Cases for Implementing Cloud-based Enterprise Resource Planning Software in Manufacturing
Due to their comprehensive nature and the integration of various business functions within a single system, enterprise resource planning (ERP) systems can be complex. Implementing this type of system involves mapping existing processes, configuring the software to meet specific business needs and training users to effectively utilize the system.
Established in 1981, Northern Transformer Corporation began as a small niche manufacturer of liquid-filled transformers. However, the company embarked on a transformative journey following its acquisition in 2012. According to Russell Anderson, vice president of business systems and IT, the new ownership harbored a vision to revive the prominence of transformer manufacturing in Ontario, prompting a radical shift away from outdated paper-based processes. Anderson recalls the challenges of coordinating operations without a coherent system.
“It was a cottage-type business that did everything by paper,” he told Machine Design. “It was all run through three or four people’s heads.” So when they embarked on trying to transform the product line that they were building and position themselves to grow the business, they “knew there was no way we could continue with that,” he said.
This realization led to the strategic implementation of Epicor Kinetic ERP, which served as the cornerstone of their transformation. “This investment laid the groundwork for moving away from disparate Excel sheets towards the centralized platform,” he said—a sentiment echoed by other manufacturers who also recognize that outdated systems can stifle growth.
READ MORE: ERP Vertical AI Agents Aim to Simplify Access to Answers for Quick Action
Take McNeal Enterprises Inc., a family-owned contract manufacturing company founded in 1976. They have had their own transformation under the leadership of De Anna Mirzadegan, executive vice president of operations. Located in the heart of Silicon Valley, McNeal has been a player in plastic component production, adapting dramatically to the fluctuating demands of semiconductor manufacturing and medical device production, particularly in the wake of the COVID-19 pandemic.
As the pandemic introduced unprecedented challenges and while many companies faltered, McNeal thrived, leveraging technology to maintain operational efficiency. The company had been using the Epicor platform since 1997, Mirzadegan told Machine Design. “It was called DCD at the time,” she remembers, “and were using 4.0—aren’t they on 24.1 now but with a new naming convention?” she said.
The contract manufacturer was able to turn potential crises into opportunities, she said, as one of their best decisions was expediting the migration to a cloud-based ERP system. Originally planned for mid-2020, the urgency of the COVID-19 pandemic hastened their transition to the cloud. “I will say that going to the cloud is probably one of the best decisions I've ever made in regard to our software and just running the business,” she said.
And as with Northern Transformer, the shift allowed McNeal to streamline operations significantly. Cloud-based access provided teams with real-time, data-enabling collaboration without geographical constraints. “It has made things so much easier…so much flexibility,” Mirzadegan affirmed, adding that being able to be at a convention in another state, accessing her business via laptop and answering a question without any complicated logins is “unbelievable.”
Integrating Systems: From Design to Operation
For both companies, the transition involved not just operational but also design systems. At Northern Transformer, an initiative to improve design capabilities led to the integration of a 3D design environment. This leap allowed connections between design and manufacturing processes, ensuring accurate bill of materials (BOMs) were integrated into their ERP system.
Anderson said they started with the basic modules that allow purchasing parts, manufacturing goods and running finance processes. Over time, they added some of the quality modules and more supplier tracking. “What we’ve found…is that we’re moving into some parallel systems that also give us better capability to run some of our…compliance based-quality processes,” Anderson said.
Anderson acknowledged the difficulty in assigning an ROI to the system’s implementation. “When you’re running on paper, you have no baseline,” he explained, “but we have a couple of things we know for sure: We’ve dramatically increased our quantity and value of parts that we purchase—probably by three times—and we haven’t increased our headcount in that department in finance. More transactions with the same headcount.”
This agility mirrors McNeal’s experience with automation in their order processing operations. McNeal witnessed notable improvements and operational efficiency after integrating automation features in their Epicor ERP system. The company reduced manpower in customer service alone, going from five employees to just one or two. “It’s a very large and robust platform, and maybe companies our size [50 employees] might think, ‘Oh, it's too much for us,’” Mirzadegan said. “We take advantage of a lot of the automation functions of it.”
McNeal also adopted Epicor’s Enterprise Content Management (ECM) solution to tackle long-standing document challenges. “We always had issues of broken links,” she recalled, explaining that when someone would move a file on the server it was no longer connected to Kinetics. This mirrors Anderson’s observation about data visibility at Northern Transformer. By integrating these technologies, both companies have empowered their workforces to focus on higher-value tasks.
READ MORE: 4 Powerful Strategies to Transform Your Engineer-to-Order Process for Peak Performance
The People Factor in Change Management
It would appear that the workforce itself, however, is the most challenging part of the process, according to both Anderson and Mirzadegan.
“The people are the hardest part of the whole process,” Anderson told Machine Design. “You’re trying to train them on entirely new concepts. You’re trying to change what they’re comfortable with and move them into a different way of doing things. And so that, ultimately, is one of the biggest challenges you run into,” he said.
Mirzadegan agreed. “People really don’t like the changes [with] the screens,” she said. “A lot of it is a mindset…you may have liked what you had in the past, but we’re looking towards the future, and we need to embrace this and learn to use it.”
To combat resistance, Northern Transformer collaborated with implementation specialists from Success Partners and a hands-on training approach. Their strategy involved cultivating internal champions—employees who embrace the new technology and could guide their peers through the transition.
Similarly, Mirzadegan acknowledged that their journey became daunting as she recognized the apprehension employees had toward change. Proactive leadership and a culture that encourages embracing change were essential for a smooth transition.
READ MORE: Epicor Introduces AI and BI Capabilities with its Grow Portfolio
