In the dynamic and highly competitive manufacturing world, efficiency, innovation, and adaptability play a pivotal role in helping companies improve their production process and achieve production and manufacturing success. To meet the ever-evolving demands of the production engineering industry, organizations require intuitive software solutions that streamline their core operations, enhance product quality, and drive better outcomes.

Enter SAP S/4HANA Manufacturing for Production Engineering and Operations — a comprehensive module within the SAP S/4HANA suite designed to revolutionize how manufacturers plan, execute, and optimize their product engineering, production process, and manufacturing operations.

This article will discuss the key features and benefits of the SAP PEO module, how it enables companies to stay agile and responsive to industry shifts, and where our team of expert SAP consultants can fit in your organization.

What is SAP PEO?

SAP S/4HANA Manufacturing for Production Engineering and Operations (PEO) is a comprehensive manufacturing solution that helps companies consolidate their critical engineering and shop floor management information to improve their production process, shop floor execution, and ensure efficient communication.

The SAP PEO solution makes it easier for users to digitize shop floor information. It can efficiently record production progress data, enables better support for quality manufacturing in engineering-to-order (ETO) processes, and facilitates more efficient data connection across the entire production process.

With PEO, you can accurately model your production process, provide your production operators with instructions, ensure that the process has been correctly executed, and track production progress.

When changes occur in the design or production process, the PEO application simplifies data management and connection from product design to execution, direct instruction, and scope of impact, making it easier to improve shop floor responses and enhance operational efficiency.

Core Features in the SAP PEO Module

The SAP PEO module allows organizations to integrate enterprise resource planning (ERP), record production progress data, product design, and manufacturing operations management functionality into one application, making communicating customer requirements and product specification changes across departments easier.

Here’s a closer look at the key features included in SAP PEO:

Site Management Digitization

SAP Production Engineering and Operations provides a fully integrated site management system that enables users to control work instructions and procedures, qualification management, component management, process quality approval, and other critical production engineering operation activities.

Design and Shop Floor Harmonization

With intelligent PEO SAP functionality, production engineering activities and operations work together seamlessly and minimize the risk of rework or interruptions in the production process.

SAP PEO also offers intuitive production process planning and change impact analysis tools to help users quickly reflect changes from engineering to the shop floor, improve product routing management, and optimize change management activities for core production processes.

Production Order Integration

By leveraging Engineering and Manufacturing BOMS, process design features, and 3D drawings, SAP PEO enables the consistent management of production order information and efficient process design.

Understanding the Differences Between SAP PP and SAP PEO

While master data and transactional data are essentially the same across both SAP PP and PEO applications, there are a few key differences in the functionality of their core components.

Here’s a closer look at the main differences between the two SAP solutions:

Shop Floor Routing

Shop floor routing functionality in SAP PEO enables organizations to create production hierarchies for critical manufacturing operations and maintain all production engineering processes on the operation level. With 3D process instructions, quality checks, and buy offs, users can perform activities for a specific Production Order or Shop Floor Order with increased clarity and efficiency.

Bill of Material

With the comprehensive SAP PEO module, users can leverage three different Bills of Material (BOMs) for the same finished product based on unique production engineering requirements and the complexity of their core manufacturing processes. In PEO, the BOM is maintained on the current version, making it easier to track changes, complete orders, and optimize the production process.

Here’s a quick look at the three main BOMs included in the SAP PEO solution:

  • Planning BOM
  • Engineering BOM
  • Shop Floor/Manufacturing BOM

Production Version

The Production Version component comprises a specific version of BOM and a version of routing to maintain agile operations and map each version to the Production Version application.

Product Usage

SAP S/4HANA Manufacturing for Production Engineering and Operations is the ideal solution for use in prototyping and new design implementation activities, providing in-depth detailing and tracking functionality and ensuring users stay up-to-date with requirements for changes across the system.

Top 6 Advantages of the SAP PEO Module

PEO empowers organizations and production operators to enhance their manufacturing and production operations, record production progress data, reduce costs, and maintain a competitive edge in the ever-evolving business landscape.

Here’s a closer look at the main advantages of PEO for business users:

Real-time Insights

SAP S/4HANA Manufacturing for Production Engineering and Operations provides real-time visibility into production operations, enabling production managers to make quicker, more informed decisions.

It also helps production operators and other key business users identify and address issues as soon as they arise, leading to more efficient production processes and accurate product manufacturing information.

End-to-End Integration

The PEO module integrates with other SAP S/4HANA components, such as Supply Chain, Procurement, and Financial Management applications. Tight integration between systems breaks down existing data silos and supports seamless collaboration across different organizational functions.

Enhanced Efficiency

SAP S/4HANA Manufacturing streamlines the entire production and manufacturing process by automating manual tasks and optimizing resource allocation across the organization. This, in turn, increases operational efficiency, reduces lead times, and improves the cost of production for end users.

Production Planning and Scheduling

SAP S/4HANA Manufacturing for Production Engineering and Operations includes advanced tools for production planning, scheduling, and other network activities.

It enables organizations to optimize resource utilization, minimize downtime, and ensure materials and resources are available when needed, improving production throughput and overall manufacturing efficiency.

Quality Control and Compliance

The PEO solution allows organizations to establish and enforce quality standards, ensuring products meet or exceed quality requirements and regulatory standards.

It also offers features for quality inspections and non-conformance management to facilitate better connection across systems and maintain compliance with regulatory compliance requirements.

Innovation and Future-Readiness

With SAP S/4HANA Manufacturing for Production Engineering and Operations, organizations can embrace Industry 4.0 concepts, including IoT devices, AI, and machine learning integrations.

By staying at the forefront of technology, organizations can remain competitive and adaptable to future industry trends, facilitate predictive maintenance activities, and optimize manufacturing operations.

How Can We Help?

Whether you need help creating new product manufacturing plans, additional support navigating integrations between PEO and other SAP and non-SAP systems, or just an extra hand getting started on your journey with SAP applications, Surety Systems is here to help.

Our senior-level, US-based SAP consultant team has the knowledge, skills, and proven track record of success needed to help your internal teams manage critical implementation or integration projects and maximize success across the entire company.

Getting Started with Our Team

Interested in learning how SAP S/4HANA Manufacturing for Production Engineering and Operations can help you manage manufacturing orders and create better production plans? Ready to get started on a project with our SAP consulting team?

Contact us today!