SAP S/4HANA Manufacturing for Production Engineering and Operations (PEO)

SAP S/4HANA Manufacturing for Production Engineering and Operations (PEO) was developed for discrete industries and especially for complex assemblies. Such assemblies usually comprise products that generally involve intricate engineering, and are characterized by small quantities, up to batch size 1 (especially ETO, CTO and CTO+). The manufacturing process takes longer than usual and often requires changes by engineering that need to be applied in process.

PEO is embedded in S/4HANA, and interacts seamlessly with the other modules, adding further functionalities to the digital core and addressing the challenges associated with the production scenarios just described.

Introducing PEO enables a structured and efficient end-to-end design-to-operate process in a single system and closes the gap between product design/engineering and production/assembly.

Core PEO functions

The following illustration depicts the typical process from engineering, the interface to S/4HANA and the subsequent steps through to assembly on the shop floor.

Special interfaces can connect PLMs from various providers to the S/4HANA system, so that not only BOMs, but 3D models and the Product and Manufacturing Information (PMI) can be transferred for further use. The Engineering Bill of Materials (EBOM) is transferred to the Manufacturing Bill of Materials (MBOM), creating special PEO routings that extend the existing PP routing functionalities. PEO focuses on comprehensive control of the complexity of changes in this and all other process steps. So, for example, BOMs and work plans are version-controlled.

The process of a change is structured via a central change record which is incorporated into all relevant processes and objects with an auditable trail. PEO uses a change impact analysis to predict detailed effects of changes up front, right down to individual work instructions – even for production orders that are already in progress. This support in implementing changes is consistently followed up on the shop floor by actively alerting workers to any changes (e.g. different component, changed torque, etc.). A dynamic 3D model also shows the worker exactly what has actually been installed. Then finally, a complete as-built BOM is generated in the system (genealogy).


S/4HANA not yet introduced or in process of being introduced?

Talk to our experts at an early stage.

  • We can identify the aspects that you should ideally pay attention to at an early stage when implementing S/4HANA if you are considering using PEO;
  • Alternatively, we can advise you on the feasibility of a side-by-side approach and possible use cases.

More information

Find out more about PEO, the benefits and our proof of concept packages in our PEO booklet.

Your expert for SAP PEO
Alexander Böhm Member of the Management Board at io
Alexander Boehm
Member of the Management Board