Cloud Technology

Aerospace and defense (A&D) manufacturers manage the manufacturing sector’s most complex programs, relying upon extensive supply chains that reach around the globe while adhering to strict compliance with existing regulations. With cyclical demands and tight time-to-market expectations, manufacturing planning is both an art and a science. The industry’s precisely engineered products require close integration between engineering and manufacturing operations.

On top of these challenges, the A&D industry is one of the most highly regulated manufacturing industries. There is no single A&D organization that monitors compliance with multiple regulations and adherence to standards as there is in other industries. The burden for compliance falls heavily on the shoulders of the OEMs and their supply chains.

Today, cloud computing is revolutionizing A&D manufacturers. Industry analysts note that most manufacturers are using not just two or three but often four or more separate point solutions to manage different functions. Reliance on so many systems creates inefficiencies and introduces potential incompatibilities among disparate platforms and file structures. The same data must be entered multiple times in different places. There’s a great deal of room for manual errors, inconsistencies, and delays.

During the past several years, cloud computing has emerged as a true leader in the A&D industry. Fully integrated cloud ERP offers versatility and state-of-the-art features that enable users to process custom orders quickly, perform accounting functions, and execute many of the steps in program management, all within a single solution.

However, cloud computing isn’t without its critics. As the Aerospace Industries Association (AIA) first reported in 2010, “Cloud computing was recognized as a technology that offers flexible access to computing resources, providing clear efficiencies, but also major challenges to the aerospace and defense industry. Protection of proprietary information when using this technology is not only business critical, but can be a national security risk if exposed inappropriately.”

The positive side of the increased implementation of cloud computing in the A&D industry is that many cloud vendors have expanded the A&D security requirements into greater cloud security across all industries. Cloud computing vendors will continue to invest heavily in security research and development to keep pace with this industry’s requirements.

Even the U.S. Department of Defense (DOD) has weighed in on cloud technology solutions for government agencies. Teri Takai, the DOD’s CIO, published the DOD Cloud Computing Strategy in July 2012. She wrote, “The Department is committed to realizing the value of cloud computing and providing a secure enterprise cloud environment… The federal government intends to accelerate the pace at which the government will realize the value of cloud computing by requiring agencies to ‘evaluate safe, secure cloud computing options before making any new IT investments.’”
 

EaglePicher Technologies

EaglePicher Technologies (EPT), American-based and owned, is headquartered in Joplin, Mo. EPT has been a leader in designing and manufacturing batteries, battery management systems, and energetic devices for the defense, aerospace, medical, and commercial industries for nearly a century. EPT manufactures batteries for some of the world’s most sophisticated satellite and weapon systems produced by government defense contractors. Each battery it manufactures is highly customized to precisely fit with the overall system it will power. There are few off-the-shelf products, and the development and manufacturing cycles can span years. This engineer-to-order (ETO) approach makes it impractical to implement some of the conventional approaches practiced by high-volume manufacturers to maintain efficiencies.

EPT has been using a cloud ERP solution, the Plex Manufacturing Cloud, for several years. It is delivered exclusively as a Software as a Service (SaaS) offering and 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 companies to effectively and efficiently manage virtually every aspect of their operations.

In 2007, EPT hired Dave Ryan. The launch of the Plex Cloud had stalled and there was no strategic plan to use the software as an opportunity to drive business process improvements. As director of IT, Ryan and a team of key personnel looked at all areas of the business in a fresh, objective way and identified the most efficient approach. He and his team led the Cloud product deployment and implemented modules and enhancements that would help EPT achieve process improvements. A major objective of this strategic approach was a transformation from manual, paper-based processes to a highly efficient paperless environment where electronic processes replaced many unnecessary steps.

Once EPT was on the implementation path, the team looked into how the software could drive improvements in major processes such as program management, purchasing, and customer quoting. At the time, purchasing was handled through a series of cumbersome manual steps that could take several days or weeks to complete, while program management was a manual process consisting of spreadsheets and shared file storage, and customer quote functions were used only to generate quote numbers and didn’t provide all of the details or the integration with the rest of the business that EPT needed for its A&D customer base.
 

More Accuracy, Efficiency

EPT bills for services at milestones established in its contracts, and the Plex Cloud enables employees to note these milestones when orders are entered into the system. Because of the integration of order entry and accounting functions into the software’s workflow tracking features, bills are now automatically generated and sent when these milestones are achieved – saving the division and its customers time and resources.

The heavily manual process used for milestone billings in the past required EPT program managers to verify that they had achieved their milestones, complete service request/milestone payment forms, distribute them for handwritten signatures, then forward them to accounts receivable, where data entry clerks would generate electronic bills. Those bills would be sent to the customers’ accounts payable clerks, who would have to go through a similar time-consuming process on their end.

“The biggest advantage of our more efficient billing process is the time savings,” Ryan explains. “What could take days and consume the resources of multiple departments has been transformed into a one-person, two-mouse-click event.”

EPT also uses the system to build initial proposals with material costs, labor, and all other required data. In many cases part numbers do not exist at this point – a major stumbling block to building proposals in the ETO environment, given traditional approaches – but the system allows users to assign a generic part number until one is established later in the development cycle.

“We’ve seen many benefits from an automated order and proposal system,” Ryan says. “Before, we may have had to manage multiple versions of proposals, and the human error inherent in manual updating could lead to inaccuracies and time-consuming corrections and order tracking. With the Plex Cloud, we have a ‘single version of the truth’ and our customer proposals are now fully integrated with customer orders and program management as well as the rest of the Plex system.”

In addition, the technology solution maintains a history of quotes and the results of EPT’s proposals. Sales and purchasing managers are able to review all proposals – those that led to contracts as well as those that did not. They are now able to identify trends in costs and customer concerns, and use this knowledge to improve the content of their proposals and their overall win-loss ratios.
 

Improved Program Management

This implementation automated many of the time-consuming processes that program managers used to perform manually.

For example, program managers and contract administrators now rely on technology to handle much of the communication they previously had to do themselves. Critical customer requests, such as engineering changes, contract adjustments, or deadline changes, are automatically communicated to all program management team members using an automated email notification feature.

Program managers also are helping to drive process improvement with enhancement requests of their own. One such enhancement included adding the previous price and the quote price next to the actual purchase price on the purchase order, eliminating the need for the program manager to research this information before approving the PO. EPT estimates that the automation saves more than 600 hours of manual research per year.

Program managers manage all progress tracking and status reporting through the system. Team members can enter and track their individual progress in real time, so regular program status meetings run more smoothly and discussion can focus on potential problem areas. Fewer, shorter, and significantly more productive meetings are the result.

The managers rely on the system’s program management function to track all activity associated with a job. Managers utilize a scorecard template to assign green, yellow, or red ratings to nine different elements. EPT’s management staff can use this information to review job statuses, which eliminates the need for many meetings. If an element of the job is scored yellow or red, the risk and mitigation have to be identified.

The reporting and tracking of program management statuses is also more efficient. Management staff can easily review all program statuses by pulling reports from the system at any time instead of tracking down the individual program managers for updates. This leads to improved decision-making, as managers no longer have to search paper reports to find information. As a result, they can focus on the aspects of programs that are identified as being at risk.
 

Conclusion

Full implementation has exceeded all project goals related to streamlining functions:

• Quickly and easily processes custom orders
• Improves the speed and accuracy of accounting functions and financial tracking
• Streamlines workflow, sign-offs, and other activities associated with overall program management.

These efficiencies support the company’s overall business goals of time savings and improved productivity, ultimately leading to higher customer satisfaction and a more competitive position in the market.

Customers have repeatedly expressed their approval of EPT’s cloud ERP system. This has led to repeated customer requests to expand the use of Plex on their specific programs.

Ryan adds, “At EaglePicher Technologies, we are constantly looking for new systems improvements, and with Plex Systems, there is always the flexibility to expand and enhance what we have.”

See a Video
Learn how the Plex Cloud works for EaglePicher Technologies at http://bit.ly/16EJ48z.

About the Author: Jim Shepherd serves as vice president of strategy, responsible for defining strategic direction of Plex Systems with manufacturers across multiple industries and global markets.

Plex Systems Inc.
Troy, Mich.
www.plex.com

EaglePicher Technologies LLC
Joplin, Mo.
www.eaglepicher.com