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Infor adds MES to ERP with Lighthouse Systems acquisition

ERP vendor Infor acquired Lighthouse Systems, a provider of MES software that enables manufacturers to run operations 24/7. The deal makes sense, but integration won't be easy.

Infor added manufacturing execution systems to its ERP arsenal with the acquisition of Lighthouse Systems.

Based in Crawley, U.K., Lighthouse Systems is an MES software provider known for its main product, Shopfloor-Online, which enables manufacturers to connect, run and monitor manufacturing machinery. Terms of the deal were not disclosed.

Formed in 1990, the privately owned Lighthouse Systems' products are deployed in 500 manufacturing sites in 45 countries. The company has approximately 100 employees. The Lighthouse leadership team will stay in place, according to the companies.

The acquisition could provide Infor's manufacturing customers a way to unify its ERP planning with MES execution capabilities.

Integrating ERP and MES

Infor has already integrated its CloudSuite ERP products with Shopfloor-Online as well as other MES applications, but the company wanted to bring Shopfloor-Online in-house, according to Uma Welingkar, head of product at Infor.

Many Infor customers want to be able to run 24/7 manufacturing operations and get more real-time visibility on manufacturing systems, which will be helped by integrating Infor's ERP and Lighthouse Systems' MES software, Welingkar said. The fully integrated ERP and MES system offers customers an out-of-the-box deployment option and a greatly reduced time to value.

Uma Welingkar, head of product, InforUma Welingkar

"Having MES capability as a complete end-to-end solution is a big need for them right now as they're going through transformation, the digitization of automation and all of the real needs that they have," she said. "Over the past year, especially with COVID, we've seen these requirements change as well."

Infor and Lighthouse Systems have a few common customers in discrete and process manufacturing, so an acquisition rather than continuing a partnership made sense, Welingkar said. Infor partnerships with other MES providers will continue.

"This allows us to build a tighter integration and better vet the requirements that our customers have to build into that end-to-end solution," she said. "Our goal over the next 12 to 24 months is to make sure that we have the MES integration tightly built into our ERP."

Shopfloor-Online establishes all manufacturing operations into a central system that enables companies to run manufacturing operations 24/7, according to the company. The software can be deployed on-premises or in hosted cloud environments. The product's user base is primarily in discrete and process manufacturing companies in automotive, building and construction, food and beverage, life sciences, packaging and sustainable energy businesses.

Lighthouse Systems' installed base maps closely with Infor's manufacturing customer base, Welingkar said. Infor will begin to integrate Shopfloor-Online into Infor CloudSuite, providing an out-of-the-box deployment capability.

Manufacturing systems will require integrated ERP, MES

Infor has revamped its on-premises ERP applications as the multi-tenant cloud Infor CloudSuite, which focuses on ERP functionality for specific manufacturing industry verticals. The company also recently sold off its enterprise asset management (EAM) business to Hexagon.

Jon Reed, co-founder, DiginomicaJon Reed

Jon Reed, co-founder of Diginomica, an enterprise computing industry analysis firm, said integrating ERP and MES makes sense.

"Historically, we have separate MES systems that couldn't talk to ERP systems," he said. "But in this age of the so-called intelligent enterprise, that doesn't work anymore, because you're trying to drive end-to-end process flows, automation and analytics on top of that stuff, so it just doesn't work to have them separate anymore."

However, integrating the Shopfloor-Online MES and Infor CloudSuite ERP will be trickier than advertised, he said, because, while Shopfloor-Online can be cloud-based in a hosted scenario, it's not designed for multi-tenant SaaS like Infor CloudSuite.

"If you look at Infor's cloud rhetoric for CloudSuite ERP, they really push the multi-tenant part, but now they've acquired something that's not," Reed said. "The question is, what's their roadmap for that, because it's not always that easy to refactor software to be multi-tenant."

Addressing that question may not be an urgent issue for many manufacturers, he said, as many are laggards in moving mission-critical manufacturing systems to the cloud.

Predrag Jakovljevic, principal industry analyst, Technology Evaluation CentersPredrag Jakovljevic

MES aligns more with ERP capabilities than EAM, which may be why Infor sold off its business last summer but decided to bring in Lighthouse Systems, according to Predrag Jakovljevic, principal industry analyst at Technology Evaluation Centers, an enterprise computing industry consulting firm in Longueuil, Quebec.

Infor EAM was successful as a standalone business in industry verticals like transportation and utilities that aren't core to Infor's manufacturing base, so there was not much cross-pollination of EAM and Infor CloudSuite customers, he said.

The convergence of ERP planning capabilities with MES execution capabilities makes sense, Jakovljevic said, but Infor faces a challenge in cross-selling the applications.

While converging manufacturing planning with ERP with execution MES makes sense, Infor must figure out how to cross-sell ERP with Lighthouse. Infor also faces challenges in competing with ERP vendors such as Plex and IQMS, where MES was integrated from the start, he said.

"For [requests for proposal] and analyst briefings, the ERP and MES integration looks great, but the question remains if it can be integrated properly," Jakovljevic said.

Jim O'Donnell is a TechTarget news writer who covers ERP and other enterprise applications for SearchSAP and SearchERP.

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