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Ed McMahon
CEO, Epec Engineered Technologies
SuperNova Award Category:
- Technology Optimization and Innovation
The Company:
Epec Engineered Technologies designs and manufactures custom build-to-print products for all sectors of the electronics industry, including printed circuit boards, battery packs, fans/motors, cable assemblies, user interfaces and more. Founded in 1952 and headquartered in New Bedford, Mass, Epec employs more than 120 professionals across the US, Canada and UK, as well as at 28 contract manufacturers in Asia. Epec has 5,000+ customers around the world, including GE, Philips, Siemens, Raytheon, Tesla, Dolby, Honeywell, Lockheed Martin and Northrop Grumman. Epec combines highly experienced technical resources, a proven manufacturing platform & the fastest delivery in the industry to deliver cost-effective & innovative solutions with the highest reliability in the market.
The Problem:
Epec’s problem was two-fold. For one, the printed circuit board industry underwent rapid consolidation beginning in the 2000s as large competitors bought out smaller shops, reducing the number of PCB manufacturers from 1,200 to just 200 as of 2014. In the face of mounting competition, Epec itself acquired seven companies – but was challenged to turn those acquisitions into value in large part because of its highly fragmented IT environment of on-premise applications.
Epec was limited by inflexibility across business and IT systems, including an Epicor Vantage ERP application, a handful of manufacturing applications and extensive use of more than 40 spreadsheets. Customizing the ERP system was so difficult as to be impractical, prompting Epec to resort to manual workarounds. Epec suffered inefficiency, poor visibility and high costs as complexity grew across its distributed global environment, jeopardizing its ability to fulfill complex build-to-print custom work from demanding buyers.
The Solution:
Epec launched an IT and business modernization initiative in 2007 to introduce new scalability, efficiency and visibility across the business. Central to this effort was its multi-phase deployment of NetSuite for manufacturers, as an integrated cloud ERP platform that could handle key processes from end to end.
NetSuite today supports Epec's engineering, manufacturing, inventory & order management, financials, CRM, case management, and ecommerce across the globe. As a cloud application, NetSuite gives Epec personnel at HQ and facilities across the US, Canada, UK, and China 24/7 access to design and production workflows— eliminating time zone delays and enabling a “follow the sun” business model.
Epec has introduced complementary cloud solutions, including PLM 360 from Autodesk to streamline complex custom work; an online CPQ engine from Selectica; Box for document management and HubSpot for marketing automation round out Epec’s cloud environment.
The Results:
Epec’s adoption of cloud ERP has been the catalyst for a large-scale transformation into a lean manufacturer that excels at agility, efficiency & transparency. Cost-efficiency, speed of execution and customer satisfaction has soared during Epec’s 9 years on NetSuite. In stark contrast to the inflexibility of Epicor, Epec has made extensive use of NetSuite’s customization capabilities to continually optimize workflows and business process efficiency. Key results Epec has achieved include:
Supply chain efficiency. Epec has improved visibility and collaboration in purchasing components from about 30 core suppliers. Cross-departmental supply chain transparency has enabled it to reduce costs, minimize waste and optimize planning.
Faster decision-making. Epec has dramatically improved its ability to make informed business decisions w/ on-demand access to real-time data and flexible ad hoc reporting.
High customer satisfaction. Customer satisfaction and repeat business has risen in tandem with the faster delivery and greater visibility Epec can now offer its customers. A NetSuite-based B2B Customer Center enables customers to conveniently view and pay invoices, check order statuses, retrieve tracking numbers, manage purchasing and accounts, and more.
Global operational efficiency. Epec extended direct NetSuite usage to four contract manufacturers in China, enabling Epec management to get real-time updates on work in progress.
Metrics:
Since adopting NetSuite:
- Epec calculates ROI of $500,000 from its cloud investments, including both operational efficiency improvements and avoidance of costs for internal IT systems and a larger IT staff.
- Epec revenue has soared 233% since its IT modernization got under way, to more than $50 million in 2015, making Epec one of the fastest-growing electronic component manufacturers. Throughout that time, payroll costs have risen just 15%.
- Epec has avoided the need for 4 full-time equivalents at Asian manufacturing plants by giving partners direct access to NS.
- Epec has eliminated 10 manual steps previously needed by enabling customers to custom-configure PCBs with the Selectica CPQ engine.
- 2x increase in sales quotes. Epec has doubled the average number of sales quotes per day to 75 without adding additional staff.
- Epec forecasts ROI of about 10x from its NetSuite-based B2B Customer Center portal, in part by reducing requests for invoice documentation to Epec’s AR department.
- 2% freight cost reduction. Greater visibility helped Epec adopt more cost-effective freight movement strategies, netting a 2% freight cost reduction in 2014-15.
- Epec added 4,000 square feet of manufacturing space in late 2014 to produce custom battery packs, fans and motors in Massachusetts, bringing the facility to 24,000 square feet. Epec also doubled its number of manufacturing personnel while reconfiguring warehouse and quality control areas.
The Technology:
NetSuite ERP, Work Orders and Assemblies
Autodesk PLM 360, Selectica CPQ, Box, Pardot
Disruptive Factor:
As with many IT projects, Epec initially encountered resistance from users accustomed to doing business the old if inefficient way. A top-down approach to modernization, led by CEO Ed McMahon and other executives, was instrumental in Epec’s embrace of cloud technology.
Epec has distinguished itself as a Matrix Commerce leader by aggressively building a business platform that marries people, process, and technology on a global scale. Epec’s transformation has not just disrupted the company internally — it has reinvented relationships with customers, suppliers and manufacturing partners by opening doors to new commerce models and supply chain strategies that benefit all stakeholders.
Epec’s rapid revenue growth and ROI are clear indicators of its success in leveraging cloud technology to emerge as a Matrix Commerce leader, and in seizing competitive advantage in an industry that’s consolidated significantly in recent years. For instance, Epec has accelerated its time to value from acquisitions with a flexible cloud platform that can be readily extended to acquired entities.
And Epec has been well positioned to withstand the rising wages and labor shortages that have hurt many Western manufacturers in China. By giving Chinese manufacturing partners direct access to NetSuite, Epec has reduced internal personnel requirements while improving production speed and quality, and promoting win-win collaboration between Epec and its contract manufacturers.
Shining Moment:
Epec’s transformation into a lean manufacturing organization has won it industry acclaim such as the 2015 Manufacturing Leadership Award in Innovation Process Leadership from the F&S Manufacturing Leadership Council.
In addition, Epec was honored by Supply & Demand Chain Executive magazine with placement on its annual Top 100 list in 2014, and in 2016 won the Supply Chain Excellence category in the 3rd annual Manufacturing Awards from the Rhode Island-based Providence Business News.
