SAP for aerospace & defence manufacturers

See how SAP can help build a stable foundation for the further development of aerospace & defence manufacturing.

SAP for discrete manufacturing

Why SAP
Business challenges
Sales
Production
Supply Chain
Quality management
Finance
IT
HR
ERP Value Check
AI readiness

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Why SAP

Aerospace & defence projects require particular control over scope, timing, costs, quality, compliance and documentation. In this environment, every decision – from a sales promise, through an engineering change, to a quality release decision – can affect production, procurement, finance, compliance and the customer relationship.

ERP should not be only a system for handling transactions. In A&D, it must support a complete, auditable flow of information: from offer and contract, through materials, production, quality and costs, to the digital product thread and the organization’s readiness for further development.

Hicron helps aerospace & defence companies organize processes and data in SAP so that business decisions are based on one current picture of program execution – instead of spreadsheets, local workarounds and dispersed sources of information.

See where SAP can bring the greatest value in aerospace & defence projects.

Do these challenges sound familiar?

In aerospace & defence companies, the greatest risks often do not appear in one department, but at the intersection of functions: sales, production, procurement, quality, finance, IT and the organization.

The most common challenges include:

promising a date and scope without confirmed feasibility,
product configuration and contract changes that do not reach production on time,
export restrictions discovered only after an order has been accepted,
production controlled by spreadsheets and current priorities despite a plan in ERP,
engineering changes moving into execution without a controlled trace,
a transformation scope that is too broad before one complete value chain has been verified,
ATP and MRP based on inventory that operations do not recognize,
long-lead-time materials not protected for the correct program,
own stock, consignment stock and material at subcontractors mixed in one view,
interrupted batch and serial number traceability in the material flow,
quality decisions remaining in PDFs or emails instead of controlling material movement,
SAP QM scope built as a list of functions rather than from certification requirements,
product, order, contract and program margin not combining into one picture,
standard cost, WIP and variances becoming visible too late,
S/4HANA migration preserving an unsuitable cost model,
S/4HANA scope built from a catalog of functions rather than process gaps,
master data not ready for transformation, analytics and AI,
key decisions remaining in the heads of a few people and their spreadsheets,
implementation planned “for the whole company” without a clear order of roles and responsibilities,
training and change added at the end, even though workarounds reveal real process gaps.

SAP can help organize these areas in one data and process model. The right sequence is essential: first critical processes, data owners and the digital product thread, then automation, analytics and AI.

Want to know how?

Schedule your ERP Value Check

Sales: a credible promise to the customer, controlled offer configuration and export compliance

In aerospace & defence projects, the date and scope are sometimes agreed before the organization has confirmed material availability, production capacity, program milestones and a formally approved contract. Sales then works with only a partial view of the situation, while the cost of later corrections is carried by production, procurement and finance.

Another risk is the lack of a consistent flow between offer configuration and execution configuration. Technical configuration, commercial agreements and contract annexes may remain in the offer, CRM, a document or correspondence. If they are not linked to the material, product structure and order, production may plan a different version than the one ultimately ordered by the customer.

In A&D, compliance of the recipient, product, destination country and license is part of sales feasibility. If compliance is checked only after the order has been accepted or execution has started, the organization is exposed to blocks, scope changes and regulatory risk.

How Hicron helps

Hicron starts by organizing the process from offer to order confirmation. It identifies the data, conditions and approvals needed to make a realistic promise to the customer.

SAP S/4HANA can connect the order and contract with material availability, production plan, capacities and program costs. SAP Advanced Available-to-Promise and SAP PP/DS help calculate the date based on actual constraints instead of relying on spreadsheets and declarations from individual departments.

Hicron also designs a common trace from offer configuration to execution configuration. SAP Advanced Variant Configuration allows only permitted product variants to be built, while SAP PLM and Engineering Change Management link a change with the relevant BOM revision, documentation and validity date.

In compliance, Hicron embeds compliance requirements into the sales process. SAP Global Trade Services can perform legal and license checks on data linked to the transaction and block further processing if requirements are not met. As a result, compliance is checked earlier and on the same data basis as order execution.

Business value

a more credible promise of date and scope,
lower risk of renegotiations and expedited procurement,
better connection between sales, production, materials and costs,
controlled flow from offer configuration to execution configuration,
lower risk of planning an outdated product version,
earlier detection of export restrictions,
auditable course of compliance decisions,
greater transparency of order execution from the first stage.

Production: an executable shop-floor plan, the correct product revision and a safe transformation scope

ERP may generate requirements and a plan, but the actual sequence on the shop floor may still be controlled by spreadsheets, morning priorities and local decisions. This happens when the plan does not include the full picture of shortages, capacities, subcontracting, testing and current program priorities. The organization then has two plans: the official one in ERP and the operational one in Excel.

Another risk is uncontrolled transfer of engineering changes into execution. In complex, configurable products, a single change may affect documentation, BOM, routing, materials, tools and instructions. If the revision used on the shop floor differs from the one used to calculate the plan and cost, the organization loses consistency between the product designed, ordered and built.

A transformation scope that is too broad may also be a challenge. If the S/4HANA program covers “all production” before one complete value chain has been verified, data, integration and shop-floor work issues may emerge too late.

How Hicron helps

Hicron compares the planning method recorded in the system with actual production steering and identifies rules that ERP does not currently reflect.

SAP PP/DS enables planning with material and capacity constraints, sequencing simulations and earlier bottleneck detection. SAP Digital Manufacturing can provide current confirmations from the shop floor. The goal is not to remove every human decision, but to base it on one current execution picture.

Hicron also maps the digital trace of a change: source, impact, approval, validity date and confirmation of implementation on the shop floor. SAP PLM and Engineering Change Management can control revisions of materials, BOMs and documents, while SAP S/4HANA Manufacturing applies them in the relevant orders and operations.

For S/4HANA transformation, Hicron helps select a pilot product or program that represents the most important variants and risks. It then walks through its end-to-end flow – from BOM and procurement, through operations and tests, to execution confirmation and cost. On this basis, the target process model, gap list and phased roadmap are created.

Business value

one current picture of production execution,
fewer discrepancies between the ERP plan and the operational plan,
earlier bottleneck detection,
better assessment of WIP and the cost of sequence changes,
controlled transfer of engineering changes into execution,
lower risk of using an outdated specification,
ability to recreate the as-built configuration,
safer, phased S/4HANA transformation scope.

Supply Chain: reliable inventory, material allocation and ownership control

The system may show inventory that is not available in practice: quality blocked, assigned to another program, located in an unconfirmed location or physically unavailable for use. As a result, ATP makes a promise and MRP plans based on a reality different from warehouse and production operations.

Long-lead-time materials may be purchased for a specific contract but moved into general stock. Another program may consume them even though the original delivery date still assumes their availability. The organization simultaneously freezes capital and experiences critical shortages.

In the A&D supply chain, material may belong to the manufacturer, the customer or the supplier and at the same time be located outside the plant, for example at a subcontractor performing a special operation. Without a clear model of ownership, location, value and responsibility, reconciling shortages and settling consigned material becomes a manual investigation.

How Hicron helps

Hicron organizes availability definitions, inventory statuses, responsibility points and posting moments. SAP S/4HANA Inventory Management, SAP EWM and SAP QM can reflect location, quality status and restrictions on material use.

MRP and aATP then use controlled data, while exceptions are visible in the process instead of remaining in spreadsheets.

Hicron also defines the material allocation policy, exceptions and rules for decisions about moving components. SAP Project System and mechanisms such as project stock or sales-order stock help preserve the connection between the material and the contract.

In more complex project manufacturing, SAP PMMO can support requirements grouping and cost-related inventory management between WBS elements according to agreed rules.

Hicron also maps real ownership and material-flow scenarios. SAP S/4HANA supports special stock types, subcontracting, consignment material and movement tracking between locations. As a result, procurement, warehouse, subcontracting and finance work with one shared answer: what we own, where it is, who it is intended for and what value it has.

Business value

more reliable material availability,
lower risk of promises based on unusable inventory,
more consistent ATP and MRP planning,
better protection of long-lead-time components,
maintaining the link between material and contract or program,
greater transparency of material transfers between programs,
control of own material, consigned material and material located at a subcontractor,
fewer manual reconciliations between warehouse, procurement and finance.

Quality management: full as-built trace, quality decisions and QM scope derived from requirements

Information about the origin and use of a component may be available at goods receipt but fail to flow consistently through issue, subcontracting, assembly, testing and shipment. Reconstructing the as-built configuration during an audit, claim or nonconformity analysis then requires combining data from many systems and documents.

A quality decision may remain in a PDF or email instead of controlling further material movement. If information about use, conditional release or rejection exists only in correspondence, operations may unknowingly use material before approval.

Another issue is designing the SAP QM scope as a list of functions without first determining which inspection points, evidence and decisions are material for the customer, certification and product risk. This can create an extensive scope that does not always improve auditability while imposing additional registrations on users.

How Hicron helps

Hicron identifies the minimum required product genealogy trace and the points where it must be recorded. SAP S/4HANA can connect batches, serial numbers, material documents, orders and inspection lots. SAP EWM and SAP Digital Manufacturing can extend this trace to warehouse and execution.

As a result, reconstructing as-built relies on process transactions rather than later merging of dispersed files.

Hicron also designs a controlled quality decision path, including roles, acceptance thresholds and exceptions. In SAP QM, the inspection lot, results and usage decision can directly change stock status and determine next steps. Documentation can be linked to the process object, and workflow can assign the task to the right person.

Hicron designs the SAP QM scope based on a requirements map: what must be proven, at what point in the process and at what product level. Only then are inspection plans, characteristics, decision points and nonconformity handling designed. The system configuration is subordinated to the certification path and customer expectations, not to the completeness of a functional catalog.

Business value

a more complete trace of batches, serial numbers and components,
easier reconstruction of the as-built configuration,
less manual data merging during audits or claims,
quality decisions that control material movement,
greater control over releases, rejections and exceptions,
auditable trace of quality decisions,
QM scope derived from certification and customer requirements,
fewer unnecessary registrations that do not create value for quality and compliance.

Finance: one program economics and cost aligned with execution

A plant may know the overall result but be unable to quickly reconcile profitability at different levels: product, order, contract and program. Sales, controlling and operations then make pricing or make-or-buy decisions based on different numbers.

In long-term contracts and scope changes, the lack of a common cost and revenue logic also makes it difficult to produce a reliable forecast of the final result.

Product costing may look correct until month-end closing reveals shortages, rework, unconfirmed operations and work in progress. If these events are added in Excel, controlling has no current view of the variance or its source.

S/4HANA migration is also a challenge. A technically correct transfer of existing accounts, cost centers and settlement rules may preserve a cost model created around historical system and spreadsheet limitations.

How Hicron helps

Hicron aligns the profitability model: cost objects, allocation rules, revenue recognition and responsibility for forecasting. SAP S/4HANA connects financial and controlling postings in the Universal Journal, while Margin Analysis and Project System allow results to be analyzed by product, customer, contract and program.

One data structure makes it easier to align operational decisions with the economic account of the program.

Hicron also organizes the cost flow: from plan and material issue, through operation confirmation, to WIP, variances and order settlement. SAP Product Costing and production settlement functions in SAP S/4HANA can automatically link execution with cost.

During migration to S/4HANA, Hicron separates the decision about the target model from the decision about migration technique. It first evaluates which dimensions and rules support actual decisions and which are workarounds or duplications. Only then does it design the target model and transition plan. The result is a change roadmap, not an automatic copy of the past.

Business value

a consistent view of product, order, contract and program margin,
one cost and revenue logic for sales, controlling and operations,
a more reliable forecast of the final result,
earlier identification of cost variances,
fewer manual corrections in Excel,
better connection between execution and cost,
controlling model aligned with management decisions,
S/4HANA migration as an opportunity to organize the financial model rather than copy historical limitations.

IT: value-based scope, ready data and a realistic sequence for ERP, analytics and AI

In A&D, the boundary between ERP, PLM, manufacturing execution, quality management and compliance tools has a direct impact on program cost and risk. If the S/4HANA scope is built by adding functions, the project grows before the organization determines which decisions and data must remain in the ERP core and which belong to specialist systems.

Master data – material, BOM, customer and supplier – is the basis for almost every scenario. Yet its quality is often treated as a task to be solved just before go-live. Moving inconsistencies into the new environment makes planning, traceability and compliance difficult from day one.

Planning AI and analytics on a foundation where Excel remains the source of decisions is also a challenge. If order, material issue, operation execution and cost do not form one reliable chain, the analytics layer will spread inconsistency faster than it improves decisions.

How Hicron helps

Hicron starts with value streams, business decisions and gaps in the current flow, and then defines architecture boundaries and integration principles. SAP Signavio can support process analysis, SAP S/4HANA can serve as a consistent transactional core, and SAP BTP can integrate extensions and domain systems.

Hicron assesses data readiness in parallel with process analysis. It identifies critical objects, owners, quality rules and the scope of cleansing. Only the result of this assessment should become one of the criteria for selecting the transformation path. SAP Master Data Governance can support central creation, change and approval of data, while SAP S/4HANA Migration Cockpit supports controlled migration.

In analytics and AI, Hicron organizes the investment sequence: first critical processes and data, then a shared analytical model, and only then automation and AI for clearly defined decisions. SAP S/4HANA provides the transactional context, SAP Datasphere and SAP Analytics Cloud can build the data and analytics layer, and SAP BTP and SAP Business AI can develop use cases once quality, security and responsibility criteria are met.

Business value

S/4HANA scope derived from process gaps rather than a catalog of functions,
clearer boundaries between ERP, PLM, MES, QM and compliance,
fewer overlapping responsibilities and integrations,
data readiness as part of transformation, not a task at the end of the project,
higher quality of material, BOM, customer and supplier data,
better foundations for traceability, compliance and planning,
a realistic sequence of investments in ERP, analytics and AI,
lower risk of scaling inconsistencies through automation.

Organization and change: resilience of operational knowledge and change based on actual ways of working

Key decisions in an organization may remain in the heads of a few people and their spreadsheets. Order priorities, response to shortages, cost corrections or date promises often depend on the experience of individual experts. The organization works, but is vulnerable to turnover, absence and scaling.

Another issue can be an implementation planned “for the whole company” without a clear order of roles. A single go-live date does not mean that all roles and processes are equally ready. Without defining who must accept the first stage, which decisions they will make in the new model and which teams will join later, accountability for acceptance becomes blurred across functions.

Training and change are often added at the end, even though workarounds may be the only working process. User resistance does not have to come from reluctance toward the system, but from the fear that the new model will take away their way of coping with shortages, changes and unusual situations.

How Hicron helps

Hicron identifies critical decisions, their owners, input data and acceptable exceptions. It then moves repeatable rules and approvals into the process, leaving humans with decisions that require judgment.

Role-based SAP Fiori and SAP Business Workflow can provide tasks, context and an approval trace to the right people. This reduces dependence on informal knowledge without removing expert responsibility.

Hicron builds an implementation roadmap in waves of processes, locations and roles. For each wave, it defines owners, readiness criteria, acceptance scenarios and the minimum set of competencies. SAP Activate supports phased transformation, while SAP Fiori roles and applications can be assigned to a specific way of working.

Hicron also analyzes workarounds as a source of knowledge about gaps. Together with users, it determines what should be standardized, automated or kept as a controlled exception. Training is built around role scenarios and decisions, not only transactions.

Business value

lower dependence on informal knowledge and individual experts,
greater organizational resilience to turnover and absences,
visible trace of decisions, approvals and exceptions,
implementation roadmap based on roles, processes and locations,
clearer readiness criteria for subsequent waves,
training linked to users’ actual decisions,
use of workarounds as a source of knowledge about gaps,
greater user trust in the new process.

ERP Value Check

You do not always need to start with a broad transformation program. In aerospace & defence projects, it is particularly important first to understand complete value chains: from the sales promise, through material, execution, quality and cost, to management decisions and compliance.

During ERP Value Check, we analyze the extent to which the current ERP environment supports processes typical for aerospace & defence.

In particular, we check:

whether sales can make date and scope promises based on executable data,
whether offer configuration is linked to execution configuration,
whether contract, engineering and quality changes have a controlled digital trace,
whether export restrictions are checked early enough in the process,
whether production works on one current plan rather than in parallel in ERP and Excel,
whether planning takes shortages, capacities, subcontracting, tests and program priorities into account,
whether long-lead-time material is protected for the correct program,
whether own stock, consigned stock and material at subcontractors are clearly distinguished,
whether traceability covers the entire flow: receipt, issue, subcontracting, assembly, testing and shipment,
whether quality decisions control material movement or remain in documents and emails,
whether QM scope results from customer, certification and product-risk requirements,
whether finance sees one view of profitability for the product, order, contract and program,
whether execution cost, WIP and variances are visible during execution,
whether the target S/4HANA model organizes controlling instead of copying historical limitations,
whether the transformation scope results from process gaps and business value,
whether master data is ready for transformation, analytics and AI,
whether the organization has defined owners of decisions, exceptions and subsequent implementation waves.

The outcome of ERP Value Check is an initial map of the areas where SAP can generate the greatest business value – through optimization, system development or implementation.

If you already use SAP, check whether the system fully supports your sales, production, supply chain, quality, finance, IT and organization.

If you are only considering SAP S/4HANA, see how it can help build a stable foundation for the further development of processes, data, analytics and AI.

In both cases, the goal is the same: greater control over programs, configuration, materials, quality, costs, compliance, the digital product thread and business decisions.

Schedule your ERP Value Check

AI does not replace order in ERP

AI can support data analysis, planning, risk identification and decision-making. In aerospace & defence, however, it cannot replace order in processes and data.

First, a reliable chain is needed: order – material – execution – quality – cost. Only then can analytics and AI accelerate decisions without increasing the scale of inconsistency.

That is why, as part of ERP Value Check, we analyze not only opportunities for optimizing SAP, but also the environment’s readiness for analytics and AI: data quality, information owners, change rules, process integration and the decisions that can be safely supported by automation.

Check whether your organization is ready for SAP, analytics and AI.

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