ERP Is Reaching The Shop Floor

Jan. 8, 2010
The suppliers of enterprise resource planning systems have bolstered their MES applications to support manufacturing processes.
Whirlpool Corp., in Benton Harbor, Mich., needed to monitor and control quality and costs across more than 60 plants and research centers around the globe. In North America alone, Whirlpool was managing more than 100  enterprise resource planning (ERP) and legacy systems. The company wanted to enable continuous process improvement and high asset utilization while gaining visibility into manufacturing operations. Integrating and gaining visibility across varied ERP and legacy systems was a costly prospect. Some plants were still pulling plant data from hand-written notes.So the company decided to consolidate with one ERP system that could reach down to the plant floor for critical data. The company chose SAP AG, Walldorf, Germany, as its ERP supplier, and deployed SAP’s Manufacturing Integration and Intelligence (MII), an enterprise manufacturing intelligence system once known as Lighthammer, to grab plant data. “We wanted to extend the functionality of the ERP to our production people so they could improve their productivity and performance,” says Rui Fonseca, director of global development at Whirlpool. “We needed to reduce product defects and rework efforts, and we also needed to streamline information to the plant floor.”The company began with one plant in late 2005 with the application, which, at the time, was known as xApp Manufacturing Integration and Intelligence, or xMII. Since then, Whirlpool has deployed MII to most of its plants in North America, Europe and Asia. The system lets managers track everything from overall equipment effectiveness (OEE) to tank-level data in its foam chemical tanks. With production data integrated into its ERP and visibility through a dashboard, the company saw a return on investment in two years.Deja vuWhirlpool’s story has become a common one as manufacturers in both process and discrete industries deploy intelligence applications software and manufacturing execution systems (MES) to manage plant data and integrate with ERP. The MES has become the translation center between the monthly batch processing of ERP and the real-time continuous data of plant operations. Controls vendors such as Invensys Operations Management (IOM), Rockwell and Siemens have developed MES offerings, and in recent years, ERP vendors have extended their tools down to the plant floor.ERP vendors have touted the easy integration that their MES provides, while analysts have noted that best-of-breed MES suppliers have greater functionality. That’s changing. SAP, Oracle and even Microsoft have enhanced their MES offerings through research and development (R&D) and acquisitions.Both SAP and Oracle Corp., the Redwood Shores, Calif.-based enterprise software vendor, now have MES specifically engineered for discrete and process manufacturers. SAP acquired Lighthammer in 2005 to provide manufacturing intelligence and MES-like functionality to its process manufacturing customers. SAP acquired Visiprise in 2008 to bolster its MES offering to discrete manufacturers. Oracle now offers Oracle Manufacturing Execution System for Process Manufacturing as an add-on to its Oracle Process Manufacturing System. And it also offers Oracle Manufacturing Execution System for Discrete Manufacturing (MES for Discrete).One of the reasons plants are turning to ERP for manufacturing support is simply to get more out of their ERP deployments. “In this economy, companies are trying to do as much with their ERP as possible,” says Simon Jacobson, research director at AMR Research Inc., in Boston. “They take the MES license during an upgrade and take up the challenge of extending ERP to the shop floor.”Even as ERP vendors are offering manufacturing support modules, they haven’t attempted to enter the control space. “Both of the big ERP vendors are developing product components for plant operations, but they stop short of going down to control,” observes Bob Mick, vice president, enterprise systems, at ARC Advisory Group Inc., in Dedham, Mass. “They don’t do control, but they do the basic data collection.”MES tradeoffsThe relatively uncomplicated integration between the ERP and shop floor that comes with using the MES systems supplied by ERP vendors is not enough alone to justify the choice. “Vendors will sell you on the value of integration and less customization, but the reality is, if you’re buying for integration and sacrificing functionality, that’s a big problem,” says AMR’s Jacobson. “Is it module-to-module integration or business process that you want? You want to take high-fidelity functionality and integrate that.”One of the attractions of using ERP for MES is the ability to map plant technology across multiple facilities. “We’re trying to provide a scalable solution that can compare one plant to another,  so plant managers can drill down into efficiency losses,” says Manish Modi, vice president of manufacturing and PLM development at Oracle. “It allows users to get visibility and get real-time measurements of efficiency, productivity and OEE.”When ERP vendors first introduced MES solutions, many analysts noted that best-of-breed systems offered greater functionality. While some analysts still hold that view, ERP vendors have pushed to improve and enhance their MES offerings. “SAP and Oracle are adding more and more things for manufacturing,” says Ed English, director of supply chain management at KMC Systems Inc., a medical instruments contract manufacturer in Merrimack, N.H. “We used to use third-party vendors, but the products from Oracle and SAP are getting very robust. And the third parties don’t have all the interaction with the ERP that you get with Oracle and SAP.”Microsoft Corp., Redmond, Wash., has invested in developing its BizTalk to support small- to medium-size manufacturers. In many cases, Microsoft partners with plant intelligence companies that perform MES-like duties. The integration of plant data with business data comes down to the compatibility of Microsoft’s Windows and Office products. “On the plant floor, they’re running on Windows, and the ERP system is running on Windows,” says Dave Lassiter, U.S. director of manufacturing solutions at Microsoft.Nalco Co., of Naperville, Ill.—a water treatment and process improvement company—uses Microsoft as its business intelligence layer and PI System from Microsoft partner OSIsoft, of Leandro, Calif., for plant intelligence. Historically, Nalco on-site technicians manually compiled customer data from thousands of process plants. The company recently replaced that time-consuming process with data collection with OSIsoft’s PI System. The data can then be analyzed, displayed and shared through Microsoft business tools such as SharePoint, PerformancePoint and Excel.The solution eliminated most of the costly manual data collection, which improved both efficiency and accuracy. The systems also improved Nalco’s service to its customers, who now get consistent key performance indicators and analysis of their process operations that were not possible before the OSIsoft and Microsoft deployment. The bottom-line result was a 5 percent increase in Nalco revenues, a considerable amount for a $4 billion company.Contested groundControl vendors are competing directly with ERP vendors for the MES ground. Invensys Operations Management offers MES services as an extension of its control technology. “We took automation technology and developed an approach that measures real-time accounting and added an application that uses SAP’s MII to suck up manufacturing data into the accounting system,” says Peter Martin, vice president of business value improvement at IOM, in Plano, Texas.One IOM customer uses Invensys MES tools to measure plant data and marry it to SAP accounting. Sasol (originally called South Africa Coal, Oil and Gas) is a South African company with operations in mining, energy and chemicals. Sasol needed new technology to measure and manage energy consumption at its steam plants. To accomplish this, the company needed to gather data from mechanical devices that read wheel flow meters. The data came from each plant’s distributed control system from Invensys. Invensys used dynamic performance measurements (DPMs) for each individual boiler. DPMs were developed for steam cost, steam quality and production rate.This real-time performance measurement system provided consistent and accurate measurements of each plant’s performance. The data was displayed for operators on a dashboard that enabled them to identify inefficiencies and take action to improve performance. The data was integrated with Sasol’s SAP materials management and production planning modules to enable accurate forecasting. According to IOM, this automated data collection and analysis resulted in $400,000 in energy savings in the first two months from just two of the company’s five targeted steam plants.ERP vendors have enhanced their MES offerings in recent years, bringing new functionality to the plant floor. Both SAP and Oracle have developed distinct products to address the specific needs of process and discrete manufacturing. SAP and Oracle have worked to bolster their offerings to both forms of manufacturing. “Their focus has been to invest where they’re weak,” says ARC’s Mick. The result of this investment is greater visibility, streamlined integration between plant and business data, and the ability to map a plant’s IT blueprint and deploy it at multiple facilities.Related Sidebar - Batesville Tool & Die – ERP and MES SaaSTo read the article accompanying this story, go Sidebar - Filling in for SAPTo read the article accompanying this story, go

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