Both anchor and integrator
ERP's central role in the supply chain gets boost from integration technology
By Roberto Michel, editor -- Manufacturing Business Technology, 2/1/2003 12:00:00 AM
Enterprise management refers to a company's primary systems for enterprise and commerce management. For many companies, an enterprise resources planning (ERP) system unites core functions—including order entry, purchasing, production planning, inventory control, and financials—under a common database and user interface. ERP vendors, however, have evolved into enterprise suite vendors that also offer integrated applications for supply chain management, customer management, and business intelligence. Today's enterprise management solutions also encompass enabling technologies such as portals and middleware that unite applications and business processes.
To run its power-generation operations, TransAlta needs not only fuel, but also information—including data about plant performance, materials, equipment, and financials. The data comes partly from its enterprise resources planning (ERP) system, but the desired information flow is thanks to a layer of integration technology the company obtained via its ERP vendor.
Calgary, Alberta, Canada-based TransAlta is an electric-generation company, but has challenges common to manufacturers, including plant maintenance. In the past, running its maintenance operations meant accessing multiple systems and paper-based data sources. While ERP holds key data, plant-level systems such as plant historians also hold information that TransAlta managers need to make maintenance decisions, says Paul Kurchina, manager of program management for TransAlta.
In short, TransAlta faced a classic hurdle. Despite the usefulness of ERP as a single system for handling core transaction and planning functions, for some business processes, multiple systems—and more specifically, workflows between multiple systems—are the answer. To achieve this cross-application capability, TransAlta deployed what's called an xApp from Walldorf, Germany-based SAP, its ERP supplier.
Like most other major ERP vendors, SAP has expanded into extended application suites for supply chain and customer relationship management (CRM), and also offers portal, integration middleware, and data warehouse software. SAP's xApps are called "composite" applications because they use technologies such as portals and middleware to link together information and business processes from existing systems.
The xApp being deployed by TransAlta is called xApp Visual Information for Plants, or xVIp. The solution unifies disparate sources of data pertinent to asset management. "With our maintenance processes, a number of systems and information sources need to come together and interact," says Kurchina. "This includes not only information from our SAP [ERP] system, but also real-time systems that collect plant information, and document systems. To us, the xApp is the means of pulling all this together in an easy-to-use way."
The type of solution being installed by TransAlta points to a new role for ERP vendors. Not only have vendors expanded their suites to offer supply chain management applications, they also now offer business process management and integration software for tying an enterprise's entire applications environment together.
While analysts predict flat or slightly declining revenue growth for core ERP software over the next few years, ERP vendors can expect healthy growth overall. Much of that growth will come from extended applications, but experts also see integration and business process management as an opportunity.
Brian Zrimsek, a research director with Stamford, Conn.-based analyst firm Gartner, points out that most mid-size and larger companies have multiple types of CRM, supply chain, or even ERP systems, and must find ways to get those systems to work together. As a result, he says, the major enterprise suite vendors "have had to open up their architectures so that they can play nice in the sandbox—so to speak—with other systems."
Technologies such as portals, Web application servers, and data warehouses all are being used by enterprise suite vendors as foundation pieces for integration. Says Zrimsek, "The vendors definitely are starting to take integration up a layer to assemble applications and information to more flexibly support business processes."
Peter Graf, SAP vice president of market strategy, says xApps are a layer of applications that address integration at a business process level. According to Graf, xApps meet this need by "snapping onto existing systems to provide for new and improved processes that are cross-functional, and composite."
In addition to SAP-developed xApps, consulting firms and other third parties are using SAP's middleware to help develop and deploy new xApps. For instance, xVIp was developed by NRX, a Toronto-based vendor of equipment information systems.
The xVIp solution, says Kurchina, uses SAP's portal and middleware to aggregate and visualize data from a plant historian system, from an electronic document management system, and from the ERP system. Roles-based alerts are part of the portal, and SAP's middleware synchronizes changes made on the portal with underlying systems. "xVIp is taking pieces of information within these existing systems, and enabling them to work together around common goals," says Kurchina.
The portal allows managers to make decisions about equipment maintenance scheduling, says Kurchina, which, when done efficiently, leads to improved uptime. The system also cuts the amount of time it takes for managers to access information, including previously hard-to-find paper-based documents that have been digitized by NRX.
As a result, says Kurchina, maintenance tasks that used to take several hours are now done in about 30 minutes. "The time savings is nice, but the real key is increased equipment availability," says Kurchina.
The Microsoft angle
Enterprise suite vendors focused on small- and mid-size manufacturers also are coming out with advanced integration offerings, typically using standards and server software from Redmond, Wash.-based Microsoft Corp. Costa Mesa, Calif.-based SYSPRO, for example, makes extensive use of Microsoft technology.
Harold Katz, technology enabling manager for SYSPRO, says Microsoft technologies are used in at least a couple of different ways. One is a collaborative commerce engine called Document Flow Manager that uses eXtensible markup language (XML) to automate the flow of documents and transactions into and out of the SYSPRO suite. The software uses Microsoft's message queuing technology, and also is compatible with Microsoft's BizTalk integration server product.
Under its e.net solutions offering, says Katz, SYSPRO also offers a set of software objects written to Microsoft's Component Object Model (COM) standard that open up access to the business logic and data in the SYSPRO suite. These objects, says Katz, can have either internal or external integration benefits. For example, COM would allow a manufacturer using the SYSPRO suite to provide inventory look-ups to one of its customers. Internally, COM technology can provide self-service look-ups for casual users of the ERP system.
SYSPRO also is using Microsoft technology to develop XML Web services. With Web services, specific standards and protocols are used to expose, publish, and integrate information that needs to flow between systems.
According to Katz, enterprise suite vendors today are putting more effort into integration technology. "ERP systems in general have become feature-rich, but less fluid," he says. "Now we are seeing a greater interest in system flexibility."
XML is fast becoming the standard wrapper for integration, with vendors such as Carpinteria, Calif.-based QAD making their enterprise suites more XML-compatible. Bill Keese, director of planning and control at QAD, says that QLink, the integration engine at the heart of the vendor's QAD/Connects architecture, has always been able to accept and process XML messages. Now QAD is wrapping the business logic of its ERP system—MFG/PRO eB2—so that information and logic can be exposed to other systems via XML.
On a broader business process management front, says Keese, QAD has developed specific applications that make use of Qlink and XML. For instance, the eQ suite from QAD handles distributed order management capable of tapping into multiple back-end systems, and performing vendor managed inventory.
A suite for integration
Pleasanton, Calif.-based enterprise suite vendor PeopleSoft also offers integration technology, as well as solutions that draw on data from existing systems. Paola Lubet, a PeopleSoft vice president, says AppConnect is a suite of integration technologies.
The suite has three main pieces, says Lubet. The first is PeopleSoft's portal product, the second is a data warehouse called Enterprise Warehouse, and the third is Integration Broker, which handles messaging and business process integration.
The suite is comprehensive, says Lubet, in that the portal offers information management for people, the warehouse organizes data, and the integration broker links processes. Additionally, she says, the metadata behind each product is consistent. "A company can go out and buy best-of-breed tools for any one of these three pillars, but if there is no synergy between the technologies, integration is much more difficult," says Lubet.
PeopleSoft also contends it offers cross-application functionality. An example of this, say Lubet, is PeopleSoft's Incentive Management software. This solution pulls needed data and logic from financials and human resources modules to manage the process of paying incentives and commissions.
For R&M Energy Systems, a Houston-based manufacturer of equipment for the oil industry, a data warehouse solution from its ERP vendor has proven to be both a means of decision support and integration. The company, which uses the Movex enterprise suite from Schaumburg, Ill.-based Intentia, also uses Intentia's data warehouse.
Jim Moore, business systems manager for R&M, says one of the warehouse's key functions is aggregating information needed to pay commissions. Some of that data comes from the ERP system, but other commissions-related data comes from a separate database. "The dynamics of tracking sales and commissions and bonuses in our industry can be complex," says Moore. "Sales districts and other information can change rapidly, and that data needs to be collected and managed in one central place."
Implementing the data warehouse was relatively easy, says Moore, because Intentia provided R&M with about 15 data models it needed for analysis. "It's virtually a turnkey package," Moore says of the warehouse.
As for integrating many systems, that's not an issue for R&M, says Moore. For one, the company is mid-size, and the companies it has acquired have adopted Movex. Says Moore, "One of the key reasons we went with Movex in the first place was a complete offering. We knew we wouldn't have to be doing a lot of integration."
Ultimately, this new wave of integration from enterprise suite vendors is business process-focused. Andrew Moore, director of integration products for Denver-based enterprise suite vendor J.D. Edwards, contends that ERP vendors must imbue their integration software with pre-built support for specific business processes.
In J.D. Edwards' case, it acquired an integration software framework from webmethods, Fairfax, Va., but has done further development around the framework, calling it eXtended Process Integration (XPI). On top of this framework, J.D. Edwards offers eXtended Business Processes, or XBPs, that target integration between specific systems. "There is value in having a sophisticated applications integration framework—the plumbing—but the real value comes from pre-building support for business processes on top of that plumbing, like an order-to-cash process," Moore says.
Such pre-built integration must entail more than templates. As Moore puts it, "Essentially, [XPBs] become service-based applications that run in real time, communicating between ERP and advanced planning systems, or with CRM. A complete integration solution needs to validate transactions, guarantee message delivery, and ensure that business processes are executed and automated in real time."
| Enterprise Management* | ||
| Adonix | Agilisys (including BRAIN) | American Software |
| Baan Company | Best Software | Cincom Systems |
| CMS Manufacturing Systems | Epicor Software Corp. | ESI/Technologies |
| Exact Software | Friedman Corp. | Frontstep |
| GEAC Enterprise Solutions | Glovia International | HarrisData |
| IFS | Intentia | J.D. Edwards |
| Lilly Software Associates | Made2Manage Systems | MAPICS |
| Microsoft Business Solutions | Oracle Corp. | PeopleSoft |
| ProfitKey International | QAD | Ramco Systems |
| Relevant Business Sytems | ROI Systems | Ross Systems |
| SAP | Scala Business Solutions | SoftBrands |
| SSA Global Technologies | SYSPRO | VAI |
| * Based on enterprise suite/ERP vendors from MSI's Top 100 list. Many of these vendors also offer other applications. | ||
| For more info, visit: www.manufacturingsystems.com/software_finder | ||
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