SAP Defining Role in Plants With Portals and Vendor Working Group

Summary:The most common Enterprise Resource Planning (ERP) question in manufacturing is from companies struggling to determine what software to use for business processes that plant workers perform directly. What was once a best-of-breed world is even more confused as the small vendors consolidate and the ERP vendors expand their capabilities.

The most common Enterprise Resource Planning (ERP) question in manufacturing is from companies struggling to determine what software to use for business processes that plant workers perform directly. What was once a best-of-breed world is even more confused as the small vendors consolidate and the ERP vendors expand their capabilities.

The Bottom Line: Even as SAP expands its manufacturing presence with SAP Manufacturing Dashboard for the Plant Manager, it is seeking a customer-driven accommodation with production operations vendors it once thought it could replace.

ERP vendors face three significant hurdles

Many SAP customers have finally fully deployed their ERP systems in manufacturing and now understand the variety of specialized tasks that don’t fit neatly into the standard ERP model. As such, ERP vendors have the following hurdles:

  • The financial- and inventory-oriented data models do not accurately represent the actual manufacturing, maintenance, and quality processes.
  • Multiscreen user interfaces are for office workers and slow down production workers in lean operations.
  • Integrating process equipment, automating workflows, and streamlining user interfaces requires extensive scripting or programming by expensive external resources.
These problems created a fairly safe market for the production operations vendors. Even when an ERP vendor does 100% of a project, the expense the hurdles causes prevents the customer from global rollouts. The Takeaway: Even as ERP capabilities improve, third-party vendors will play a crucial role.

SAP to facilitate integration standards

At SAPPHIRE ‘04, SAP said it will facilitate a series of workshops aimed at solidifying standards for enterprise-to-shop-floor integration. It has gained support from a variety of production operations vendors, including Siemens, Rockwell Automation, Honeywell, OSIsoft, Invensys, Emerson Process, Apriso, Lighthammer, and ABB. The goal is to accelerate adoption of standardized approaches for the manufacturing architecture.

Though SAP is open to ideas from the participants, it is championing industry efforts like ISA 95 as a starting point. AMR Research was involved in the early days of the standard effort and agrees it is a good place to start. The Takeaway: SAP is now working with its erstwhile competition to try and solve their common customers’ problem.

SAP is simultaneously encroaching on EMI portal space

SAP certainly isn’t ceding all the territory. In parallel, it is unveiling its SAP Manufacturing Dashboard, which is initially aimed at the plant manager, but is potentially expanding to other roles. The product is a set of portal content providing a snapshot of operations, exceptions, execution status, and Key Performance Indicators (KPIs). Unlike many past efforts, the company started with a blank slate, interviewed plant managers to find out what they wanted, and then tested prototypes with them before committing it to code. The product is part of mySAP ERP 2004, but can be used with older ERP versions, such as R/3, by companies that have upgraded their license, but not their software. The Takeaway: SAP is trying to establish its portal technology in areas pioneered by Enterprise Manufacturing Intelligence (EMI) vendors like IndX, Lighthammer, and OSIsoft.

Pragmatic approach should help deal with three hurdles

SAP’s announcements are good, pragmatic steps in the right direction. The two efforts show that there will still be competition, but customer needs come first.

SAP and its customers must, however, keep the three hurdles mentioned above at the forefront of their thinking. These fundamental usability and implementation cost issues are critical to the success of today’s multisite manufacturing rollouts. In particular, the vendors should keep a close eye on the skills needed to implement the system. If 20 ABAP or SAPscript programmers, or their NetWeaver equivalent, are needed to implement each site, it will never get off the ground.

AMR Research originally published this article on 12 May 2004.

Topics: SAP, Browser, Enterprise Software, Software

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