Single Source of Truth Lifts Profitability and Productivity for Leading Aerospace Component Manufacturer
Founded in 2011, Novaria Group is a privately held leading precision component manufacturer that delivers optimum performance and sustainable growth to the aerospace and defense marketplace. Since its inception, Novaria has expanded rapidly, acquiring two to three new companies each year, and achieving an enviable ~20% growth rate. In 2020, in a strategic move to facilitate continued success, Novaria hired Tim Koeneman as Vice President of IT to implement the systems required to scale. “We needed to adopt smart technology that would deliver control and visibility to enable us to focus on building the business,” he recalled. “Sophisticated investors expect us to show gross margin by product and profitability quarter-over-quarter. We simply didn't have the systems to do that.”
Koeneman elaborated, “Our approach is to maintain the entrepreneurial spirit of the companies we acquire. We buy a good company and then invest in talent, processes and technology.”
A thorough evaluation led Novaria to select Epicor® Kinetic deployed on the government cloud. Koeneman explained why Epicor was chosen: “I was not interested in maintaining an on-premises footprint. We want to focus on the business, not on backing up SQL servers.” He continued, “Cloud-based Epicor Kinetic has aerospace manufacturing expertise and could be implemented without having to make customizations, which was critical. The cloud also eliminated the technology obsolescence risk that is inherent in many of the companies we acquire who have outdated systems.”
Currently encompassing 18 business units, Novaria has migrated eight companies—roughly 50% of total revenue—to Epicor Kinetic on the government cloud and in-progress to deploy Epicor Automation Studio.
Implementations are smooth and predictable and have delivered an unexpected but very welcome benefit. “As we’ve undertaken Business Process Reengineering in the context of implementing Epicor, we’ve been able to move from a tribal knowledge base to a documented set of procedures,” Koeneman shared.
Cloud-based Epicor Kinetic has aerospace manufacturing expertise and could be implemented without having to make customizations, which was critical. The cloud also eliminated the technology obsolescence risk that is inherent in many of the companies we acquire who have outdated systems.
He added, “Time-to-market is a big advantage with Epicor Kinetic. It’s straightforward, easy-to-use, and is built for manufacturing, so it works right out of the box.”
Epicor Kinetic on the government cloud also facilitates approximately 30% of Novaria business that supports the defense industry. Epicor Kinetic on the government cloud also facilitates approximately 30% of Novaria business that supports the defense industry. All U.S. defense manufacturers must comply with International Traffic in Arms Regulations (ITAR), and utilizing the government cloud aids in meeting these compliance requirements.
Koeneman’s objective is to move as many Novaria companies as possible to the platform. “Epicor has provided an unprecedented degree of visibility across our businesses and allowed us to adopt a shared-services model,” he noted. “The Novaria companies on Epicor can utilize the same controllers and processes for AR/AP. And it has given us a standard language.”
One of the most significant benefits of Epicor has been gaining a new level of clarity and control around pricing, empowering Novaria to adopt an actual costing method. “Epicor allowed us to make more informed decisions, which has been especially important during the recent inflationary period,” Koeneman said.
“In addition, we have improved Novaria’s leverage with suppliers because we can demonstrate total purchases across the businesses, not just by individual division.”
Another measurable benefit has been a substantial decrease in Novaria’s financial auditing fees. The businesses that have migrated to Epicor have created a standardized, repeatable process that has streamlined audits. Koeneman divulged, “The eight companies on Epicor can be audited as one, effectively cutting the number of companies to audit nearly in half.”
Moving businesses to Epicor has helped hold audit costs stable even as they have acquired more companies. Additionally, access to the data empowers Novaria’s C-suite to have better insights into the businesses on Epicor and have data-driven conversations.
Epicor Professional Services has been a significant contributing factor to our success. It’s a quality team that works with passion and humility.
Koeneman is currently evaluating Epicor Grow to replace Power BI. Low-code Epicor Grow, an all-in-one cloud business intelligence solution that will help provide Novaria with a standard cross-company corporate dashboard. He mentioned, “Epicor Grow is ERP-agnostic, so even our companies that are not yet on Epicor Kinetic can be integrated. We’ll be able to easily see daily performance across the entire business.”
Confidence in moving forward with additional Epicor implementations and modules is due in large part to Koeneman’s experience with Epicor Professional Services. He acknowledged, “Epicor Professional Services has been a significant contributing factor to our success. It’s a quality team that works with passion and humility.”
He emphasized, “Not only are they experts in Epicor but they also bring to bear best practices from across the industry. Epicor consultants have been a big part of our ability to move as quickly as we have and to get the results we achieved.”
