Tags
Discrete, PortSAP, PP, PP-PI, Process Industry, Ray Hornbrook, Repetitive, SAP, SAP PP
TL;DR:
- Discrete = lot-based, make-to-order/make-to-stock, classic production orders, strong change control and serial tracking.
- Repetitive (REM) = rate-based, high-volume, stable BOM/routing, minimal order admin, period costing with backflushing.
- Process Industry (PP-PI) = batch-centric, recipes/phases/resources, strict batch/QM/regulatory needs, frequent co/by-products.
- In S/4HANA, all three are supported. Production versions, backflushing, and tighter costing integration are common threads.
- Pick by how you manufacture (lot vs. rate vs. batch), regulatory needs, product variability, and costing/reporting requirements.
The Big Picture
SAP Production Planning (PP) gives you three mainstream ways to run manufacturing:
- Discrete Manufacturing (PP-Discrete): Think assemblies and components build in defined lots, track each order, and capture variances when you finish.
- Repetitive Manufacturing (PP-REM): Think stable, high-volume lines—plan by rate and periods, backflush components, and avoid the overhead of managing thousands of orders.
- Process Industry (PP-PI): Think chemicals, food, pharmaceuticals—execute via process orders with recipes and phases, strict batch and quality controls, and frequent co/by-products.
While they can overlap, each shines under specific operating conditions. Your choice should mirror how your factory actually runs day to day.
When Each Model Fits Best
Discrete Manufacturing: Lot-Based, Configurable, Traceable
Best for: Automotive components, industrial equipment, electronics, machinery, configured-to-order items.
Why it works:
- Lot/Order focus: Every build is a production order with its own BOM snapshot, routing, reservations, and costs.
- Change control: Engineering changes are managed at the order level; you can split, rework, scrap, or hold work-in-process.
- Traceability: Serial numbers, batch tracking (if needed), and detailed confirmations (per operation).
- Costing: Order-based—you see variances at order close and settle to the material or other receivers.
Typical master data: Material master + BOM + Routing + Work Centers (capacities/activities) + Production Versions (mandatory in S/4HANA).
Common transactions (GUI examples): CO01/02/03 (create/change/display order), CO11N/CO15 (confirmations), MIGO (GI/GR). (Fiori apps exist for all of this.)
Repetitive Manufacturing (REM): Rate-Based, Period-Driven
Best for: Consumer goods, automotive subassemblies, electronics with stable demand, any high-volume, low-variety environment.
Why it works:
- Rate & period focus: Plan by line rate and periods (daily/weekly/monthly), not by thousands of small lot orders.
- Low admin: No classic order header for every lot—backflush components and post GR in one go.
- Costing: Product Cost Collector (PCC) and period-based settlement—ideal when you care about line/period performance over individual lots.
- Speed: One posting (e.g., backflush) can scrap/consume/confirm/receive—perfect for takt-driven lines.
Typical master data: Material master with REM profile, Rate Routing, Production Line/Work Centers, Production Versions.
Common transactions: MF50 (planning table), MFBF (backflush/GR), KKF6N (create PCC). (Again, Fiori apps exist in S/4HANA.)
Process Industry (PP-PI): Batch-Centric, Regulated, Recipe-Driven
Best for: Chemicals, pharmaceuticals, food & beverage, paints, cosmetics—anywhere recipe/phase control and quality/batch management are mandatory.
Why it works:
- Process orders & phases: Execute with Master Recipes (operations broken into phases) on Resources (analogous to work centers).
- PI Sheets/XSteps: Digital work instructions and process messages to/from DCS/MES/LIMS systems.
- Batch & QM: Heavy batch creation, classification, shelf-life, and QM results recording; supports co-products and by-products naturally.
- Costing: Typically order-based, with allocations for co-products and credits for by-products.
Typical master data: Material master (always batch-managed), Master Recipe, Phases, Resources, Inspection Plans/Characteristics, BOM (often includes by-products).
Common transactions: COR1/2/3 (process orders), C201 (recipes), QM results recording, PI sheets.
Head-to-Head: Key Differences That Matter
| Dimension | Discrete | Repetitive (REM) | Process Industry (PP-PI) |
| Primary unit of control | Production order (lot) | Rate/period (line output) | Process order (batch/campaign) |
| Master data focus | Routing + Work Centers | Rate Routing + Line | Master Recipe + Resources + Phases |
| Typical posting behavior | Operation confirmations, GI (261), GR (101) | Backflush components + GR in one step | Phase confirmations, GI/GR often via recipe steps |
| Costing | Order-based (variance at close) | Period-based via PCC | Order-based, co-/by-product logic |
| Traceability | Serial numbers, optional batch | Batch optional; serial rare | Batch mandatory, QM heavy |
| Change frequency | Frequent ECOs, variant config common | Low; stable BOM/routing | Medium; recipe governed/testing |
| Best for | Configurable or variable lots | High volume, low mix | Regulated, batch processing with co/by-products |
Planning, Execution, and Costing Nuances
Planning & MRP
- Production Versions are central in S/4HANA across all three models (used by MRP and order/REM creation).
- Discrete: MRP proposes planned orders → converted to production orders; lot sizing and setup times are key.
- REM: MRP proposes planned orders, but planners typically work in the planning table (MF50/Fiori) to smooth rates and shifts; conversion can be collective.
- PP-PI: MRP proposes process orders or planned orders that become process orders, often grouped into campaigns for efficiency and cleaning/changeover logic.
Shop-Floor Execution
- Discrete: Fine-grained control; partial confirmations, rework orders, and operation-level scrap tracking are easy.
- REM: Takt-driven; one backflush can confirm quantities, consume components, and post GR. Component staging often via KANBAN or line-side supply.
- PP-PI: Phases map to real process steps (charge, heat, react, filter, fill). PI sheets capture parameters; process messages integrate with DCS/MES.
Quality & Traceability
- Discrete: Serial numbers and equipment records common; batch optional.
- REM: Batch sometimes used for components or outputs; many plants rely on period/performance KPIs more than batch granularity.
- PP-PI: Batch management + QM are core. Certificates of analysis, shelf-life, potency, and legal compliance drive the model.
Costing & Settlement
- Discrete: Order costs collected and settled at order close; variances highlight efficiency for each lot.
- REM: Costs collected on Product Cost Collectors and settled per period; perfect for continuous lines where order variance isn’t meaningful.
- PP-PI: Order-based costs with co-product apportionment and by-product credits; detailed consumption/yield at phase level.
Warehouse, Staging, and Backflushing
All three integrate with IM/WM/EWM, but the flow differs:
- Discrete: Components are picked/staged to the order (reservations drive picking tasks). Operation confirmations consume at the right step.
- REM: Backflushing at the line is standard; components are pre-staged (KANBAN, supermarket) and consumed automatically at posting.
- PP-PI: Staging follows recipe phases (e.g., charge 500 kg solvent in Phase 10). Batch determination and quality holds are common, with sample draws and inspection lots.
S/4HANA Considerations
- All three models are supported in S/4HANA. Many plants run more than one (e.g., PP-REM for stable subassemblies plus Discrete for final assembly; or PP-PI upstream, Discrete downstream for packaging).
- Production Versions are mandatory and should be governed well (who owns them, how they’re changed, and how they map to routing/recipe alternatives).
- Fiori apps simplify confirmations, order conversions, variance analysis, and material staging—but SAP GUI transactions remain available and widely used by power users.
- Embedded EWM brings richer staging strategies (e.g., PMR-driven staging for process orders or advanced KANBAN for REM).
Choosing the Right Model: A Simple Decision Guide
Ask these questions:
- Do you run in lots or by line rate?
- Lots with frequent changeovers → Discrete.
- Continuous rate/period focus → REM.
- Is batch compliance/regulatory central?
- If yes (CoA, shelf-life, potency, recipe governance) → PP-PI.
- How variable are BOMs and routings?
- High variability or variant configuration → Discrete.
- Very stable BOM/routing and long runs → REM or PP-PI (if process-based).
- How do you want to see costs?
- Per order/lot variances → Discrete/PP-PI.
- Period/line performance → REM (PCC).
- What does the shop floor expect?
- Operation-by-operation confirmations and serial control → Discrete.
- One-touch backflush, takt adherence → REM.
- Phase-based execution with PI sheets/messages → PP-PI.
Common Pitfalls (and How to Avoid Them)
- Using Discrete where REM fits better: If you are creating thousands of tiny orders for a high-volume line, admin will swamp you. Move to REM and period costing.
- Skipping batch/QM in a process environment: If you are in PP-PI and downplay batch/QM, audits will hurt later. Design batches, specs, and results recording up front.
- Under-governing Production Versions: In S/4HANA, bad version governance leads to planning and execution surprises. Treat versions like master data with clear ownership.
- Forcing one model everywhere: It is normal to mix. Use REM for stable upstream assemblies and Discrete for final assembly or service kits; combine PP-PI for bulk and Discrete for packaging.
Example Scenarios
- Automotive Tier-1: Wheel hub assembly in REM (stable, high-volume), final vehicle-specific kit in Discrete (variant config, order-level traceability).
- Paint Manufacturer: Bulk base in PP-PI with recipes and batch QC; small run color-tint Discrete or REM depending on volume and variability.
- Electronics: SMT line in REM for boards; enclosure assembly and test in Discrete for flexibility and serial control.
Wrap-Up
There’s no “best” universal model there’s the model that matches how you make product and how you want to measure it. If you build in lots and need fine-grained control, Discrete is your friend. If you run steady, high-volume lines, REM keeps admin low and KPIs clear. If your world is recipes, batches, and regulation, PP-PI is the natural fit.
Action step: Map one representative product family to each model and run a pilot fit/gap: master data (BOM/routing/recipe, versions), staging/backflush strategy, confirmations, and costing/settlement. Pick the model that minimizes exceptions and tells finance the story they need.
If you have question on this or any other PortSAP Consulting blog please feel free to contact us at Blog@PortSAP.com. Or if you are looking for Top Quality SAP Consultants please feel free to contact us.
The author, Ray Hornbrook, has over 19 years of SAP functional and technical experience. Ray started his career in SAP as a MM/PP Subject Matter Expert (SME) for a SAP implementation in 1998 and is now a Senior Level SAP Consultant. Since Ray has worked both sides of SAP, business end user and IT professional, he is able to communicate effectively with both IT and Business team members. Having a background as an SAP business end user has helped Ray greatly in his consulting career. The business background helps him better communicate with the business members of the team. As well as helping bridge gaps in communication between the IT and Business team members.
To find out more about Ray Hornbrook please check out his LinkedIn profile by clicking HERE.
End of document – www.portsap.com
PortSAP Blogging 