Anthony Cecchini is the President and CTO of Information Technology Partners (ITP), an ERP technology consulting company headquartered now in Virginia, with offices in Herndon. ITP offers comprehensive planning, resource allocation, implementation, upgrade, and training assistance to companies. Anthony has over 20 years of experience in SAP business process analysis and SAP systems integration. ITP is a Silver Partner with SAP, as well as an Appian, Pegasystems, and UIPath Low-code and RPA Value Added Service Partner. You can reach him at [email protected].
Production planning is a critical component in manufacturing and operations management, ensuring that materials, resources, and schedules align to meet production targets efficiently. With the evolution of technology, SAP has introduced advanced solutions like SAP S/4HANA, which offers significant enhancements over its predecessor, SAP ERP. This blog explores the differences in production planning between SAP ERP and SAP S/4HANA, highlighting key functionalities and improvements.
Let’s just set the table and explore the differences…
SAP ERP (Enterprise Resource Planning) has been a cornerstone for many businesses, providing comprehensive modules for various business functions, including production planning. SAP ERP’s production planning module helps manage manufacturing processes, but it relies on older technologies and methodologies.
SAP S/4HANA represents the next generation of SAP’s business suite, built on the in-memory SAP HANA database. This modern platform integrates advanced analytics, real-time processing, and a simplified data model to deliver superior performance and agility. Production planning in SAP S/4HANA is designed to take advantage of these technological advancements, offering more efficient and flexible planning capabilities.
Key Differences in Production Planning Features 
SAP ERP: In SAP ERP, PP-DS is a component of SAP Advanced Planning and Optimization (APO) and interfaces with SAP ERP through middleware. This setup can result in complex integration scenarios and additional costs for middleware solutions.
SAP S/4HANA: In SAP S/4HANA, PP-DS is embedded directly into the system with additional license costs. This integration simplifies the architecture and provides seamless planning and scheduling capabilities, enabling more responsive and efficient production processes.
Production Engineering & Operations
SAP ERP: The production engineering and operations functionality is not available in SAP ERP, limiting the ability to integrate engineering and production processes seamlessly.
SAP S/4HANA: This functionality is embedded in SAP S/4HANA with an additional license cost. It allows for better coordination between engineering and production, enhancing the overall efficiency and quality of manufacturing operations.
Predictive MRP (pMRP)
SAP ERP: Predictive MRP is not available in SAP ERP. Instead, businesses rely on traditional MRP processes, which can be less responsive to changes in demand and supply.
SAP S/4HANA: SAP S/4HANA includes pMRP, which offers advanced simulation tools to predict material requirements more accurately. This functionality, along with the predecessor Long-Term Planning (LTP) from SAP ERP, helps planners make informed decisions and respond quickly to market changes.
MRP Live: Enhanced Material Requirements Planning
SAP ERP: MRP Live is not available in SAP ERP. The traditional MRP processes can be slower and less flexible, often requiring batch processing and multiple transactions.
SAP S/4HANA: MRP Live in SAP S/4HANA provides far greater options for selecting relevant parameters, such as multiple plants, materials, and MRP controllers. It handles both master production scheduling (MPS) materials and MRP materials in a single transaction, offering real-time planning and faster processing times.
Externally Procured Material
SAP ERP: Options to create planned orders and purchase requisitions are available, but the process can be cumbersome and less efficient.
SAP S/4HANA: Only purchase requisitions are created during the MRP run via the MRP Live transaction for material marked for external procurement. This streamlines the procurement process and reduces manual intervention.
Delivery Schedule Lines for Externally Procured Materials
SAP ERP: Users have the option to create delivery schedule lines for externally procured materials manually, which can be time-consuming.
SAP S/4HANA: Delivery schedule lines are automatically created during the MRP run via the MRP Live transaction. This automation reduces errors and improves procurement efficiency.
Production Version Management
SAP ERP: Production versions are optional for discrete manufacturing but mandatory for process and repetitive manufacturing. Selection methods are based on validity date, lot size, and explosion date. However, no mass creation functionality exists.
SAP S/4HANA: Production versions are mandatory for all production types (discrete, process, and repetitive). The selection method is not available, and the version with the latest “valid from” date is considered. Mass creation of production versions is facilitated through two reports via Transaction SM38: CS_BOM_PRODVER_MIGRATION and CS_BOM_PRODVER_MIGRATION2.
Process Management
SAP ERP: Process management is handled by ABAP list-based process instructions and browser-based PI sheets, which can be less user-friendly and flexible.
SAP S/4HANA: SAP S/4HANA enhances process management through browser-based PI sheets and XSteps, providing a more intuitive and integrated approach to managing production processes.
Quota Arrangement
SAP ERP: Users can choose to use quota arrangements, but the functionality may be limited and less automated.
SAP S/4HANA: Quota management is always considered by the MRP Live transaction during the MRP run, ensuring more accurate and automated material planning.
Repetitive Manufacturing
SAP ERP: Repetitive manufacturing (REM) includes action control, fair share rule, push distribution, and deployment horizons. These features require manual configuration and management.
SAP S/4HANA: All these features are considered by default in SAP S/4HANA, simplifying the setup and management of repetitive manufacturing processes.
Planning File Entry
SAP ERP: Net change planning in the planning horizon (NETPL) is available, but it can be less efficient and slower.
SAP S/4HANA: NETPL is unavailable in SAP S/4HANA, as MRP Live always determines the shortages and requirements of all materials in the scope of planning, ensuring real-time and comprehensive planning.
BOM Header Quantity Range
SAP ERP: BOM header quantity ranges enable users to define a quantity range for which the BOM is applicable, providing flexibility in production planning.
SAP S/4HANA: This functionality is not available in SAP S/4HANA, which may limit some flexibility but simplifies the BOM management process.
MRP Area for Storage Location
SAP ERP: This feature is available, allowing users to manage MRP at the storage location level.
SAP S/4HANA: The MRP area for storage location is unavailable in SAP S/4HANA, potentially centralizing MRP management but reducing granularity.
Consumption Mode in MRP
SAP ERP: Four consumption modes are available: backward consumption only, backward/forward consumption, forward consumption only, and forward/backward consumption.
SAP S/4HANA: In addition to the four consumption modes from SAP ERP, SAP S/4HANA introduces a fifth consumption mode: period-based consumption. This mode allows sales orders, dependent requirements, or material reservations to consume planned independent requirements (PIRs) within the consumption period of the PIRs.
Monitor Internal and External Requirements
SAP ERP: This functionality is not available, requiring users to check the material situation in Transaction MD04 and then run MRP to address requirements.
SAP S/4HANA: SAP S/4HANA provides the Monitor Material Coverage, Monitor Internal Requirements, and Monitor External Requirements SAP Fiori apps, offering greater flexibility and insights into internal and external requirements situations.
Analyze PIR Quantity
SAP ERP: This analysis functionality is not available, limiting the ability to evaluate forecast accuracy.
SAP S/4HANA: SAP S/4HANA allows planners to analyze how accurately the forecasted quantities in the PIRs match the quantities actually delivered to customers, enabling better forecasting and planning.
Excess Component Consumption, Material Scrap, and Component Scrap
SAP ERP: These analysis tools are not available, making it difficult to compare expected and actual scrap or consumption.
SAP S/4HANA: SAP S/4HANA includes apps to compare the expected scrap percentage defined in the master data with the actual excess consumption or scrap recorded in the production process, providing valuable insights for process improvement.
Deployment Options: SAP HANA On-Premise vs Cloud
One critical aspect to consider when comparing SAP ERP and SAP S/4HANA is the deployment options available. Both solutions can be deployed on-premise or in the cloud, but the benefits and considerations differ significantly.
SAP S/4 HANA On-Premise: Deploying SAP S/4HANA on-premise provides businesses with full control over their infrastructure and data. It allows for customization and integration with existing on-premise systems. However, it requires significant upfront investment in hardware and ongoing maintenance costs.
SAP S/4 HANA Cloud: The cloud deployment of SAP S/4HANA offers flexibility, scalability, and reduced infrastructure costs. Businesses can quickly scale resources based on demand and take advantage of regular updates and innovations provided by SAP. The cloud option also simplifies disaster recovery and business continuity planning.
When deciding between SAP HANA On-Premise vs Cloud, businesses need to consider factors such as data security, compliance requirements, and IT resources. Both deployment options offer robust production planning capabilities, but the choice will depend on specific business needs and strategic goals.
If you would like to dive deeper, see last months blog Decoding SAP HANA Deployment Options.
Enhancing Production Efficiency with SAP S/4HANA
Transitioning from SAP ERP to SAP S/4HANA can significantly enhance production efficiency and agility. The advanced features and real-time processing capabilities of SAP S/4HANA allow businesses to respond faster to changes in demand and supply, optimize resource utilization, and improve overall production planning accuracy.
Real-Time Analytics: SAP S/4HANA’s in-memory database enables real-time analytics and reporting, providing planners with up-to-date information to make informed decisions quickly. This capability is particularly valuable in dynamic manufacturing environments where timely information is crucial.
Integrated Processes: The seamless integration of production planning with other business processes in SAP S/4HANA ensures better coordination and collaboration across departments. This integration reduces silos and enhances overall operational efficiency.
User Experience: The modern SAP Fiori user interface in SAP S/4HANA offers an intuitive and user-friendly experience, making it easier for planners to access and manage information. The responsive design ensures that users can access the system from various devices, including desktops, tablets, and smartphones.
Summary
The transition from SAP ERP to SAP S/4HANA marks a significant shift in production planning capabilities. With embedded advanced planning tools, real-time processing, and enhanced user experiences, SAP S/4HANA offers a more efficient and responsive solution for modern manufacturing challenges. Whether considering SAP HANA On-Premise vs Cloud deployment, businesses can benefit from the flexibility, scalability, and innovative features that SAP S/4HANA provides. By leveraging these advanced capabilities, companies can streamline their production processes, improve resource utilization, and stay competitive in a rapidly evolving market.
