on 2024 Apr 08 8:00 AM
In this article we describe alternative options of an SAP application landscape that can provide Manufacturing Engineering capabilities and provide guidance on deciding the most suitable target application architecture. The broader PLM (R&D) is not in scope of this document but will be discussed in a different article. A list of criteria is intended to help evaluating the options to make the right choice for a customer, taking their situation and preferences into account.
The business requires the ability to coordinate the ramp-up to production across design and manufacturing. It includes defining bills of material, equipment, resources, and processes for production. According to SAP Reference Business Architecture the Manufacturing Engineering business area comprises the following capabilities (Figure 1 - available to view in SAP Signavio Process Explorer
From the “Plan to Fulfill” end-to-end business process you can drill down to the activities enabled by the business capabilities (Figure 2):
The Solution Value Flow Diagram (Figure 3) shows the implementation of a Solution Process Module by depicting an implementable combination of Solution Components and their corresponding Solution Capabilities for hybrid deployment.
SAP’s product portfolio offers the following manufacturing solutions which provide the above-mentioned basic Manufacturing Engineering capabilities (Figure 2) mostly focusing on manufacturing master data.
Note: SAP Manufacturing Execution (ME) and SAP Manufacturing Integration and Intelligence (MII) are still available, however, the latest release (SAP ME 15.5, SAP MII 15.5) will reach the end of mainstream maintenance in 2027 (extended in 2030), and there are no plans for further releases of SAP ME/MII. Therefore, SAP ME+MII are not considered as potential solutions in this article. For further details please refer to (SAP Maintenance Strategy: Maintenance 2040, Product Availability Matrix (PAM)).
Moving forward, the platform of innovation is SAP Digital Manufacturing (aka SAP Digital Manufacturing Cloud) as a key component of SAP’s strategic manufacturing solution portfolio.
In the context of the manufacturing engineering capabilities, SAP S/4HANA provides core manufacturing master data functionality. SAP Digital Manufacturing solution is a cloud-based manufacturing execution system (MES).
In a typical manufacturing environment, the core ERP solution is complemented and integrated with an MES/MOM system. In the overall application architecture SAP Digital Manufacturing is not an alternative to S/4HANA, but the MES required to enhance and complement the core ERP manufacturing capabilities.
The brief description below focuses on the Manufacturing Engineering (master data) context only and is not intended to provide the full scope of the capabilities of the products. For additional details please visit Manufacturing Software | MES & IIoT Solutions | SAP.
SAP S/4HANA has all the standard core capabilities to support basic manufacturing engineering (Figure 4).
Figure 4: SAP S/4HANA Manufacturing - Production Engineering Capabilities
The SAP S/4HANA Manufacturing core Production Engineering functionalities enables you to design products and resources, managing the change throughout the life cycle, manage master data such as materials, routings, BoMs, recipes, work centers, etc. It provides the ability to coordinate the ramp-up to production across design and manufacturing.
SAP S/4HANA Manufacturing for production engineering and operations (PEO) is an SAP S/4HANA product extension expanding S/4 Enterprise Management core discrete manufacturing capabilities with enhanced 3D visualization, production process planning, manufacturing change management, shop floor production order and operations management supporting complex manufacturing scenarios.
SAP PEO is suitable solution for Discrete Manufacturers for complex ETO and CTO+, CTO assembly processes, especially those making highly engineered products in low volume, large items. Long lead times, ongoing and high frequency of engineering changes to be incorporated during production. Relevant industries include IM&C and A&D whereby final assembly of a large final product is comprised of many complex subassemblies & components (Figure 5).
Figure 5 – SAP PEO: Key Production Engineering capabilities
S/4HANA includes the embedded PEO and we won’t address alternative deployment options in this article.
Production Engineering and Operations for Complex Assembly (PEO) | SAP Mfg Solutions
Production Engineering and Operations for Complex Assembly (PEO) | SAP Help Portal
SAP Digital Manufacturing is a cloud-based manufacturing execution system (MES) supporting shop floor control, resource orchestration, intelligent factory operations and insights. SAP Digital Manufacturing allows manufacturing master data management on its own, however for the basic master data it is recommended to have SAP ERP as the leading system (system of records). Out of the box integration content between S/4HANA and Digital Manufacturing ensures the synchronization of manufacturing master data, like material, BOM, Work Center, Routing/Recipe, Production versions, QM Defect codes and groups, Tools/Equipment.
SAP Digital Manufacturing provides additional capabilities:
The picture below depicts the solution options based on the manufacturing operating models (manufacturing options):
Figure 6: SAP PEO vs. SAP Digital Manufacturing
Based on the characterization of the solution options this is mainly a buying decision where budget and costs must be compared with the benefits of adding SAP Digital Manufacturing to the target architecture. We assume that SAP S/4HANA is part of the target application architecture - the customer already running SAP S/4HANA or planning the transformation to S/4HANA.
A simple decision tree to determine the target application architecture is illustrated below:
Companies using SAP have been running Manufacturing in their ERP solution and moving to S/4HANA they can continue to do so. While SAP S/4HANA has the standard core Manufacturing/Production Engineering and extended POE capabilities, customers recognize the need for more robust digital solution to manage manufacturing operations close to the SFC.
According to the characteristics and capabilities of the solutions SAP S/4HANA with SAP Digital Manufacturing is a recommended target application landscape while S/4HANA with PEO is more suitable for specific industries with complex manufacturing environment.
The best comprehsive overview of current SAP PP solutions I have seen so far.
Realy good explained. Thanks for that.
Hello Gabor, That's really informative. Can you please guide how can we get the Solution Value Flow in Signavio.
BR
Satya