In a Monday afternoon breakout section, Peter Martin and Kevin Fitzgerald, Invensys’ SAP programming expert, described Invensys’ adventures in SAPland.
“InFusion was certified for NetWeaver on the day we introduced it,” Martin said. What he and Fitzgerald have been creating PCAs for SAP. A PCA is a “packaged composite application,” and is designed to move data in and out of SAP’s main modules.
“With these two loops, you can now apply control theory to the entire business enterprise.” Invensys’ Peter Martin on the company’s co-innovation with SAP of Real Time Finance and Real Time Production Execution applications.
Martin went through his discussion of the gaps between plant resource management, production management, and enterprise management on the operations side, and the huge gap between the plant floor and the financial reporting side of the business.
“I’m the CFO,” Martin quoted an attendee at one of his focus groups as saying, “and I don’t measure the business, I do financial reporting.”
His boss retorted, “I’m the CEO, and I say you measure the business, so you better get at it.”
Martin noted that it is very easy for a million dollar improvement in a plant to be lost completely in the financial rollups. “It doesn’t matter what the truth is,” he said, “if it isn’t measured, you didn’t do it.”
One of the attendees tried to argue the point. “Shouldn’t you get credit for it, though?”
Martin said, “What happens is that you have to prove, beyond a shadow of a doubt, that you deserve the credit. I’ve had plant accountants tell me, ‘20,000 things changed in the plant last month–why should you get the credit when any of those things might be responsible?’”
Invensys’ “real-time accounting” is the software that is resident in the controllers in the field that reports from the field sensors and provides real accounting numbers from the plant floor, Martin explained. “Real-time finance” is the daily rollup that interfaces with production management and reports to the financial reporting system in ERP systems like SAP.
One of the audience members suggested that there are now five basic parameters: “flow, level, temperature, pressure and financials.”
Martin noted that one of the CFOs in his focus groups said that he was well aware of the fact that finance isn’t doing it right. He also noted that most CFOs will agree, and they’re frustrated too. But the technology now exists to solve the bad financials problem.
Part of that technology, he said, is coming from the Invensys/SAP working relationship. SAP calls it co-innovating. They took a look, Martin reported, at where they had “white space” in the market, and came up with two areas in which Invensys had strength: consumer packaged goods and chemicals/process industries.
First, the partnership produced Netweaver certification for InFusion and before that, ArchestrA. After an identification of business values, the partners concluded that they would design and build two PCAs in partnership.
The first is “Real Time Production Execution.” This is based, Martin said, on ArchestrA, InFusion and SAP XMII (which is a Lighthammer development originally), and is designed to address those performance gaps in operations that we usually group together and try to bandaid as MES.
“What we’ve created,” Martin said, “is a top-to-bottom business loop. You can download a recipe from SAP, execute it and report historized data back up into SAP. And it is based on the S95 standard, so it is useful in any enterprise.”
The other PCA is “Real Time Finance.” Like Real Time Execution, Real Time Finance is an XMII application. It provides full financial visibility and auditable visibility of the financial side of the enterprise. It is the second top-to-bottom business loop. “With these two loops, you can now apply control theory to the entire business enterprise,” Martin said.
Now, instead of slowing the speed of manufacturing to keep up with 19th century cost accounting, Martin said, we can increase the speed of financial reporting to keep up with manufacturing in the 21st century.