Enterprise Resource Planning Blogs by Members
Gain new perspectives and knowledge about enterprise resource planning in blog posts from community members. Share your own comments and ERP insights today!
Showing results for 
Search instead for 
Did you mean: 


The functionality which is achieved by using this solution of SAP is simple and different from a normal or standard PP Process.

In just a short or brief sentence SAP PEO is more process or operator oriented. With PEO, SAP has tried to dive more deeper into operator level instruction, checks and activities. Yes this solution was previously achieved by using SAP ME solution. With PEO SAP has taken a small bite of the existing SAP ME solution into the existing SAP S4 HANA Solution.

SAP PEO is rather similar to SAP PP in many sense. The structure and the concept of the master and transactional data is not same but similar between the two. In this Blog I will try to explain the usability of PEO solutions with perspective to present scenarios being used in the manufacturing process in day to day activities.

Since last few months I have been working with PEO and trying to map normal customer problems or bottlenecks using PEO Solution.

PEO is normally designed by SAP to map any new product development into SAP with great detail. Some of the key functionalities of PEO can be listed out as below.

1. PEO deals with any new Product which is to be developed in the company right from Engineeering cycle to Planning and then subsequently production.

2. It gives better insights which can prove useful while performing or incorporating a vital change in the design of the material.

3. It keeps the Engineering and the Production department on the same page resulting in saving of costs, time and rework to a great extent.

4. By using the concept of Complex Assembly we can easily manage huge assemblies in a more simplified way in SAP.


Similarity and Differences between SAP PP and SAP PEO

Theres a basic similarity between SAP PP and PEO. Generally there are doubts that what has been changed and what are benefits of the changes done in PEO.
The Master Data and the Transactional Data are more over same in PP and PEO, but we have few difference in reference to the functioning of the process. And it's no doubt with PEO, SAP has brought some new features.


Bill of Material

With SAP PEO three different BOMs can be used for the same finished product based on your engineering requirements and process complexity.

  • Engineering BOM

  • Planning BOM

  • Shop Floor BOM or Manufacturing BOM

All these BOMs have different functions when a new product or component is going to introduced in a manufacturing organisation. Here we can use combination of only EBOM and MBOM or all the three EBOM, Planning BOM and Manufacturing BOM.

The BOM details and fields are exactly the same. The only difference between BOM structure of PEO and PP is the version number. Here in PEO the BOM is maintained based on version which makes it easy to understand that presently which BOM version is the latest one. Any change in the EBOM will tend to deviate MBOM structure as well which will result to new BOM Version of Both EBOM and MBOM. And as a good practice the previous version can be marked as obsolete once it has a successive version existing and has been released.



Shop floor routing as the name suggests is completely justified by its name. It is more relevant and considered towards the operator convenience and detailing. Now here in Shop Floor routing SAP has done some significant changes.

In shop floor routing one more hierarchy has been added as Activities under an operation and the Work centre assignment, time maintenance, Scrap, Reduction everything is maintained on the Operation level.

In Activity level we have Process Instructions, Buyoffs, Qualifications Maintenance, Quality Checks etc.
Means on the activity level SAP has provided more details for the Operator and Quality checks as well so that the activities performed for a specific Production Order or a Shop Floor Order should be completed with better understanding and clarity. There is also an option to maintain 3D Work Instruction as well on the Activity Level using DMS.


Production Version

The concept behind the Production Version is the same as in SAP PP. The only difference is that Production Version is a combination of a Version of BOM and a Version of Routing.

Any change in the BOM will lead to new versions of BOM which will again lead to new versions of Routing and new Versions of Production Version.

The production version can be made Quantity Relevant as well using Shop Floor Routing. We can easily maintain this by creating the Production Version via app and mapping the BOM Version and Shop Floor Routing Version to it.



So as we have seen there is not much changes for BOM and Routing, but the only significant change is the version management. So the question, Can we use this solution anywhere else rather than only for Make to Engineering Product or Prototype Product?
The answer is as explained by SAP, SAP Production Engineering and Operations is actually ideal for the usage in Prototyping and New Design Implementation.

But we can also use SAP PEO in those areas where the product are stabilised and we require greater in depth detailing for the operator or greater in depth detailing and tracking as per to the process is concerned.
With a stabilised product the requirement of changes will be less and which will be resulting in less versions of the Product as well. Here SAP PEO can be help in better Master Data Maintenance and a step more towards Production Process.

Labels in this area