SAP S/4HANA Manufacturing for

Production Engineering and Operations (PEO)

Jochen Steinbach, SAP
May 4/5, 2020

PUBLIC
Legal disclaimer

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Agenda

❑ Positioning
❑ Solution Overview
❑ Solution Details
▪ Production Engineering
▪ Production Operations
❑ Solution Landscape
❑ Roadmap
❑ Q&A

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Positioning

❑ Licensed S/4HANA Enterprise Management

Customer
❑ Discrete Manufacturers in A&D and IM&C
❑ Highly Engineered Products
▪ Engineer to Order
▪ Make to Order / Configure to Order

❑ Complex assembly production

▪ Low amount of production orders
▪ High number of components and operations
▪ Long lead times
▪ Constant changes to in process orders
▪ Focus on manual work

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SAP Digital Manufacturing Solutions
A complete portfolio of manufacturing solutions to support digitalization and Industry 4.0

SAP Digital Manufacturing Cloud

Manufacturing ▪ Manufacturing Insights
Execution
▪ Manufacturing Execution
Planning
and Manufacturing
Scheduling Insights

SAP Manufacturing Suite

▪ SAP Manufacturing Integration and Intelligence
Manufacturing Environmental ▪ SAP Manufacturing Execution
Engineering Health & Safety ▪ SAP Plant Connectivity

Industrial
Automation
✓ Connectivity SAP S/4HANA Manufacturing
✓ Predictive Quality ▪ for Production Engineering and Operations
✓ Manufacturing Network ▪ for Planning and Scheduling
✓ Machine Learning
▪ Environmental, Health & Safety
▪ Quality Management

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 SAP S/4HANA – Suite 1909
Sales & Marketing Finance Manufacturing Supply Chain
• SAP digital payments add-on • Governance, risk, and compliance • Responsive manufacturing (ME, MII) • Integrated business planning
• SAP CRM • SAP Multi-Bank Connectivity • Production operations (MII, QIM) • Global batch traceability
• SAP digital payments add-on • Digital operations for manufacturing • Extended warehouse management
Suite LoB SAP C/4HANA
• SAP Cash Application • Transportation management
Solutions** • SAP Sales Cloud
• Financial planning & analysis
• SAP Commerce Cloud
• SAP Marketing Cloud

• Sales performance management • Advanced accounting & financial close • Extended production planning and • Advanced warehousing
S/4HANA • Advanced financial operations scheduling • Advanced transportation
• Treasury management • Production Engineering and • Advanced order promising
LoB Solutions* • Commodity management Operations
• Subscription billing and revenue management

• Order and contract management • Accounting and financial close • Production planning • Inventory
• Sales force support • Financial operations • Production operations • Warehousing
• Cost management & profitability analysis • Quality management • Shipping and transportation
• Enterprise risk and compliance • Manufacturing insights • Order promising

Enterprise Management
• Service master data and agreement
management
• Service operations and processes
• Service parts management
• Maintenance management • Enterprise portfolio and project • Operational procurement • Core HR and time recording
management • Sourcing and contract management
• Product engineering • Supplier management
• Procurement analytics
• Invoice management

• Asset operations and maintenance • Extended Enterprise portfolio and • Central procurement
• Environment, health, and safety project management
S/4HANA • Product lifecycle management
LoB Solutions* • Product compliance

• SAP CRM • SAP Geographical Enablement • Digital operations for R&D • Supplier collaboration • Core human resources and payroll
Framework • Requirement management (IPD) • Business network • Talent management
Suite LoB • SAP Intelligent Asset Management • Guided end-user buying • Time and attendance management
Solutions** SAP C/4HANA
• External workforce management • Human capital analytics
• SAP Service Cloud

Service Asset Management R&D / Engineering Sourcing & Procurement Human Resources
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* Additional License -** Additional Installation and license – c(Partially) Compatibility Scope
 SAP S/4HANA Manufacturing for production engineering and operations

Initiating production by creating orders,

monitoring order progress and manage order
changes.
Converting product design into Production Order
production process design that Management
is the common basis for
production planning, order
management and execution.
Managing work queues,
Production Complex Assembly instructing operators and
Engineering Execution recording complete as-
built information

SAP S/4 HANA

Allowing real-time access to all

relevant data from MRP, PP/DS,
PS, PUR, IM, QM, FIN, …
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Production Engineering and Operations
Combining PP-ERP and new Execution Layer in S/4HANA

PEO Change Impact Analysis & Change Management

PP - ERP Layer Production Engineering Production Planning Production Operations FI/CO

PLM
Operations:
BOM-Items: Operation Sequence PS
Materials Work Center Assignment
Quantities Standard Times / Durations
Configuration Component Assignment () MRP, PP/DS
E-BOM E-BOM M-BOM Shop Floor Routing Planned Order Shop Floor Order PUR

IM

TDMI VEMP
QM

PMI PMI PEO Execution

3D Model Information: Operation Activities:

Item Instance Positions
PMI
PEO - Execution Layer
Any order / simultaneous groups
Component Assignment
Inspection Characteristics + PRT
Interactive Work Instructions ME Execution
Qualification Requirements
Buy Offs
Action Handlers DMC Execution

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PEO overall architecture
Fiori Launchpad

SAP S/4HANA

QM PP/PEO
PS

Production Shop Floor

Defect Planned Order
Order Item SD
Activities

IM
Inspection Lot

Production
Workcenter BOM Routing PUR
Version
(Master) Version Control Version Control Version Control
Inspection
Characteristic Activities FI/CO

SAP HANA Database

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SAP S/4HANA Manufacturing for Production Engineering and Operations
Apps and Capabilities

Production Engineering Production Operations

Manufacturing Change Management Production Order Management & Control

Assign new Manufacturing Change BOM / Routing Shop Floor Order Production Monitoring
E-BOM Change Impact Version • Operation/Activities • Qualifications required
versions Record Analysis Management • 3D Visuals • PRTs
• Work Instructions • Buyoffs Production Order
• Data Collection • … Change Management
BOM Production Process Planning
Management Planning Complex Assembly Execution
Manage
Master Data
Manage BOMs Shop Floor Routings Non-Conformance /
• Operation/Activities Templates and
Work Assignment Defect Handling
• 3D Visuals Favorites & Work Queues
• Work Instructions
Tracking of Batches
• Data Collection Manage Standard
Visual Enterprise • Qualification required and Serialized Parts
Manufacturing Texts
• PRTs Perform Operations
Planner • Buyoffs Manage Buyoff and Activities
• …
Action Log & Genealogy
Templates

Major Assemblies / Installation Kits

Model-Unit-Effectivity

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Version Control for BOMs and Routings

E-BOM M-BOM Routing Production Version

❑ M-BOM Alternative
#1 #1 #1
❑ Routing Alternative
Successive Version Control

❑ Selection Criteria
#2 ➢ Data Range
#2 ➢ Lot Size Range
#2 #3
❑ Version Validity
#3
#4 M-BOM Routing Valid from
#1 #1 Jan 15
#3 #4 #5 #1 #2 Jan 27
#2 #3 Feb 25
#6 #3 #4 Apr 7
#5
#4 #5 Jun 15
#7
#4 #6 Jul 1

❑ BOMs and Routings are version-controlled in PEO.

❑ Changes can only be done while a version is “in-process”.
❑ On release, the consistency of BOM, Routing and their relationship the version gets locked and cannot be changed anymore.
❑ Consistency of BOM and Routing are checked on release of the Routing version.
❑ The validity of M-BOM and Routing versions is controlled within the Production Version.
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SAP S/4HANA Manufacturing for Production Engineering and Operations
Apps and Capabilities

Production Engineering Production Operations

Manufacturing Change Management Production Order Management & Control

Assign new Manufacturing Change BOM / Routing Shop Floor Order Production Monitoring
E-BOM Change Impact Version • Operation/Activities • Qualifications required
versions Record Analysis Management • 3D Visuals • PRTs
• Work Instructions • Buyoffs Production Order
• Data Collection • … Change Management
BOM Production Process Planning
Management Planning Complex Assembly Execution
Manage
Master Data
Manage BOMs Shop Floor Routings Non-Conformance /
• Operation/Activities Templates and
Work Assignment Defect Handling
• 3D Visuals Favorites & Work Queues
• Work Instructions
Tracking of Batches
• Data Collection Manage Standard
Visual Enterprise • Qualification required and Serialized Parts
Manufacturing Texts
• PRTs Perform Operations
Planner • Buyoffs Manage Buyoff and Activities
• …
Action Log & Genealogy
Templates

Major Assemblies / Installation Kits

Model-Unit-Effectivity

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Production Engineering
Change Impact Analysis

➢ The change impact analysis can be triggered from different master data objects: E-BOMs, M-BOMs, and shop-floor routings.
➢ It determines the net change of the trigger objects and identifies all manufacturing objects that are impacted by those changes:
M-BOMs, shop-floor routings, production orders, project networks, and directly related purchase orders (direct procurement, purchase-to-order,
purchase-to-project).
➢ The change impact analysis also determines which parts (BOM items, operations, operation activities) of an object are impacted by the
change.

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SAP S/4HANA Manufacturing for Production Engineering and Operations
Apps and Capabilities

Production Engineering Production Operations

Manufacturing Change Management Production Order Management & Control

Assign new Manufacturing Change BOM / Routing Shop Floor Order Production Monitoring
E-BOM Change Impact Version • Operation/Activities • Qualifications required
versions Record Analysis Management • 3D Visuals • PRTs
• Work Instructions • Buyoffs Production Order
• Data Collection • … Change Management
BOM Production Process Planning
Management Planning Complex Assembly Execution
Manage
Master Data
Manage BOMs Shop Floor Routings Non-Conformance /
• Operation/Activities Templates and
Work Assignment Defect Handling
• 3D Visuals Favorites & Work Queues
• Work Instructions
Tracking of Batches
• Data Collection Manage Standard
Visual Enterprise • Qualification required and Serialized Parts
Manufacturing Texts
• PRTs Perform Operations
Planner • Buyoffs Manage Buyoff and Activities
• …
Action Log & Genealogy
Templates

Major Assemblies / Installation Kits

Model-Unit-Effectivity

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Production Engineering
Source-BOM / M-BOM Handover

➢ Enables handover of engineering structure to manufacturing structure

➢ Facilitates component allocation to routing operations
➢ Supports 3D model based visual handover, quantity-based non-visual handover, and hybrid scenarios
➢ Version management controls changes/updates and ensures multi-level consistency
➢ Supports model / unit effectivity
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SAP S/4HANA Manufacturing for Production Engineering and Operations
Apps and Capabilities

Production Engineering Production Operations

Manufacturing Change Management Production Order Management & Control

Assign new Manufacturing Change BOM / Routing Shop Floor Order Production Monitoring
E-BOM Change Impact Version • Operation/Activities • Qualifications required
versions Record Analysis Management • 3D Visuals • PRTs
• Work Instructions • Buyoffs Production Order
• Data Collection • … Change Management
BOM Production Process Planning
Management Planning Complex Assembly Execution
Manage
Master Data
Manage BOMs Shop Floor Routings Non-Conformance /
• Operation/Activities Templates and
Work Assignment Defect Handling
• 3D Visuals Favorites & Work Queues
• Work Instructions
Tracking of Batches
• Data Collection Manage Standard
Visual Enterprise • Qualification required and Serialized Parts
Manufacturing Texts
• PRTs Perform Operations
Planner • Buyoffs Manage Buyoff and Activities
• …
Action Log & Genealogy
Templates

Major Assemblies / Installation Kits

Model-Unit-Effectivity

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SAP S/4HANA Manufacturing for Production Engineering and Operations
Apps and Capabilities

Production Engineering Production Operations

Manufacturing Change Management Production Order Management & Control

Assign new Manufacturing Change BOM / Routing Shop Floor Order Production Monitoring
E-BOM Change Impact Version • Operation/Activities • Qualifications required
versions Record Analysis Management • 3D Visuals • PRTs
• Work Instructions • Buyoffs Production Order
• Data Collection • … Change Management
BOM Production Process Planning
Management Planning Complex Assembly Execution
Manage
Master Data
Manage BOMs Shop Floor Routings Non-Conformance /
• Operation/Activities Templates and
Work Assignment Defect Handling
• 3D Visuals Favorites & Work Queues
• Work Instructions
Tracking of Batches
• Data Collection Manage Standard
Visual Enterprise • Qualification required and Serialized Parts
Manufacturing Texts
• PRTs Perform Operations
Planner • Buyoffs Manage Buyoff and Activities
• …
Action Log & Genealogy
Templates

Major Assemblies / Installation Kits

Model-Unit-Effectivity

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SAP S/4HANA Manufacturing for Production Engineering and Operations
Apps and Capabilities

Production Engineering Production Operations

Manufacturing Change Management Production Order Management & Control

Assign new Manufacturing Change BOM / Routing Shop Floor Order Production Monitoring
E-BOM Change Impact Version • Operation/Activities • Qualifications required
versions Record Analysis Management • 3D Visuals • PRTs
• Work Instructions • Buyoffs Production Order
• Data Collection • … Change Management
BOM Production Process Planning
Management Planning Complex Assembly Execution
Manage
Master Data
Manage BOMs Shop Floor Routings Non-Conformance /
• Operation/Activities Templates and
Work Assignment Defect Handling
• 3D Visuals Favorites & Work Queues
• Work Instructions
Tracking of Batches
• Data Collection Manage Standard
Visual Enterprise • Qualification required and Serialized Parts
Manufacturing Texts
• PRTs Perform Operations
Planner • Buyoffs Manage Buyoff and Activities
• …
Action Log & Genealogy
Templates

Major Assemblies / Installation Kits

Model-Unit-Effectivity

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 Manufacturing Engineering
Process Flow
Change Impact
Analysis
Manage
Visual Enterprise Production
Manufacturing M-BOM Version
Planner
Change Record
Manage ▪ BOMs Manage Production
PLM E-BOM unassigned ▪ Routings
Routings Routing
BOMs ▪ Production Orders Version
▪ Purchase Orders
Production
Order Change Production
Management Order

Manage
Change Records

▪ The picture above describes the typical Manufacturing Engineering process within PEO.
▪ PEO receives new or changed BOMs from a PLM system and incorporates them into manufacturing master data and production orders (if required). The
source BOM can be an E-BOM, a pre-shaped M-BOM, or a real M-BOM.
▪ The change record is used to analyze, plan, and execute the changes required in a change cycle. It is an integrated environment that provides visibility and
access to all artifacts involved in the change cycle. Manufacturing Engineers can plan and execute the changes to Manufacturing-BOMs, Shop-Floor-
Routings, Production Orders and so on directly from the Change Record App.
▪ The Change Impact Analysis will support the Manufacturing Engineer to identify all manufacturing objects that are impacted by a change

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Production Operations
Process Flow
Manage Production Orders /
Production Operations

Production
Production Order Confirmation Manage
Production Production
Holds Hold
Manage Work Perform
Operations Center Queue Operation

Defects Manage
Perform Defects
Activities Activity

Personal My work
Assign Work Work Queue queue Buy Off Manage
Buyoff
Serial Numbers
Genealogy
Action Log

▪ The picture above describes a typical process flow of how production orders are executed.
▪ Work is either triggered by work center queues or explicitly assigned to operators and accessed via personal work queues.
▪ Holds, defects and buyoffs can be initiated from the worker UI (Perform Activity). Holds can also be created from the monitoring apps.
▪ All information gathered during production plus all holds, defects, and buyoffs are documented in the genealogy and action log for each individual serial
number.
▪ Production confirmations are automatically created and posted.
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SAP’s Manufacturing Architecture

ISA 95 R&D Manufacturing Service

S/4 PEO S/4 Digital Manufacturing Intelligent Asset

Cloud Management
PLM ▪ Change Impact Analysis ▪ Manufacturing Insight ▪ Strategic Asset Perform.
L4 ▪ BOM Management ▪ Predictive Quality Management ▪ Predictive Maintenance
Enterprise Business
Process ▪ Shop Floor Routing ▪ Shop Floor Design ▪ Asset Intelligence Network
▪ Production Order Management ▪ Manufacturing Network

L3 PEO S/4 ME/MII DMC

Manufacturing Complex Assembly Mfg.Execution Mfg.Execution
Operations Management

PCo PCo
L0-2
Process Control
Sensors & Actuators
Manufacturing Process

Abbreviations: DMC = Digital Manufacturing Cloud PCo = Plant Connectivity Deployed in Deployed Deployed on
PEO = Product Engineering & Operations PdMS = Predictive Maintenance and Service the cloud on premise the edge
ME = Manufacturing Execution ASPM = Asset Strategy & Performance Management
MII = Manufacturing Intelligence and Insight AIN = Asset Intelligence Network
DMC = Digital Manufacturing Cloud
Hybrid Manufacturing Concept
providing shop floor execution flexibility

Discrete Manufacturers
especially those making highly engineered products
 PEO for Production Engineering and Order Management

… for complex assembly processes

low volume, large orders, long lead times, on-going engineering changes
to be incorporated during production, focus on manual work

 PEO Execution

… for sub assembly and fabrication

high volume, small orders, short lead times, stable master data,
automated.

 ME or DME Execution
SAP S/4HANA | Product Roadmap – Manufacturing

2019 2020 2021 2022

Manufacturing Engineering
Improve product quality and speed up routing
maintenance through enhanced capabilities for
routing comparison
Increase flexibility in Material Planning with
Planning Bill of Material and Planning Routing
Speed up routing maintenance by using
standard library and templates
Improve flexibility in managing manufacturing
bills of materials (BOMs) using substitute
materials
Enhanced project structure synchronization with
major assembly manufacturing bills of materials
Manufacturing engineering and operations Manufacturing Engineering Manufacturing engineering and operations
Improve manufacturing engineering by Increase efficiency with further improved Improve efficiency and quality of production
leveraging product and manufacturing manufacturing engineering capabilities master data by leveraging machine learning
information (PMI) capabilities
Improve decisions about how to incorporate
engineering changes into manufacturing
Disassembly in Production
(in routing and during execution)
Identifying installation location with the help of
reference designators
Support externally processed operations
(in routing and during execution)

Extended Production Operations Manufacturing Engineering

Make the products your customer wants using
Eliminate dependencies between operators by variant configuration in SAP S/4HANA
allowing flexible process execution Manufacturing for production engineering and
operations
Reduce the amount of scrap through timely
rework
Extended Production Operations
Effectively incorporate order changes at any Streamline manufacturing by integrating SAP
time during the manufacturing process S/4HANA Manufacturing for production
engineering and operations with SAP
Increase flexibility by posting confirmations
Manufacturing Execution
after work has been performed
(asynchronously)
Controlling and Tracking Tool Usage

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Further information …

Manufacturing Product Hub Discover S/4HANA SAP Partner Edge

Discover SAP S/4HANA Help Portal Digital Journey with SAP S/4HANA SAP S/4HANA Roadmap

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Thank you.
Contact information:
Jochen Steinbach
CPO S/4HANA Production Engineering and Operations

Jochen.Steinbach@sap.com