concircle blog

When Warehouse and Production Become One: The Next Step Toward the Smart Factory

Written by Kaan Kizkin | May 22, 2026 9:01:10 AM

Anyone who has ever been on the shop floor knows the problem: The order has been released, the machine is ready, but the material isn’t there yet. Or it is there, but no one knows it because the warehouse and production operate on different systems.

This is exactly where the integration of SAP Extended Warehouse Management (EWM) and SAP Digital Manufacturing (DM) steps in. No manual inquiries, no duplicate entries, no guesswork. Instead: a seamless process that unifies warehouse and shop floor into a single system.

 

This is exactly where the integration of SAP Extended Warehouse Management (EWM) and SAP Digital Manufacturing (DM) steps in. No manual inquiries, no duplicate entries, no guesswork. Instead: a seamless process that unifies warehouse and shop floor into a single system.  

 

Why this matters at all

 

Without end-to-end integration between the warehouse and production, disconnects occur: manual entries, phone calls between the warehouse and the shop floor, unnecessary buffers. With EWM-DM integration, an end-to-end process is created that works in real time:

 

  • SAP Digital Manufacturing knows which materials are already available at the production supply area (PVB)
  • The warehouse automatically receives staging requests as soon as production needs them
  • Goods movements, consumption, and goods receipts are synchronized across systems

 

The result: less waste, greater transparency, shorter response times, and a key building block on the path to the Smart Factory.

 

The Five Integration Scenarios

  


1. Staging Request: Material Arrives When It Is Needed

SAP DM knows which components are required for an order. Instead of waiting for the warehouse to take action on its own, SAP DM sends a staging request directly to EWM. EWM then automatically creates the necessary warehouse tasks and places the material in the production-adjacent staging area, known as the production supply area.

 

2. Material consumption: What is used is posted

The worker installs a component. SAP DM records the consumption and immediately reports it to EWM. The production supply area stock decreases, EWM posts the goods issue, and the ERP system receives the stock movement. Everything happens automatically, everything in real time.

What used to be a manual confirmation or a daily closing now happens at the moment the action takes place.

 

3. Goods Receipt: Finished goods go directly into the warehouse

When the operator completes the final production step, this signals the goods receipt to SAP DM. EWM receives the putaway request, creates the putaway task, and posts the finished goods. The ERP system follows suit. The entire completion of a production order, without a single manual step in the warehouse system.

 

4. Inventory synchronization: The worker sees what is at the staging area

How much of component X is still at the staging area? In a non-integrated world: unknown, unless you check. In an integrated world: visible directly in SAP DM, updated the moment EWM completes a warehouse movement.

This continuous inventory reconciliation is the foundation for making material staging decisions based on facts rather than guesswork.

 

5. WIP (Work in Process) Management: Interim Storage

Not every production process is a single, continuous flow. Semi-finished goods must be temporarily stored between two work steps, on different production lines, in different facilities.

SAP DM recognizes when a shop floor order requires temporary storage and triggers the corresponding EWM process. EWM puts the goods into storage, then makes them available again for the next step, and both systems know exactly where the goods are at all times.

 

What this means in practice  

At concircle, we’ve set up and tested this integration: from the production order in the ERP system to the finished goods being put into storage. What sounds like a complex process in theory runs smoothly in everyday operations without any manual intervention.

 

Here are a few highlights:

Provisioning requests are created in SAP Digital Manufacturing using the “Manage Provisioning 2.0” app. Only components whose provisioning methods are relevant to stock requests are displayed, such as cross-order provisioning or order-specific provisioning with a stock request.

  

 Sending the staging request to SAP EWM and viewing availability in the “Manage Staging 2.0” app  

 

  

 

 Real-time status tracking of the deployment request 

 

  

 Real-time inventory overview at the production supply area – visible directly in SAP DM. 

 

The Bottom Line

In most companies, warehousing and production represent the closest operational interface—and yet one of the least integrated. SAP EWM and SAP DM bridge this gap. Not with a workaround, but with a well-designed standard scenario that is ready for production use today.

Those already using both systems now have a direct path to greater transparency, less manual effort, and a production process that works—even when things get tight.