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It was announced this week…

http://www.mbtmag.com/article/CA6570888.html?nid=3436&rid=1258896918

SAP to buy Visiprise.  Those of us in the business knew it was coming at some point, and it happened.  What will be really interesting is to see what this does to the relationships SAP has with other key players in the industry like Camstar, Apriso, Wonderware, Rockwell, etc.  All of these companies have some type of technical or strategic relationship with SAP so they can all say they can “connect to SAP with their MES solutions.”

So now what?  It was hard to argue with a customer that says something like “I spent $XXM on SAP to run my business and if I can leverage that investment to help me run my operations better, that is what I am going to do.”  In the mid to long term, it is going to be very hard to convince a company to use a different MES solution other than Visiprise if they are an SAP user.

I have often wondered who is going to “win” in the MES space - ERP or the Automation vendors.  This move would appear to be a swing in the direction of ERP winning the battle for MES.  I have been silent on posts for a while, but this will provide some good thoughts in the upcoming weeks.

I read all the time that the “surveys show that ERP systems are the key to improved corporate performance.”

I have a slightly different opinion.

While I believe that standardizing, condensing, purging and streamlining can enhance business performance; I don’t think implementing an ERP system is the cause of all of these changes - and therefore improvements.  I think companies that chose to replace their legacy system with a modern ERP solution, are improving their business in many ways besides focusing on the ERP implementation.  Lets look at some other possible factors:

1. Companies that put in new ERP systems are probably already making money.  Most struggling companies don’t say “lets put in a new ERP, that is our key to turning this thing around.”

2. Companies that put in a new ERP system are improving many parts of their business and the support of a modern, consolidated solution helps in those improvements.

3.   This is just a hunch, but most people in leadership that choose to implement a new ERP system have done it before.  It happens, but I’ll bet it is rare to have the legacy leadership choose to move away from the legacy systems.  More often, there is a change in leadership, ownership, etc. that leads to these changes.

I believe modern systems can definitely have positive affects on the business.  However, I think the positive performance of these companies due to many factors.

There is a debate brewing about wether ERP or the large automation/software vendors like Rockwell, GE Fanuc, Siemens, and Wonderware are going to “win” in the MES space.

I would be curious to hear what everyone thinks about this?

We once had a MES project with a large medical devices company.  This was a great project, that started well, and then the project sponsor went on vacation.  After a week he did not return, then two weeks, then three….

Then, not at all.

We all (Flexware and the customer) found out the way he had justified the MES project was by using some budget left over from another project.  They certainly needed the MES, and we all knew this was going to be a great solution.  These games get played with capital money sometimes, but this one got some real scrutiny when this guy left the company.  The project manager we were working for (she worked for the sponsor that left) called us and asked us to stop our work immediately.

The big meeting….

So here we are, a small company with this large project, stalled.  The Plant Manager called a meeting and asked us (now this was our problem) how we were going to justify this project.  He said “If you can’t tell me right now how much this project is going save me, we are not going to do it.”  Of course, he meant finish it.  I replied by saying “Justifying MES systems is very difficult and requires good data, great understanding of the problems and opportunities, and will take some time.  I can have the project finished in the amount of time it will take to do the justification.”

After some more flaming hoops, we got to finish the project and it all ended well.  It is a constant reminder that sometimes MES takes vision and faith.  I liken it to on-line banking.  There were probably many “old-school” banks that probably scoffed when someone said “you better get online banking up and running here or you may be out of business.”  “Where is the ROI?  Prove it to me!”, they said.  I hope they took the leap of faith and invested in these improvements, because if not, they may be watching from the sidelines.

Same goes for manufacturing and MES investments.  Sometimes it is ROI, vision, and faith combined that gets these projects done.  Sometimes it is leftover capital budget.

Oracle has announced a partnership with Kepware to build OPC connectivity into their ERP solution.  This will be interesting.

As MES professionals, we are always debating “who will win?”  Is it the ERP companies, or the automation companies that will win the battle for the MES space?  This seems to be a play for Oracle that tells the world, “we are coming down into automation to get the data we want.”

I will be curious what type of data repository, or manufacturing execution system database schema Oracle has, or will, put together to house this information.  How will it be reported?  How will it be presented?  How will this data drive business logic?

I do like the acknowledgement from Oracle that there is valuable data in shop floor systems that needs to be integrated into ERP.  Perhaps one they get into some projects, they will see just how fun shop floor integration projects are!

As a side note, Kepware is an awesome company, and they have the best OPC Servers in the market. (IMHO)

Original news on MBT Magazine….