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ERP vendors doing more to support digital manufacturing technologies

Efforts by SAP, Oracle, Infor and Epicor vary widely in their comprehensiveness and depth, as do their philosophies about whether to develop a separate digital manufacturing platform.

Digital manufacturing technologies are beginning to enable manufacturers to use data integration to link the various silos and processes of the manufacturing lifecycle. The goal: to provide enhanced insights that enable better business decisions.

As manufacturers embark on their digital transformation journeys, succeeding in an Industry 4.0 environment will have much to do with the ERP systems that must support connections between machines, processes and systems.

The question, however, is whether ERP vendors are stepping up to the plate to help manufacturers transition to the digital world. Four major ERP vendors who were asked about their efforts to support digital manufacturing technologies all reported significant progress.

"I spend a lot of time with customers on a global basis talking about their initiatives -- smart factory, digital factory, smart plant -- and where they want to go in the future," said Mike Lackey, global vice president of solution management for line-of-business manufacturing at SAP Labs, based in Palo Alto, Calif.

Lackey said the focus is on SAP's latest-generation ERP platform, S/4HANA. "That's the digital core for us."

SAP has two plant-centric applications, SAP Manufacturing Execution (ME) and SAP Manufacturing Intelligence and Integration (MII), Lackey said, which take the data from ERP and enforce execution through the production line.

SAP ME, a manufacturing execution system (MES), integrates business and manufacturing processes, enabling users to access real-time information to run more efficient, high-quality production on the shop floor, according to the vendor.

SAP MII is described as helping manufacturers use the industrial internet of things by connecting equipment, people and operations to their extended supply chains. The software provides the manufacturing intelligence and visibility they need to run in real time and to integrate manufacturing processes with business operations.

"S/4HANA quickly analyzes the data and gets it back to the machines through our shop-floor applications, which is the way we're helping companies achieve this digital factory," Lackey said.

At its 2017 Sapphire Now conference, SAP relaunched Leonardo, a portfolio of digital manufacturing technologies that the vendor is embedding into its core products.

"SAP Leonardo, our digital innovation system, enables manufacturing companies to accelerate their digital transformation," said Pradeep Amladi, SAP global vice president of marketing for manufacturing, high-tech and energy resource industries. "It integrates breakthrough technologies, such as IoT [internet of things], machine learning, artificial intelligence, big data and blockchain, along with design thinking methodology and SAP expertise."

Leonardo, which feeds into S/4HANA, makes it easier for manufacturers to automate and digitize processes from the boardroom to the plant floor and across functional silos, from procurement and development to delivery and service, Amladi said in an email. It also enables software-enabled intelligent products based on usage insights and the delivery of "industry-blurring solutions."

If it actually comes to fruition, Leonardo might be the standard setter in digital manufacturing technologies, said Seth Lippincott, an analyst at Boston-based Nucleus Research.

"It sort of sits on top of your ERP system," Lippincott said. "So you have S/4HANA that is your main system of record and that helps you run your business, production schedules, [material requirements planning], whatever ledgers you want to keep ... From the data that you're collecting in your system of record, you're able to gain some insights into running your business better and developing new business models."

Kimberly Knickle, vice president of IDC Manufacturing Insights, based in Framingham, Mass., said that while SAP has Leonardo, Oracle has some IoT-enabled capabilities for the cloud that integrate with Oracle Supply Chain Management (SCM) Cloud applications.

These IoT-enabled capabilities include:

  • IoT Asset Monitoring Cloud, which monitors assets, utilization, availability and data from connected sensors and creates incidents in the SCM, ERP or service loads to automate workflows;
  • IoT Connected Worker Cloud, which tracks employees to support safety, service and regulatory compliance initiatives; and
  • IoT Production Monitoring Cloud, which monitors production equipment to assess and predict manufacturing issues.

The new cloud applications enable businesses to benefit from digital supply chains by enabling them to detect, analyze and respond to IoT signals and to incorporate these insights to deliver innovative new services faster and with less risk to customers, according to Oracle.

"They have, to some extent, created these smaller apps that are focused on taking advantage of IoT and sensor data," Knickle said. "The idea is that it can be connected to Oracle's ERP system, but it also lets you take advantage of the data now. I think that's a lot of what Leonardo is about: Let's take advantage of the sensor data now. I do like the way that Oracle has created these smaller bites so that it may be easier for some manufacturers to consume."

Oracle's SCM Cloud enables manufacturers to digitally connect all of their processes in one cloud-based architecture and provides end-to-end visibility across the business, said Julia Vagdati, product marketing lead for SCM Cloud at Oracle, based in Redwood City, Calif.

Oracle is not just integrating a whole lot of separate products in the cloud, but rather building an end-to-end, process-oriented architecture that is the operating model of the business, said Roddy Martin, vice president of product marketing for Oracle SCM Cloud.

Parsing strategies for digital manufacturing technologies

Nucleus' Lippincott said, although ERP vendors are using the same buzzwords to refer to this digital transformation strategy, including Manufacturing 4.0 and Industry 4.0, he still has questions about their strategies.

"The question I always ask is whether they're doing that now and whether the customers are really going digital now," he said.

SAP's approach has been not to house the digital manufacturing technologies in ERP, but instead to build them on top of it.

"From the conversations I've had with Oracle, its capabilities are baked into the existing services and applications that they have. So it's not like an innovation platform," Lippincott said.

One of the products ERP vendor Infor has in place for manufacturers is its enterprise asset management (EAM) system, said Ziad Nejmeldeen, senior vice president and chief scientist at Infor Dynamic Science Labs in Cambridge, Mass.

"This solution lets our customers register all of their assets, and all of the sensors attached to those assets can be registered and maintained," Nejmeldeen said.

Infor's goal is to take information from sensors about past asset failures and to use it to predict when assets will need maintenance, he said. Therefore, the customer can act on predictions as they see fit and optimize maintenance schedules.

Last year, Infor created a new division, dubbed H&L Digital, to provide digital cloud products so it can offer digital as a service for "cloud-based industry applications, dynamic data-driven insights, cutting-edge user experience design and a connected supply chain network."

Infor said its digital transformation services involve a three-layer approach:

  • Software and platforms: the cloud applications that power a business, including ERP, EAM, SCM, human capital management, configure price quote and Infor ION middleware to integrate them and publish data.
  • Data and analytics: Layered on top of the core apps are API management, insights from Infor Dynamic Science Labs and the computing power of Amazon Web Services.
  • H&L Digital -- "Rethinking the way a business works to make it more effective and impactful for the connected age and create new data-driven ways to deliver an elevated experience, service or product."

Single-platform model uses ERP as hub

ERP vendors are trying to ensure that they can take advantage of sensor data in the supply chain, the plant or wherever the data may come from because it's essential to increasing visibility and understanding what's happening on a real-time basis, Knickle said.

Another ERP vendor working to adopt digital manufacturing technologies is Epicor Software Corp.

"We enable companies to be digital manufacturers through our platform. We don't have a separate platform that we're developing these technologies on,” said Terri Hiskey, vice president of product marketing for manufacturing at Epicor, based in Austin, Texas. "The ERP system is the hub that contains all the information. And for companies to leverage Industry 4.0 technologies, there has to be a way to get all the information in and out. And we do that through our open architecture and APIs."

To support its customers' Industry 4.0 initiatives, Epicor's ERP has a modular platform based on a service-oriented architecture that enables better cooperation across departments, according to Hiskey.

If businesses are to take advantage of the new age of intelligent manufacturing, their ERP and MES systems must be integrated, according to Epicor.

Epicor's MES automatically monitors machines, as well as collects and analyzes production and performance data 24/7, the vendor claimed. It can connect to any ERP system, giving everyone in the plant and throughout the business an opportunity to take action to improve manufacturing performance.

The bottom line: Pretty much all of the major ERP vendors are doing something to help manufacturers become digital companies. They're just going about it in different ways.

Next Steps

Read a definition of digital manufacturing

Understand the role of product lifecycle management in Industry 4.0

Learn about IoT and digital transformation

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