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Plexus Online - Champion Case Study

Champion Plastics Attracts a New Customer Segment After Using Plexus Online to Modernize its EDI

When Champion Plastics, Inc. landed a coveted Harley Davidson account, owners Mike and Matt McDermott knew they couldn't afford any missteps, especially with their EDI. Current customer General Motors was changing its EDI system, and they knew they could adapt their current system to integrate with GM's. But they weren't certain it would work for Harley Davidson. Rather than pay for a GM adaptation that might not work for Harley Davidson, they decided to research and shop for a new system.

"Initially, we were looking at systems only for EDI purposes," says Mike McDermott, President. "We weren't looking for a complete ERP system. But we knew our method of inventory control was a high hurdle. We are unusual in that we use our customers' part numbers instead of generating our own, and we didn't want to go through the hassle of changing that. We also knew that we had a different system for each area of our business, and that integrating all these systems was going to be an issue.

"We spent four months evaluating ERP systems, and we realized none of them integrated as well as Plexus Online. Most other systems would have required us to generate our own part numbers. Plexus allowed us to keep our current processes so the transition to a new system would be faster and less disruptive. We were able to adapt Plexus to us instead of us having to adapt to other software. We saw that Plexus had a lot to offer in terms of systems integration, and it could all be beneficial to us. So, we decided to go with the entire system. It has paid off in ways we hadn't anticipated."

Improvements in Operational Efficiency

Champion Plastics began its Plexus implementation in January 2005. The team started with the EDI module and worked its way into Shipping. Once Inventory Control was up and running, they moved into Quality, Control Plans, Production Planning and Purchasing, introducing module by module. They quickly evolved into a lean manufacturing organization.

"We're a quick turnaround company, and we have to be flexible and aggressive," says Mike. "We found that Plexus is a very time-efficient system. Preparing shipping documents, sending ASNs, creating purchase orders, etc. are only a click away. Plexus has greatly affected our parts traceability, which is a key requirement, especially for our automotive customers. With just a few clicks we can easily find what material was used, when the material came in, when and who manufactured the part, and when and how it was shipped out."

"Before Plexus, if there was a quality issue, we had to spend hours manually going through paperwork," Matt acknowledges. "Our former system was effective, but it was paper driven and quite frankly, archaic. It took two hours a day and was designed just to record the outgoing serial numbers. Plexus has allowed us to reduce our entire company's paperwork by over 50 percent, and what little we now have we don't have to store. All data is stored on the Plexus system, and we can access it at any time. This gives us about a 33 percent savings on manpower at the manufacturing level. In addition, Plexus allowed us to stop the redundancy of checking work."

The Plexus Online browser-based system allows Champion Plastics managers access to all business information from their homes or while on the road, which has greatly simplified their lives.

"We can log in from literally anywhere," Matt says. "If there's a problem on the second shift, I can log on from home and fix it within minutes rather than having to drop everything and run back to work or face a mess in the morning. It's extremely convenient."

Reduction in Quality and Shipping Problems

"At our size, we can't afford quality or shipping problems," Mike emphasizes. "It would kill us."

In the past, Champion Plastics would occasionally ship the wrong box to the wrong customer. Now that the Plexus system bar-codes everything, shipping errors have virtually been eliminated.

"Before Plexus, the person getting the orders ready the night before would sometimes grab and ship the wrong box," says Office Manager Amanda Lamb. "This was a major problem because we ship for just-in-time manufacturing. When this happened, we had to manually search serial numbers to find the error, and it took forever. To avoid shipping errors, we spent a half hour every morning manually inspecting every box. It was time consuming.

"With the Plexus system, nothing can be shipped without being scanned. When each container is scanned, the information goes into computer to prepare a shipping label. If anyone accidentally grabs and scans the wrong box, an error message saying 'Invalid Serial Number' pops up on the screen. It's almost impossible to ship the wrong parts."

The Plexus scheduling module reduced man hours required for production scheduling by more than half. What used to take 12-15 hours weekly now takes only six or seven despite a large increase in customers. Champion Plastics has also been able to reduce its inventory by nearly 30 percent and still meet customer demand.

"Our business is a little different." Mike explains. "We ship to meet our customers' just-in-time requirements, but it's cheaper for us to run several weeks or months worth of orders and then store them in our warehouse until it's time to ship. With the Plexus serial numbers and scanning systems, we can easily find the parts when we need them.

"With Plexus, our information and planning is more accurate. We know exactly how many parts we have on hand and can easily determine how many to run. This saves us machine time because we aren't running parts we don't need. Our raw materials and finished goods inventory counts are now precise. We couple our inventory counts with parts planning to determine production runs. We are now running the right parts at the right times for increased efficiency."

The MRP module (Materials Scheduling) has vastly simplified raw materials purchasing. The MRP looks at current inventory, what Champion Plastics currently has on order, the minimum inventory they'd like to keep on the shelf, and sales requirements. After looking at all of these figures, the Plexus system generates recommendations of what needs to be ordered in what amounts and when the order should be placed.

"It's a wonderful thing," Matt smiles. "The whole Plexus system has helped us elevate the effectiveness of our operations. The fact that each system for each area of the business-purchasing, inventory, quality, manufacturing, shipping, accounting, etc.- integrates with the others makes it easy to run a great operation. We were a good company before, and now we're better. The competition in manufacturing is only going to increase. We're confident that we are well positioned to compete and grow."