Kors Engineering: Plex acquires Kors Engineering - does this bring us closer to the factory of the future?

Plex acquires Kors Engineering - does this bring us closer to the factory of the future? Brian Sommer Wed, 02/24/2021 - 00:04 Summary: Plex Systems has been a big change agent in the ERP space, being the first to pioneer multi-tenant cloud ERP software. Its recent acquisition of Kors Engineering could trigger better value for manufacturers and ignite a wave of additional M&A deal-making by competitors. Here's our assessment. (© Zapp2Photo - Shutterstock) Today, cloud ERP vendor Plex Systems is announcing its acquisition of Kors Engineering. Kors is a 40+ year old firm with a 20-year partnership with Plex. This deal provides a number of OT (operations technology) capabilities and services from Kors that complement Plex's IT solutions. Both firms are privately held and Michigan-based. No financial terms regarding this deal were announced. Details regarding how the two operations will merge were not provided either although we did learn that Kors' president, Tony Kaczmarek, will become part of Plex's Product Management team. Kors claims their employees average 25 years of industry experience and will be joining Plex. The two firms share a number of the same customers including some of Plex's largest customers. Why this deal & why now? The short answer is that Kors' technology deals with tons of complexity at the OT level and its solutions have been integrated with Plex's IT products for some time. While each vendor has done a solid job of managing customer needs in their respective responsibility areas, competitive forces are (or will soon) demand that manufacturers get a tightly integrated suite of products that tie the shop floor, production equipment and back office together. Other drivers for this include: The growing interest by manufacturers to achieve full factory of the future (or 4th Industrial Revolution or Smart Manufacturer) automation and capabilities The need to better manage operations down to the millisecond instead of at the end of an accounting period (see this recent diginomica piece) Competitors have created ever larger suites at the OT level via M&A activity (e.g., check out Aveva's acquisition of OSIsoft) Traditional ERP vendors have recently tried to get into the shop floor with new (albeit incomplete) IoT (Internet of Things), IIoT (Industrial Internet of Things), big data and machine learning offerings New competitors (e.g., Uptake) aim to make data and insights, not ERP, the key technology for heavy industries Why this deal is noteworthy Kors has a fairly complete suite of edge/plant floor products under the Mach2 brand. According to Kors: Kors's Mach2 product interacts with plant floor machines and peripherals: Real-time, actionable data to the enterprise, passing that data to dashboards and other systems Automated plant floor processes alleviate manual effort and resources and drive efficiency High volume capabilities, over a million transactions per day on more than 6,000 machines Seamlessly integrates with Plex Smart Manufacturing Platform; deployed in nearly 200 plants In July last year, Manufacturing News reported: Mach2 ... is connected to Plex by design. These tools help accelerate design, engineering and implementation processes to provide a rapid "Day 1" experience for Plex users needing live, real-time shop floor data. "Mach2 delivers rapid standard integration, while providing a platform to address unique customer, process or localized requirements," said a company spokesperson. A powerful code-free environment minimizes deployment time, and opens opportunities for support in the Plex community as well as internally by the customer," continued the spokesperson. "Powerful dashboards and visualization options communicate performance and business data to complete the circuit of information-from the plant floor, to Plex and back to the operators, supervisors and production management. Who is Kors Engineering? Kors Engineering has been integrating their technology solutions with Plex "for more than 20 years". To say these two firms are acquainted with each other would be an understatement. In 2020, Plex announced: Plex named premier partner Kors Engineering the 2020 Solution Partner Impact Award winner. The Kors Mach2 integration software platform, when coupled with Plex, helps manufacturers leverage shop floor data to realize greater quality, visibility, and control. That was the third year in a row Kors won this award. What this means for Plex customers Plex has been a cloud ERP/MRP provider since the late 1990s. That's notable as many of their competitors only recently became evangelists to cloud solutions. For some competitors, it took the work-from-home mandates of the coronavirus pandemic to enlighten them re: their on-premises thinking. Sadly, some of their competitors still don't have a true multi-tenant cloud solution. One major competitor only offers a light-weight form of multi-tenancy in that a customer can have multiple plants and instances share key functionality and configuration data in one hosted implementation (In reality, this is nothing more than a hosted, multi-company solution not multi-tenant). While multi-tenant cloud solutions are commonplace in Finance, HR, CRM and other disciplines, real-cloud ERP has been as rare as hen's teeth for decades. (via Plex Systems, all rights reserved by Plex.) The Kors deal does bring an on-premises market reality to Plex's historically cloud-only world. In OT environments, manufacturers often possess a number of machines, controls, valving, switching, sensors, etc. that are monitored and controlled by local, on-premises devices. Some firms still have a mix of analog and digital controls, too. And many firms do not have any way for much of their machinery to be accessed or controlled via online or remote means. A number of manufacturing plants are not there yet when it comes to the world of the 4th industrial Revolution. In fact, there are plant operators that don't want these advanced controls and visibility as it helps their systems avoid being compromised by third parties. That world is fading though. Highly automated (think lights-out) manufacturing is a requirement for firms to operate at top efficiency, avoid scrap and deliver a quality product. This is why more and more manufacturers want solutions that capture data from production assets, inform operators of status, recommend courses of action and monitor outputs. These manufacturers want to have digital twins of their production facilities. They want to operate their facilities remotely. What these firms often need/want are a collection of hardware and software that are resident at plants to provide critical operational data in a real-time and continuous manner. They want these solutions to also interact with core ERP modules like Production Scheduling, Demand Planning, Cost Accounting and more. The latter can reside in a public cloud while the former may have portions of this on-premises and portions in a cloud environment. Manufacturers have specific and important business requirements that make the cloud issue a bit more cloud-y. In some manufacturing environments and sub-verticals, items may be getting produced continuously or in tenths of a second or less. If data is packeted, encrypted, transmitted, etc. to and from a cloud data center, the latency could be problematic for time-sensitive operations. That is why some manufacturers need on-premises solutions at the edge - these could be data aggregators, sensors, controllers and other technologies that help monitor and control operations. These plant-level systems may also include Human Machine Interface (HMI) devices, Supervisory Control and Data Acquisition (SCADA) technology, Manufacturing Execution Systems (MES), Programmable Logic Controllers (PLCs), Distributed Control Systems (DCS), etc. In short, this deal will bridge Plex's cloud strengths with Kors' shop floor and operations strengths. The new combined offering may test some aspects of Plex's existing cloud infrastructure. Kors' solutions may pump more data into a historian or other system that may need to reside in a cloud or hyperscaler environment. Plex's current cloud is its own but demands on this could grow significantly post-acquisition. That's especially true if Plex is successful in cross-selling the Kors solution to many within Plex's install base. This is not Plex's first acquisition. In July 2018 the firm acquired IIoT firm DATTUS. It acquired supply chain planning cloud vendor DemandCaster in 2016. Plex's acquisitions generally become full Plex solution components and not disjointed, bolt-on solutions. Customers of either product line should anticipate an even tighter level of integration between solution suites. (via Plex Systems - all rights reserved by Plex. ) How is this competitive? Given the long-term partnership between the two firms, this deal should become accretive very fast. I/we wouldn't anticipate a lot of reworking of the solutions to make integrations tighter is needed. There are several competitors with solutions at the plant/shop floor level. Some of them may lack a key component or two in their suites. Many plant level solutions have hit or miss integration capabilities to major ERP vendors. Likewise, many ERP solutions stop well short of the plant solution layer and only offer a 'framework', 'platform' or 'architecture' that expensive integrators have to flesh out to make the solutions be truly seamless. The weak points in this world can include: Missing components Inability to control really old capital equipment (e.g., an 80-year-old stamping machine with no digital controls or monitoring capability) Large integration gaps that third-parties must close and maintain Different kinds of security at the plant and HQ levels Uneven or different kinds of automation at different plants within the same firm A different technology team needed at the plants vs. HQ ERP vendors offering generic connectors (e.g., a generic IoT conn