Overview

The SAP Digital Manufacturing Cloud (DMC)

What potential does SAP DMC offer as an MES?

In the fall of 2020, SAP lowered its forecast for the current financial year and the SAP share price fell significantly as a result. At the same time, SAP CEO Christian Klein surprised the market with a strategy update: the move to the cloud was to be further accelerated and revenue from the cloud business was to triple by 2025. An initial measure followed at the beginning of 2021. The “Rise with SAP” program is intended to support companies in their transition to the cloud.

The fact that cloud solutions are becoming increasingly important at SAP and will eventually completely replace on-premises systems has been communicated from the Walldorf headquarters for years. Many of the companies acquired in recent years have introduced cloud applications: from SuccessFactors (2011) and Ariba (2012) to Fieldglass and Concur (both 2014). In-house software has also increasingly been developed for the cloud. This includes the SAP Digital Manufacturing Cloud (SAP DMC), which was launched in 2019.

SAP itself sees the Digital Manufacturing Cloud as a fully-fledged Manufacturing Execution System (MES) that also provides analytics and planning functions. It also offers the typical cloud benefits: OPEX instead of CAPEX, high scalability, location independence, low effort for the IT department. This is certainly true in principle. However, it is worth taking a somewhat more differentiated look in order to correctly assess the potential of SAP DMC.

SAP Manufacturing Execution (SAP ME): Godfather for SAP DMC

The on-premises software SAP Manufacturing Execution (SAP ME) was the technological inspiration for the Digital Manufacturing Cloud. SAP ME, in turn, is the result of an acquisition in 2008, when SAP bought the American company Visiprise, which had previously been known primarily on the domestic market for its comprehensive MES, which was characterized by a guided manufacturing approach, support for rule-based dynamic production processes and a focus on tracking and tracing. Complex single-item production formed the DNA of the MES. In contrast, series-oriented production with related batch sizes or the management of batches was not necessarily a strength. This basic orientation of the Visiprise software continues to this day.

The origin is also the reason why data and structures in SAP Manufacturing Execution are defined individually, i.e. independently of SAP’s ERP philosophy, and stored accordingly in a local database for each instance. In principle, SAP ME functions autonomously and locally for each production site. This has corresponding consequences for the interaction with SAP ERP or SAP S/4HANA and for realizing end-to-end business processes. In order for an exchange to take place between SAP ME on the one hand and SAP ERP or SAP S/4HANA on the other, not only is a “data transfer” required, but also a “data translation”. This requires complex interface handling, for which SAP provides an additional solution: SAP Manufacturing Integration and Intelligence (SAP MII).

SAP Manufacturing Integration and Intelligence (SAP MII): Indispensable translator

SAP MII was also the result of an acquisition. SAP had already taken over the American company Lighthammer in 2005 and thus acquired a platform that specialized in the processing and exchange of production data – the software was able to communicate excellently with typical store floor data sources such as PLC or Historian Technology components. It was also able to visualize data from production on a web-based basis. This meant that the platform was actually a tool set that could be used to implement individual requirements in the connectivity environment and for visualization. SAP users initially misunderstood this and classified SAP MII as a solution that was supposed to map production processes – quite a few even as a genuine manufacturing execution system. SAP was certainly not entirely uninvolved in this misunderstanding with its communication, but changed course over time and after some criticism: today, SAP MII primarily serves as a central interface between SAP ME and SAP ERP or SAP S/4HANA. The fact that the solution can also be used for the visualization of certain reports or for the logical processing of store floor data is increasingly receding into the background.

The software acquired from Lighthammer also included a small component that was given the name SAP Plant Connectivity (SAP PCo) by SAP and became part of SAP MII – which can be installed separately and works independently. The tool is responsible for connectivity to the typical data sources and data sinks on the store floor. The best-known example in this context is probably the ability to communicate with corresponding instances via the standard OPC UA (Open Platform Communications Unified Architecture) protocol. While SAP PCo was initially only able to transfer the data collected on the store floor to SAP MII, the component was gradually opened up so that it can be used directly with SAP ME and, for some time now, completely autonomously. For example, the production level can be connected directly to SAP ERP or SAP S/4HANA or to SAP Extended Warehouse Management (SAP EWM). Data from the machine and plant level can also be transferred directly to the cloud.

Very interesting and important to know: SAP PCo is free to use for companies that use SAP ERP. Under SAP S/4HANA, however, a license is required. This apparently affects not only new customers, but also companies switching from SAP ERP to SAP S/4HANA.

SAP Digital Manufacturing Cloud: MES system with analytics functions?

Back to the SAP Digital Manufacturing Cloud. The solution can actually be seen as a cloud counterpart to the on-prem solution SAP ME – at least in relation to the part that is referred to as Manufacturing Execution. The process orientation and core functions are comparable to SAP ME, although the functional scope of SAP DMC is smaller and less differentiated. However, additional areas are covered: “Resource Orchestration” can be used to perform planning tasks, such as order sequence planning. Labor Management” is used for personnel deployment planning. In addition to Manufacturing Execution, the cloud solution offers a second part: Manufacturing Insights provides a range of analytics features that companies can use to gain valuable insights from production data.

SAP is therefore positioning the Digital Manufacturing Cloud as an independent MES, at least in perspective. There are currently still some limitations and challenges in practice: The not yet very comprehensive functionality is flanked by the fact that SAP DMC as a cloud solution naturally offers only a few technical options for making customizations or adjustments in order to meet the specific requirements of production processes.

Integration issues are currently even more difficult to resolve. The options for exchanging data and objects with SAP ERP and SAP S/4HANA are rather limited. This raises the question of how the increasingly complex requirements for end-to-end process digitalization can be met. This applies all the more if the assets on the store floor are to be connected – for example, if the production status and progress has to be processed automatically using typical machine data acquisition. SAP again provides for the use of SAP PCo for this purpose. The overall integration would therefore start with SAP ERP or SAP S/4HANA, lead via the cloud solution to the local PCo instance and from there to the automation level. Relevant actual data would have to take the opposite route, either to be processed on the Digital Manufacturing Cloud or to be transferred to SAP ERP or SAP S/4HANA.

With SAP DMC EDGE to hybrid MES: Hybrid Digital Manufacturing Landscape

Because SAP DMC is a cloud solution, latency can occur when exchanging data with a production site. In addition, downtimes in the WLAN connection cannot be ruled out. This can be problematic, especially with end-to-end communication along the automation pyramid (or automation network) to the assets on the store floor. Because if the data exchange stops, production may also stop. To prevent this, SAP offers an appliance called SAP DMC EDGE as a supplement to SAP DMC. The EDGE server, a combination of proprietary hardware and software, mirrors the functions and data from the cloud on site and synchronizes the Digital Manufacturing Cloud with current statuses from production. This could be interpreted as an intelligent combination of the strengths of the cloud and on-premises world.

SAP uses the term “Hybrid Digital Manufacturing Landscape” to describe the possibility of users being able to use all on-prem and cloud solutions from SAP for the manufacturing sector in any mix and at different production sites. Some plants may then use SAP ME on site, others only SAP DMC and others SAP DMC in combination with DMC EDGE. In addition, and depending on requirements, SAP PCo or even SAP MII can be added.

Manufacturing companies facing the challenge of digitalizing their processes end-to-end will assess the variety of technologies and solutions from SAP based on a number of criteria. In addition to functionality, these certainly include complexity, flexibility and agility. And finally – quite old-fashioned – the total cost of ownership (TCO). Regardless of whether OPEX or CAPEX…