Most warehouses are unique and have a structure of their own. That structure has to be reflected in SAP EWM accordingly. For this purpose SAP EWM provides such concepts and objects as Warehouse Number, Storage Type, Storage Section, Storage Bin, Quant and Activity Area. As a hierarchy they can be shown as follows:

Each object will get an article of its own; for now let me briefly explain what each of them is for:

1. The Warehouse Number is the highest organizational unit in SAP EWM. Several warehouse numbers can be maintained on a single server. For example, if a company runs dozens of warehouses physically located in different parts of the city or of the planet, all 10 of them can be set up in SAP EWM. A warehouse here means not a single building within a warehouse complex, but the entire complex, even if it consists of several buildings separated by a street.
   Most of the settings in SAP EWM are maintained at warehouse number level, which makes it possible to use different receiving, shipping and storage strategies in different warehouses whenever their processes differ.
2. The Storage Type is a physical or logical subdivision of the warehouse complex, characterised by its warehousing technique, the space it requires, its organisational form or its functionality. The name can be misleading: a storage type is best thought of as a type of storage area within the warehouse. In practice the warehouse is divided into zones – a goods receipt area, a shipping area, a storage area, a packing area and so on. All of these are represented in SAP EWM as storage types. Dozens of settings are maintained at storage type level; they will be covered in a separate article.
3. The Storage Section is a logical or physical grouping of storage bins within one storage type that combines bins with similar attributes. For example, the storage area may contain bins for fast-moving and for slow-moving products – in that case they are split into sections. Or bins for heavy and for light products. In each case the grouping principle is chosen based on the specifics of the warehouse business processes.
4. The Storage Bin is the smallest spatial unit in the organizational structure of the warehouse. So that SAP EWM knows exactly where stock is located in the warehouse, every storage bin is assigned a value that is unique within the whole warehouse number. The storage bin therefore defines the exact position of product stock in the warehouse.
5. The Quant is the smallest unit of product stock in the warehouse with identical characteristics. If a storage bin holds several pieces of a product whose attributes are absolutely identical in terms of SAP EWM, then this is one quant and the system shows this stock in a single line. If at least one of the stock characteristics differs – the batch number or the stock owner, for instance – then in SAP EWM these are different quants and they are shown in several lines.
6. The Activity Area is a logical division of the warehouse into arbitrary zones grouped by the similarity of the activities performed in them. Honestly, the activity area is a hard concept to pin down in words. You only really understand what it is once you have applied it in practice while configuring SAP EWM. In a separate article I will walk through the activity area settings so that it becomes clearer what this is and how to work with it.

To make it completely clear, here is an example of the organizational structure of a small warehouse consisting of:

1. Checkpoint 1 – the entry and exit point for trucks to be unloaded
2. Checkpoint 2 – the entry and exit point for trucks to be loaded
3. A parking area for trucks waiting to be loaded or unloaded at the warehouse. It is split by purpose – for unloading or for loading.
4. Door 1 – for unloading
5. Door 2 – for loading
6. Goods receipt area
7. Loading area
8. Product storage area. It is split by ABC classification

Schematically the warehouse looks like this:

For such a warehouse I would build the following structure in SAP EWM:

Explanation of the diagram:

1. WN01 – Warehouse Number
   1. STRG – storage type for the product storage area
      1. STGA – storage section for category A products
      2. STGB – storage section for category B products
      3. STGC – storage section for category C products
   2. STAG – storage type for the staging area at the doors
      1. INBD – staging area for goods receipt
      2. OUTB – staging area for shipping
   3. DOOR – storage type for the doors
      1. DINB – storage section for the goods receipt doors
      2. DOUT – storage section for the shipping doors
   4. YARD – storage type for the warehouse yard
      1. PINB – storage section for vehicles waiting to be unloaded
      2. POUT – storage section for vehicles waiting to be loaded
      3. KINB – storage section for the checkpoint of vehicles waiting to be unloaded
      4. KOUT – storage section for the checkpoint of vehicles waiting to be loaded

The third level of the hierarchy is the names of the storage bins in the corresponding storage sections and storage types.

As you can see from the diagram, the physical warehouse fully matches the warehouse structure in the SAP EWM system. Of course, the decision about what becomes a storage type and what becomes a storage section is not down to the imagination of the SAP consultant. The choice is driven by the nature of the settings that are maintained at the level of each organizational object in the system. So if you have no hands-on experience with SAP EWM, start by following SAP best practices; once you have gained some implementation experience of your own, you will be able to design the warehouse in SAP EWM yourself.

That is all about the organizational structure. In my other articles I will go through the settings of each SAP EWM organizational element in detail.