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Arla's quest for Business-to-Manufacturing integration

Denmark’s giant dairy co-op sees standards-based automation solutions as the best way to harmonize not only processing and packaging but all of business and manufacturing, as well.

This diagram illustrates the layers of interconnectivity that Arla Foods aims to spread across all of its plants worldwide. The
This diagram illustrates the layers of interconnectivity that Arla Foods aims to spread across all of its plants worldwide. The

Like most forward-thinking consumer packaged goods companies these days, Arla Foods has spent considerable time and energy trying to better integrate information flow between its processing and packaging functions. But rather than stop there, the Danish dairy giant—with annual sales of US$7 billion and production facilities that stretch from Denmark and Sweden to the United Kingdom and Argentina—is going one step further. It’s also integrating high-level business information with its plant-floor information systems. The end result is impressive.

“The integration of business and manufacturing has a strategic importance for Arla Foods in supporting the challenges the business is facing in terms of optimizing production performance, as well as fulfilling food safety regulatory requirements,” says Arne Svendsen, production IT manager at Arla Foods. “This integration includes the transfer of detailed production schedules from our ERP system to the plant floor, as well as the seamless collection of key processing and packaging figures. With an expansive growth strategy, it is a must to integrate business and manufacturing, especially when new facilities become part of the family due to mergers and acquisitions.”

A firm believer in standards, Svendsen has been influential in helping SAP “discover” the plant floor. As the leading supplier of Enterprise Resource Planning systems in the world, SAP until recently did not offer an application solution that permitted true Business-to-Manufacturing (B2M) integration. But with packaged goods companies around the world—Arla among them—seeking a better B2M integration solution, SAP recently introduced NetWeaver™ in a version that supports ISA S95 XML standards. Involving what IT experts call “wraparound” software, it turns SAP’s R3 ERP product into one that is fully compatible with ISA S95 XML standards.

This greatly improves SAP’s connectivity and interoperability with the outside world, specifically with the plant floor. With this initiative, SAP asked itself “How do we achieve standards-based interfaces to our systems? How do we ensure that if a production order’s path from ERP to the plant floor needs to pass through Wonderware or Rockwell or Siemens components, it won’t require three separate interfaces?” The answer: S95 compatibility.

“What we have learned,” said SAP senior vice president Stefan Schaffer in a recent interview with Greg Gorbach of the ARC Advisory Group, “is that there are already defined standards that really fulfill the customer’s needs. And these seem to be realistically implementable, so there is not a lot of value for us in creating competitive standards. It’s a much better business case for all the participants to use these well-thought-through standards than to create new ones.”

First implementation

The first implementation of SAP NetWeaver in its S95-based format is scheduled to unfold this May at Arla Foods’ Vimmerby plant in Sweden. Here, powdered milk is packaged for industrial customers in bags ranging from 10 to 1ꯠ kg.

“With this NetWeaver implementation, we will be able to transmit production orders from the ERP down to processing and packaging machines and transmit data back up again,” says Svendsen. “To achieve that degree of integration in the past, we’ve had to develop custom-made solutions using the very first versions of B2MML schema from the World Batch Forum. Because NetWeaver uses an open standard, ISA S95, we no longer need to come up with custom-made integration solutions. That means we can roll out a consistent, available B2M solution to multiple plants quickly and easily. We are approaching the goal of an ‘off-the-shelf’ solution.”

Tim Sowell, vice president of product strategy at Wonderware, provides additional insight into the difference between custom-made or “point-to-point” solutions and a single, standards-based solution.

“Everybody wants the same two-way street: Production schedules down, production performance data up. And while it’s possible to achieve this with point-to-point solutions, they aren’t easily maintained and they aren’t very scaleable. Suppose Arla acquires another company and Arne Svendsen needs to roll out his custom-made B2M integration solution to that company’s multiple sites? Without a single standardized integration scheme, he’ll struggle.

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