SAP Lighthammer Acquisition Connects CRM to Shop Floor

Appeared in the CRM Daily, June 23, 2005 - http://www.crm-daily.com/story.xhtml?story_id=36739

By Erika Morphy

"Breaking down the barrier between the plant floor and the business systems is key to manufacturing and supply-chain productivity," said Kirk Royster, manager of global enterprise architecture at Dow Corning.

Enterprise-applications provider SAP has acquired Lighthammer Software Development Corporation, a vendor of manufacturing-intelligence applications -- software that provides real-time data from the manufacturing plant floor about schedules delays or inventory problems. Prior to the acquisition, SAP had maintained a partnership relationship with Lighthammer for close to two years. Terms of the acquisition were not announced.

12,000-Plus Manufacturing Base

SAP has some 12,000 manufacturing customers that now will be able to access Lighthammer's Collaborative Manufacturing Suite as an SAP XApp application on the company's NetWeaver business-applications platform. XApps are applications that sit on top of NetWeaver -- a platform that SAP introduced in January 2003 -- to automate business processes by tapping into data that resides in other applications or databases around the enterprise. Andy De, director of SAP's manufacturing solutions management division, said that SAP would introduce the new Lighthammer suite as part of its mySAP enterprise resource planning software "in the foreseeable future."

Connecting Manufacturing to Customers

Lighthammer's sweet spot is its ability to offer real-time views of manufacturing performance variances -- which could be anything from breakdowns in equipment to work-schedule issues and inventory-flow problems. "Breaking down the barrier between the plant floor and the business systems is key to manufacturing and supply-chain productivity," said Kirk Royster, manager of global enterprise architecture at Dow Corning. By connecting SAP to Lighthammer, users will be able to integrate manufacturing data into their customer-relationship management (CRM) applications as well. "Most manufacturers have implemented heterogeneous systems to manage their shop-floor operations," said SAP's De. The challenge, though, he said, is that the implications of this data are not understood until it is seen in the enterprise-resource and customer-relationship systems.

Connecting It All

The new XApp, he said, will offer "out of the box" connectivity between manufacturing execution, shop-floor applications and business decisions. For SAP's CRM customers, the company said, the acquisition will help improve the exchange of information between manufacturing and supply operations, enhancing the output of analytics functionality within the mySAP CRM system. Royster noted that after implementing the Lighthammer and the SAP manufacturing intelligence dashboards, both plant personnel and line management have been able to access information to make decisions -- while fully understanding the business impact of those decisions. "This has already contributed to increased responsiveness and tangible value at a lower total cost of technology ownership for Dow Corning," he said.