At a Glance:
- This paper showcases how EaglePicher Technologies’ Defense and Space Power Division dramatically improved the efficiency of its Engineer-to-Order (ETO) operations.
- Fully integrated Cloud ERP offers versatility and state-of-the-art features to enable users to more quickly and easily process custom orders, perform accounting functions, and execute many of the steps in ETO program management.
- The division eliminated cumbersome, redundant manual activities, reducing the time it takes to perform critical program tracking, ordering, billing, and processing functions from days to just minutes.
About EaglePicher Defense and Space Power
The EaglePicher Technologies’ (EPT) Defense and Space Power Division manufactures batteries for some of the world’s most sophisticated satellite and telescope systems produced by government defense contractors. While the organization’s products are of two core cell types, 3 1/2-inch or 4 1/2-inch, each battery it manufactures is highly customized to precisely fit with the overall system it will power. There are no off-the-shelf products, and the development and manufacturing cycles span years.
The division’s Engineer-to-Order (ETO) processes are very different from those processes used in the high-volume or batch production of products with predictable specifications.
The process typically begins not with a customer order but with a “customer- risk” or “cost-plus” contract with the customer, signed before a product design even exists. The contract identifies the product needs, including how long the battery will need to run, what size compartment it will have to fit into, and other highly precise requirements. This initial contract funds a single phase of development, after which product testing begins. Adjustments may be made and a new phase of development begins, with a new contract and funding, followed by additional testing. This “fund-build-test, then fund-build-test again” cycle continues until the end-customer has completed the assembly of its end-product.
Applying an ERP Solution to ETO Processes
In its other manufacturing operations, EPT has been using a cloud ERP solution, Plex, for several years. The Plex Software as a Service (SaaS) system combines the capabilities of enterprise resource planning (ERP), manufacturing execution systems (MES), quality management, customer relationship management (CRM), shop-floor integration, and much more into a single fully integrated solution. It enables the company to more effectively and efficiently manage virtually every aspect of its operations.
In addition, EPT now also uses many of the functions within Plex to improve its Defense and Space Power ETO operations. The system has enabled the division to more quickly and easily process custom orders; perform related accounting functions; and improve its workflow, sign-offs, and other activities associated with overall program management.
More Accurate, Efficient Proposals
EaglePicher Technologies uses Plex to build the initial proposal with material costs, labor, and all other required data. Although no part number exists yet, the system allows users to assign a generic part number until one is established later in the development cycle.
All proposal data is maintained and updated automatically. According to Senior IT Project Manager Dan Mullins, this saves time and improves accuracy over the previous manual processes.
“We’ve seen many benefits from an automated order and proposal system,” said Mullins. “Before, we had to manage multiple versions of proposals, and the human error inherent in manual updating led to inaccuracies and time-consuming corrections and order tracking. With Plex, we have ‘a single version of the truth’ and virtually no room for error.”
In addition, the system maintains an extensive history of all quotes and the results of EPT’s proposals. Sales and Purchasing managers are able to review in great detail all proposals — those that led to contracts as well as those that did not. They can identify trends in costs and customer concerns, and then use this knowledge to improve the content of their proposals and their overall win-loss ratios.
More Efficient, Accurate Billings
The EPT Defense and Space Power Division bills for services at particular milestones established in its contracts. Plex enables employees to note these milestones when orders are entered into the system. Thanks to the integration of the order entry and accounting functions and Plex’s workflow tracking features, bills are now automatically generated and sent out when these milestones are hit — saving time and resources for the division and its customers.
The heavily manual process used for milestone billings in the past required EPT’s program managers to verify that they had achieved their milestones, complete “service request/milestone payment” forms, distribute them for handwritten signatures, and then forward them to Accounts Receivables, where data-entry clerks would generate electronic bills. The electronic bills would be sent to the customers’ Accounts Payable clerks, who would have to go through a similar time consuming process on their end.
Now, everyone can easily see in real time when milestones are reached. When a customer sees that a milestone has been reached, the contract manager requests an invoice. The EPT program manager electronically generates an invoice using Plex’s workflow function to obtain electronic signatures where needed and to automatically send the invoice to the customer. With the elimination of manual steps, there are no more lost forms or missing information, and fewer resources are needed.
“The biggest advantage of our more efficient billing process is the time savings,” explained Mullins. “What used to take days and consume the resources of three different departments has been transformed into a one-person, two-mouse- click event.”
Easier Financial Tracking
The versatility of Plex has simplified order-entry processes. Entering technical and financial information for its highly complex government contracts had been a time-consuming process that required much duplicate data entry before Plex’s automated order-entry function was introduced. The company now enters all
this information just once.
Because the order-entry functions are completely integrated with financial functions, the system also saves Finance time and improves its efficiency. One of Finance’s biggest challenges in an ETO environment is tracking actual expenses to its funding. This information is critical, as it relates to liabilities, penalties, incentives, and more that must be tracked on an ongoing basis. With Plex, this is all tracked automatically in real time, with no additional manual labor or resources required.
Improved Program Management
EaglePicher Technologies’ program managers have benefited from the use of Plex to handle much of the communication that they previously had to handle personally. Critical customer requests, such as engineering changes, contract adjustments, or deadline changes, now are automatically communicated to all program management team members using the Plex automated email notification feature.
When a part is purchased for a contract job, a feature in the purchase order system automatically routes that purchase order request to the appropriate program manager for approval. The purchase requisition displays the last purchase price of this part as well as the price that was quoted on the proposal for that job. The program manager sees the current purchase price and the last purchase price for this part as well as the price quoted to the customer in the proposal. This feature is a tremendous timesaver for the program manager.
Program managers also use Plex to manage all progress tracking and status reporting. Their team members can enter and track their individual progress in real time within the system, so regular program status meetings run more smoothly and discussion can focus on potential problem areas. In the past, when program status was tracked manually, much of the time in meetings was devoted to updating and reconciling progress reports as opposed to having value-added conversations about potential issues.
Now, each program manager is able to pull up a single program tracking report at the start of each meeting. The team is assured that the information is accurate and up-to-date and can focus its discussion on critical issues.
The EPT leadership requires program managers to manage their programs using Plex. Reporting and tracking are more efficient. Management can easily review all program statuses by pulling reports from the system. This enables improved decision-making, as managers no longer have to search paper reports to find information. With Plex, they can zero right in on the aspects of programs that are identified as being at-risk.
EaglePicher Technologies and its Defense and Space Power Division are very happy with how Plex enables improved ETO operations, and they are exploring additional features that can help even further. The software’s many features have helped them manage complex custom manufacturing jobs with a level of efficiency that is unusual for ETO operations.
As Mullins sums it up, “Plex is truly operating as a contract management system for our ETO business and we couldn’t be more pleased.”