ERP Install Leads To Big Hardware Sale

Whether you're talking about tracing food products or manufactured parts, there has been an increased demand for lot traceability (what material was used, what was made from that material, where was it shipped) for recall purposes. Smart VARs will be able to take this knowledge and create solutions that not only provide the necessary traceability but also show additional benefits such as reduced excess inventory and subsequent improved cash flow. Plexus Systems provided a good example of this in a recent installation done for FormTech Industries.

FormTech Industries, a provider of forged metal components to the automotive industry, recently found itself under new ownership with a host of problems. The company was experiencing inventory troubles due to a lack of visibility and had no effective method of tracing the genealogy of the products it produced. Since the new owners and some senior leadership had previous experience with Plexus Systems, they called the integrator for help. "The problems FormTech was experiencing are typical in manufacturing," says Daniel Lamb, director of IT services for Plexus Systems. "Oftentimes, machines are set up to continually produce a part to keep the operator busy, even if the company doesn't need the part. When storage space is gone, inventory is shoved in spare spaces throughout the building and sometimes forgotten." FormTech was no different. The manufacturer was eager to better manage its inventory so it could schedule its production efficiently and eliminate what amounted to money (i.e. excess inventory) sitting in storage. Additionally, FormTech needed lot traceability of its products to deal with warranty issues. Automotive companies want full traceability of all parts that go into an automobile in the event that a defective part needs to be recalled.

After numerous strategic planning meetings to determine the exact needs of FormTech, the manufacturer accepted Plexus' proposal for a new ERP solution. The hardware portion of Plexus' solution includes 115 3M  Touch Systems M150 touch screen monitors with resistive touch technology; 139 Dell Optiplex 210L PCs; 167 Zebra Z4M bar code label printers; 142 PSC PowerScan RF cordless, wedge, bar code scanners; and 47 Motorola (formerly Symbol) MC9090 RF (radio frequency) mobile Pocket PCs/scanners. Lamb explains that forging plants, in general, are very hot and dirty, and that the FormTech plants were no exception. "There is hot metal all over the place," he says. "We needed to choose products that could survive the heat and soot. In looking at the low failure rate of the products used at some of our other customer sites, we felt confident in their ability to last in this environment."

For software, Plexus used its own Plexus Online, a hosted ERP solution with added functionality for manufacturing environments. The software is composed of over 350 modules, which Plexus enables depending on the needs of the client. Inventory tracking, time and attendance, accounting, bar code labeling, and production scheduling are just a few of the modules enabled for FormTech. The program is accessed through Internet Explorer using the 3M touch screen monitors (for ease of use on a shop floor) and is hosted at Plexus' data center. The entire ERP installation, including hardware installation for all seven of FormTech's plants, was completed in nine months.

ERP System Leads To Traceability Of Inventory
The new ERP system has affected nearly every facet of FormTech. Employees now use Plexus Online to record production and scrap, access drawings and procedures, record inventory transactions, track shipping and receiving and material movements, and perform quality checks and audits. In the case of receiving materials, employees use the Motorola mobile computers to scan incoming parts. Employees can use Plexus Online to compare scanned parts with a bill of lading and create bar code labels for inventory. At any time in the future travels of parts, employees use handheld scanners to scan parts and denote their new locations.

Lamb says that one needs only to walk outside the FormTech plants to see a difference due to the new ERP system. "FormTech used to have many containers holding extra rusting inventory in its side yard lots," explains Lamb. "Now there are very few, meaning FormTech is no longer manufacturing parts unless they are needed." Thus it stands to reason that cash flow has improved for FormTech, since the company now has more of a just-in-time production mentality. With over 350 modules of functionality in FormTech's newly implemented system, there is room for expansion into other business operations that have not yet been addressed.

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