Cloud ERP System Provides Real-Time Business Data

By Samuel Greengard  |  Posted 2016-04-08 Email Print this article Print
Cloud ERP

FloraCraft, a producer of foam products, implements ERP in the cloud to boost performance, access real-time data and deliver accurate customer orders on time.

Over the last decade, manufacturers across a wide swath of industries have found that getting products to market faster and more efficiently is critical. However, legacy enterprise resource planning (ERP) solutions and other enterprise applications often fall short. As a result, many organizations are heading into the cloud to achieve a more agile, flexible business and information technology framework.

One company that has embraced the cloud for ERP is FloraCraft, the world's largest supplier of Styrofoam brand foam products. The company, which operates manufacturing facilities in Michigan, California and Mexico, sells more than 3,500 products through stores such as Jo-Ann's, Michaels and Walmart, as well as to floral distributors and other industrial manufacturers.

"We had been using an old green-screen type of system from the 1980s," explains Steve Carlson, director of operational planning and management information at FloraCraft. He adds that the legacy environment had enormous limitations, and the challenges continued to mount.

"We couldn't accurately capture our costs because we were still doing time studies with stopwatches," Carlson recalls. "We were managing forecasts and orders in spreadsheets. And we had supervisors on the floor making independent decisions without regard to how they might impact upstream or downstream customers and other [stakeholders]."

Poor inventory visibility and a lack of overall insight into the business were leading to procurement, scheduling and delivery problems.

Implementing a Major ERP Upgrade

FloraCraft's managers began considering a major ERP upgrade. They examined a handful of solutions and eventually selected the Plex Manufacturing Cloud, which went live in 2013.

"Our business is a lot different now," Carlson reports. "We have real-time data for forecasts and on the shop floor."

As order data streams in from customers, the system calculates the demand and adjusts manufacturing resource planning (MRP) accordingly. This enables the firm to determine the demand for raw materials dynamically and to capture cost and other data—including how machine downtime impacts the business.

"All of this has dramatically improved the business," he adds. "We are now able to operate the business with lower inventory levels and meet demand consistently."

The net effect is an ability to deliver completely accurate customer orders that are 100 percent on time and delivered within two or three days. In addition, FloraCraft is now able to dive into data and understand key performance indicators (KPIs) in a way that wasn't possible in the past.

Because the system places a serial number or identifier on every piece of raw material or component, "We can view product costs and inventory with total accuracy and make necessary adjustments," Carlson says. In addition to the strategic benefits, the system has dramatically cut phone calls, emails and other interactions that previously devoured employee time and resources.

Training Employees Was a Challenge

The biggest challenge, Carlson says, was getting long-term employees trained to use the system. "Many of them had little or no previous experience with computers," he points out. "There was a fair amount of initial skepticism."

Fran Keson, who has been working for FloraCraft for 43 years, controls all the jobs for packaging. Before the new system, she quality-controlled every piece of foam that came through the factory by hand and used paper to keep track of each piece.

When the company migrated to Plex, Keson was worried that she would lose her job because she didn’t know how to use a computer. But she learned to use the system to keep track of everything, which made her job much easier.

"The system is very intuitive, and people caught on very quickly," Carlson reports. "The wonderful part about being in the cloud is that we are able to get information from anywhere at any time using laptops, tablets and smartphones. That enables us to take a far more strategic approach to the business."

Samuel Greengard writes about business and technology for Baseline, CIO Insight and other publications. His most recent book is The Internet of Things (MIT Press, 2015).

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