms are through ensuring warehouse storage space is maximized through efficient logistics monitoring and control (Saena 2003, p. 41). This is done by tracking the availability of inventory and goods in transit to arrange for better storage. This improves a firm’s warehouse storage capacity hence aid in better resource utilization leading to improved profits. The reduction in product handling offered by SAP’s warehouse management system aids in the reduction of costs for the company. The use of expected goods received notification on the system aids in the recording of all goods received in advance, hence aid in easy record retrieval, and improves system transparency.

Increased logistics transparency in SAP’s welfare management functions as a measure to improve the effectiveness of firm’s welfare management functions. With this transparency, the firms is in a position to better position itself to carter for increased demand and accurately respond to customer requirements. The other way SAP manages warehouse maintenance is that it depends less on IT in logistics support (Young 2009, p. 39).

The firm, therefore, uses SAP systems software to meet its logistics requirement with the less use of IT than other firms offering warehouse maintenance services like Oracle and Microsoft. The SAP warehouse management platform also has a quality management function which aids in mapping the quality of operations. SAP welfare system also makes use of value added services on the products as per the requirements. This has the ability to increase the company’s profits as it improves product price.

The above advantages aids the firm in the realization of its warehouse management requirements and it can be concluded positively that SAP aids in the achievement of warehouse management to a company. This is demonstrated by the advantages and policies rolled out by SAP in warehouse management and presented in the form of SAP extended welfare management. The SAP extended warehouse management offers greater functionality and flexibility in welfare management other firms cannot rival. SAP is a leading management systems provider as depicted by its superior services. SAP also aids in ensuring the welfare management system performs effectively and offers application support to clients.

There are other strategic and financial benefits from SAP’s warehouse management solution and include 3 years payback time, improved competitive advantage, augmented customer satisfaction and that the system is reliable. These details give the way SAP implements its welfare management system and the advantages a company accrues from implementing a warehouse management system from SAP.

Cases using SAP warehouse management

The first example of a recent company to implement SAP’s Extended Warehouse management system is Grainger. Grainger is a principal supplier of repair, maintenance, and operating products and recently implemented SAP warehouse management system (Customer Testimonials). The implementation of the SAP welfare management is a principled decision for the company as demonstrated by the implication of the decision on the activities of the company. The main implications of the implication include increased distribution efficiencies, high cost savings, and the company had gained a competitive advantage over its competitors.

Ferrero a consumer products company integrated SAP warehouse management system in its operations and has achieved various advantages (Customer testimonials). The implications to the company include improved logistics transparency, improved storage capacity; reduce dependence on IT in logistics determination and better service and product delivery (Smith & Tompkins, p. 713).


In conclusion, warehouse management is an essential part of a company’s operations. It determines the company’s ability to meet deadlines in delivering orders, good use of storage capacity, provision of customer service and the realization of efficient levels of inventory levels for the company. SAP provision of warehouse management systems is beneficial as depicted by the advantages gained by firms using the management systems. The warehouse management systems provided by SAP allow a firm to manage inventory levels, improve the use of storage capacity, costs savings for the company and the realization of better service delivery and meeting order deadlines.


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Bolten, E 1997, Managing Time and Space in the Modern Warehouse: With Ready-to-use Forms, Checklist & Documentation, Amacom Div American Mgmt Assn, New York.

Cohen, S & Roussel, J 2004, Strategic Supply Chain, McGraw-Hill Professional, New York. Web.

Dreamtech Software Team, 2006, Sap R/3 Black Book, Dreamtech Press, New York.

Geunes, J, Pardalos, P & Romejin, E 2002, Supply Chain Management: Models, Applications, and Research Directions, Springer, New York.

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Kappauf, J, Koch, M & Lauterbach, B 2012, Logistic Core Operations with SAP: Inventory Management, Warehousing, Transportation, and Compliance, Springer, New York.

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Radhakrishnan, P 2001, Logistics and Supply Chain Management, Allied Publishers, New York.

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Saena, J 2003, Warehouse Management and Inventory Control, Vikas Publishing House Pvt Limited, Delhi.

Sinha, A 2009, Supply Chain Management: Collaboration, Planning, Execution and Co-ordination, Global India Publications, Delhi.

Smith, J & Tompkins, J 1998, The Warehouse Management Handbook, Tompkins Press, New York.

Young, J 2009, Selecting, Buying, Installing and Using a Modern Warehouse Management System, Lulu, Raleigh.

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BusinessEssay. "Systems, Applications, Products (SAP) Warehouse Management." November 8, 2022.