SAP AG is acquiring Lighthammer Software Development Corporation, a privately-held supplier of enterprise manufacturing intelligence and collaborative manufacturing software, based in Exton, Pennsylvania. The acquisition is intended to deliver value through improved manufacturing performance with rapid time-to-value for SAP's installed base of more than 12,000 manufacturing customers. Lighthammer's Collaborative Manufacturing Suite (CMS) will be delivered as an SAP xApps composite application on the SAP NetWeaver platform. The announcement was made Wednesday, June 22, at ARC Advisory Group's Performance Driven Manufacturing Forum in Boston, Massachusetts.

"Acquiring Lighthammer supports SAP's strategy of enabling adaptive business networks, or ABNs, for our customers," said Nils Herzberg, SVP, Manufacturing Industry Solutions, Product and Technology Group (PTG), SAP. "Essential to enabling the ABN is bridging the disconnect between the shop floor and the enterprise through what SAP refers to as adaptive manufacturing -- the ability of a manufacturer to profitably replenish the supply chain while dynamically adapting to unpredictable change. The SAP Lighthammer combination exemplifies the ABN vision."

SAP said that the acquisition supports the company's commitment to offering an ISA-95 enabled manufacturing solution that further reduces the complexity of building custom connections to shop floor systems and thereby accelerates the time-to-value for the end customer.

The SAP Lighthammer solution will be designed to provide real-time visibility to manufacturing exceptions and performance variances, including root causes and business impacts, enabling manufacturers and their production personnel to adapt to change and rapidly respond to unforeseen demand and supply events. The combination will enable SAP to deliver real-time transactional integration between ERP and plant floor systems as well as unified, real-time analytics and visualization, often referred to as "manufacturing intelligence," out-of-the box to its manufacturing customers; the combination will also enable companies to leverage their current investments at a lower total-cost-of-ownership (TCO).

"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, Dow Corning. "Implementing Lighthammer and the SAP manufacturing intelligence dashboards, integrated through SAP NetWeaver at our manufacturing facilities, allows both plant personnel and line management to access information and the relevant KPIs for making right time decisions while fully understanding the business impact of these decisions. This has already contributed to increased responsiveness and tangible value at a lower total cost of technology ownership for Dow Corning."

Utilizing the ISA-95 standards for manufacturing interoperability, the Lighthammer and SAP manufacturing solution will exchange data and render them through the SAP manufacturing intelligence dashboards to deliver actionable intelligence in the form of alerts, reports, key performance indicators (KPIs) and decision support to production personnel for right time decision making. The combined solution will allow production personnel to identify deviations in real time, provide drill-downs to understand the business and financial impact of the exceptions to be managed and display the workflows to resolve them rapidly and cost-effectively, resulting in improved productivity.

"Lighthammer and SAP have a shared vision of the adaptive business network, exemplified by our longstanding partnership as a premier SAP xApps partner," said Russell Fadel, CEO, Lighthammer. "We are happy to join the SAP family and deliver on the adaptive manufacturing vision and strategy while driving real value for SAP's manufacturing customers."

In making the announcement, SAP stated that the acquisition is expected to be completed in July 2005. Lighthammer employees will remain in their current facilities in Exton, Pennsylvania, and will become a part of SAP America and SAP Labs.