Not Yet Sold on SaaS ERP in Manufacturing? Take a Hard Look at Plex Online - Part 2

Part 1 of this blog series explained Plex Systems’ ebullience and growth despite a hostile and depressed environment, especially in the discrete manufacturing sector. While the software-as-a-service (SaaS) model is now mainstream in many functional areas of business, the article concurred with Frank Scavo’s recent assertion that, for the time being, there is only one true SaaS enterprise resource planning (ERP) solution for manufacturing companies: Plex Online [evaluate this product]. 

Minimal Technology Gobbledygook

Since the underlying technology is not of much interest to SaaS users, Plex’ marketing collateral is not replete with the techie details. That said, as mentioned in Part 1, the system is built on Microsoft’s .NET technologies. There is a Microsoft SQL Server database on the back end, with Active Server Pages (ASP) as the original development platform.

New(er) modules and enhancements are being developed in C Sharp (C#.NET). The user interface (UI) is Web browser-based, utilizing HyperText Markup Language (HTML)Dynamic HTMLJavaScript, and Extensible Markup Language (XML). Thus, as a slightly negative trait, the look and feel of the different Plex Online screens that are written in these different technologies can be noticed by a discerning eye (look at relevant Plex screen shots here).

The hardware platform is based on Hewlett-Packard’s (HP) Wintel servers, whereas information storage is based on EMC Coporation and NetApp’s products. Plex currently runs two instances of the system, for load balancing and failover purposes, which is a common practice of established SaaS providers, such as or Workday. Plex has certification of its operations that is compliant with the stringent SAS 70 Level II requirements.

Support for Large Manufacturers: Defying Another SaaS Myth

In addition to defying the misconception that SaaS solutions can only cover fringe departmental functions (see Part 1), Plex has been defying the conventional wisdom (or myth) that SaaS is only appropriate for smaller enterprises. To that end, Plex has recently been reporting success in selling to larger organizations, with over US$1 billion in revenue. Some of these were complete ERP replacements in true multi-facility, multinational organizations, while others were plant-level implementations where a traditional on-premise vendor was handling the primary corporate requirements (i.e. a two-tier or hub-and-spoke ERP strategy).

For example, Inteva Products is a company of 3,600 with 17 facilities on three continents. Looking to replace its former rigid on-premise tier-one ERP system, Inteva chose Plex Online. The implementation in 14 global locations reportedly took just 12 months. Another similar example would be Jagemann Stamping Company, which replaced 12 different IT systems and reportedly reduced IT costs by 15 percent. The implementation was completed in under 6 months with no production disruptions.

Such feel-good stories are proofs of concept that Plex can address large companies as well. Plex Online allows a single company to run a separate material plan for each plant and to transfer material between plants with correct accounting for costing methods that may differ between plants.

Some International Coverage

Truly global coverage is not yet the company’s strongest suit, as its customers are primarily in North America, with some customer locations in China, Europe (Germany and the United Kingdom [UK]), and Japan. Multinational companies may need to set up multiple organizations (tenants) within Plex, but these are to accommodate different tax and regulatory requirements (localizations) rather than for multi-facility requirements.

Given that there are no dedicated product managers at Plex (as explained in Part 1), localizations and new vertical industry solutions are handled on an opportunistic basis. In other words, when a customer needs extensions, Plex provides the solution with support from partners, such as Plante & MoranBDO Seidman, and Baker Tilly (Plex is constantly on the lookout for new partners).

Therefore, prospective customers that are evaluating Plex should not assume that Plex can handle all international and vertical industry requirements. Companies should be specific on their requirements and be prepared for Plex to propose additional time and costs to develop the needed localizations and extensions.

Up Close and Personal with Plex at a Recent Event

Until recently, my dealings with Plex were via conference calls and briefings. I had a chance to meet in person with Patrick Fetterman, VP of Marketing, in Boston at the BIOMEDevice 2010 conference in late April. Fetterman’s presentation at the expo floor was entitled “SaaS Solution to Product Traceability & Regulatory Compliance.”

With its vast experience in the automotive industry (and aerospace & defense [A&D] to a degree), Plex is trying to entice medical device manufacturers to depart from the old inefficient model of quality management and traceability. This model of tracking quality documents was at best designed to electronically mimic paper-based systems (or is still manually paper-based). In this scenario, a standalone system requires tedious manual correlation of data from multiple point systems.

Conversely, a new model of quality and traceability is designed to electronically manage and track all steps of production and measurements, and record data accordingly. This model is designed to follow the production processes within a single comprehensive system with a seamless flow of data.

Standard Practices versus Best Practices in Traceability

To illustrate the contrast, Fetterman started with an all-too-common scenario, where a triggering event could be that a distributor has just noticed that one device has a problem: a liquid crystal device (LCD) display sometimes flickers, rendering the device unusable at times. In such cases, the distributor company notifies its account representative, who then notifies the manufacturer’s Quality & Compliance department.

A heavy investigation then ensues, whereby the Quality & Compliance department goes into action by first retrieving the device from the distributor to analyze the problem and identify the serial number. Once it identifies the root cause (e.g., the faulty LCD component has a bad lead), the department then needs to retrieve the pertinent paperwork with the records of the production details and supplier shipments from the warehouse where the item was stored.

In order to notify the supplier of the bad component, the quality personnel must then search the related paper records for details regarding receipt of the bad component. Thereafter, the personnel must correlate the batch(es) of faulty components with their usage in production by the dates of receipt and production in order to identify all of the possibly affected devices. Eventually, the department will quarantine the devices that are still in stock, and recall the other devices in which the component had been installed.

The above exercise requires a few weeks of painstaking overtime to track the source of the problem and to identify potentially affected products. Other important projects and products have to be unfortunately put on indefinite hold while the team dedicates themselves to resolving these burning issues. As a result, the total costs can balloon as broader quarantines/recalls are issued in order to control further problems and eliminate all possible risks. In fact, the risk of injury to the public increases with the time it takes to identify and control a quality issue.

There Must Be a Better Way (in This Day and Age)

In a much improved and modern scenario, the distributor will notice the very same problem with the LCD display. But, instead of alerting the account executive (who then cascades the alerts upstream the supply chain), the distributor simply logs onto the Web portal of the manufacturer’s system and creates a problem report, including the serial number or bar code scan identifying the problem device.

The problem ticket then triggers alerts inside the system, immediately notifying Quality & Compliance to investigate. The trouble ticket arrives with a complete traceability tree for the problem device, including all its components. Thereafter, a root cause analysis (RCA) will identify the LCD problem, whereby the problem ticket will be automatically sent to the supplier for corrective actions.

At the same time, all LCDs within the same batch are quarantined inside the software; software quarantines all inventory that is not yet consumed, all finished goods that are still in stock, and identifies any shipped product that needs to be recalled. In this case, notifications can be sent to distributors/customers immediately regarding quarantine/recall.

Consequently, the total time for analysis and action can this way be reduced from weeks to hours. In addition, since required personnel resources can now be reduced to a couple of people, costs can be drastically reduced and interruptions to business minimized. Needless to say, with quicker time-to-response, risks to the public are drastically reduced.

What’s Required for a New Model?

In order for trading partners to engage in this collaborative traceability and remedy capabilities, one needs the following prerequisites:

  • complete serialization of all raw materials, components, and processes

  • data collection on the plant floor in real time

  • error-proofing that requires material, process, and worker to be identified before a process can take place

  • data must be kept online and readily available

  • the existence of strong disciplines for RCA, e.g., Eight Disciplines Problem Solving (8D) or 5 Whys

  • software for correlating all this data, available anytime, from anywhere

My recent articles have talked about Lawson Software and Infor’s traceability solutions in the food industry, but neither of them is a multi-tenant SaaS offering. Plex contends that SaaS lends itself well for traceability, since on-premise and single-tenant hosted systems require massive (and expensive) storage systems to maintain data online and be readily accessible. In contrast, due to cloud elasticity SaaS providers can offer virtually unlimited storage.

Moreover, incidents and problem reports happen at inconvenient times around the clock and from many possible locations. To that end, online SaaS solutions are accessible from anywhere and at anytime by default. Web-based solutions are also readily available for use by the manufacturer’s customers/distributors and its suppliers, for seamless communications and corrective action tracking during crises.

Not Hunky-dory Yet

However, the medical devices and life sciences industry might not be yet ready to jump on the SaaS bandwagon due to the US Food and Drug Administration’s (FDA) regulatory and validation requirements. There has been no FDA guidance issued on SaaS yet. Other issues and caveats would stem from the dubious validation of software that is outside the manufacturer’s physical control in spite of the additional power and accessibility of a SaaS system.

SaaS applications must be built with full redundancy, backup, and failover so that the risk of data loss is reduced to as close to zero as possible. To that end, Plex is happy to submit itself to the customer’s qualification of it as an approved vendor.

The final part of this blog series will peer into Plex Systems’ future, and will conclude with a brief question and answer (Q&A) session with the company’s top executives. Your views, comments, opinions, particular experiences with Plex and its product are welcome in the meantime. Are you becoming more open-minded and ready for an on-demand manufacturing ERP product?
comments powered by Disqus