Weaknesses in an optimized server appliances company’s legacy third-party manufacturing software had caused increasing scheduling, quality control and workload distribution problems.

As a contract manufacturer of optimized server appliances for application developers and service providers, MBX Systems (Wauconda, IL) must customize manufacturing, configuration, testing and other processes for each customer. As the business grew, however, weaknesses in the company’s legacy third-party manufacturing software had caused increasing scheduling, quality control and workload distribution problems. Those included:

  • A lack of automated scheduling and associated controls
  • Unbalanced workload distribution
  • Frequent manufacturing bottlenecks
  • Poor traceability throughout production
  • Manufacturing defects
  • Missed work deadlines

    Under the guidance of CIO Justin Formella, the company evaluated alternatives for resolving these issues. The choice came down to whether MBX would buy a commercial discrete manufacturing package or build a custom application tailored to the firm’s specific needs. Making the right ‘buy or build’ decision was critical to MBX’s ability to expand manufacturing capacity, improve customer service, serve new vertical markets, and otherwise maintain the steady growth path of the previous 15 years.

    After researching various commercial software vendors at tradeshows and online, MBX invited a shortlist of companies to demo their software and discuss their product capabilities. While each commercial product had a unique feature set that met some of MBX’s needs, they also lacked required functionality.

    “Without a suitable one-stop shop packaged solution, MBX decided to combine the best functionality from what we saw and develop the solution in-house,” the company said. “This also affords us the opportunity to enhance the software in the future to meet customer requirements that we can’t anticipate until they arise.”

    Some of the unique functionality MBX needed included: the ability to accommodate its customer needs on the fly; meet continuously growing volume demand; and evolve its software to incorporate new service introductions to maintain a competitive advantage.

    The system was rolled out in January 2010, helping MBX more than double year-over-year revenues, increase manufacturing volume, reduce defects, and achieve other gains that are now forcing the company to double its space for the second time in two years to accommodate business expansion.

    “ The software allows each individual work center to handle more variability,” MBX explains. “Because routes depend on specific dependent actions, the software allows us to customize the route definition as to what tasks need to occur in each work center and the background processes that need to run in order to accommodate these tasks.” The software allows better insight into job costing and visibility to booked time-to-actual labor for measuring real-time productivity, as well. These measurements are displayed on large screen monitors in production for builders to track.

    Workmanship quality improved significantly as a result of the new software: if any step in the build process is omitted the software will not allow the order to move to the next work center. Each work center physically checks the previous work center’s accuracy in the visual build document to see if there is any deviation. Any anomalies are recorded by the builder and it gets corrected before the order moves through their work center.

    Individual builders also gain more clarity into the requirements of their work center: concise and specific information is customized to view only what needs to be done at their station, saving time and confusion by removing instructions that don’t apply to them.

    MBX confronted the decision to migrate or not to migrate to a new manufacturing software platform at a time when the country--as well as MBX customers--were battered by the recession. Formella’s leadership drove the migration decision itself as well as the choice of a custom-build strategy. He played a pivotal role in:

  • Convincing the MBX leadership team to make the investment in new software despite the weak economy
  • Evaluating ‘buy or build’ scenarios
  • Performing in-depth assessments of all relevant commercial software applications to determine suitability for MBX’s needs as well as weaknesses in the applications themselves
  • Identifying the benefits of building custom software, ranging from the ability to tailor the application to MBX’s processes to easier integration with the company’s order entry/CRM system, finance application and online customer portal
  • Securing agreement from all stakeholders, including the COO, manufacturing director, and engineering and supply chain teams
  • Developing the specifications for the software
  • Driving a six-month project turnaround from concept to deployment

    In the first year of use, MBX’s new custom production software drove major improvements in processes, quality control, and the company’s bottom line. With new capabilities such as automated scheduling, fast custom event creation, detailed defect tracking and increased flexibility enabling up to 15 people to work on the same order simultaneously (compared to one builder at a time previously), results in 2010 included:

  • 116% year-over-year increase in sales
  • 57% increase in appliance manufacturing volume
  • 71% decrease in quality defects
  • 34% increase in performance efficiency
  • 90% customer retention rate
  • 10% of sales through new customer acquisition
  • 18% reduction in the cost of bringing new customers on board
  • 67% reduction in training time and associated costs

    Partly as a result of these software-related achievements, MBX in 2010:

  • Maxed out its profit sharing plan
  • Awarded $1,000 bonuses to every employee
  • Initiated plans to double its space for the second time in two years

    “The production software allows us to reduce bottlenecks by (virtually) dragging and dropping builders from one work center to another,” says Manufacturing Manager Carl Nothnagel. “Different work centers, such as pre-assembly and configuration, are stressed at different levels at different times. We can see where bottlenecks are likely to occur and move builders to prevent it.

    “The software allows us to do more work with the same amount of physical space to handle extreme variability in manufacturing volume. When we started feeling space constraints, we implemented a cart concept tied to the software that improved the staging of raw materials within the production department. Using a kanban process to link order picking and cart staging to the production schedule, orders are prioritized and picked sequentially using iPads connected to a picking cart that lists an order’s raw materials. The carts have a flag for the builder’s reference corresponding to the orders in the queue and the software pushes out the next production order. As space opens in the staging area, the monitor displays the next round of orders to pick and stage.”

    In addition, the software was recognized in the company’s ISO:9001 2008 recertification audit. The team leader noted that the software “provides real-time feedback on status of work, as well as identifies any quality issues, from the point of order acceptance through shipping. It is the best I have ever seen.”