Co-Product and By-Product:

A Co-Product is a product that is produced in parallel with other products but have high value. The system creates a separate order item in the production order for each co-product. This means that it is possible to display actual costs at co-product level.

A By-Product is a product that is produced in parallel with other products. The system does not create a separate order item for each by-product. The material valuation of a by-product is always based on the price specified by price control in the material master.

SAP IBP solution does not distinguish between Co-Product and By-Products

How to Setup Co-Production in Scenario in IBP?

SAP IBP Master Data Setup:

Production Source Header:

In the Production Source Header MDT update the Source Type as ‘C’ for Co-Product FG100-CO. C indicates Co-production.

One Source ID ‘1010_FG100_PV1’ is assigned to Finished Product FG100 and Co-Product FG100-CO

Production Source Item:

Below is the master data setup for the Production source item.

SG100 is the semifinished material with a source ID ‘1010_FG100_PV1’. RM100 and RM200 are the raw materials with a source ID ‘1010_SG100_PV1’

Resource Location:

Below are the resources available at location 1010 which is production plant. Capacity Supply can keep it blank since capacity supply time series indication is marked as "X"

Production Source Resource:

Below are the resources used by source ID

Capacity updated for each resource in IBP:

Supply Chain Network:

Network setup for Co-Product Scenario.

Input:

Independent Demand at Finished Good (FG100) and Co-Product (FG100-CO)

Finite Heuristic Output:

Net demand is calculated for finished product FG100 based on the independent demand at the same product.

However Net demand is not calculated for co-product FG100-CO. The heuristics that support co-production don't plan a production event just to satisfy net demand for a co-product. Demand for a co-product is satisfied only from stock. 

Optimizer Output:

The optimizer supports co-production and calculates a cost-optimal production plan. It considers production costs, stock holding costs, and costs incurred for not satisfying demands for all output products, that is, both main and co-products.

Independent Demand at Finished Good (FG100) and Co-Product (FG100-CO) at DC-1000

System has calculated net demand for FG100 till W13 since it has independent demand till W13 only at DC- 1000.However, it has calculated Net demand till W15 at plant 1010 is due to co-product independent demand.

Optimizer has calculated Net demand for co-product FG100-CO at DC due to co-product independent demand.

In W15 we have independent demand only for co-product FG100-CO and system has generated production receipt.

//Setup initial cost Production Cost, Transportation cost, Non Delivery Cost, Inventory holding Cost

I hope this blog was helpful to understand the setup. Thank you.

In the realm of warehouse management, effective storage strategies are vital for maximizing space utilization, enhancing operational efficiency, and improving inventory accuracy. SAP Extended Warehouse Management (EWM) offers a robust framework for managing various storage strategies, one of which is the Pallet Storage Strategy by Handling Unit (HU) Type. This article delves into the intricacies of this storage strategy, detailing end-to-end configurations and best practices for implementation.

Ever wondered how production and warehouse operations sync seamlessly in SAP? The integration between SAP EWM and Production Planning (PP) ensures real-time material staging, consumption, and inventory updates—crucial for manufacturing excellence.

In this guide, I Delve into :
✅End-to-end EWM & PP integration
✅Configuration steps for raw material staging & finished goods receipt
✅Key master data and testing approach
✅Real-world staging methods: Single, Cross-Order & Crate Part staging
✅Differences between Production and Process Orders

In today's competitive supply chain landscape, operational efficiency and inventory accuracy are crucial to meeting customer expectations and reducing fulfillment costs. Automatic Replenishment in SAP EWM is a strategic tool that helps businesses maintain seamless warehouse operations by ensuring that picking locations are consistently stocked without manual intervention. By automating the movement of goods from reserve areas to fixed picking bins based on real-time stock levels, businesses can prevent order delays, optimize labor utilization, and reduce stockouts. In this blog, we’ll explore how automatic replenishment supports warehouse efficiency and demonstrates its functionality through a practical test scenario.

Let’s dive into the key configuration steps that make this process work effortlessly behind the scenes.

Configuration:

1. Activate Replenishment strategies in storage type

2. Maintain Document types and item types for warehouse request

3.  Assign Fixed Bins to the products

4. Stock Removal Strategies

4.1 Specify Storage type Search sequence for Stock removal

4.2 Determine Storage type Search sequence for Stock Removal

5. Warehouse Process Type

5.1 Define Warehouse Process Type

5.2 Determine Warehouse Process Type

6. Maintain Product Master

Test Case:

In this test scenario, we will walk through a practical example to validate how Automatic Replenishment works in SAP EWM. The goal is to demonstrate that a Warehouse Task is automatically created when the stock in a bin drop below the predefined minimum quantity threshold.

We’ll simulate a real-life outbound process, starting from the creation of a Sales Order, triggering a pick from fixed bins, and observing how the system handles replenishment post-picking. Verify that the system automatically triggers replenishment when the stock in a fixed bin falls below the minimum quantity after a picking confirmation.

Pre-requisites:
1. Ensure Sufficient Stock is Maintained in the Reserve Area
Before testing replenishment, verify that adequate stock is available in the Reserve Area (HLR1). This stock will be used by the system to automatically replenish the Fixed Bin once the stock level falls below the defined minimum threshold. The replenishment warehouse task will move stock from the reserve area to the fixed bin to ensure seamless picking operations.

2. Ensure Sufficient Stock is Available for Order Picking

Verify that enough stock is available in the Fixed Bin to fulfill the outbound delivery. Once the picking is executed and confirmed, the system checks if the remaining quantity in the bin has fallen below the configured minimum quantity. If so, the follow-up replenishment process is automatically triggered, creating a warehouse task to replenish the fixed bin from the reserve area ensuring readiness for future picking demands.

3. Stock Removal Strategies are Preconfigured for Order Picking

As a prerequisite, ensure that appropriate Stock Removal Strategies are already configured in the system. These strategies determine how the system selects stock from storage bins during the picking process for outbound deliveries. Having this in place ensures that the system can efficiently identify and pick stock from the correct bins when processing the sales order.

Create a Sales Order (T-Code: VA01)

Sales Order is created with a quantity of 26 units. Each fixed bin holds 10 units, and the minimum quantity is configured as 5 units (as shown in Step 3). After the picking process, we expect the system to identify that the stock has dropped below the minimum threshold and automatically trigger a replenishment task from the reserve area.

Create an Outbound Delivery in S/4HANA and Distribute to EWM (T-Code: VL01N)

Generate the outbound delivery based on the sales order and distribute it to the EWM system.

Process the Outbound Delivery Order in EWM (T-Code: /N/SCWM/PRDO)

Access the outbound delivery order and create the picking warehouse tasks.

Create Warehouse Task:
 Outbound Delivery > Follow-on Functions > Warehouse Task

Three Warehouse Tasks have been Successfully Created for Picking. As expected, the system generated three warehouse tasks one for each fixed bin, each containing 10 units, to fulfill the 26-unit Sales Order. Upon confirmation of these tasks, the stock level in each bin is evaluated. Since the remaining quantity falls below the defined minimum threshold, the system is expected to automatically trigger three replenishment tasks from the reserve area.

Let’s now verify these replenishment tasks in the Warehouse Monitor. à Filter with Open Warehouse Task and Whse Process Type - 3010

Immediate Replenishment tasks have been automatically Created. The system has instantly generated replenishment tasks following the confirmation of picking tasks. The automatic creation of replenishment warehouse tasks is a result of the key configuration settings completed earlier such as activating automatic replenishment, defining the appropriate process type, and setting up effective stock removal strategies (as outlined in Steps 1, 4, and 5). These configurations work together to ensure seamless replenishment when fixed bin stock falls below the minimum threshold.

Before proceeding with the confirmation of these replenishment tasks, let’s first review the current stock levels in the fixed bins for the relevant products. This will help us validate that the system correctly identified the stock falling below the minimum quantity threshold and responded as expected.

Stock Status Before Replenishment Confirmation
One bin shows 4 units remaining, while the other two bins have disappeared from available stock, likely due to full depletion. Let’s confirm the replenishment tasks and verify the updated stock levels in the fixed bins.

Post Replenishment Task Confirmation
After confirming the replenishment tasks, all fixed bins are fully restocked and now ready for picking in upcoming outbound processes, as illustrated in the image below.

This example demonstrates how Automatic Replenishment functions in SAP EWM. When stock levels in the picking area fall below the defined minimum quantity, the system proactively creates replenishment tasks to transfer stock from the reserve area to the fixed bins. This ensures that stock is consistently available for picking, supporting uninterrupted outbound operations and enhancing overall warehouse efficiency. It's a powerful feature that helps businesses maintain optimal stock levels and streamline their fulfillment processes.

Discover how to connect SAP Digital Manufacturing (DM) to Telegram and Email for real-time machine alerts—eliminating delays in NC/scrap incident response. This step-by-step guide includes a Node.js backend setup, UI5 integration, and BTP deployment with reusable code snippets to automate shop-floor notifications instantly.

In today’s fast-paced supply chain environment, efficient warehouse management is crucial for meeting customer demands and optimizing operational performance. One of the key functionalities within SAP Extended Warehouse Management (EWM) is Wave Management, which enables organizations to manage the picking process intelligently. This article will provide a detailed overview of SAP EWM Wave Management, its significance, and an end-to-end configuration guide to help you leverage this powerful feature effectively.

we are trying to build an interface between salesforce and sap tm.  The interface would provide a freight estimate or quote to salesforce. we would like to use the sap tm freight estimate tool but there doesn't seem to be api's or programs available to do this.  Any help would be appreciated.

Thanks

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Sub bins means subdividing a storage bin, primarily used for pallet storage where the system creates multiple sub-bins within a main storage bin based on handling unit (HU) type, especially when pallet storage is defined as the storage behavior.