At a Glance:
- Plex Cloud ERP helped rubber molder shift from job-shop mentality to brand mentality and develop product for new market.
- System improved inventory accuracy by 87 percent and improved quote win- loss ratios.
- Manufacturer benefits from project management, cost tracking and pricing capabilities.
- System launched in just five months.
About Hiawatha Rubber Company
Since 1955, Minnesota-based Hiawatha Rubber Company has had a reputation as a leader in the rubber molding of high-precision parts for several industries, including medical, aerospace, printing and more. The company recently discovered a new opportunity in the waste water industry. With some significant R&D, it was able to develop a better performing and environmentally greener alternative to existing parts used in the processing of waste water.
The biggest challenge Hiawatha faced in this transition was not in developing or even in selling the new product but in changing its business model and culture.
For more than 50 years, Hiawatha had operated in a traditional job-shop environment, responding to orders from its customers. The switch to a brand-owner environment was a dramatic change for a workforce that had never before been in the business of product development or marketing. This evolution in its business model forced changes in virtually every area.
The Search Was On
One of the most critical areas requiring attention was Hiawatha’s data management processes and system. For many years, Hiawatha had used an AS/400-based system to capture labor data, and relied on spreadsheets and homegrown databases to manage the rest of the data it needed, but management could only access financial information. No meaningful management data could be tracked or generated without custom programming.
As the company considered the business needs associated with its new product development and launch, it realized it needed a system that not only was integrated but could provide the operational data management it required to ensure quality, production and profitability in its new market. The company would have to track data across all of its functions and introduce ongoing improvements in cost, productivity and efficiency.
Hiawatha had ambitious goals for its new IT solution. It looked for a system with unlimited data storage, project management capabilities and complete crossfunctional integration. This ideal solution would enable improved inventory controls; detailed labor, profit and loss cost tracking; and other best practices. Management wanted data to be accessible not only by a select few people, as had been the case with its previous system, but by the entire workforce.
When Hiawatha explored options, one product advanced quickly to the top of the list: the Plex Cloud ERP solution. Having been initially developed by manufacturers for manufacturers, Plex seemed perfectly in tune with Hiawatha Rubber’s needs.
After selecting Plex Cloud ERP, the company worked with Plex’s partner Baker Tilly to implement the system, with an initial launch date seven months out.
A few months into implementation, the project team felt so confident with the conversion process that it bumped up the launch date by two months. Not only did Baker Tilly manage to complete the launch smoothly in five months, Hiawatha experienced no business interruptions during the process.
Letting the Experts Handle Maintenance and Security
Because Plex is a cloud model, all of Hiawatha’s data is securely housed and maintained off-site by Plex Systems. Hiawatha avoids costly servers, hardware and energy costs. There’s no need for internal IT maintenance.
“Our strategy as a company is to focus on our strengths while avoiding areas in which we’re not experts,” said Operations Vice President Howard Hauser, “so having our system moved into the cloud was a perfect solution for us. With Plex, we’re letting the experts handle all our IT maintenance and security issues while we focus on our business.”
Improved Cost Tracking
Before the Plex Cloud ERP implementation, the components of product costs were tracked manually. Now, all cost components, such as labor and materials, are tracked automatically. Cost data and product profit and loss reports are accessible in real time. This ensures accuracy, drives improved customer responsiveness, and allows for speedier and more strategic decision-making.
Now armed with real-time data, management can measure production cycle times and see who is meeting productivity standards and who isn’t. This increases accountability across the workforce and identifies who needs additional training. Ultimately, it leads to improved productivity.
More Customer Wins
“Now that we have a better handle on costs, we can price our products more strategically,” said Hauser. “We have been able to identify products that were either overpriced or underpriced and have been able to adjust them in order to be more competitive.
“Since we began more strategically pricing our products, we’ve seen a definite improvement in our quote win-loss ratios and we’ve gotten more business overall. When we accessed more detailed, complete data on some products that we didn’t think we could price competitively, we learned we’d been wrong. We’ve found we could still make a profit on some high-volume products.”
Project Management Function Invaluable
As Hiawatha worked to develop its new product for the waste water industry, the company relied heavily on Plex’s program management function. Employees used the system features to manage the internal complexities of everything related to the launch, including R&D, engineering revisions, market research, production line implementation, brand development and sales activities.
Highly integrated with the checklist system, APQP, the workflow function, Plex’s program management features help Hiawatha make sure all necessary tasks in the development process are completed.
Improved Inventory Tracking
Before Plex Cloud ERP, Hiawatha management always found a few surprises when it performed its annual physical inventory. That’s no longer the case.
Container-to-container inventory controls, enabled by new barcoding processes and technology, have driven much more accurate inventory tracking.
The first physical inventory Hiawatha conducted after the launch of Plex was virtually flawless. Also, the first time annual inventory variances were tracked, they showed a reduction from 2.25 percent to .29 percent, a total improvement of 87 percent.
“The results have been so good that our controller has allowed us to use the cycle count in lieu of a year-end physical inventory,” said Hauser.
With Plex Cloud ERP, all Hiawatha employees have access to business data. For many members of the workforce, this led to a new sense of empowerment and self-worth.
“Anyone can now find and display data about their job or print out a report and make decisions that will help the company operate better or faster,” noted Hauser. “This makes everyone feel more a part of the company. The fact that management clearly trusts the shop floor workers with business data has improved morale — an unexpected bonus of bringing Plex to Hiawatha Rubber.”
As we continue to access meaningful data through Plex, we will keep making better decisions,” said Hauser. “We know we will see improvements on an ongoing basis in every area of the company.
“The implementation of Plex coincided with a major cultural shift for Hiawatha, and in many ways it helped foster the changes we needed,” concluded Hauser. “As we moved from a job-shop mentality to a brand mentality, we faced many challenges, but we now have the foundation for future success.
“Plex has played an integral role in getting us to this point.”