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Tying the Shop Floor to the ERP System

Plex Online White Paper

At a Glance
This paper describes the evolution of IT strategies and the advantages of using an ERP system focused on linking shop floor and top floor operations. ERP systems shed light on manufacturing processes, enabling improved decision-making. A case study highlights how Plex Online dramatically decreases training expenses, freight costs, and scrap, while enabling business growth without additional resources.

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No. 1 Rated ERP Solution for Manufacturers

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ERP and the Shop Floor


Enterprise Resource Planning (ERP) on the shop floor is as critical to the viability of the enterprise as any component in the execution of manufacturing.

High-performing manufacturers have found that full integration of real-

time operational data collected from the shop floor to the top floor is key to Integrated ERP on the shop floor brings manufacturers improved quality, increased production throughput, less scrap, and many more benefits.

reducing costs, streamlining operations and improving customer satisfaction.

A History of IT Strategy
In the years leading to 2000, many manufacturers focused on preparing for a potentially disruptive transition in IT functions at the turn of the century. Most IT leaders strategic focus was on making sure that internal systems halt, on Y2K.

would continue to function, and operations would not come to a screeching After Year 2000, many enterprises began deploying on-site ERP systems that were rooted in For these applications, the

accounting and HR functions. manufacturing processes are an afterthought. The systems were designed with an activity which

starts on the top floor and filters down to the shop floor, which is the rubber meets the road. didnt matter how well the top floor functioned. where, in the manufacturers world, It soon became apparent that if the manufacturing process wasnt efficient, it It wasnt until after companies successfully traversed the dawning of the 21st century that they realized the best ERP solutions actually start on the shop are introduced. floor and are refined and improved there before accounting and HR functions

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Today, tying the machines on the plant floor to management on the top floor for a real-time glimpse of manufacturing status isnt just convenient, its critical for a company seeking to remain viable in a competitive market.

Primary Drivers for ERP on the Shop Floor


Thanks to todays ERP systems, companies apply the same lean quality improvements to data, a highly valued product, as they apply to the rest of the products they manufacture. This includes the highest levels of data quality, accuracy, delivery and storage. Incorrect, untimely, or unavailable data about your plant floor can be more dangerous than no data at all. Quality data helps expose plant floor deficiencies and anomalies of OEE, quality and traceability. Allowing an ERP system to effectively automate a process not only results in a nearly perfect production process, it also frees an operator to focus on other, valueadded activities. When additional data is captured, the shop floor is integrated with the top floor for a real-time snapshot of traceability and machine output. Tony Kaczmarek, president

Plex Online brings manufacturers improved quality, increased production throughput, and less scrap.

of Kors Engineering, has seen

dramatic transformations occur when ERP ties the shop floor to the top

floor. Integrated ERP systems make plant floor activities more visible to all employees. In fact, Kors Engineering has found that most companies learn theyve known after decades of operation. more about their systems the first day they bring their equipment online than Plex Online has the industrys most comprehensive quality management and supply chain management functionalities. It has the capabilities needed by traceability, statistical process controls, issues management, and more. comprehensive internal and supplier auditing. medical device manufacturers to manage problem controls, cost recoveries, Its compliance monitoring functionality has additional features that enable

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Plex Online in Action


ERP on the shop floor brings many opportunities for improvement. Better many benefits. quality, increased production throughput, and reduced scrap are a few of the Ralco Industries was one of the first companies to implement Plex Online, the industrys #1 ERP Software-as-a-Service (SaaS) solution for manufacturers. Our inventory accuracy was, at one time, only about 50 percent, says Jim Piper, president of Ralco Industries. We were conducting grueling physical

inventories every month, and they would be off by the next week. We never

knew if we had enough parts to a set-up, we followed different steps and processes. Each This resulted in lost time, worker had his own method. inconsistent product quality,

build a set-up. Every time we did

scrap, expedited shipments, and more issues. We knew we had to fix our system. A diligent search for an ERP provider that could meet its stringent

requirements brought Ralco to Plex Systems, provider of Plex Online. Ralco started its implementation with the Plex Online Purchasing function, one of 350 functions available. It was great, says Piper. We found we could now easily match receipts to our internal purchase orders, and match orders, and actually reduced the number of POs. The improved efficiency saved us about $100 per purchase order processed.

purchase orders to invoices. We had more control and security over purchase

Results for Ralco were immediate and significant:


Training costs were reduced by over 50 percent because all functions in Premium freight costs were down by 20 percent in the first year. Scrap rates declined by 60 percent.
Plex Online were available from a consistent interface.

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Weve significantly grown our business in a down economy, which says a lot, said Piper. We couldnt have done that without Plex Online. We wanted to differentiate ourselves from our competition, and weve done that.

Shop Floor Benefits


Plex Online is easy to use. Any person working on the shop floor can leverage the ERP system to set up and run his machine. This knowledge empowers manufacturing processes. management and helps drive informed decision-making to fix deficiencies in Plex Online enables machine recipes. Settings for specific parts are

automatically entered for tolerances, speed and other critical requirements no machine operation is underway until settings are met.

which enable a controlled strategy for production. The system can ensure that Traceability from station to station allows management to tie into environmental systems, hydraulics and manage energy systems.

We easily match receipts to our internal purchase orders, and match purchase orders to invoices saving $100 per PO processed.
Once the shop floor machines are online, its easy to focus resources, is no reason to be unaware of what is transpiring on the plant floor, regardless of where you are. eliminate waste, improve quality and work more efficiently. Today, there

Global Implications for the Single Source of the Truth


The world is getting smaller and your enterprise isnt only across the street or in the neighboring state. It may be on the other side of the globe. Plex Online allows companies to review all manufacturing entities through the same lens, allowing the easy distillation of data using common data points.

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Global companies quickly deploy Plex Online with new acquisitions so they can easily compare results in different facilities and strategically determine product design and order fulfillment.

They also extend Plex Online to their suppliers. Because the system is producer. Using the Plex Online EDI module, they can send advanced

integrated, suppliers can directly ship products to OEMs on behalf of the shipping notices (ASNs), submit electronic notifications, create POs, and

initiate shipping. Customers receive the ASNs before the products arrive.

ERP Success
Plex Online is a system that integrates all manufacturing processes, from the shop floor to the top floor, to make certain all facilities, efficiency of the manufacturing processes. regardless of location, work together to synchronize and maximize the There is a community of Plex Online users eager to share specifics about how their choice of system has paid off and helped them environment. maintain a competitive edge and allowed them to thrive in a competitive

About Plex Online


Plex Online, built on a Software as a Service (SaaS) model, offers more than 350 functional modules, providing manufacturers instant access to vital information and management functions using a simple Web browser. The on-demand solution features product lifecycle management (PLM) functions such as program and change management, enterprise resource planning (ERP) functions such as accounting and finance modules, customer relationship management (CRM) features such as order entry and tracking, manufacturing execution systems (MES) functions such as production scheduling and machine integration and supply chain management (SCM) functions such as supplier quality and traceability. www.plex.com

www.plex.com | 1.888.454.PLEX
No. 1 Rated ERP Solution for Manufacturers