a privately-held North American provider of enterprise resource planning
(ERP) solutions that helps mid-size engineer-to-order (ETO) and project-based
manufacturers to improve their business is a stellar example of a focused niche
vendor. As an illustration, seven US-based ETO companies recently selected the
Encompix ERP system within a thirty-day time bracket.
Encompix, which has a single focus in the ETO market, has therefore recently captured a significant market and mindshare, particularly given that the following manufacturers have thereby decided to partner with the Cincinnati, Ohio-based (US) firm:
Enterprises, Inc. of Akron, Ohio, a global leader in designing, engineering,
manufacturing and supporting custom air handling systems.
Cross Bros. Co., a leading Rochester, New York (US), material-handling
company dealing with high-quality custom fabricated equipment and custom conveyor
Gehring L.P., based in Farmington Hills, Michigan (US), is
part of the Gehring Group, the leading corporation for honing technology worldwide.
Their customers include all of the major engine manufacturers (General
Motors, Chrysler, Ford, Honda,
Saturn, Caterpillar, Harley Davidson).
Kvichak Marine Industries, based in Seattle, Washington (US),
a worldwide leader in the design and construction of high quality, customized
aluminum workboats, from twenty to one hundred feet in length.
Rimrock Automation, Inc.
of New Berlin, Wisconsin (US), a provider of robotic automation solutions
Rough Brothers, Inc., based in Cincinnati, Ohio, designs,
engineers, manufactures, and installs custom greenhouses with capabilities
to build any number of structures using a variety of coverings including glass,
polycarbonate, film, and more.
Wolf Robotics, based in Fort Collins, Colorado (US) designs
and manufacturers industrial welding cells.
refers to its 270 customers as a close and happy extended ETO family, a feeling
that can particularly be noticed during its annual users conferences, where
most attendees share the same issues and concerns about running their businesses.
Such was the recent event, when Encompix' customers from the US and Canada met
in Cincinnati for the Annual User Conference, on October 15-17, 2003. Around
eighty attendees participated in the three-day event with over thirty-five general
and breakout sessions. Showcasing Encompix version 9.2B, the
vendor gave detailed educational sessions on key components of the system. Its
partner presentations from Configure One, a provider of product
configurator software solutions; Cimmetry Systems, a provider
of visualization and collaboration solutions for the architecture and engineering,
construction (A/E/C), manufacturing, and electronics markets; Aimasoft,
a computer-aided design (CAD) integration provider; and Prism Software,
a provider of software products for the distributed project management, helpdesk,
and e-business, updated attendees on new third-party add-on functionality. The
conference also included five separate special interest groups covering the
major product areas with time set aside for users to share ideas.
Encompix continues to add new functionality to address the needs of ETO and
project-based companies, whereby the customers play a big part in the development
process. Many enhancements are a direct result of their input, while most support
calls that require development work get resolved by maintenance releases, which
are provided on a regular basis to existing customers. To that end, the recent
release contains major enhancements to financial accounting, shop floor control,
purchasing, sales and job orders, shipping, inventory control, advanced
planning and scheduling (APS), subcontracting, progressive billing, and
revenue recognition. Further, for ETO companies who operate a major spare parts
business, Encompix has developed new material planning functionality and multi-warehouse
capabilities to support the manufacture and distribution of spare parts.
The next release, Version 9.3 which is planned for the 1st Quarter of 2005, is supposed to feature the following enhancements:
materials management: An integrated solution between manufacturing, purchasing
and inventory management to provide visibility throughout of the application
of parts or work-in-progress (WIP) in non-conforming materials
(NCM) defect tracking
Project reserve inventory management: This should provide the ability for
customers, especially those with government project costing and tracking requirements,
to purchase inventory with project funds, track its use across individual
orders within that project and report on the actual costs throughout the life
of the project
Complete integration of approved alternate parts
Integrated item revision control from the engineering bill of materials
Improved long lead item processing: This should allow customers to purchase
their long lead items early in the project and then assign them to the appropriate
jobs as the project structure matures.
recent success of Encompix is one of the strong indications that after years
of hesitation and caution, ETO manufacturers have begun to demonstrate a new
economic confidence. For a comprehensive discussion of the ERP requirements
of project-oriented and ETO manufacturers, see ERP
Systems and the ETO Manufacturing Market.
is Part One of a two-part note.
Two will cover challenges and make user recommendations.
manufacturers have to seek out ERP systems that will plan and account for activities
before and after the "factory" activity. Thus, through the Program Cost Accounting,
Project Accounting, Project Definition and Project Resource Planning sub-modules,
to name only some, an ETO focused vendor should take a holistic approach to
the needs of project-driven manufacturers, as to address the entire process
life cycle, beginning with the bid and estimating processes, all the way to
installation and service management. The company should thereby be able to connect
the project status tracking with back-office processes. The system should also
have a bidirectional interface to CAD design and project management tools such
as Microsoft Project. Many customers require weekly progress
reports and are comfortable with the MS Project format, but the product on its
own cannot give the visibility and scheduling over a great number of concurrent
products, and that is where the products like Encompix come into the picture.
indeed seems to have responded to many nitty-gritty aspects of the project-based
industries. After over a decade of somewhat stealth operation, Encompix has
begun to make some noise in the North American midrange ETO ERP market, with
the above-mentioned recent wins and product related initiatives. The company
was founded as a consortium of several ETO companies and initially named ShopPro
Software in 1992, with the aim of developing an integrated solution
for job-based manufacturing companies. Then, ShopPro merged with Paradigm
Integrators in 1996, to first form CDC Holdings, and
eventually became Encompix, Inc. Since then, the privately-held company claims
to have experienced rapid and profitable growth.
company attributes that growth to its narrowly defined focus on discrete ETO
manufacturers, which may belong to a raft of seemingly diverse discrete manufacturing
industries (such as machinery, tooling and molds, industrial conveyers, aerospace,
oil & gas equipment, industrial ovens, metal fabrication, etc.), but they all
have similar business processes and issues. (For a discussion of these processes
and issues see ERP
Systems and the ETO Manufacturing Market. When one narrows this down
to a selected few regions in North America, and to selected company sizes (e.g.,
a sweet spot of companies averaging $30 million (USD) in revenues and thirty-five
concurrent users), the notion of a laser-sharp focus emerges. However, the company
also likes its future outlook despite its seemingly narrow marketing opportunity,
as it estimates approximately 7,000 mid-market prospective customers in its
target geographies in the US Midwest, Northeast, West Coast, Southwest, and
the touted (approximately) 80 percent success rate against its usual suspect
direct competitors, such as Lilly Software, Jobscope,
Made2Manage, Epicor (the Vantage
product), MAPICS (the SyteLine product), Visibility,
and Microsoft Business Solution (MBS) Solomon,
and with the average implementation of 150 days, whereby the ratio of software
license fee versus professional service cost is often 2:1. This translates into
a contract price of less than $200,000 (USD) for thirty users, we tend to concur
with the Encompix' bullish attitude. One should also bear in mind strong references
amongst its 270 customers, many of which will have a similar profile to prospective
customers in terms of size, industry, geographic location and so on, knowledgeable
and experienced Encompix staff with decades long tenures with the vendor (the
vendor sells only directly) and a well-attuned implementation methodology.
on the recent contract wins, in the near future, Encompix plans to particularly
target five US states in the Midwest (Ohio, Michigan, Indiana, Illinois, and
Wisconson), which will be the center of its marketing campaigns and direct selling.
The vendor expects this region to account for over 50percent of new sales revenue.
The company also continues to expand the functionality of its Encompix product,
which capabilities go beyond traditional ERP functionality, as evidenced by
this latest enhancements bonanza. Advanced planning and scheduling
(APS), with visual drag-and-drop capabilities, is an optional module, which
was built for scheduling time of key resources, and which is more applicable
in project environment than expected. It comes in handy with the shop-floor
data collection module, which is also available.
for the customer relationship management (CRM) capabilities, the vendor
had started by offering integration to the Best Software's
SalesLogix product, but it has often turned out to be overkill
for the customers as they typically have very few customers. Thus, Encompix
has been building a native CRM product that will link its contact management
with quotation and service modules. This is a part of a long term service life
cycle management (SLM) vision ranging from CRM to field service to enhance its
customers' capability to deliver service at a profit (for more on the SLM concept,
Lifecycle Management - Tapping into the Value of the Product Aftermarket).
This feat is envisioned through building on the existing Encompix Service Management
application and its forthcoming CRM application.
WebCenter is the Encompix collaborative e-commerce module,
which might prove the suspicion that the ETO manufacturing world is not at the
leading edge of technology adoption. Namely, although WebCenter has been available
for several years, it has only recently seen customers more and more looking
at adopting this technology. In the long term, the vendor also plans to develop
a data warehousing application to enable its customers easier business intelligence
(BI) and analytics capabilities. It currently partners with CorVu
for executive information system (EIS), alerting and scorecard capabilities,
such as the tools to identify the fastest moving spare parts, warranty trends
as well as tools to maximize inventory turns and measure lead-time to fill orders.
However, Encompix might also be looking at more sophisticated BI applications
like Business Objects and MicroStrategy down
the track Encompix' optional modules include, CorVu BI module, WebCenter e-commerce
module, Configure One Product Configuration module, Encompix APS, the F9
financial reporting product, Best's ABRA human resource and
payroll suite, and Aimasoft's BOMLink module for two-way CAD
integration. All optional modules are integrated into the standard product offering.
While many of the these functionalities sound ordinary and appear to be offered by many vendors as "supported" when responding to RFIs, subsequent product demonstrations often reveals the need for some tweaking or even for a major modification in order to satisfy stringent customer requirements. As the expression goes, "the devil is always in details." On the contrary, Encompix allows users to estimate and quote an overall project using "buckets" of time or dollars, which enables enterprises to perform actual rollups. In other words, companies can track orders and projects and compare their progress to the original estimate, as well as to previous iterative changes, all in the "bucket" form, such as total engineering hours or total dollars. Many other systems that claim to be ETO-oriented can only track the current iteration.
concludes Part One of a two-part note.
Two will discuss challenges and make user recommendations.