Oracle takes on the plant floor
There is more to Oracle Corp.'s application strategy than big acquisitions, its future Fusion applications, and its stack of Fusion middleware. For manufacturers, that something extra is production execution. Oracle has offered higher-level production planning and resource management functionality for many years—even addressing flow manufacturing—but with Release 12 of its ERP sui...
There is more to Oracle Corp. 's application strategy than big acquisitions, its future Fusion applications, and its stack of Fusion middleware. For manufacturers, that something extra is production execution .
Oracle has offered higher-level production planning and resource management functionality for many years—even addressing flow manufacturing—but with Release 12 of its ERP suite, it takes square aim at manufacturing execution system (MES) capabilities.
This is no mere tweaking of a shop-floor control module, says Manish Modi, VP of manufacturing and product life-cycle management (PLM) development at Oracle, but full MES applications for either process or discrete industries.
“For the low- to medium-complexity manufacturing environment, we've created a one-stop shop where you can get not only your ERP manufacturing solution from Oracle, but also an MES solution,” says Modi. “The feedback of customers—those using some of our capabilities on the shop floor, as well as those using a third-party MES—was, 'Why don't you make more of an investment in a solution that we can use directly on the shop floor?' We've done that with Release 12.”
There are two Oracle MES solutions: Oracle MES for Discrete Manufacturing, aimed at a variety of discrete verticals; and Oracle MES for Process Manufacturing, aimed at sectors including food & beverage, chemicals, pharmaceuticals & biotech, metals, and natural resources. Both work in conjunction with the manufacturing master data in Oracle E-Business Suite Release 12, and are available now.
For manufacturers, this approach from Oracle carries questions, such as just how deep does the MES functionality go, and where does it leave best-of-breed partners. The stakes are high for manufacturers, which, according to Boston-based AMR Research , are focusing on manufacturing application investments, and need those applications to blend effectively with enterprise processes.
Colin Masson, an analyst with AMR, says Oracle's MES solutions do contain “deep” functionality not normally offered by ERP vendors. Among these, he says, are configurable, dispatch list-driven execution, electronic work instructions, clock-in/clock-out for time capture, streamlined material transactions, and shop-floor exception reporting. Moreover, says Masson, the user interface is configurable.
Oracle also has solutions for finite scheduling, maintenance, and quality management that complement the execution functions.
“They've made the MES functions much more accessible,” says Masson. “They offer workbenches that let you tailor the user interface, the alerting, and ad hoc reporting in much the same way you'd expect from a best-of-breed MES solution.”
Modi confirms Oracle's MES has highly configurable user interfaces. What's more, he adds, the applications dig down into hands-on execution—not just the higher-level resource and costing management focus taken by most other ERP vendors.
“We've given our users tools such that a plant-floor supervisor can have a birds-eye view of all the work that needs to be done on the shop floor,” Modi says. “They can create dispatch lists and prioritize those lists for the shop-floor operators. The operators have a comprehensive user interface where they can see all the work they are supposed to do, and the sequence they are supposed to do it in. They also can report any exceptions.”
Another capability in the MES play is a piece of Fusion middleware called Sensor Edge Server that integrates with programmable logic controllers and other shop-floor devices. Sensor Edge Server isn't necessary for the MES, says Modi, but for some users, it makes sense as part of streamlining real-time information capture.
Consistent with this streamlining, the MES applications also minimize the need for operator inputs, and in situations where traditional keyboard data entry would be cumbersome, Oracle has created a touch-screen user interface. “We've focused on usability enhancements so that with minimal clicks, the operators can move forward to their next piece of work,” says Modi.
For manufacturing intelligence, Oracle leveraged an analytics engine from its Siebel acquisition to devise manufacturing intelligence schema under its Oracle Business Intelligence Enterprise Edition (OBI EE) offering. AMR's Masson says a plus for this BI platform is that it takes more of a federated approach, rather than forcing users to duplicate all manufacturing data into a big data warehouse.
On the process side, some of the new MES functions include electronic dispensing and pre-weighing, and electronic batch-record control that supports the Food and Drug Administration's 21 CFR 11 rules for electronic records, according to Karen Theel, Oracle's senior director of process manufacturing product management. The touch screens also are important for process-industry users, she adds, who wanted screens capable of being used by operators wearing protective gloves.
“In process industries, there are still many tasks that rely on paper-based methods or legacy systems,” says Theel. “We wanted to give those users an integrated solution they could leverage right on the shop floor to handle execution.”
Dispensing and pre-weighing are among the main reasons that Napp Pharmaceuticals , a medicines manufacturer based in Cambridge, U.K., beta tested the process-industry MES, according to Gerald Peters, Napp's production operations systems manager.
Electronic pre-weighing is so mission-critical, says Peters, that in the past, Napp implemented a third-party MES primarily for this single function, and later customized Oracle's manufacturing functionality to support it. Now that the function is standard in Oracle's MES, says Peters, it's a question of “when, not if” the company will adopt it.
Napp also is interested in the MES's touch screens, as well electronic nonconformance tracking, says Peters, but the pre-weighing tops the list because it gives the company a real-time view of what has been allocated, and sets the foundation for precise consumption reporting. This should lead to greater agility, he adds. “If something changes in the supply or demand picture, we'd be able to react more quickly to see exactly what has been dispensed—but not yet consumed—and thus possibly could be reallocated,” he says.
Fusion and integration
Oracle's Fusion architecture supports integration between the MES and other systems. MES-level exceptions can be tied to enterprise processes via Fusion middleware including business activity monitoring (BAM), and a business process modeling engine that uses the standard Business Process Execution Language (BPEL), says Theel.
Additionally, Oracle has prebuilt integration from its MES offerings to ERP in accordance with the ISA 95 standard for plant-to-enterprise data exchange. This integration uses the Business to Manufacturing Markup Language (B2MML), a standard XML schema for ISA 95. “We've put together a 'cook book' implementation guide for our service providers, and we've developed services and B2MML messages for various components of the ISA 95 standard,” says Theel.
This integration approach uses open standards, notes AMR's Masson, but the overall manufacturing solutions strategy is not as partner-oriented as the one from archrival SAP . The German ERP giant, under its NetWeaver architecture, has devised a number of certification programs heavily used by partners in the MES space.
“With SAP, it's very apparent that they have this adaptive manufacturing program and various levels of certification, whereas with Oracle, it's not readily apparent where you find that information,” Masson says. “I think Oracle has some way to go in making it easy for customers to navigate which manufacturing solutions they should use, [in what cases] you might need to use a partner solution to extend those capabilities, and what certifications exist that would give customers a comfort level that the partner has worked with Oracle to build an appropriate integration.”
Modi, however, says that integrating to the MES functionality or OBI EE's metrics is straightforward for partners. “We've created an open, standards-based integration framework,” says Modi. “We don't necessarily need to have vendors certified to do [manufacturing integration] the Oracle way.”
What of partners?
Masson also points to another difference between Oracle's manufacturing strategy and SAP's: the latter hasn't developed its own full-blown MES solution. Some midmarket ERP vendors, however, do stress MES, so Oracle is not the first ERP vendor to enter the space.
For Modi, the real issue is what customers want, and he says Oracle believes that for low- to medium-complexity plant floors, customers want an MES option from Oracle. This still leaves room for partners, he adds. “Some customers, such as in semiconductor fabrication, would have a very complex shop-floor environment, which would be more sophisticated than what we would expect to be able to handle with our [MES] solution,” Modi says. “I would expect those customers would rely on a third-party MES provider.”
Another scenario where users would gravitate toward a third party, notes Masson, would be those companies that want an autonomous MES implementation, and would not want a local instance of the Oracle ERP system just to deploy the Oracle MES, or remotely tie into a corporate ERP instance. “We still come across manufacturers that are hesitant to run their 24/7 manufacturing solution off a remote ERP instance.” says Masson.
Tom Comstock, a senior VP with MES vendor Apriso , sees market validation in Oracle's approach. “We appreciate the fact that there is a marketplace for MES that's growing and very real,” he says. “More competition always is a threat on one level, but on another level, the fact that you have a major ERP vendor saying MES is important leads to less confusion at the CIO level about the need for MES.”
Comstock says Apriso doesn't feel pinched by competition from Oracle—or for that matter, other ERP or best-of-breed vendors—because it differentiates by offering a broader “operations execution” suite that excels at global execution and management of operations. This approach, he says, requires the ability to define best practices and track metrics across plants, as well as “actionable dashboards” that can trigger processes at the MES level.
Apriso also sees a continued need for third-party MES among user companies with more complex shop floors. Overall, Comstock sees room for best-of-breed vendors moving up into manufacturing operations management, as well as ERP suite vendors offering some degree of MES. Says Comstock, “There is so much focus on manufacturing solutions right now that we see plenty of room for growth.”
According to AMR's 2006 research on application spending, the top category for applications spending is manufacturing operations—including MES, and topping even ERP. However, of the money being spent on manufacturing applications, says Masson, two-thirds is spent on homegrown systems or heavy customization of commercial software, which indicates a gap that's gone unfilled by application vendors.
This two-thirds of the market presents a looming sweet spot for enterprise-class vendors such as Oracle that can step forward with MES options, while also presenting opportunity for best-of-breed and big automation vendors. As Masson concludes, “Really, that's the opportunity for whoever goes after the market: replacing that two-thirds of the market that are building their own solutions.”