by Pierce Owen, VP of Research and Publishing, SAPinsider According to a 2019 SAPinsider survey “Transforming the Intelligent Supply Chain,” 95% of SAP’s customers in the manufacturing sector plan on evaluating information technology/operational technology (IT/OT) integration, and 65% have already taken that step or moved past it to pilot, implement, scale, and use their integration solutions. To leverage the technologies in the Industry 4.0 movement (of digital twins, augmented reality, and artificial intelligence), manufacturing organizations must automate their processes and capture event data from operational technology in a way that can integrate with their enterprise information technology, such as enterprise resource planning (ERP) systems. Unfortunately, collecting this data from OT machines presents many challenges. Factories tend to have dozens to hundreds of machines from several original equipment manufacturers (OEMs) that all communicate in proprietary protocols, making it difficult to exchange data between OT systems, let alone between IT and OT systems. If they can solve this problem, they can leverage the data from the factory floor to improve operations and productivity and increase revenue and uptime. Lion, an Australian food and beverage company, chose SAP Manufacturing Integration and Intelligence (SAP MII) to integrate its SAP S/4HANA instance with its plant operations. This research brief shares how SAP MII can lead to improved automation and IT/OT integration.

From Best of Breed to Holistic Solutions

While automotive, industrial manufacturing, and aerospace companies have often seen significant savings in the tens of millions of dollars with Industry 4.0 solutions, fast-moving consumer goods (FMCG) organizations have not achieved such a genuine step change. Rather FMCG companies have experienced a more incremental but continuous improvement. According to another survey conducted by SAPinsider, companies in the automotive, industrial manufacturing, and aerospace industries are twice as likely to have integrated IT/OT systems than companies from all other industries. FMCG companies often must digitize and automate their manufacturing processes before they can think about integrating with the IT systems. Only after they have digitized, automated, and integrated systems can they apply machine learning and data analytics to truly transform their operations. In Lion’s case, the company digitized and automated a manufacturing plant in New Zealand, but a best of-breed strategy for all their enterprise solutions had left them with dozens of different IT solutions and a complicated organic IT architecture that its developers had taken as far as it could go. This meant that when they wanted to pursue IT/OT integration and move scheduling and other data into their ERP system, they could not optimize the scheduling process. Lion decided to go with a holistic SAP suite: a new deployment of SAP S/4HANA, SAP SuccessFactors solutions, SAP Integrated Business Planning for Supply Chain (SAP IBP), and SAP MII. Neil Schiff, Workstream Leader for Manufacturing Integration at Lion, shared, “Our old ERP implementation was not configured optimally for manufacturing. It didn’t run each individual vessel or container as its own resource, and it effectively as an accounting system. Without SAP S/4HANA and SAP MII, we would have required 3-5 extra people to accomplish what we’re doing now.”

Improving Automation

SAP MII provides a one-stop shop for plant operators and empowers and engages them with the appropriate information for their job. “People don’t want to work for a business with technology from the 1980s. We need to give talented people appropriate jobs with appropriate tools to perform those jobs,” said Schiff. For instance, packaging at the Lion plant requires an operator located at the packaging machine that labels the bottles. Lion can send down the production schedule to the execution system with SAP MII, and operators can execute that schedule without mistakes. Operators can see schedule changes in real time, and the shares data integrates with SAP Extended Warehouse Management (SAP EWM) to show the status of deliveries. Operators can push one button to have more labels delivered and another button to halt deliveries. They also receive alerts for quality inspections and can see the quality notifications. Operators work in SAP MII for quality, efficiency, materials, waste, track and trace, and labeling processes. Downtime information from the control system of the machine, pallet labelling, and warehouse transactions all integrate from different SAP applications and come together for the operator in SAP MII. Schiff explained, “In September 2017, we switched off 17 separate software tools and moved all our operations to SAP applications. Honestly, it was hard going at first, but we’ve come through it now. At the start, we only wanted to use SAP MII for integration, but we came away impressed by the full functionality and performance of MII as well as its capabilities to integrate with the control systems.” By doing all transactions throughout its processes in one core system, Lion has improved visibility into plant operations. For example, in its New Zealand brewery, Lion uses SAP MII to track materials used in grain silos and hops bins in real time, accurately, and no longer depends on people tracking all materials on paper. Even non-scheduled transactions — such as orders for yeast removal, which happen whenever brewers decide the time is the right — are automatically created in SAP MII. This means the team leader no longer must go into the ERP system to create the order manually. Lion has essentially used the brewery in New Zealand as a pilot and now plans to use feedback on functionality from the employees there to scale and improve the system in Australia. “We have gone through many continuous improvements with this integration with the shop floor,” said Schiff. “Now, moving on from this pilot, we expect improved levels of integration and automation everywhere with SAP MII.”

What Does This Mean for SAPinsiders?

Based on our research and the case study at Lion, the following considerations can help SAP customers improve plant automation and integration:

• Collaborate between operations and IT professionals. Manufacturing management and integration software tools such as SAP MII must first and foremost fulfill the requirements of the end users, but as Lion experienced, they should also integrate with the rest of the enterprise IT architecture.
• Consider holistic solutions. Best-of-breed solutions exist because sometimes they truly do provide unmatched functionality, but Lion found that SAP MII had at least reached parity with the other manufacturing operations management (MOM) solutions that it tested. At parity in functionality, SAP MII was the easy choice for Lion, which benefited from the deep integration with all its other new SAP applications.
• Conduct a pilot. Lion confessed to experiencing some “trauma” when it switched everything over to the new SAP environment at once in New Zealand, but it learned from that pilot program and expects a much smoother implementation in Australia. All manufacturing companies should run a pilot program for MOM solutions to ensure they integrate with all the necessary control systems and deliver the right data to operators when they need it. If the pilot proves its value, then use any constructive feedback and scale.
• Use an agile approach rather than a classic waterfall method. Seek out executive support and invest in the training and education required to facilitate an agile environment. As one SAP ERP user puts it, “Work globally with agile methods. Collaborate with your colleagues daily with tools like scrum.” Couple this focus on agile methodology with the use of analytics to aid decision making and drive innovation.

Following this strategic guidance should help SAP customers get the most out of SAP MII. Pierce Owen, VP, Research, SAPinsider, can be reached at Pierce.Owen@wispubs.com.