SAP applications ecosystem spawns new capabilities, performance opportunities

When discussion steers toward concepts such as partner ecosystems and integration middleware, the business imperatives behind the concepts can get lost pretty easily. But not for Tom Alloway and other managers at NOVA Chemicals.

Alloway is corporate advanced process control (APC) leader at the Pittsburgh-based manufacturer of plastics and chemicals. He says NOVA is using a composite application based on software from SAP and its partner Pavilion Technologies that combines Pavilion's predictive capabilities for plant-floor performance with data drawn from an SAP ERP system to arrive at profit-related insight that optimizes capacity. SAP's NetWeaver integration and application platform—as well as its efforts in building a strong partner ecosystem—helped make such solutions possible.

But to Alloway and his colleagues, all that really matters is the information itself.

“For most of us, we don't even know NetWeaver is there as part of this solution,” says Alloway. “We just think in terms of the new capability that we have—this new view of information for capacity optimization.”

SAP and its independent software vendors (ISV) are busy offering up a new breed of joint solutions that use NetWeaver as the glue. The size of this ecosystem is expanding, with more than 2,000 ISVs involved. Dozens have attained Powered by NetWeaver certification, which is based on using at least two pieces of the NetWeaver stack.

“SAP is doing very well with its ecosystem,” says Jim Shepherd, a senior VP with Boston-based AMR Research. “It has a very large customer base, and that's attractive from the ISV perspective. The ISVs are aware that NetWeaver certification—or even better, the Powered by NetWeaver status—is the price of entry for greater access with that customer base.”

Like its key ERP rivals Oracle and Microsoft, SAP realizes it needs a strong ecosystem.

“It's in the interest of the big suite vendors to nurture their ecosystems,” says Shepherd. “They need those partners to offer more complete solutions, and validate their platforms.”

Of course, the big ERP vendors have long-established partner programs as well as integration technology. Only in recent years have they introduced newer middleware platforms based on Web services technology rather than relying on application programming interfaces (API). In the view of many ISVs, SAP is proving itself a leader with NetWeaver and the resources invested around the platform.

“There is a real corporate commitment from SAP to go with this platform,” says Bob Salvucci, CEO of MCA Solutions, a service-parts planning vendor with Powered by NetWeaver status. “You can see the commitment in the organization SAP put behind NetWeaver and its partner programs. There is more realization today from SAP that they won't be able to build it all.”

While there are many pieces of the NetWeaver platform, when it comes to solutions for manufacturing, a key technology stems from SAP's acquisition nearly two years ago of plant intelligence vendor Lighthammer. SAP has evolved Lighthammer's technology into a solution called SAP xApp Manufacturing Integration and Intelligence (xMII) that addresses the disconnect between the plant floor and the enterprise.

Sudipta Bhattacharya, an SAP senior VP, says xMII serves as a middle layer for tying plant-level information from partner systems with enterprise data and business context from the ERP level. For instance, says Bhattacharya, a manufacturing execution system (MES) or plant historian may detect a batch or production order has fallen out of quality specification. Via xMII, the event can be matched with appropriate actions, such as further quality testing, order replanning, or expediting a shipment from another plant.

“There are all these events happening across different locations in the supply chain,” Bhattacharya says. “The greater the latency between the detection of a significant event and the actions that need to be taken, the more inefficiencies that will creep into the supply chain. So if we can take those events that are being detected by a partner solution in real time and allow managers to act on them, then we've addressed a major hole that exists today.”

Nova Chemicals is benefiting from this ability. Its solution—piloted at an Alberta, Canada-based plant that produces ethylene and polyethylene—leverages Pavilion's Model Predictive Intelligence (MPI) technology to support predictive analytics on the outcome of production, as well as real-time production visibility.

Using xMII, NOVA taps information from MPI and correlates that with enterprise data to deliver trending displays, including the ability to see contribution margin by product. Meanwhile, NOVA uses SAP Enterprise Portal, another part of the NetWeaver stack, to manage who sees what information according to their roles.

The MPI portion of the solution went live in January 2006, while the xMII piece that is key to the composite approach went live a couple of months later. Most managers see the trending either via the SAP-powered portal, or in the case of operators on the plant floor, the displays are seen through the Pavilion8 interface, or as values through the distributed control system.

Integration between Pavilion MPI and SAP xMII was not difficult to achieve, says Alloway, because of Pavilion's close partnership with SAP. The Pavilion8 product family has Powered by SAP NetWeaver status, and integrates with xMII for visualization. It also supports NetWeaver's XI integration broker.

Both Pavilion and NOVA Chemicals are part of SAP's Industry Value Network (IVN) for the chemicals industry.

The trending allows managers to more easily see how current production decisions impact contribution margin. For instance, says Alloway, it may be that an order for a given plastic is most profitable only under certain conditions—such as when specific equipment is available. “Ultimately, we are able to log on and immediately see the value of the decisions we are making on the plant floor,” he says.

Prior to the composite approach, it would have been difficult to achieve such timely decision support. Experts would have had to log onto different systems, gather data, combine it into a spreadsheet, and disseminate the analysis.

Such an exercise likely would have lacked the right degree of analytical context. As Alloway puts it, “We didn't have timely displays that showed the production and contribution trends all linked together, with the capability to see the actual dollar value associated with the trends.”

ISVs say NetWeaver is more flexible than the days when integration relied on SAP's Business APIs—or BAPIs—and its Intermediate Document (IDoc) data-transfer technology. While BAPIs and IDocs are still in wide use, integration based on NetWeaver holds the advantage, says Scott Watson, an industry director for Brooks Software, an MES vendor with Powered by NetWeaver status.

“BAPIs are more proprietary versus the service-oriented approach of NetWeaver,” Watson says. “NetWeaver brings more flexibility to the integration, and more easily supports real-time communication.”

ConAgra Foods, an Omaha-based food products manufacturer, is benefiting from a Powered by NetWeaver solution. In 2006, ConAgra deployed the SmartOps Multistage Inventory Planning & Optimization (MIPO) application, a tool that helps ConAgra set the policies governing inventory levels for its downstream stocking locations, says Bob Masching, VP of sales and operations planning for ConAgra.

Masching says the level of SAP certification was one of the factors ConAgra considered in looking for an inventory optimization solution. The subsequent MIPO deployment using the certified integration fits well within ConAgra's SAP environment, he adds, with its main touch points being with SAP's Advanced Planner & Optimizer (APO) tool. The systems exchange data on shipment history, forecasting, and relevant supply plans.

“The good fit with our SAP environment primarily is driven by the level of certification and the relative ease of being able to integrate common master data between the two applications,” explains Masching.

SAP's support for partners isn't just about technology, however. Mitch Kick, SAP's VP of strategy for platform ecosystem, says SAP also works closely with partners to identify functionality gaps—or “white spaces”—that can be addressed by composite solutions.

For several years, says Kick, SAP has published Solution Maps that outline SAP and partner functionality. SAP's Industry Business Units, which involve participation from end users, play a key role in identifying needed functions. Another way end users take part in the ecosystem, Kick adds, is through the 650,000-member SAP Developer Network.

“Other vendors talk about their ecosystems in terms of the number of partners,” Kick says. “We've moved beyond that by putting our customers front and center as co-innovators in our ecosystem efforts.”

SAP's IVN program—which includes those for the chemicals, high-tech, and consumer goods sectors—is part of this customer-focused aspect of the ecosystem. The IVNs are guided by SAP end users, and include ISVs and systems integrators with deep industry experience.

“The IVN program is about hearing what customers require, and what information they want to use,” says Gregg Le Blanc, director of product marketing for OSIsoft, a vendor of real-time operations management software and a member of the chemicals IVN.

In OSIsoft's case, says Le Blanc, its PI System historian aggregates real-time process trends from the plant floor. OSIsoft also developed a metadata repository called the Data Directory that further organizes plant information before it is passed upward as a Web service to the NetWeaver layer. Right now in the chemicals industry, says Le Blanc, a hot button is how to fine-tune plant operations to save energy.

According to Tim Sowell, a VP with plant management vendor Wonderware, part of Invensys, which currently belongs to two IVNs, the main advantage of a program such as IVN is it leads to joint solutions that are closely tailored to user needs. For the vendors, the programs create a closer working relationship with SAP, especially with product planning issues such as identifying functional gaps. “This is a much closer level of work than was ever done under a pure certification program,” says Sowell.

John Dyck, global director of production management for GE Fanuc Automation, which announced a sales & marketing agreement with SAP Americas last October, says xMII excels at passing up the right details needed for industry solutions. For instance, rather than simply passing up consumption totals for an order, individual lot numbers or summary process data for that order also can be passed upward.

“We are establishing a way to share information between production management and the SAP environment in the right context,” says Dyck. “This supports a composite-application approach that resolves specific business scenarios.”

Carter Johnson, a senior VP with Visiprise—an MES vendor with both IVN membership and EBS status—agrees that NetWeaver-based integration supports the level of detail needed for industry solutions. In the past, he says, MES-to-ERP integrations tended to be one-off projects and relatively basic: moving data such as schedule down to MES, and consumption back to ERP.

Using capabilities such as xMII, Visiprise and SAP have mapped out detailed information flows. For example, a standard integration could support an engineering change in ERP that triggers specific MES actions, such as whether affected work orders are sent to a rework loop or needed changes are made in process, including the proper genealogy tracking.

“Those are among the complex scenarios we handle with xMII,” says Johnson. “The effect is to take away more of the integration burden from the customer.”