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Working with its "Head in the Cloud"
Using a cloud-based ERP system, an Illinois manufacturer can easily access job information 24/7 from anywhere in the world
D2P graphic by Jennifer Bryda
Michael Chirchirillo, operations manager for Chirch Global Manufacturing, realized quickly through a "global alert" on his mobile device that there was a problem at his factory in Illinois. The job that was set up had stalled because of a supplier issue and the clock was ticking. If he was at his plant, he could easily set things straight, but he was far south at a conference in Florida.
Instead of scrambling to hop on a flight back to Cary, Ill., or making a slew of phone calls to managers on the shop floor, Chirchirillo simply turned on his laptop and accessed all of the job information instantaneously via the "cloud"—a powerful and connected information system that stores data on the web.
He retrieved real-time data about the job and realized a materials supplier was two days late. He then accessed the factory's production schedule on his device and quickly swapped the delayed job with the job that was next in line since its material was already on hand.
And all he needed was an Internet connection.
Enterprise resource planning (ERP) has gone to the cloud. The cloud-based ERP system used by Chirch Global—Epicor Express—is an SaaS model, meaning "software as a service." It enables the company to basically discard its traditional IT department where someone would install and manage ERP software on a server, and puts the company's real-time job information on the cloud, where it is available 24/7 from anywhere in the world simply through an internet connection.
"Accessing job information from anywhere, particularly on business trips, is critically important to me," Chirchirillo said.
The result of the cloud-based ERP is a more agile manufacturing company that can react quickly to customer demands and job changes. So if there is a delay on a job, the customer knows well ahead of time and can make adjustments. This improved communication with the OEM customers has been much appreciated by current customers and is drawing attention to the company from prospective customers who are attracted to Chirch Global's increased efficiency and improved communications, Chirchirillo said.
Since signing on with Epicor Express (www.epicor.com) in 2009 (Chirch Global was the beta site for the cloud-based ERP system), its on-time delivery score has increased significantly. So far this year, it has hovered around 95 to 98 percent, up from 50 percent two years ago.
And when the company "pre-emptively" handles a delay and lets the customer know ahead of time, Chirchirillo said, the customer often is very understanding. And with the increased communication through the cloud between suppliers and the customers, Chirch Global has been systematically improving its efficiency and creating a good, reliable name for itself in the manufacturing world when it comes time for a design engineer to choose a supplier, he said. Chirch Global is ISO and TS 16949 certified and designs and builds close-tolerance progressive dies and manufactures metal fabrications, stampings, and assemblies. Chirch Global also leads the Chirch Global Manufacturing Network, an alliance of 14 manufacturing companies in Illinois and Wisconsin that are independently owned, but collaborate with Chirch Global to meet customer needs.
Even though Chirch Global (www.chirchmfg.com) is a small- to medium-size manufacturer, it is on track to compete with much larger manufacturers because of the creative use of its cloud-based ERP.
"I feel like we would have stayed in that small business mentality if we didn't switch to the cloud," Chirchirillo said. "But we're advancing further now because we're using the cloud, and we're reacting quickly, and being responsive to our customers because we're relying on the system (Epicor Express). It has changed the name of the game because we can now go toe-to-toe with any company because we have the infrastructure set up.
Building Business in the Cloud
Setting up that infrastructure, where job information is systematically entered and then updated on the cloud, has meant practically no more human error when it comes to mistakes in entering job data. Before Epicor Express, Chirch Global's plant manager used an Excel-based program to control the entire production schedule and was in charge of manually entering the job number, part number, quantity, due date, tool number, and as much other information as he could.
"Human error was constantly being found and when you put in the wrong tool number by maybe replacing or swapping two numbers, a totally different tool is going to be worked on," Chirchirillo explained. "Consequently, we stopped trusting the manual system and stopped using it."
It was about that time that Epicor, which also provides traditional on-site ERP systems, came out with Epicor Express, the cloud-based system. The program is customizable and Chirchirillo, who spearheaded and implemented the cloud-based program at Chirch Global, decided to design a "job traveler" production schedule that incorporates a sequence of operations based on the company's TS certification. So instead of the plant manager entering all of the job information on the production schedule, when an order comes in, the person who takes it enters the order and immediately and automatically creates a job. Through backwards scheduling, it goes into the live production schedule available via the cloud on the web through Epicor Express.
The SaaS (software as a service) model that powers Epicor Express allows the user to log into the company's system via the Internet from wherever there's an Internet connection, thus allowing the user to be "very agile" when controlling jobs on the factory floor, giving them a competitive edge over manufacturers who are not ERP cloud-based, said Christine Hansen, product marketing manager for Epicor.
Customers of Epicor Express say they embrace the notion of being "untethered" from their ERP, meaning that the company does not need an IT department, but rather relies on Epicor Express to manage synchronizing the job information, as well as handling updates to the software. In fact, the accessibility and convenience of Epicor Express allows manufacturing companies to grow rapidly without worrying about additional IT costs. The SaaS model enables fast scalability of the business, as with some medical device manufacturers who use Epicor Express and are quadrupling their business in six months to a year, Hansen said.
Epicor (www.epicor.com), which focuses on ERP solutions for manufacturing companies, templated Epicor Express for small manufacturers aimed at high growth. Epicor's latest release, Epicor ERP 10, features a touch-enabled interface for tablet use so that workers can actually access the application from the shop floor and make instant adjustments to production. Epicor Express requires an upfront implementation fee and then a monthly subscription.
The cloud ERP package allows manufacturers to purchase one "seat"—or user—at a time, so that the company can grow slowly as business expands and they hire on more people. This is better than having to make huge leaps in package upgrades, as with traditional ERP systems, which can be costly, Chirchirillo said. Currently, Chirch Global has 10 seats through Epicor Express, which means 10 workers can be logged into the system. If the company decides there needs to be an 11th person logged in all day to the system, they can simply add and pay for one more seat, as opposed to jumping to a 40-seat level as with other programs, he said.
"It allows us to incrementally increase our costs while we're increasing our sales and profitability," he said, explaining that this allows the company to grow without getting in over their heads with additional costs for unnecessarily-large upgrades.
The cloud-based system is also saving company administrators money because they were able to cut out the expense of having an IT person on staff, which proved risky and limiting. Whenever the old ERP system failed, the company would have to rely on the IT staff to patch the system however they wanted.
"Basically, we were dependent on whoever was customizing our (ERP) system. And if they ever left the company or the system went down, we had no backup," Chirchirillo said. "There was no one else who knew the system that well to be able to get it back up and running."
By basically "outsourcing" its IT department to Epicor Express, Chirch Global got rid of a "fixed cost" and turned it into a "variable cost" that increases incrementally as the business grows, Chirchirillo explained. Staff at Epicor immediately handle IT problems when they arise and "nine times out of ten, they're already aware of the problem and fixing it before we even call," he said.
Rather than focusing on IT and the problems it brings, Chirch Global now has the freedom to focus on more important matters, explained Epicor's Hansen.
"Having ERP systems in the cloud enables manufacturers in particular to take the IT aspect of what they do and move it outside of their business so that their focus is not on IT," she said. "IT is managed by the professionals (at Epicor) that developed the application and know how to use it. The manufacturer can focus on serving their customers and meeting their customer demands."
It is that essential understanding that manufacturers are focused on customer satisfaction that has made Epicor a "valued business partner" to Chirch Global, Chirchirillo said.
Epicor has its roots in manufacturing, so they understand the functionality of the business, Chirchirillo said. "In the manufacturing world, you're going to have partials and short shipments and expediting costs, and Epicor gets that side of it," he said.
It Could All Go Up in the Air
In manufacturing, "fires" happen every day, Chirchirillo said.
"But you can either sit there and wait for every fire to happen and then stress out and become incredibly inefficient, or you can say, 'How can we use the (cloud ERP) system to communicate so that this never happens again?" Chirchirillo said.
Epicor Express has allowed communication to flow easier and faster within the company, so that when a part fails inspection or a job is late, company managers can act pre-emptively by solving the problem and contacting the customer immediately. And then "fires" of a similar kind rarely happen again.
"Cloud ERP makes us completely proactive as opposed to being reactive," he said.
So rather than being people dependent, Epicor Express allows a manufacturer to be system dependent. Without the cloud-based system, Chirchirillo would have to call into the plant and have someone there give him an update.
"Now I don't need to burden anyone, really. I can go online and find all the information through it being cloud-based," he said. "Doing all of this remotely is huge because you know everything's not dependent on you being there."
TThe view through the app when used to monitor equipment utilization and energy consumption
Photo courtesy of ITAMCO
Before, if a customer called him up for an update on their order, he would have to hang up with the customer, call into the factory, get the information over the phone, and then call the customer back. Now, Chirchirillo can use his mobile device or laptop to bring up the order with the customer on the phone with him.
"So I can say, 'Looks like it's in shipping and we're going to have a slight overage, but your parts are ready to go,'" Chirchirillo said. "When I'm talking to anyone, I'm able to get the information to my customer right then and there."
However, one time, Chirchirillo was unable to access the cloud ERP system because the Internet was down at the factory due to construction down the road. But all he had to do was drive to a nearby Panera Bread restaurant that had a Wi-Fi connection and he was able to keep business up and running.
"I was at Panera making purchase orders, entering sales orders, and mandatory invoicing. It didn't matter what I wanted to do; as long as I had that Internet connection, I was up to speed," he said. "Because if you can't invoice something, that's the biggest issue. If you can't get it off the floor and do what everyone's here to do, that's an issue. But being cloud-based, that risk is dramatically lowered."
Having that "on-demand" ERP system through the cloud means a manufacturer has 24/7 access to the system and receives real-time data on jobs and company stats, explained Epicor's Hansen.
And having instant access and instant information is what people expect nowadays, she said.
"It really enables businesses to be more mobile and we're seeing a huge trend in that today," Hansen explained.
Collaboration is another trend that is attracting attention in the manufacturing world through websites like yammer.com, which is used by Chirch Global and is somewhat like a Facebook for the business world, allowing companies to interact and help each other solve problems. However, Epicor has recently introduced a social enterprise tool for its system that allows employees within a company to electronically collaborate. When they collaborate, Hansen explained, that knowledge base is then stored within the Epicor ERP system and can "sit alongside" the company's ERP data.
"If I'm going back and forth with my customer or my engineers, I can record those conversations within social enterprise. And so then I can see when a quote changed, when a quote was accepted, and the history of the activities on the quote alongside this conversation that's happening," Hansen said. "That's also stored within my ERP system, so that if anything comes up or I need to access a document that was perhaps stored within a conversation, I can do that as well. It's a whole new way that businesses are starting to collaborate and talk."
Because the cloud system allows Chirch Global to react in a real-time atmosphere, access information from anywhere, and now collaborate socially, it has become a more efficient company that is able to put customers first.
"The whole point of business in general is turning the focus on the customer. And by using this (cloud) ERP system, that communication just flows so much easier, all the way up to the customer level so that they can react and be more profitable on their side," Chirchirillo said.
And with Chirch Global making changes like pushing information swiftly though the system and communicating with the customer faster, those customers start to become interested in getting even more products.
"We're starting to get new product developers and the new product engineers asking to come out to our facility and tour it. They really want to come out and understand what we do," he said. "Now, rather than me trying to pull them to come visit, they're asking to come. So, it (cloud-based ERP system) has really changed things."
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