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Integrated Production Engineering and Planning in SAP S/4HANA Manufacturing with PEO and PP/DS (Process Overview)


This blog provides an overview and use case of the integrated Production Engineering and Planning  with the extended LoB Solutions for Manufacturing in  SAP S/4HANA

  • Extended production planning and scheduling (PP/DS for S/4HANA)
  • Production Engineering and Operations (PEO)

The article is not a detailed description of PP/DS for SAP S/4HANA (Advanced Planning) nor Extended Production Engineering and Operations (PEO) and does not replace the SAP help nor the SAP Service notes.

For information about basic setting and basic customizing in embedded PP/DS refer to SAP note  2712349 – Best practices for implementation of Production Planning and Detailed Scheduling for SAP S/4HANA 1709 and 1809 .

The SAP help PEO Implementation Guide describes the configuration steps to setup a S/4HANA  system for working with SAP S/4HANA Manufacturing for production engineering and operations (PEO).

Target audience of this blog are project team members and key user who are interested on an overview on an integrated production engineering and  planning process with S/4HANA.


General Information Regarding S/4HANA PEO & PP/DS

Among others Extended Production Engineering and Operations (PEO) provides features to model the production process in more detail and more detailed instructions for production operators.

SAP S/4HANA Manufacturing Advanced Planning is used for Production Planning and Detailed Scheduling (PP/DS). Create procurement proposals for in-house production or external procurement to cover product requirements and PP/DS for S/4HANA provides features to optimize and plan the resource schedule and the order dates/times in detail.


Picture:SAP S/4HANA Manufacturing with PEO and PP/DS

Information on S/4HANA PEO Bills of Material and Routing

Production Engineering introduced a new Version-managed BOM where different change states of the BOM are represented by versions.  Every BOM version has its own release status.
A released BOM version can be used in production execution and that cannot be changed. For changes you have to create a new BOM Version.

Production engineers convert engineering BOMs (EBOMs) into either planning BOMs or shop floor BOMs.
Planning BOMs (date-effective or version-controlled) can be used in production versions which are used by MRP.

PEO provides also Version-managed shop floor routings where every routing version has its own release status. Similar to Version-managed BOM a released routing version can be used in production execution and cannot be changed. For changes in the routing a new routing version has to be created.

Shop floor routings provide with operation activities more level of detail. One or multiple activities define detailed work instructions for production operators without making scheduling on operation level more complicated.

PEO uses version-controlled bills of material and routings (shop floor BOMs and routings), to ensure that consistent BOMs and routings are used in production execution.

Along with the planning BOM also planning routings are available to support the production planning.

In the Manage Production Versions app you define the usage of BOMs and routings for the different purposes – distinguish BOMs and routings used for planning (MRP, PP/DS) from those used for shop floor execution.

For this article on PEO and production planning in PP/DS only planning BOM and planning routings are relevant. The planning routing can be date (or parameter) effective.

Since PDS as source of supply for inhouse production does not support parameter efficiency you can only use Date-Effective Planning BOM and Planning Routings with PP/DS for S/4HANA.

The following pictures show important differences of Version Management BOM and Version Management Routing (vs. classical BOM & Classical Routing)

Picture: Classical BOM & Routing vs. Version-Controlled Classical BOM & Routing

In classical bills of material (BOMs) and classical Routings the different changes states are represented by data effectivity.  The version-controlled BOMs and the version-controlled Routing   in PEO support different changes states using versions.


For more details refer to the SAP help


Information on Production Engineering and Operations with Advanced Planning

In a scenario with product engineering and production planning you can use as simplified master data planning BOMs   and planning Routing in the production version of SAP S/4HANA Manufacturing and integrate them as Production Data Structure (PDS) to PP/DS for S/4HANA.

In fact in S/4HANA you can perform the  MRP based on the planning BOM only and all component requirements  are scheduled on the start date of the planned order for the header material but with the Advanced Planning features of PP/DS and an assignment of  the components at operation level you can perform a more detailed scheduling during MRP.

In an additional PP/DS production planning run you   optimize and plan the resource schedule and the order dates/times in detail and thus also detailed requirements dated for components.

For more information concerning different Process Variant in PEO (Sequential Production Engineering and Planning and  Parallel Planning with Date-Effective Planning BOMs and Routings) see SAP help -> Process Variants in PEO

With Parallel Production Engineering and Planning  process variants “Planning with Date-Effective Planning BOMs and Routings” and “Planning with Version-Controlled Planning BOMs and Routings” the product engineers create EBOMs and production engineers convert the EBOMs into version-controlled- / date-effective planning BOMs.

With planning routings, the material requirements planning, and capacity planning can be executed long before the complex version BOM and shop floor routing are available.

The Production process planning in S/4HANA requires also the managing of  production versions
A production version is used to combine a BOM alternative with a routing alternative .
In S/4HANA production version are the only source of supply for in-house production and integrated with PP/DS for S/4HANA as PDS.

If you want a BOM or Routing to be considered by PP/DS for S/4HANA you have to create a production version and transfer it  as Production Data Structure to PP/DS.  The MRP in PP/DS generated Planned order based on the PDS.

MRP Live is used for the creation of receipts for single or multilevel materials using components that are planned either in SAP S/4HANA or In this scenario in  Production Planning and Detailed Scheduling (PP/DS).
Since  the MRP Live plans infinitely and does not take any capacity constraints into account the  PP/DS optimization or scheduling heuristics can be used to plan generate a  finite plan that  considers the resource availability or scheduled the  sequence of orders/operations on the resources to a defined time/date.

For production execution the planning BOMs are converted into a shop floor BOM and the shop floor routings are created for the product.

Planned orders cannot be converted into production orders and production execution cannot start until the shop floor master data are created and released.


Picture: Process flow in PEO and PP/DS

In the production Planning master data routing the operations are the central objects.
In PEO you can model the production process in more detail with component assignment at operation activity level. Various objects like qualifications or work instructions can be assigned to PEO activities.

In PP/DS an operation contains also activities and planning functions such as alternative modes/resources or activity-relationships could be assigned to PP/DS

In PEO as well as in PP/DS Operation activities can be created for the segments; setup, produce, and teardown.

In S/4HANA 2020 there is no integration or dependency between Activities of operations  in PEO Shop Floor Routings and Activities of operations  in PP/DS Production Data Structures.

If you perform a detailed scheduling in PP/DS based on the routing data in PEO the integration of the components requirements dates is on level Operation. There is no integration/ synchronization between PEO and PP/DS on level Activity yet.

Purpose of this blog is to get an overview about an integrated production engineering and planning process with SAP S/4HANA PEO and PP/DS.

The follow-up blog will detail this process with a demo scenario on S/4HANA Manufacturing

1 Comment
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  • Thank you Tom!

    Could you explain the two new options in TA CURTO_CREATE?
    1. Single Source of Supply for latest BOM Version
    2. Source of Supply for every BOM Version

    Do I need to create PDS for planning BOM with date effectivity and also for PEO shop floor BOM which is version BOM?
    If yes, means we did new development into PDS structure to accommodate PEO Version BOM?