- By John Weber
- January 31, 2023
- Software Toolbox
Find out what ERP systems and SAP are about and how they fit into Industry 4.0 and Smart Manufacturing.
We’ve heard from our clients that are operations technology (OT) focused that they don’t always really understand what ERP systems and SAP are about and how they fit into Industry 4.0 and Smart Manufacturing.
They just know they are big systems on the business side. If you’re a user or integrator experienced with business level integration, you could skip to the integration points section. Let’s start with basic definitions, cover some terminology and integration points, challenges and alternative approaches that lower cost and time to results.
What’s an ERP system, and what is SAP?
The acronym stands for Enterprise Resource Planning and there’s great resources on the internet to explain it in detail. We know the term sounds vague and broad. An ERP system does many things as there are 100’s of functions that we could list, all having to do with managing all the resources in a company (enterprise). For purposes of this discussion, an ERP system performs functions on the business side of the company: accounting, paying vendors, collecting from customers and paying employees, processing orders from your customers and converting them to materials requirements to be purchased, inventoried and consumed in the operations process. The ERP system uses a central database for all functions that promises the perfect clarity a business needs to succeed.
SAP is a type of ERP system that is used in many Fortune 1000 companies globally. The product has been around since 1973 when it released its first financial accounting software, running on mainframes at the time. It is now a $32.9 billion revenue company with over 100,000 employees. If you work for a large corporation, there is a good chance your company’s purchasing, accounting, order processing and more are managed with SAP. SAP has many competitors, the largest probably being Oracle, but many others that aren’t as big. Across the realm of ERP solutions are dozens of software vendors small and large, including even Microsoft. Although we will focus on SAP, the alternative solutions we discuss also include options for other ERP software integration.
For operations/OT practitioner readers, an analogy for ERP systems you might relate to is MES. If you’ve been involved in an MES or Manufacturing Execution System implementation in your business, you may know it encompasses 100’s of functions, including things like OEE, quality tracking, downtime tracking and more, all things happening on the operations side of the business, and how much each user implements varies, just like ERP.
MES is about actually making the product that the business sells and expects to earn a profit from. Some ERP vendors want to move into the MES space, and attempt to, and sometimes that works for a user. We find that customers want best-of-breed systems, especially when there are systems on each side, tailored for specific industry verticals. They don’t want to have to compromise and take a one vendor solution.
For the goals of Industry 4.0 and Smart Manufacturing, transparent, clear, accurate and timely information sharing is required. ERP systems are part of the stack of systems that have to be integrated at some level.
The integration points between ERP, MES and operations all relate to the differing functions knowing what the other is doing and what the needs are. Sales can’t provide lead times very accurately if they don’t know what’s happening in manufacturing. Manufacturing can’t produce if the materials it needs are not being procured and delivered on time. Order processing can’t accurately say an item is in stock if when manufacturing is done, the warehouse inventory isn’t updated in real-time. If your product is customizable to the customer order, manufacturing can’t make the right product if it can’t get the requirements for that order from the business in a timely fashion. Step back and think about your company and start drawing connections on paper or your whiteboard. They must happen somehow.
Integration points: How and why are different solutions needed?
Traditional ERP integration over the years has taken on many forms. Exchange of paper and manual data entry has existed since the birth of computers and is still used. Early digital integration involved CSV/TXT file exchanges. First it was on magnetic tapes exchanged each day and batch processed overnight. Then it became portable disks, and eventually over a network. But it was still file exchange, still not real time.
The most popular method we’ve seen are shared database tables. The ERP administrator defines a table set with columns for data to be shared, and rules for reading/writing to those tables. Anyone wanting to interface inserts their data there, scripts in the ERP process it. Computing power growth has moved the pickup and processing in ERP to near and possibly real time, but there was an intervening database.
The demands of flexible, real-time manufacturing visibility and business integration created by competitive markets demand real-time integration, and ERP suppliers have responded. Many ERP vendors, including SAP, are offering cloud hosted ERP solutions. At the same time many are still premises hosted and will remain that way. To achieve business goals, the integration points must become more direct, more complete and focused on things that make a difference, while achieving reasonable time to integration and cost.
Integration points: Modern and SAP Specific
For most ERP vendors, many offer integration with secured REST or SOAP Web Services. The level of standardization vs user specific customization varies by ERP solution and even version, but the key is web services are functionalities that are well known for integration.
For business-to-business system integration there are Integration Products as a Service (iPaas) from the big suppliers like IBM, SAP and Oracle. Those solutions are often out of reach in cost and complexity, and do not recognize the needs of the OT practitioner. Solutions are available from Boomi, Celigo and others are lower cost. But none of the iPaas solutions reach the plant floor landscape of PLCs, control systems, OPC UA, MQTT, and other OT technologies, at a cost and complexity level that is appropriate.
With SAP, they support some levels of web services integration with SOAP using a tool they call WebDynpro and mapping to internal SAP programs. REST can be accomplished with the SAP Gateway also mapped to SAP programs or existing function calls. However, there are many other unique to SAP connection methods that are often preferred by SAP administrators or are the only option for certain integration types. We have a whitepaper that goes into each of these in more detail, but here’s an overview.
RFC or Remote Function Calls: RFC has two meanings. First an RFC is something the SAP administrator or programmer defines and maps to the internal SAP functionality and data. Second, RFC is a TCP/IP connection type. The integrating client connects over an RFC TCP/IP connection pipe or NetWeaver as an alternative connection type, and accesses the calls. RFCs are synchronous calls meaning the client application asks and waits on SAP to respond, which can be good for situations where you just can’t wait. But there can be performance limitations, and RFCs have formats customized by each SAP administrator.
BAPI – Business Application Programming Interface: Instead of just functions, business objects are exchanged over RFC interfaces, not just data points. This is a more abstract method than just RFCs that adds more meaning to the data and potential for standardization.
IDoc – Intermediate Document: This is a file exchange, that is then transmitted over a real-time connection with SAP. However, SAP queues processing of iDocs, so how quickly things happen are up to the SAP Administrator and their implementation specifics. iDocs are asynchronous calls, so the requesting client application does not sit around and wait, which can improve overall performance with large number of calls, but at the cost of real-time responses from SAP.
What all these methods have in common is that someone must have done something on the SAP side for you to interface. You will not interface beyond arcane database tables and CSV files with SAP without the collaboration of your SAP administrator to share or create the necessary connections and provide credentials. This is the nature of SAP; you cannot avoid it.
Alternative solutions and next steps
If you can motivate that cooperation, which may require management sponsorship of the project, then there are alternatives to complex and expensive tools, that are made with OT practitioners in mind, while following the rules of SAP and using certified interfaces, sure to put the SAP Administrator’s mind at ease.
For example, the OPC Router is a software product that natively interfaces to control hardware, OPC DA, OPC UA, files, email, notification systems, MQTT SparkplugB & plain MQTT with templates for configuring connections and all the SAP integration methods described above over certified connections. Connections are formed with visual, conditional workflows that OT practitioners can understand, and SAP Administrators will find refreshing to work with to build bi-directional real-time integrations. For other ERP systems, the same OPC Router supports REST and SOAP integrations. You could even use OPC Router to integrate with iPaas solutions that support REST and SOAP.
Deployable on Windows or in Linux Docker containers, available in perpetual or subscription licensing models. OPC Router bridges the ERP & SAP to OT gap in a comfortable, cost-effective way. Software Toolbox’s 27 years of expertise in providing and supporting integrators and users with off-the-shelf OT/industry/manufacturing software and ability to converse and work with IT, are why we are the US and Canadian supplier partner for OPC Router, helping system integrators and users every step of their journey.
To learn more or to request a free consult, visit the OPC Router Website, Contact Us, or Download the SAP to OT integration whitepaper featured on this page.
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