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Plexus Online - PGS Case Study

Plexus Online Allows Precision Global Systems To Expand While Minimizing Costs and Personnel In All Three Divisions

When OEMs have trouble with a production run and want to recover the assembly or the costly components, they turn to a unique state-of-the-art company called Precision Global Systems (PGS) in Troy, MI. Specializing in Crisis Manufacturing Management TM, Machining and Assembly, and Component Recertification, PGS's three divisions recertify parts and in the process identify and correct engineering, manufacturing and raw material problems.

"Non-conformances become scrap only when they hit the scrap heap," says Richard Najarian, PGS President. "We typically are able to save about 85-90% of each lot shipped to us, which nets each of our customers anywhere from $1 million to $8 million dollars per year, every year. We're able to recertify parts per OEM standards, and the majority of what used to be written off as scrap is available for future manufacturing runs. Everybody wins."

In 1997 PGS was struggling to keep track of the piles of documentation required for every customer. Najarian heard about Plexus Online through business associates and decided to install the Document Control Module and become one of Plexus Online's first 10 customers.

"We need to track changes for every single component, and some components can have as many as 15-20 changes," Najarian contends. "Plexus simplified and organized document control. The most current revisions are now only a few keystrokes away and available to everyone. Repeatability and continuity are critical to our processes, and we needed every change error-proofed. The module works beautifully for us."

Over the next eight years PGS grew and the part numbers proliferated. Success solving customer manufacturing problems led PGS to develop its Crisis Manufacturing Management Division and Machining Division while its Component Recertification Division continued to expand. Problems with customer inventory management, lot traceability and shipping consistency began to surface.

Errors resulting from growing pains burden most small companies. PGS, like any other growing company, was worried about problems and inefficiencies in quoting, sales, purchasing and accounting. PGS has hundreds of automotive customers working with thousands of parts, and traceability was a concern. All processes were conducted internally, but ASNs went through an outside company, which PGS could not effectively control.

"Like most small companies, our resources are limited," Najarian says. "We needed a system that would tie everything together without stretching them any thinner. In 2001 we enhanced our partnership with Plexus to develop a full Quality Management System. Using the Plexus System made earning ISO/TS 16949 and ISO 9001 so much easier than what the typical company has to go through. Plexus brought real value to our company."

Bringing Inventory, Traceability and Shipping Under Control

PGS is unique in that it determines its own schedule for fixing and shipping recertified parts. It typically recertifies and then inventories parts until the customer schedules them into a production run. Prior to Plexus, whenever a customer called to check on the number of parts, PGS had to conduct an inventory before it could answer.

"Once Plexus was installed, we were able to track every part from the moment it entered our warehouse," says Najarian. "We know when it comes in, who received it, and exactly where it is our process. We can answer a customer's inventory question in seconds. We now send customers a weekly e-mail to let them know how much inventory we're holding for them. When we ship it out, an ASN is automatically generated and goes directly to the customer and becomes a receivable in our system. Using an integrated ASN system saves us thousands of dollars annually and gives us more confidence in our shipping accuracy."

Efficiencies realized throughout PGS since implementing Plexus has allowed the company to reduce its office staff by 33 percent and its operations staff by 30 percent while the three divisions continue to grow.

"I consider Plexus a true competitive advantage," Najarian says. "It gave me the means to control my business and grow my business. The system does all the work, so I can continue to expand without having to add a lot of overhead or worry about hardware or software problems. The system grows with you. We currently have over 800 different part numbers we need to track. Each part number is unique to its company and plant, and Plexus is the expert in documenting and controlling that information."

Audit Concludes Zero Opportunities for Improvement

Crisis Manufacturing ManagementTM is a rapidly expanding market for Precision Global Systems. PGS was in the midst of resolving a customer manufacturing crisis when the ISO 14001 and ISO/TS 16949 auditors arrived.

"My Director of Operations and I were involved with the crisis and couldn't fully participate in the audit," Najarian explains. "This was our initial certification for ISO 14001 and an annual surveillance audit for ISO/TS 16949. Our Quality Director worked with the two auditors. The Plexus Auditing Module is excellent and made the audit easy. It allows us to input notes for internal audits, and the auditors were able to pull up just about everything they needed right from the Plexus system. The audit went smoothly, and we had zero nonconformance and zero opportunities for improvement."

Najarian maintains that Plexus is the ideal system for any small company suffering growing pains or looking to avoid them.

"The Plexus system eliminates most of your growing pains," says Najarian. "It gets your business in order so you don't have to be consumed by day-to-day problems. It allows you to focus on your customers and your growth, which gives me the freedom to work on my business, not just for my business.

"When potential new customers see our system and how we efficiently track tooling, engineering changes, employee training, etc., they're impressed. With Plexus we can demonstrate we are the experts and have the capabilities to ensure every part is handled exactly the same way. We would have struggled doing this without Plexus."