Has SAP Nailed Plant Level Leadership with Lighthammer?

Event Summary

At the end of June, SAP announced that it was delivering enhanced connectivity between the plant floor and the enterprise by acquiring Lighthammer Software Development Corporation (http://www.lighthammer.com), a privately-held supplier of enterprise manufacturing intelligence and collaborative manufacturing software, based in Exton, Pennsylvania (US). Lighthammer and SAP shared a vision of adaptive business networks (ABN), as illustrated by their longstanding partnership, during which Lighthammer was a premier "SAP Powered by NetWeaver" and SAP xApps partner. The company's approximately sixty employees have reportedly remained in their current facilities, and have become a part of SAP America and SAP Labs. Mufson Howe Hunter & Company LLC, a Philadelphia, Pennsylvania (US)-based investment bank, served as financial advisor to Lighthammer on this transaction.

At the time of the announcement, the two merging parties and formerly close partners believed that the acquisition would deliver value through improved manufacturing performance with more rapid time-to-value for SAP's installed base of more than 12,000 manufacturing customers. Lighthammer's Collaborative Manufacturing Suite (CMS), currently used by hundreds of companies worldwide, including more than 100 Fortune 500 manufacturing companies, was to be delivered as an SAP xApps composite application on the SAP NetWeaver platform, so as to provide enterprises with what SAP refers to as adaptive manufacturing (i.e., the ability of a manufacturer to profitably replenish the supply chain while dynamically adapting to unpredictable change). For background information on this acquisition, see The Importance of Plant Level Systems, Multipurpose SAP NetWeaver, and Enterprise Resource Planning Giants Eye the Shop Floor.

Lighthammer CMS has been re-branded as SAP xApp Manufacturing Integration and Intelligence (SAP xMII). Built on a modern, service oriented architecture (SOA)-based foundation, the former Lighthammer CMS provided a broad set of services that were required to relatively quickly assemble operational excellence applications in the areas of performance management, continuous improvement, and operational synchronization. The initial version of xMII is basically the former Lighthammer software, re-released in accordance with SAP software production methodology. Moving forward, the xMII team charter will be to help SAP manufacturing customers achieve better business performance through the synchronization of operations with business functions and continuous improvement. This translates into packaged manufacturing integration and intelligence solutions targeted for real time performance measurement. On the integration front, xMII will maintain a considerable degree of autonomy, but will also be closely associated with SAP NetWeaver, running on the SAP NetWeaver Web Application Server (WAS). This is because autonomy is required to match the unique product needs of manufacturing operations that are non-SAP shops or are driven by limited on-site information technology (IT) resources and skills, both of which can be an obstacle to leveraging the complex NetWeaver stack.

The SAP xMII solution will provide near real time visibility to manufacturing exceptions and performance variances, including root causes and business impacts. This will enable manufacturers and their production personnel to better adapt to change and to more rapidly respond to unforeseen demand and supply events. In addition, this combination reportedly will permit SAP to deliver real time transactional integration between enterprise resource planning (ERP) and plant floor systems. Another potential benefit will be the ability to provide unified, real time analytics and visualization, often referred to as manufacturing intelligence or plant intelligence, out-of-the box to manufacturing customers. Moreover, with the xMII solution, SAP is also aiming to enable user companies to leverage their current investments at a lower total cost of ownership (TCO). For more information, see Plant Intelligence as Glue for Dispersed Data?.

Using the Instrumentation, Systems, and Automation (ISA)-95 standards for process manufacturing interoperability (an emerging standard for interfacing low level industrial control level [ICL] code to business applications, which aims to further reduce the complexity of building custom connections to shop floor systems and thereby accelerate the time-to-value for the end customer), the Lighthammer and SAP manufacturing solution will exchange data and render them through SAP manufacturing intelligence dashboards, in order to deliver actionable intelligence in the form of alerts, reports, key performance indicators (KPI), and decision support to production personnel for right-time decision making (see Manufacturer's Nirvana—Real Time Actionable Information and SAP NetWeaver Background, Direction, and User Recommendations). The combined solution will thus allow production personnel to identify deviations in real time, provide drill-downs so as to understand the business and financial impact of the exceptions to be managed, and display the workflows so as to resolve them relatively rapidly and cost-effectively. The aim, of course, is improved productivity.

This is Part One of a two-part note. Part Two will analyze the market impact of the acquisition, and make user recommendations.

Utilizing Plant Intelligence

One idea that has been gaining in popularity lately is the inclusion of a value-adding process layer that can fairly easily link to scattered data sources, retrieve specific data, perform process logic, and deliver a meaningful output. Companies are applying manufacturing (plant) intelligence systems, such as the one supplied by Lighthammer, to aggregate appropriate information from plant-focused data sources into a meaningful context for presentation and analysis. These systems are a combination of integration or middleware platforms and business intelligence (BI) applications, since portals can aggregate and process manufacturing data for specific user communities, and then can share scheduling information across collaborative value chains. On the other hand, manufacturing intelligence systems can collect specific data from plant-focused devices and systems, and then analyze and present the information in dashboards and other KPI tracking systems. For more information, see Plant Intelligence as Glue for Dispersed Data?.

Integral to Lighthammer is the concept of non-intrusive connectivity, allowing legacy data sources to be integrated into the overall enterprise decision support scheme with minimal effort and no disruption to operations. The product's connectivity is not limited to data sources, as it can deliver information to a broad range of Web devices, including all major browsers, handheld or palmtop devices, Web phones, and enterprise applications. The visualization functionality includes a variety of charting components, support for wireless devices, and a set of wizards for automatic generation of Web page content for users with little or no technical expertise. There is also an animation editor in the Lighthammer technology that enables users to animate objects. For instance, one might want to be able to see a vessel actually filling up and see the level changing.

A comprehensive reporting module allows content from multiple data sources to be aggregated and correlated in a single report, which can be either "live" or static, and displayed in a browser, printed, or disseminated via e-mail. For some time, the product also has provided an "enterprise" option for multi-site views of production and manufacturing operations. This option enables multiple Illuminator (a core component of the former Lighthammer CMS suite that features solid extract, transform, and load [ETL] capabilities) servers throughout the business to provide a single, unified view of enterprise information. This allows, for example, a corporate process engineer to assist plants with process problems, or a production executive to view real time manufacturing results at a number of sites from a single web browser.

The Lighthammer technology connects to the three areas that users need connection to.

  1. It connects to the main SAP modules.
  2. It connects to the dashboard, so that users have KPIs coming out of both the SAP environment and the manufacturing systems.
  3. It connects to a BI platform, which is useful as the data warehouse (i.e., SAP BW) environment is an important source of information. For example, a customer might want to capture information about reason codes for failure, so that when things are not made as they are supposed to be, all that information is captured in a data warehouse.

The problem is that, while information comes from production operations, goes to a data warehouse, and is viewed by the business, the very people who fed the information in typically do not see the data. In fact, because of a ripple-up effect of failures into the business down on the shop floor, sharing information through the manufacturing intelligence dashboards out of the BI layer can be as valuable in some cases as getting the information from the production level. For this reason, Lighthammer touts its ability to enable manufacturing in an adaptive environment by providing the business context for manufacturing data on an event-based integration in order to close this loop between the business and production levels.

Scenario-based Example

At some SAP events, the two formerly independent partner vendors related a scenario-based example that was modeled around a paint process, which had both process industry characteristics (e.g., using reactors and vessels that handle liquids and fluids) and consumer packaged goods (CPG) industry characteristics (in that material is packaged and ultimately put in a warehouse or on a shelf).

The process that the SAP and Lighthammer teams have developed starts with material being added to a mixing and reaction process, whereby the product is extracted from the reaction, and then filtered, dried, and placed as an intermediate in cans. This particular process is also applicable to the pharmaceutical industry. The product is then packaged, palletized, labeled, and shipped to a distribution center, where quality tests are performed and the ISA-95 integration standard is employed to exchange schedule and performance data between the ERP and plant-level applications. To eliminate any latency or lack of synchronization, the production plan update and associated master data are automatically transmitted to the plant floor via SAP XI using the ISA-95 integration standard. The production plan synchronizes the plant systems, so that performance data, including status costs and quality information, are fed back into SAP in real time.

To be precise, the production schedule is sent from mySAP ERP to Lighthammer CMS (now SAP xMII), transmitted to the automated system, and then displayed on the manufacturing dashboard. After the batch is executed, Lighthammer aggregates production performance data and automatically updates the mySAP ERP inventory. Needless to say, the solution also tracks how things are developing throughout the batch, capturing not only the start and end points of a batch, but it also the intermediate ones. Thus, based on the sensitive data its captures as the batches are being manufactured and on some Six Sigma control analysis, Lighthammer technology detects quality problems, generates alerts, and quarantines the batches in mySAP ERP.

Quarantining a batch based on an anomaly in the process is the epitome of a closed-loop behavior. Production quality alerts appear in the dashboard, and the production supervisor can then drill down into the alert to perform a rapid root cause analysis. At this point, it is important to have not only the visibility to stop or change the process, but an understanding of why this problem has occurred so as to prevent it from reoccurring. The final stage would thus be the production supervisor initiating a corrective action to fix the problem, resolving the exception before it becomes a customer issue in an effort to have a continuous improvement environment.

Another often presented scenario leverages radio-frequency identification (RFID) technology. In this scenario, one might have paint cans containing a certain color or a certain blend that are moving more quickly than others. RFID-enabled business processes would indicate the pattern of these cans on the floor. In addition, the notification of material available for shipping would occur automatically and immediately. What one would like to be able to do is to respond at the manufacturing level to this change on "now what?" basis. For example, the sales department might want to rapidly capitalize on this opportunity. In this scenario, the production plan can be re-aligned in real time, based on the actual capability to deliver or the capability to promise (CTP), and the transient opportunity can be successfully realized since one has the ability to respond.

With the above scenario, we are talking once again about a closed-loop application, whereby Lighthammer receives the schedule and master data from SAP, and Lighthammer in turn uses SAP XI to deliver real time alerts and KPIs to the SAP dashboard. The dashboard itself is a composite application consisting of the XI views, the KPIs, and any accompanying alerts. There might be alerts coming out of the SAP environment and out of the external plant level systems as well. In which case, Lighthammer would be monitoring conditions, calculating KPIs, and further applying execution logic.

The possible value of this for customers could be multifold. First of all, it is a closed-loop system with real time synchronization—when a plant manager is looking at data from Lighthammer on his or her dashboard, it is live data. Moreover, users have control over how often the data is sent to the screen, which is done automatically in the background. The business implications of quality performance and delivery issues on the shop floor are thereby quantified and made visible, while proactive exception detection is supported to minimize the overall supply chain impact. In addition, production personnel are empowered with a productivity tool that enables them to access all the relevant documentation on one single dashboard or system, in order to manage by exception, leverage the dashboard as a decision support environment, perform tasks assisted by automated workflows, and initiate improvements and monitor their impact with the KPI dashboard.

Lighthammer CMS 11.0

In May 2005, almost immediately before the acquisition, Lighthammer unveiled CMS 11.0, which was a major upgrade of the flagship product, featuring enhanced scalability, multisite metrics, security, and traceability for regulatory compliance of the composite platform for building manufacturing intelligence applications. The new release also added features that extended the development environment's existing performance management, continuous improvement, and operational synchronization capabilities, which were SOA-based. Importantly, the new capabilities aimed at helping developers to more easily build and deploy applications that can be accessed across the distributed manufacturing enterprise. At least 60 percent of the code in version 11, which had been under development for about a year, had reportedly been rewritten. For end users, this might mean about 15 percent more functionality and a complete upward compatibility with existing applications.

Among the most significant enhancements to version 11.0 was the Security Manager service, which added unified user management and single sign-on capabilities for run-time applications. This means users will be able to access any CMS-built application regardless of the platform on which it runs. Therefore, CMS, which previously operated only on Microsoft Windows-based systems, can now run on other operating environments, such as Linux, Sun Solaris, and HP-UX. The service also allows integration with a wide range of third-party authentication systems, including SAP, lightweight directory access protocol (LDAP) using Active Directory, security assertion markup language (SAML), Windows Domains, Kerberos from Massachusetts Institute of Technology (MIT), and others. These features should allow customers to manage user roles, memberships, and attributes better, as well as to define authentication or authorization services either from existing enterprise user management directories or through the Lighthammer application. This service should thus provide the ability to implement a security strategy that could fit virtually any existing enterprise architecture and should extend "single sign-on" into the domain of plant applications, improving compliance.

Additional compliance and traceability features that were added include an electronic signature service and a multilevel confirmation or challenge capability, which securely controls and documents user actions for regulatory compliance with 21 Code of Federal Regulations Part 11 (21 CFR 11), Sarbanes-Oxley (SOX), and other regulations. The enterprise application integration (EAI) capabilities have also been enhanced, with the addition of new business logic capabilities that take advantage of Web services in SAP NetWeaver to simplify data integration between plant systems and enterprise systems. Last but not least, the generally available CMS version 11.0 laid the groundwork for another upgrade set. Currently, the product is built mostly on Java, but the logic engine is based on Microsoft .NET. The next release, however, will be 100 percent Java-based, which should give customers a much broader choice of development platform.

Lighthammer's process manufacturing industry expertise and foresight in developing intelligent manufacturing middleware was helped by its early commitment to open technologies like the ISA-95 standard, Java, extensible markup language (XML), and SOA. Even earlier releases featured Lighthammer's leadership in the deployment of these open technologies as enablers for acquisition, analysis, distribution, and presentation of information from manufacturing systems. Lighthammer CMS functionality has long included built-in transformation of data into any standard XML message structure, such as Microsoft BizTalk, RosettaNet, and others, as well as the ability to interface with peer plant-level or enterprise-level systems using XML as the default data format for both incoming and outgoing data. Back in 2001, Illuminator 8.5 introduced a breakthrough Intelligent Agent subsystem, which could be used to enable inter-application messaging upon detection of production events or exceptions; automated calculation of KPI metrics; automatic transfer of information between XML, database, and e-mail sources; the gathering and conversion of data from external Web sources; and much more.

The product now provides an expanded set of connectors, which enables users to mine information from a broad range of manufacturing technologies, including Rockwell RSView, Siemens WinCC, Schneider FactoryCast, USData FactoryLink, Citect, and general-purpose open process control (OPC) servers. The product also allows direct connections to Sybase and IBM DB2 databases, which augment the extensive list of connectors already available for Invensys-Wonderware, Intellution, Oil Systems, Aspen Technology, Oracle, Microsoft SQL Server, and open database connectivity (ODBC) data sources.

This concludes Part One of a two-part note. Part Two will analyze the market impact of the acquisition, and make user recommendations.

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