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Gearing Up for Growth

Why Manufacturers Are Looking to Cloud ERP

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Ask a group of CIOs if they’re expecting organizational growth over the next 12 months, and the majority of them will nod in agreement. Ask them if they’re ready for it, and the answer might not be quite so clear.

In a two-part series, we’ll look at Avon Gear and EaglePicher Technologies, two well-established Midwest manufacturers that turned to cloud ERP to help achieve their goals for growth.

Avon Gear, a Michigan-based component manufacturer, has experienced steady growth since its founding in 1974. Over the past decade, the company has done more than just weather an economic storm—its annual growth rates have averaged 20 percent.

When the manufacturer saw an opportunity to solidify its leadership position, Avon Gear executives realized that disparate databases and systems were tying the hands of decision-makers. The company implemented its first ERP solution, but saw only limited success. The traditional system allowed only a handful of employees to update data or look up real-time inventory information. Reporting lagged and data quality plummeted.

That’s when Avon Gear’s frustrated leadership made the jump to cloud ERP. The sophisticated new system powered by Plex Systems let them track and record shop floor events such as production, inventory status changes, receiving, subcontracting, and shipping. Avon Gear’s shop floor managers could better calculate costs by retrieving data such as number of parts produced, production time for each part, time for total production, and the quality of the produced parts. The cloud ERP solution allowed Avon Gear to maintain its impressive growth rate without threatening its bottom line.

“We run the costing function to get the cost associated with each part and each activity,” says Matt Korth, engineering manager at Avon Gear Company. “We now know where and how to use our resources efficiently and can make better business decisions.”

Cloud ERP has provided greater accuracy and productivity for Avon Gear. Inventory variance has fallen from seven percent to two percent. On the shop floor, a production status screen at each work center is automatically updated every three minutes, allowing the foreman to check status and catch issues quickly. And preparing and modifying a shipping report—a task that used to take 2.5 hours—now takes just 30 minutes.

Just as important, plant floor employees can record their own production details in real time—and can identify and label defective parts before they move deeper into the manufacturing process. This translates to a clear view of parts produced per hour—not just per day—and better overall part quality.

How did EaglePicher Technologies use cloud ERP to support their plans for growth? Read the second part of this series to learn more.


 
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