AGM Container Controls committed to investing in technological innovation in order to reduce costs and maintain a competitive advantage while minimizing capital expenditures. By implementing Epicor Kinetic, they reduced costs, increased efficiency and reduced time-to-market on new products.
Established in 1970, AGM Container Controls (AGM) manufactures environmental control hardware for containers that hold missiles, engines, and other sensitive equipment. Since then, AGM has expanded into manufacturing parts that protect missiles and other electro-optical equipment from moisture vapor. AGM also manufactures tie down straps, as well as a product called tie down shelving that helps protect sailors and soldiers from missile, torpedo, and mine strikes. In addition, AGM manufactures the world's premier wheelchair lift for individuals with disabilities to help them access stages or navigate elevation changes in schools, convention centers, hotels, casinos, churches, and other public facilities.
In recent years, AGM has faced a number of issues that similarly challenge most military defense-related manufacturing companies. For example, the economic downturn of the past few years, as well as globalization, has adversely impacted the U.S. manufacturing sector, of which military defense companies are a part. In addition, the $450 billion dollars in defense cuts, as well as sequestration (both mandated by the U.S. Congress), have the potential to negatively impact AGM's future revenues, as 63% of AGM's business is military defense-related.
In recognition of these challenges, AGM Management has committed to investing in technological innovation to maintain a competitive advantage, as the company management understands that to survive in this difficult economic climate, let alone thrive, they need to do such things as control costs, decrease time-to-market on new products and increase responsiveness to customer demands. Accordingly, to meet these objectives, AGM Management has invested heavily in major areas of technology including an end-to-end enterprise resource planning (ERP) solution, almost entirely relying on business intelligence software from Epicor.
AGM worked with Crea8tive Technology and Design, a Platinum member of the Epicor Inspired Partner Network, to implement the ERP system and train on how to utilize the system using proven best practice models by Epicor.
Cre8tive Technology and Design's development team is well versed in aerospace and defense applications, which made the system integration to AGM's accounting, operations, engineering, and quality systems within a single database platform possible.
AGM's investment in new technologies, like Epicor, has been primarily directed at reducing costs, increasing efficiency, and reducing time-to-market on new products, while also having a positive effect on relationships with their customers.
AGM highlights the following significant gains and improvements since implementing Epicor:
When implementing Epicor, AGM did not expect to be able to reduce its paper footprint so successfully. To date, AGM has been able to scan and index over 350,000 documents, and has been able to remove hundreds of storage boxes and numerous filing cabinets, freeing up space for other uses. AGM has also been able to close an off-site storage rental, saving thousands of dollars per year.
"Cre8tive Technology and Design provided us with consulting services for the implementation of our Epicor ERP [Kinetic] system. Their team guided us through every step of the process, and helped us to understand where we could modify our internal processes to match Epicor functionality and improve our efficiency."
Eric Zuercher, VP of Engineering
Prior to implementing Epicor, AGM had contracted a third-party advisory firm to help AGM select a software program to handle inventory, sales, engineering, and manufacturing. After each departmental manager completed an extensive survey, the contractor recommended that AGM purchase an ERP system from Consona called Intuitive ERP.
Thereafter, AGM moved from their in-house, custom-designed, digital VAX computer system to Intuitive ERP, but immediately experienced significant problems. For example, AGM's on-time shipment rating crashed, operations were plagued with part shortages, and customer quote lead times ballooned to over three weeks.
When Stewart presented these issues at a CEO network meeting with other local manufacturing CEOs, he quickly discovered that AGM was not alone in facing ERP system-related challenges. His takeaway from this meeting was that AGM could not blindly switch to another system, but needed to thoroughly explore all ERP options before proceeding.
Accordingly, Stewart flew a team of five key AGM managers to an "ERP Shootout" to evaluate the options. Incidentally, learning from the previously failed implementation where the project was solely driven by AGM's IT department, Stewart chose AGM's CFO, VP of Engineering, Sales Manager, Operations Manager, as well as the new IT Manager, to attend this event. He selected this group because he felt that the five of them, as a team, had a comprehensive understanding of AGM's business processes, and would be able to recommend a suitable system.
At the ERP Shootout, the team investigated eight major software solutions, including Sage, SAP, Syspro, Microsoft Dynamics AX, Epicor, Cincom, and Infor. Ultimately, at the end of this two-day event, the AGM team narrowed their options down to two platforms—Cincom and Epicor.
Learning from their failure to properly vet the previous ERP system, AGM asked the two software companies to perform an on-site demonstration of their software to representatives of all major AGM departments: accounting, business development, contracts, purchasing, sales, engineering, information technology, quality systems, and operations.
While asking this many managers to spend multiple days sequestered in a conference room is both expensive and disruptive, Stewart recognized that it was critical that AGM management thoroughly vet both software options to make sure that the company chose the correct software.
Following these software demonstrations, AGM management selected Epicor. Although the decision to abandon the active ERP system was not without cost, the numerous issues that AGM continued to struggle with made the investment imperative.
Learning from the challenges of the previous implementation, AGM appointed a project team, which included representatives from AGM's sales, information technology, operations, accounting, and engineering departments. This project team invested a significant number of hours throughout implementation and within one year AGM was able to go live on the system.
"I was now confident that the Epicor ERP [Kinetic] implementation would not just take off, but it would soar."
During the implementation, AGM worked closely with a team from Cre8tive Technology and Design on training, piloting, and developing customizations to support AGM's business processes.
"Cre8tive Technology and Design provided us with consulting services for the implementation of our Epicor ERP [Kinetic] system," says Eric Zuercher, AGM's vice president of engineering.
"As the project leader for the ERP implementation, I worked closely with Cre8tive Technology and Design. With many years of experience with various ERP systems, but specifically with Epicor ERP [Kinetic] solutions, Cre8tive Technology and Design's services were invaluable to our successful implementation. As such, we found ourselves relying more and more heavily upon their expertise and experience as the implementation process progressed. Their team guided us through every step of the process, and helped us to understand where we could modify our internal processes to match Epicor functionality and improve our efficiency. Accordingly, we highly recommend Cre8tive Technology and Design to other companies that are looking to implement Epicor ERP [Kinetic]."
According to Zuercher, one of best memories of AGM's implementation was the day AGM went live on Epicor ERP. That day, the AGM project team assembled in a conference room to review outstanding items before go-live. The leader of the production team mentioned that a job for a certain part was not created correctly by MRP.
"Just as I was beginning to recommend a course of action, one of the planners interrupted me and suggested we look at the given part's inventory and planning parameters," recalls Zuercher. "Two minutes later, he had checked a couple of fields, found the problem, and fixed it."
In prior months, it had always been Zuercher's role to direct the investigation into these types of problems. Now, he saw that the AGM staff could solve their own problems.
"Accordingly, I was now confident that the Epicor ERP [Kinetic] implementation would not just take off, but it would soar. I attribute this success to Cre8tive Technology and Design's emphasis on knowledge transfer throughout implementation. It's not enough to just take off; you have to know how to fly," adds Zuercher.
"The most successful experience of all has been the radical improvement in AGM's company morale."
Howard Stewart, President and CEO
Over a year later, AGM's president and CEO invited Zuercher, as well as all members of AGM's ERP Implementation Team, to join him in accepting the Tucson Metro Chamber's "Large Company Category" award for "Innovation through Technology."
It should be noted that AGM primarily received this award for their innovative use of Epicor ERP software. Interestingly, besides these team members, AGM's local representative from Cre8tive Technology and Design was the only AGM vendor invited to join the team at the event.
"Supporting a successful software implementation project is just as important as helping a customer select the right software package for their business," says Aaron Continelli, president and founder of Cre8tive Technology and Design whose team helped AGM select and implement Epicor ERP. "We worked closely with AGM to define the project objectives, create a project plan, identify team members, map business requirements, design and develop software customizations, and deliver user training in order to ensure a successful system go-live for AGM."
Following a previously failed implementation, AGM offers the following critical lessons learned that enabled them to successfully move to Epicor ERP:
