MES makeover: SAP takes next step toward the "Perfect Plant" with Visiprise acquisition

06/26/2008



Globalization is no longer a long-term goal in the manufacturing industry; it's here now, and the competition that results is fierce. Executives and plant managers must now coordinate planning across the global supply network to drive responsive local execution under considerably shorter lead times.

With improved execution top-of-mind, SAP AG says it will acquire manufacturing execution system (MES) supplier Visiprise to further deliver on SAP's "Perfect Plant" vision, an initiative that brings together core SAP solutions with the software, hardware, and service offerings of "ecosystem partners" to drive innovation for discrete manufacturers.

The Visiprise buy in particular will expand SAP's manufacturing shop-floor footprint in that customers will be able to access a plant-level manufacturing execution solution that complements the SAP Business Suite.

Visiprise, a privately held company that employs approximately 300 people in multiple U.S. offices as well as Kiev, Ukraine, says its technology enhances production responsiveness, improves operational efficiencies, and enables comprehensive quality management and regulatory compliance. The vendor has more than 60 global customers, many of which already are SAP users in discrete, high-tech, aerospace & defense, automotive, and medical device manufacturing.

"The automation of business processes for manufacturing companies has been core to the SAP strategy for more than 30 years," reports Jim Hagemann Snabe, a member of the corporate office and executive council of SAP AG, adding that the Visiprise deal will enhance visibility by linking the operations of the plant floor with production planning and operations management.

The combination of SAP Business Suite applications; the SAP Manufacturing Integration and Intelligence (SAP MII) application; and Visiprise Manufacturing—Visiprise's flagship solution—will give users network-wide visibility, enable plant-to-network data integration, and facilitate deployment of "plan to make" processes across multiple plants.

"By bringing the companies together, we will capitalize on the relationship we have built over time," says John Zepecki, senior VP and general manager, SAP suite edge solutions. "We also see an opportunity to look at SAP's asset portfolio, accentuate some of these other things, [and leverage] our technology."

SAP expects the acquisition to be completed by July 2008, pending regulatory approval in the U.S. and Europe.

According to Simon Jacobson, senior analyst with Boston-based AMR Research , the agreement should come as no surprise.

"Visiprise has been portrayed many times as a model partner, achieving numerous milestones with SAP over the past few years," he says, adding that the Visiprise deal won't change things much for an SAP shop in discrete manufacturing involved in the Perfect Plant strategy, other than there is one less independent MES vendor in the market.

"This won't fundamentally change the way [companies] buy MES," says Jacobson. "If you are an SAP shop and decide that you need transactional MES, it is nice to be able to get that from SAP, instead of having to find an outside vendor."

Jacobson does offer a cautionary warning, however, saying MES isn't a "one size fits all" proposition. "There are some environments where the Visiprise MES will not fit," he maintains.

SAP's progression toward the Perfect Plant vision started with its investment in LightHammer, an MII vendor that enables production data visibility, followed by investment in Factory Logic (now xLPO), which has lean capabilities. "[SAP's] investment in Visiprise now provides them with MES capabilities," concludes Jacobson. "The question now is whether SAP will start to make the same investment in the process industry."

Learn more about the Perfect Plant vision in this Manufacturing Business Technology

white paper

, available on demand.





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