Can MES Play a Lead Role?

Can MES Play a Lead Role?
by Stephanie Neil

Posted on Wednesday, February 06, 2008 2:50:50 PM

The criterion for selecting a manufacturing execution system has just changed. It used to be that if a company needed an application to schedule production, trace work in progress, or manage quality, the buying decision was based purely on software functions and price. Today, however, there's a new dimension that determines which MES software will take center stage: ERP alliances.

"We would not have selected a vendor that didn't have a relationship with SAP," says George Chappelle, CIO of Sara Lee Corp.

The reason? Pressure. External factors ranging from regulatory compliance, to global competition, to increasing customer demands are putting pressure on manufacturers to integrate internal operations so that everything runs like clockwork.

Sara Lee is under pressure from the FDA to implement a robust traceability system that can track materials and ingredients in case of a recall, for example. "In the food industry, traceability requirements are stringent today, and they'll be more stringent in the next three to five years," Chappelle says.

So, if Sara Lee's SAP ERP system is ordering raw materials, and its MES system, which is Siemens AG's SIMATIC IT, is consuming the materials, naturally the two must interface so that when something changes in one system, it is automatically reflected in the other. But these systems use data in very different ways. ERP is transactional; MES, on the other hand, works in real time. Aligning the two disparate systems to seamlessly share data in a global landscape can be a challenge. And Chappelle, like many CIOs, can't afford to have staffers spending valuable time doing the nuts-and-bolts integration work.

That's why, when Chappelle went searching for an MES system, he made at least one thing crystal-clear: "Our criterion was that the [MES and ERP] systems have technology integration," he says. And because Sara Lee already had SAP installed, it relied on Siemens to prove that the integration could be done — and done with no pain to Sara Lee.

Indeed, these days, it is up to the MES vendors to step up their integration efforts. ERP software vendors, such as SAP, Oracle Corp., and even Microsoft Corp., are already entrenched in user companies. These ERP companies have spent the past few years rebuilding technologies around Web services and composite applications that are flexible. So ERP is in a leading role and doesn't have to prove much to its manufacturing audience. Rather, it's time for the MES vendors to step into the corporate spotlight. The question is, can MES deliver a great performance?

It was only a few years ago that industry observers and plant managers, alike, described MES as "a mess" — the result of an unruly evolution that led to a complex, monolithic footprint requiring mass-customization. In fact, many companies, Sara Lee included, didn't even use commercial MES applications, but rather pieced together their own homegrown solutions.

Understanding the need to make MES a strategic part of the manufacturing enterprise, many MES vendors are gravitating toward a new manufacturing enterprise model that is based on industry standards and maps out in very specific terms how to connect production operations with business operations in order to meet corporate initiatives. In devising the model, MESA International, an industry organization, broke up the monolithic MES monster into value-added pieces that have a direct impact on whatever key business processes are important to the end user.

The hope is that MES will take on new meaning. " 'MES' is still a term that people recognize and can hang their hat on, but when you get down to specifics, it means different things to different people," says Matt Bauer, director of information software marketing at Rockwell Automation and chairman of MESA International.

MESA's collaborative plant-to-enterprise model focuses on functional areas, such as lean manufacturing, quality and regulatory compliance, PLM, the real-time enterprise, and enterprise asset management. These are all areas that have business impact versus the more technical functions — quality control, key performance indicator (KPI) measurements, and overall equipment effectiveness (OEE) — that MES traditionally has performed.

"We are starting to talk about [MES] as manufacturing excellence applications that lay across the infrastructure," Bauer says. For the first time, MES is gaining recognition within the enterprise as a value-added application. "There is a lot of shakeout going on in our space now," he says. "The lines that used to be drawn between the enterprise and the plant level are history at this point."

May the Force Be with You

Erasing the line that has always stood between the plant and the enterprise requires a great force. In this case, that force is ERP.

Enterprise software vendors SAP and Microsoft are both members of MESA, working alongside major automation players, such as GE Fanuc, Invensys' Wonderware, Rockwell Automation, and Siemens, as well as large manufacturers, including Chevron, International Truck and Engine Corp., and Sara Lee. It's a community of alliances on a mission to redefine the role of manufacturing operations management within the enterprise, members say.

Manufacturing plants are significantly different in 2008 than they were in 1998, says Chris Colyer, worldwide solution director for manufacturing operations at Microsoft. The advent of Ethernet and wireless technology is exposing the plant to the corporate network. "That presents a huge opportunity to drive efficiency, better data models, and better collaboration across multiple plants and multiple time zones," Colyer says.

To get that scalability across the organization, a large number of MES players have built out solutions on .NET Web services under a partnership program with Microsoft. That same group is also lining up behind SAP to become NetWeaver-certified or to build composite applications based on SAP's xApp, Manufacturing Integration and Intelligence (xMII).

SAP tried to break into the MES domain a few years ago and quickly realized it does not have the industry expertise required to deliver a robust end-to-end solution. As a result, the company established an ecosystem of dozens of partners, including most of the MES companies — but not all (see sidebar).

SAP established three levels of partnerships. The basic level is NetWeaver Certification. Siemens, for example, has five certified SAP interfaces for SIMATIC IT. It is what SAP calls a "low-touch" engagement" but is still a worthwhile notch on the MES belt. "It shows a commitment to make sure the applications are using the most effective ways of communicating with SAP's infrastructure," says Maryanne Steidinger, in Siemens' discrete industry marketing group.

The second level is a joint-development effort, involving integration roadmaps and co-marketing agreements. Wonderware sits in this category, having jointly developed three composite applications using xMII to unite aspects of MES and ERP within the same data model. iBASEt, too, has built composite applications, investing lots of time and money in development for the sake of integration.

"We can't have it be that integration scares off everybody and detracts from the value proposition," says Conrad Leiva, vice president of product marketing at iBASEt.

The third type of SAP partnership is a reseller agreement, which SAP, to date, has only with Visiprise. SAP's own staff sells and maintains the product, under the name SAP Manufacturing Execution by Visiprise. SAP has closed a handful of deals since the reseller agreement was set in place last summer.

But the agreement, which basically gives SAP an MES solution, helps Visiprise, too. Having that tight connection to SAP is a dealmaker, says Carter Johnson, senior vice president of corporate development at Visiprise. "There have been deals that we won through SAP that we otherwise would not have been involved with," he says.

But it's more than just a marketing and sales agreement. There is coding and integration happening in the background as well. "The benefit to the customer is that we are taking the burden of integration on ourselves," Johnson says.

Indeed, that's what end users are asking for. "I don't want to do any more integration," says Mike Brooks, staff technologist at Chevron. "What's more germane is interoperability." Chevron looks to the vendors to do that as well as standards, he says.

In fact, standards could be even more important than industry alliances, Brooks says. That's because they can provide the real framework that allows application plug-and-play. In reality, "this stuff should just work together without [our] having to do anything," he says.

At Chevron, Brooks encourages vendors, such as Hewlett-Packard, IBM, Microsoft, and SAP, to come up with a set of products and services centered on work processes, he says. MES, regardless of the brand, should drop in with little to no configuration involved.

And it shouldn't matter what ERP application it is either. Even Oracle, which claims to have its own MES solution, is starting to revamp its partner program to include vendors with industry specialties, industry observers say. Today, technology is aimed at open architectures.

"We are pushing for non-proprietary solutions anchored around pieces that handle meta-data and modeling solutions that understand processes in an open way," Brooks says. That's the mission behind the OpenO&M initiative, a collaborative effort between MIMOSA and the OPC Foundation. It's also MESA's mission.

To that end, manufacturing execution would evolve not as a system, but rather as a framework built around a company's work processes, culture, and industry directives. That means getting a fresh take on MES.

"It is a narrow slice of what needs to happen," Brooks says. "MES has become a brand for certain products out there, but it should [occupy] the space between control systems and business systems, and [define] how you manage operations there."

MES' Moving Pieces

MES should also integrate horizontally across the plant — even into engineering. That's why, if you take a close look, you will see that there are not many independent pure-play MES vendors still around. Many of the companies are getting scooped up by big automation companies that recognize they've been missing a big piece of the plant operations puzzle for far too long.

MES orchestrates what's happening on the factory floor and in the plant. As a result, many vendors and end users are beginning to see the value in connecting MES to applications other than ERP.

"I think a greater integration of the supply chain beyond the first tier will also be important in the coming years," says John Plassenthal, project manager of strategic integration at International Truck and Engine.

And with talk of the digital factory, tighter integration with PLM will be just as important. Siemens, following its acquisition of UGS last year, is working on creating ties between these two domains. And in the aerospace & defense industry, where engineering and manufacturing departments are beginning to work in tandem, corporations are urging best-of-breed MES vendors, such as iBASEt, Intercim, and Visiprise, to establish PLM alliances.

Intercim, for example, which merged with Pertinence earlier this year, recently rolled out a product suite based on .NET 3.0 that is designed to easily integrate with ERP as well as 3D engineering models.

The Intercim product, called Pertinence Suite powered by Velocity, is designed to be easily configured by subject-matter experts who don't have to know how to run program code. "We put business rules in to define how business functions," says Judson Plapp, vice president of marketing and corporate strategy at Intercim. "It has the ability to quickly implement new rules and changes so it can constantly evolve."

The company also has a new pricing model: "The software is free. You pay for credits based on usage," Plapp says. The software-as-a-service approach — much like the way many cell phone plans work — offers the product for little to no cost and lets the customer pay only for the amount used. That is a dramatic departure from buying a multimillion-dollar software license to accommodate multiple sites, Plapp says.

The Intercim technology and new pricing model are clear indications that MES is changing drastically.

"People are getting a better feel for where they are competitive," Rockwell's Bauer says. "But the chess pieces are still moving around. The game is still in progress."

While the vendors figure it out, it's important that manufacturers not become a passive audience, warns Chevron's Brooks. Get involved, whether it's through MESA or an industry-specific organization, he said. If everyone comes together and it's executed right, MES could steal the show.