How S/4HANA can Transform Manufacturing

S/4HANA for Manufacturing

The manufacturing sector is metamorphosing to meet the next-gen customer demands. The nature of customer and market expectations are dynamic in this digital age. Customers expect you to tailor-make products to their specific needs, and deliver rapidly the highest quality products at competitive prices. They also look for qualities such as traceability and genealogy requirements stemming from product safety, legal, or maintenance needs as essential and inherent to your manufacturing offering.

To be able to meet these dynamic expectations, it’s imperative that manufacturers integrate information systems, replace expensive legacy systems and implement efficient data management solutions. This can then enable better planning and generate new efficiencies with a high-positive impact on your manufacturing lifecycle. Everything from managing the supply chain, bill of material (BOM), and order management, to engineering design, through manufacturing engineering, to the shop floor, logistics, and service, can be facilitated with these solutions.

S/4HANA, SAP’s latest flagship business suite, provides a set of solutions curated for manufacturers helping them meet the new-age needs. Designed as a digital core, SAP S/4HANA gives a single holistic solution that encompasses enterprise planning, manufacturing execution, and service. SAP S/4HANA brings the capacity to connect Internet of Things (IoT) devices to automatically respond to fluctuating signals, provide predictive indicators for preventative maintenance and product service, while understanding the cost implications and tradeoffs scenarios. Let’s look into how SAP S/4HANA addresses the different challenges in the manufacturing industry and hence, digitally transform manufacturing.

SAP S/4 HANA Transforms the Manufacturing Sector

SAP S/4HANA with SAP Cloud and LoB solutions provide an edge to your manufacturing efficiencies. Progressively, SAP S/4HANA enables companies to integrate and embed intelligence in manufacturing processes with one single source of live information. SAP confirms that this solution provides an optimal coordination of planning and execution processes, covering all aspects of the manufacturing cycle from planning to shop floor. Here are few ways the S/4HANA is transforming the manufacturing space.

Better Planning with Live MRP

Batch runs and inability to include real-time needs into planning leads to inefficient, inaccurate, and outdated planning. S/4HANA allows live Material Resource Planning (MRP) which reduces manufacturing cycle time, improves manufacturing function planning efficiency, and reduces inventory levels. Live MRP is almost 10 times faster than the traditional legacy ERP systems.

Ease of Back Order Processing

High volume back order processing is often stitched with complexities. S/4HANA automates this, making it easy-to-use with performance improvements for releasing large production orders. It improves productivity in order fulfillment processes with reduction in backordered items cancelled.

Global Data Integration

S/4HANA reduces cost to support manufacturing intelligence. HANA’s cloud- based service
encompasses all data sources, not just those from SAP. S/4HANA combined with SAP Manufacturing Execution and SAP Manufacturing Integration and Intelligence (SAP MII) allow dashboard creation, without coding, for real-time insights in to all shop floor operations, and profitability metrics. Its new data models and functions reduce the number of systems required, simplifying the IT landscape and architect, with lowered TCO.


With IoT empowered connectivity among the machines involved, manufacturers can easily automate processes. This flexibility further reduces the time taken in fulfilling an order for any make-to-order scenario.

FTE efficiency and productivity

S/4HANA comes with role-based UI simplification. UI5/SAP Fiori apps support production transactions such as order confirmations, operation confirmations, etc. Role-based apps can be customized to the needs of operators with easy-to-use personalization options available on touch screen or mobile devices. Thus, this improves the manufacturing execution FTE productivity.

Inventory & Warehouse Management

SAP’s real-time inventory management fosters transparency in all material flows. The inventory management allows manufacturers to move multiple materials at the same time with ease.

Further, it optimizes inventory levels, reduces inventory obsolescence and waste, and reduces TCO.

All inventory valuation data exists in material ledger is available as a default option which removes redundancies. Its optimized code increases the speed to actual costing, allows faster reporting needed for actual costing, multiple currency and multiple valuation methods. This increases visibility into actual profitability, enabling margin optimization and inventory accuracy.

S/4HANA has the potential to reduce the cost to support quality management, reduce revenue
loss due to quality and compliance issues, improve quality management FTE efficiency and your regulatory compliance.

The Edge Impact & Its Future

SAP S/4HANA enables you to react quickly to variable market demand, predict operational issues, and improve manufacturing performance by streamlining and integrating the entire lifecycle. It empowers a manufacturer with optimal transparency and capabilities for end-to-end analysis.

SAP intends to incorporate machine learning to further enable automation and insight to action. With ML, the system can learn continuously from the actual data, and would apply automatically customer-defined rules to either propose measures, change master data, or adapt processes. It therefore helps manufacturers focus on exceptions and other business priorities.

SAP S/4HANA provides abilities around strategy enablement, risk management, and employee engagement. We, at Savantis, help manufacturers achieve digital and business transformation by leveraging these capabilities optimally for their organization. We work closely with you to understand the processes, challenges and nuances specific to your organization. We can help you migrate your legacy systems in phases for a quicker return on investment.

Feel free to get in touch with one of our experts to discuss the needs of your manufacturing enterprise.

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