Plexus Online - Ralco Case Study


Plexus Online Revolutionizes Ralco Industries

“Three years ago our inventory accuracy was only about 50 percent,” says Jim Piper, President of Auburn Hills, Michigan based Ralco Industries. “We were conducting grueling physical inventories every month, and they would be off within the following week. We never knew if we had enough parts to build a set-up. Every time we did a set-up, it was different. Each of our guys had their own method. This resulted in lost time, inconsistent product quality, scrap, expedited shipments, etc. We knew we had to fix our system.

“We switched to the Plexus Online software in 2001. Among other things, this software allows us to do cycle inventories. Because of our improved accuracy in inventory, we can do set-ups faster, and we have been able to reduce our inventory on hand by 15 percent. Plexus Online also has a 'recipe' system for set-ups, so each setup is exactly the same. There is no room for operator creativity or variation. If someone attempts to change the recipe, Plexus communicates with the PLC and the press stops. Our scrap is down from over three percent to less than one percent. We went from a customer rejection every other month to not having one in over 1.5 years. Our OEE (overall equipment effectiveness) has gone up dramatically. It's amazing what the right system can do for your business!”

Ralco CEO Tom Gitter, Information Systems Manager Eric Reno, and Piper met in 1999 to try to determine how to get a better handle on the stamping company's systems. The goal was to find one software system that could integrate all facets of their manufacturing business. Ralco had purchased its original Manufacturing Resource Planning (MRP) system in 1988. Reno had been the system’s rep until the company folded in 1990, and Reno joined Ralco to support and improve the system. But it was old technology, incapable of machine PLC integration. Ralco management knew it needed to upgrade. In 1995 they purchased another software for shipping and receiving and decided to go with the entire system in 1998. A conversion date was set, and when the day arrived, they pushed the button. When key features did not work, they had a disaster on their hands.

“After six months of intense effort to make the old system work, we had to back off, but we knew we needed something else,” says Reno. “The key questions were, what exactly did we need, and who could provide it? The lack of accurate data from our systems was causing a number of expensive issues--quality problems, scrap, overtime, expedited shipments, etc. We had to get our systems to work for us.”

Gitter had a vision of total systems integration, and he worked with Reno and Piper over the next year to define what they wanted. They developed a six-page systems requirements document and a 15-page flow chart. Assuming an entire systems conversion would be expensive, they planned for a two-year investment payback. They figured the improvement in consistently high quality would lead to increased sales, and the improved accuracy of their systems would lead to lower production costs. The search for the Holy Grail of Software began.

“We started with about 40-50 companies, large and small,” says Piper. “We'd look at their systems and match them up against our requirements. Eventually we narrowed them down to five or six companies. They'd bring in their systems, and we'd load our data and attempt to break them. By January 2001, we had narrowed the field to three companies. One withdrew because they knew they couldn't meet our requirements. But we weren't comfortable with the remaining two. One company provided references, which we called. Their top reference told us he wouldn't recommend using them…”

The trio wasn't sure what to do at this point. “The system integration we envisioned made sense,” says Piper. “But no one had it or seemed capable of building it. We were going to have to settle for less than we wanted.

“Then Tom Gitter met a salesman from Plexus Online at the local gym. He came back to the office with a brochure and said, 'Hey, look at this!' We looked at the brochure, which seemed to promise everything we wanted. It was a small company, which concerned us. A previous small company we had worked with had gone out of business, and we didn't want to get burned again. And, it was a web-based system maintained at their complex. Security was a big issue for us, and we weren't sure about this new system.”

The Ralco trio called Plexus and spent a month testing the Plexus Online system. Remarkably, the system worked as promised. Then Ralco visited customers and found every Plexus customer seemed pleased with the software.

“Eric and I first saw the Plexus Online demo,” says Piper. “We were looking for a system that could be accessed from anywhere in the world. We had a vision of what we wanted--a living control plan that would collect data, update it, and send it where it was needed. Our vision matched up with the vision of Rob Beatty, founder of Plexus Online. The Plexus Online software could adapt to our business strategy and be customized to our requirements. Every other software company required us to adapt to their software. This seemed to be a perfect match.”

Plexus Online uses a simple, web-based format called HTML, so it provides an easy user interface and places few requirements on PCs. Unlike other software companies, Plexus Online is accessed through your web browser or a private connection to the Plexus Online network. This allowed Ralco to avoid the cost and hassle of buying, installing and maintaining the software and server. Plexus Online also supports and enhances the system, including all software upgrades, data backup, and professional system management, at its headquarters in Auburn Hills, MI.

“It was a relief for me to offload the major database and back-up responsibilities, although security was a big issue for us,” says Reno. “Another guy in our IT Department used to work for the CIA. He spent a month trying to break into the Plexus Online system. He never could do it.

“Plexus Online is an IT Department on call, and because they maintain and upgrade everything for us, I'm now a one-man IT Department. I handle network issues, PC software, etc., but Plexus Online handles everything with their system. They are responsive, fast and care about the customer. Most issues can be addressed with a simple e-mail.”

Ralco started its implementation with the Plexus Online Purchasing module. Plexus Online is designed so that you can add one module at a time or simultaneously install several.

“It was great,” says Piper. “We found we could now easily match receipts to our internal purchase orders, and match purchase orders to invoices. We had more control and security over purchase orders, and actually reduced the number of purchase orders. The improved efficiency saved us about $100 per purchase order processed.”

Ralco's old MRP system crashed January 29, 2002, so Ralco took the plunge and subscribed to Plexus Online's Sales/Customer Relationship Management, Materials, Inventory, Production Tracking, Scheduling, Shipping, Quality, Management, Communication, EDI, System Administration and Security Modules.

“Our Plexus Online rep, Mig O'Brien, developed a plan on how to design, develop and implement these modules, and they followed it,” says Piper. “One thing we had learned from previous software companies is that you have to have an internal project manager and a dedicated person from the software company. They work with each other as back-ups, and it's the only way to ensure the coordination required. Mig is our Plexus rep, and she has done a terrific job for us.”

The benefits were numerous and immediate. Plexus Online is so easy to use that Ralco was able to reduce training hours by over 50 percent.

“Plexus Online has the same Plexus Online-based Control Panel for every work area, which simplifies training,” says Piper. “Before, 90 percent of our training time was spent on computer training. But Plexus Online is easy for employees to pick up. Now each employee can run every type of equipment. That's huge.”

Results were huge, too. Products are now consistently high quality. Premium freight costs were reduced by over 20 percent per year. Now it's a rare event to have to expedite a shipment. Scrap rates are down by over 60 percent. Downtime and employee turnover have both been reduced drastically. Inventory is down. Set up times have been reduced. And the paperwork and order tracking is now easy.

“We were looking for a two-year payback, but it only took just over a year,” says Piper. “When we bring in prospective customers, they are blown away by our manufacturing systems. We recently brought in a European sales prospect, who visited our plant four times to inspect our quality and business systems. They saw the system work, they loved the manufacturing controls and the fact that the system simply won't let us ship bad product. They can go online anywhere in the world and look at what's going on with their order. We are state of the art, the cutting edge.

“We've significantly grown our business in a down economy, which says a lot. We couldn't have done that without Plexus Online. We wanted to differentiate ourselves from our competition, and we've done it.”

Ralco has been so pleased with the results of their Plexus Online modules that they are now in the process of adding additional modules.

“We get more leverage from Plexus Online than we could with an SAP or similar system,” says Piper. “This is the system of the future. Any company looking to outperform its competition and invest for the future will find its way to Plexus Online.”






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