Supernova Award Category

The Problem

Undergoing a dramatic transformation as it expanded to serve the mass market, FloraCraft fortified its logistics and supply-chain capabilities, but its technology systems could not keep pace with number of new products and production volume.

FloraCraft’s growth was hampered by slow, inaccurate technology. The legacy MXP ERP system delivered printed financial and production reports after the fact, but couldn’t provide real-time insight or control. The problem was exacerbated by a five minute data lag from the warehouse solution on the shop floor. Inconsistent inventory labeling led to inaccuracies that were amplified during the transmission of data between the two systems. With only two IT professionals across its four sites to keep everything running, improving speed and accuracy, much less innovating, was an uphill battle.

The Solution

Recognizing the limitations of its legacy systems, FloraCraft embarked on selecting a new ERP system that would provide a real-time, end-to-end view of their business, from raw materials to inventory, orders and financial reports.

After evaluating alternative systems, including Epicor, NetSuite and MS Dynamics, FloraCraft selected Plex in 2013 and deployed it at its four facilities within months. The cloud meant the company’s small IT staff could effectively support the system. And FloraCraft was drawn to Plex because it was built by manufacturing experts, offering agility, shop floor control, and end-to-end visibility of operations.

After intensive testing and training, all of FloraCraft’s shop floor personnel now use Plex, and in real-time, it helps the company forecast material needs based on big box customer data, track inventory, conduct financial reporting, and monitor employee, workstation and shop performance.

The results

FloraCraft now has insights across all departments through Plex. Real-time, accurate data has led to improved decision-making, more accurate reporting and greater profitability – abilities that proved essential during the transformation of FloraCraft’s business model.

In the past, decision making was a less-than-precise venture, dependent on after-the-fact financial statements of questionable accuracy. Now Floracraft has real-time access to production, financial and customer data in a single system of record. As a result of new data-driven operations, from the factory to customer orders, FloraCraft grew revenue by 60% without adding labor costs. As a result, FloraCraft was named 2014 Walmart Supplier of the Year (one of four companies recognized among 60,000).

This is no easy feat: Walmart relies on its suppliers to execute on key metrics around sales growth, on-time shipping and fill-rate, gross margin ROI, retail unit turns, and replenishable in stock—where 99% of their stores have to be stocked on any given day. Every week Walmart updates its warehouse order projections. FloraCraft loads this information into Plex and gets a view of Walmart’s forecast versus what FloraCraft has on order. Better visibility into lead-times and being able to dynamically schedule production allows FloraCraft to ensure it has the right quantities of materials at the right time.

Metrics

• Named a 2014 Wal-Mart Supplier of the Year (one of four companies recognized out of 60,000 suppliers).
• Achieved a 60% increase in revenue with 0% increase in labor hours.
• Increased SKUs placed with Walmart by 60%
• FloraCraft now has the ability to track all of its inventory, which helps to ensure Walmart and other customers get the right product at the right store. Plex has helped FloraCraft to increase fill rates (percentage of orders that can be filled with stock that is already on-hand) from an excellent 99.35% to an amazing 99.7%.
• Accuracy is critical in mass markets, so it is vital to have the right UPC number on a product for tracking, pricing, etc. Using Plex, FloraCraft production staff verifies UPC codes fro 3,500 SKUs using mobile scanners throughout the manufacturing process, eliminating the room for manual input errors. With Plex, verification is now 100% accurate.
• FloraCraft now has costing data down to one tenth of a cent – a feat that is incredible for a supplier of this size and complexity.

The Technology

FloraCraft uses the Plex Manufacturing Cloud as its ERP system of record for its four factories.

Disruptive Factor

In their journey to move upmarket, FloraCraft faced the challenge of adopting new technology that would require a dramatic internal culture shift. Recognizing this, along with the criticality of getting it right the first time in a low margin/high volume business, FloraCraft’s management team designed a testing and training plan to mitigate risk, making cutover completely seamless and protecting production integrity.

Since most of FloraCraft’s manufacturing processes were paper-based, very few employees were proficient IT users. The company launched intensive training – even on how to use a mouse – and within a matter of weeks following the Plex launch, all shop floor personnel were using Plex capably.

Using a phased approach, FloraCraft brought the Time & Attendance module online first so that HR, supervisors and employees could get used to the software. Next, they tested how some of the most-complex processes would work, learning each new module with a Plex project manager.

From an external perspective, implementing a global system that enabled on-time inventory management and down to the tenth of a penny precision meant FloraCraft was able to delight a new class of customers efficiently and profitably, with an extreme increase in volume. It is rare for a small family operation that supplies local businesses to successfully transform into a booming, big box retail supplier, but that is exactly what FloraCraft accomplished.

Shining Moment

In 2014, FloraCraft was named Walmart’s Supplier of the Year, recognizing everything from the quality and market success of their products to their ability to support the immense demands of Walmart’s channel. What’s more, FloraCraft increased its product presence to over 160 SKUs placed with Walmart at high volume. Not only have they been recognized by Walmart, they were highlighted by the Governor of Michigan for their entrepreneurial leadership.