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Cloud ERP System Helps EMS Company Double its Revenue and Reshore Contracts
GRAND RAPIDS, Mich.—Having lost business overseas during the recent recession, Firstronic LLC, an electronics manufacturing services (EMS) company, has reversed the offshoring trend and doubled its revenue within a year by implementing Plex Online, a cloud ERP system for manufacturers, according to company representatives.
Firstronic (www.firstronic.com) has reported reshoring contracts equating to a 300 percent growth since recently launching Plex Online and has ramped pre-production and is migrating to volume production with six new customers, all of which either selected Firstronic over competitors from regions overseas, or reshored business to the company.
"Our reshoring strategy is simple," explained CEO John Sammut, in a statement. "We focus on what we can offer that nobody else can. We know we can't compete on labor costs, so we don't try. Our differentiators have become better shop floor controls, advanced technology, speed-to-market, and flexibility—all things that Plex Online helps to make possible."
Plex Online (www.plex.com) offers features for virtually every department within a manufacturing company, including manufacturing execution system (MES) and quality management system (QMS) for the shop floor, as well as supply chain management (SCM) for procurement, enterprise resource planning (ERP) for finance and management, and business intelligence (BI) for executive management. Plex offers a"shop-floor to top-floor" view of a manufacturer's operations, enabling management to run its business to maximum efficiency, according to company representatives.
Most successful reshorers will point to differentiators like technology, quality, reliability, and collaborative supply-chain relationships as significant factors in regaining customers, according to Plex. Grand Rapids, Mich.-based Firstronic serves primarily the automotive, aerospace, commercial, and industrial tier ones and OEMs and is ISO 9001:2008 and ISO/TS16949 registered.
While looking into cloud ERP solutions, Firstronic weighed them against goals that included optimizing time-to-market, providing premium quality workmanship, and minimizing costs. The company re-evaluated its infrastructure and information system capabilities. Management realized that in order to manage expected growth, it would need to enhance its proprietary program management automation and MRP tools with a more robust, integrated ERP system.
The implementation of Plex Online was a smooth and speedy launch, according to David Alexander, materials manager and launch leader for Firstronic. "We were ready with back-up processes on the day of 'go-live,' but the cut-over was so smooth we hardly needed them," he explained in a statement. "We pretty much just stopped the unnecessary functions in the old system and started the new one with no delays or duplications of effort."
Plex Online's BOM capabilities allow Firstronic to smoothly manage each product line with its hundreds of part numbers and hundreds more sub-part numbers, according to company representatives. The solution is robust enough to provide Kanban releases, something the company's previous ERP could not do.
Plex online also supports the complexity of setups for automated PCB assemblies. It tracks the many parts that go into each PCB, and its checksheets and control plans ensure correct setup of hundreds of part reels, each containing up to 10,000 parts, according to Plex representatives. All critical requirements are built into the checklists that employees must complete before any assembly job is run. Plex Online randomizes the details on the checksheets, ensuring they are reviewed for each job. If the associated checksheet isn't completed for each operation, production stops and the checksheet refers the worker back to the appropriate FMEA (failure modes and effects analysis). This prevents any quality issues or production delays.
"The FMEAs and control plans enabled by Plex Online represents functionality I've never seen another ERP solution provide," said Firstronic President and COO Rick Herndon. "It is simple for us to present these documents as required by auditors and customers, and everyone is consistently pleased with their robustness."
Plex Online allows Firstronic to track and monitor performance, so it is able to manage its 300 percent growth without adding resources. For example, even though the number of components and part numbers that need to be sourced jumps exponentially with its new contracts, Firstronic does not plan to add to its purchasing staff of three.
"There are only a few tricks to translating increased business into increased profitability," explained Sammut in a statement. "And two main ones are maintaining resources and increasing inventory turns. With Plex Online, we don't need to add resources, and when we are fully operational on all new business, we will have doubled our inventory turns."
Sammut added that while most electronics manufacturers rely on advanced technology for their automation equipment and assembly processes, they aren't as high-tech when it comes to their systems and infrastructure.
"We're changing that here at Firstronic," Sammut said in a statement. "We've become the benchmark for the growth and reshoring that can be accomplished by the emerging mid-tier EMS."
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