SoftBrands to Institute Fourth Shift for SAP Business One Manufacturing Work-Plan Part Two: SoftBrands


At the National Manufacturing Week (NMW) event, held February 23-26, 2004 in Chicago, Illinois (US) SAP AG (NYSE: SAP), the leading provider of enterprise applications, announced the availability of new industry-specific solutions for small and midsize manufacturing companies, with the aim of extending its leadership as a provider of solutions for an even broader range of companies, from small enterprises via mid-market companies to the world's industry leaders.

As for the lower-end of the market, SAP has designed SAP Business One to meet the core management needs of dynamically growing small and midsize businesses, and is moving to better address the specific needs of small and mid-sized manufacturers through a planned strategic solution relationship with SoftBrands (, an established privately-held global leader in manufacturing management systems for small and medium businesses (SMB), whereby the two vendors have initiated efforts to integrate SoftBrands' leading manufacturing software product Fourth Shift with SAP Business One. Fourth Shift is a renowned mid-market, web-based manufacturing management solution that has broad functionality and that facilitates many critical business functions including manufacturing, operations, financials, and customer and supplier relationship management (SRM).

See Part One of this note for details on the approach to the higher-end of the SMB market.

On the SoftBrands' side, the Fourth Shift product line will still be available as a separate system and will continue to be developed as the vendor remains focused on the hospitality and manufacturing industries. With more than 5,000 customers in over 60 countries now actively using its manufacturing products (i.e., Fourth Shift, evolution, and DemandStream) and hospitality products (i.e., PORTfolio, Medallion, and RIOGrand), SoftBrands has established a worldwide infrastructure for distribution, development, and support of enterprise software. The company, headquartered in Minneapolis, Minnesota (US) has over 500 employees with branch offices in Europe, Asia, Australia, the Middle East, and Africa.

At the end of 2003, SoftBrands announced the highly anticipated release of Fourth Shift 7.30, which should confirm the company's continued commitment to its customers and products, since over seventy of the enhancements in Release 7.30 have been delivered at the request of customers. At Release 7.30, Fourth Shift significantly broadens accounting capabilities as well as other key areas of business operations. Customers are also afforded improvements in the web-based application of the Fourth Shift product, My Fourth Shift Workplace, while tighter security and easier retrieval of data are also hallmarks of this release.

In a continuing move to provide products and services on the latest Microsoft technology, which has been hinted after the release of Fourth Shift 7.20 in 2002 (see Fourth Shift's evolution Within SoftBrands' DemandStream), release 7.30, introduces FSTI (Fourth Shift Transaction Interface), which provides a common transaction interface to Fourth Shift business logic in the .NET environment resulting in an interface that is easier to use, more reliable, and easier to administer.

At the about the same time, the vendor announced that DemandStream, one of the leading best-of-breed lean enterprise automation solutions, has been integrated with the Microsoft Business Solutions' (MBS) enterprise resource planning solution Axapta. Axapta is gaining market acceptance in the US and by integrating with DemandStream, it will provide its customers a toolset for their journey to "lean" manufacturing, since economic conditions and global competition have led manufacturers to look for an alternative to "push" manufacturing. Still, although lean manufacturing is gaining wide interest and acceptance as the next big event for the manufacturer, traditional ERP systems typically revolve around push manufacturing and leave little capability to manage the lean manufacturer (see Pull versusPush: a Discussion of Lean, JIT, Flow, and Traditional MRP).

This is Part Two of a five-part note.

Part One began the event summary.

Parts Three and Four will discuss the market impact.

Part Five will cover challenges and make user recommendations.


Thus, SoftBrands claims DemandStream's integration to Microsoft Axapta and other various ERP systems now provide the manufacturer with a true lean ERP system. According to the vendor, DemandStream is the "lean conversion kit" that allows customers of Axapta and other ERP systems, to preserve their existing ERP investment while providing a lean (pull) based capability. That is done by deploying kanban management by cell in a "real time" environment. DemandStream provides factory floor management of dynamic kanbans, lean material flow management, and supply chain material/demand signals with visibility to both vendors and customers.

To that end, DemandStream provides back office integration tools for importing data using Import Wizards into the Shop Floor Module from a back-office system, and for inputting data using extensible markup language (XML) messages generated by the Shop Floor module back into a business system. Applets are included that generate manufacturing orders and purchase orders, item changes, bill of material (BOM) changes, and non-replenishable kanban.

The product delivers the following four important capabilities to manufacturers:

  1. Dynamic Kanban: Enables kaban sizing and re-sizing to be synchronized with the demand pattern of the business. This allows lean manufacturers to achieve improved material flow and reduce overall production leadtimes.

  2. Lean Scheduling and Demand Smoothing: Balances customer demand smoothly to the shop floor for timely and efficient execution. DemandStream delivers visualization to traditional Heijunka smoothing techniques and drives the execution data all the way to the cells for execution without the challenges of manual techniques.

  3. Supply Chain Planning and Execution: Supply Chain Execution is an interactive Web-based application that enables the shop floor to interact with suppliers through the Supplier Kanban Board. Features include interactive shipping and an enhanced XML messaging system, while reports include Projected Usage and Vendor Performance Statistics.

  4. ERP System Transaction Automation: Manual lean implementations are still relying on ERP systems to process transactions. This burden often times off-sets significant portions of the gains realized by adoption of lean practices. DemandStream's Back Office Integration capabilities will automate or eliminate most of the ERP system transaction processing effort.

Consequently, the product should allow manufacturers to leverage their investment in ERP systems and at the same time embrace lean manufacturing methods, and thereby improve productivity, competitiveness, and profitability, all being a must in current difficult economic times. Available off the shelf, DemandStream is able to interact with most ERP systems including Fourth Shift and evolution and thereby bridge the chasm between companies that are heavy planners, and those that must respond to constantly changing demand on the fly. SoftBrands claims that the integration with Axapta took less than 3 weeks, owing to DemandStream's architecture and the advantage of the latest technology using Microsoft's .NET platform. DemandStream is expected to release a number of other ERP integration platforms in early 2004.

This concludes Part Two of a five-part note.

Part One began the event summary.

Parts Three and Four will discuss the market impact.

Part Five will cover challenges and make user recommendations.

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