E-Commentary -- SAP Discovers The Plant Floor

Dec. 21, 2004
ERP giant is supporting standards to link the factory systems to the front office.

Today's lesson begins with a few great dates in the evolution of manufacturing technology:

  • 1698: Steam engine invented.
  • 1886: Electric motor invented.
  • 1968: Microprocessor invented.
  • 2004: SAP discovers plant floor.
Sooner or later, it had to happen. After marketing its best-selling ERP software packages, R/2 and then R/3, to thousands of manufacturing companies around the world for more than a decade, SAP, the world's biggest enterprise software vendor, suddenly made a monumental discovery: the plant floor. In May the software giant unveiled plans to integrate its ERP system with shop-floor systems. Hallelujah. At a press conference in 1996, I asked a top SAP executive when the software firm was going to connect its ERP systems with the plant floor. His response was to point to another reporter across the room. "Next question," he said. Why the turnabout? Why has SAP suddenly found plant-floor religion? The answer is that SAP's customer base is tired of waiting for ERP software vendors to wake up and smell the machine oil. Hey, you fellas in Waldorf, Germany, listen up: This is where all the products are made! With all due respect to the much-hyped "information enterprise," what good is an enterprise system that has no connection with the heart of the business -- the manufacturing operation? It's sort of like trying to pilot the QE2 from atop the bridge without knowing if the engines are running, the speed the ship's moving, and which way the rudder is turned. Manufacturers that use shop-floor systems have known -- and complained -- about this disconnect for years, to little end. And SAP wasn't the only one. Most ERP vendors were extremely slow to recognize and respond to the need for better plant-floor connectivity. "The ERP vendors missed a big market by not integrating with the plant floor," says a systems architect at a large manufacturer of electrical test and measurement equipment. "We built our own interface for our MES and MRP systems." Four years ago an AMR Research report stated, "ERP systems appear to have a dismal lack of necessary plant functions." Not much has changed, although some ERP vendors have since begun offering ERP functionality to support lean manufacturing efforts. Now comes SAP, with several key initiatives displaying a commitment to marrying ERP and plant-floor systems. "The ability to tightly integrate core manufacturing with other business operations is vital to managing a truly adaptive business," says Claus Heinrich, SAP executive board member. SAP promises enhanced interoperability across SAP and non-SAP systems, through what it calls a new "shop-floor-to-top-floor" program. The company plans to create an integration layer to allow translation of disparate IT "landscapes" into real-time operations. To do all this will require the various vendors to agree on certain data and manufacturing information standards. Starting in June, SAP began hosting a series of interactive workshops with customers and other software vendors that will culminate in a summit conference at SAP's technical gathering in October called SAP TechEd. "Given the heterogeneity of most shop floor applications, the onus is on the vendor community to agree on standards that enable easy interoperability and movement of information across manufacturing systems that customers already own or are in the process of implementing," Heinrich adds. Translation: if there weren't so many MES systems in use out there, we'd have integrated R/3 with the shop floor sooner. Maybe. But one has to wonder just why SAP waited so long to discover the plant floor. Doug Bartholomew is a former IndustryWeek Senior Technology Editor. He is based in San Francisco.

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