Plant composite application succeeds in wake of acquisition; sparks industry revitalization

SAP says there are today more than 300 installations of its key technology for plant-floor integration just more than a year after acquiring Lighthammer, original developer of what is now the Manufacturing Integration and Intelligence (SAP xMII) composite application.

By connecting plant equipment directly to the enterprise system, SAP xMII is said to uncover and make visible manufacturing exceptions and performance variation, as well as discover root causes of exceptions and discern business impact.

Manufacturers named by SAP as users of SAP xMII include Arla Foods, Eastman Chemical Co., Pemex Gas y Petroquimica Basica, and Whirlpool.

"SAP xMII enabled us to aggregate data from disparate systems across the enterprise and deploy applications rapidly to empower executives, managers, supply chain, and production personnel with the decision support they need," says Scott Dietrich, business performance management team lead, Eastman Chemical Co. "The three-year net present value on the portfolio of composite applications we developed using SAP xMII in 2006 is anticipated to be around $20 million."

A composite application is built by combining multiple Web services, functions from within other applications, or even systems that have been packaged as Web services, orchestrated to perform as an application.

Sudipta Bhattacharya, senior applications VP for SCM, PLM and manufacturing, SAP Labs, says the solution's success is indicative of a larger rejuvenation of the manufacturing space as viable for use of IT to improve productivity.

"We are the clear leader in the fast-expanding manufacturing operations space, and our validation of this composition-layer approach to enterprise connectivity through the purchase of Lighthammer sparked that rejuvenation," says Bhattacharya.

Speaking from the first SAP Adaptive Manufacturing Summit, Bhattacharya says the increased pace in manufacturers' IT investments is reflected in reports coming out of analyst firms such as Boston-based AMR Research.

Manufacturers are finding diverse uses for xMII, including quality programs, ISA S95-based enterprise integration to plant infrastructures such as Wonderware's ArchestrA, and direct delivery of customer exceptions to the plant floor.

The next release of SAP xMII will be Q1 or Q2 2007. "The immediate demand warranted selling the existing product without significant change following the acquisition as an upsell opportunity," says Bhattacharya.

SAP says few manufacturers have the plant-floor integration needed to achieve optimized Overall Equipment Effectiveness (OEE)—one of the most relevant metrics for manufacturing—or the ability to build applications that lead to real process innovation. Based on data feeds from SAP or other ecosystem partners, says Bhattacharya, SAP xMII installs can run from weeks to several months.