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Using ERP To Streamline Business Processes: The Case Of Lexatys
Is the adoption and implementation of an ERP software worth the investment? Let us tell you about Lexatys.
This engineering firm was undergoing rapid growth and optimizing resources and processes became paramount. With the help of Oracle's ERP software solution NetSuite, the company accessed reliable organized data to continue taking the business to the next level.
Let’s go over the key points of their success story, written up by consulting firm Ovum for NetSuite.
Lexatys is a Delaware-based company that manufactures microwave components. As business boomed between 2016 and 2019, it realized it was losing control of its back-office systems and processes.
At the time, it organized operations and resources through Excel spreadsheets, accounting software Quickbooks, and Aras Innovator, a product lifecycle management (PLM) system. This triad worked well until rapid growth surpassed its capacity.
Resuming control quickly and streamlining operations and resources coherently as the company kept growing was paramount.
Four reasons led Lexatys to seek an enterprise resource planning solution:
- It used outside contract manufacturing services for assemblies for components.
- It had little visibility into its vendors' processes and stock levels.
- The procurement process was manual and Lexatys was overbuying stock to have a margin for error.
- The inventory was disorganized and difficult to control.
Basically, resources and processes were spinning out of control, causing disruption in manufacturing cycles and keeping the company in reaction mode.
Also, time was of the essence. Lexatys was growing fast and could not afford downtime. So, the issue was not adopting a new ERP. Founder Walter Gordon knew this was the solution.
But he was aware of how an ERP software implementation process worked; how time-consuming and costly it could get.
The real challenge was improving the existing system quickly and effectively to keep up with rapid growth.
Lexatys needed to regain control of its business processes fast.
After looking at other solutions, like Made2Manage and Manman, Gordon decided to replace its existing spreadsheet service Quickbooks for NetSuite, particularly its SuiteSuccess rapid deployment model, which offers a customized deployment. You can learn more about the model’s “four key pillars” methodology in the original Lexatys case study report.
The company had to streamline and improve two crucial back-office processes:
1. Supplier and inventory management
Before: With QuickBooks, Lexatys recorded changes manually after a vendor acknowledged a purchase order (PO).
What changed? With NetSuite, the process was automated, from reports and inventory updates to vendor performance qualifications.
After: Now Lexatys tracks stock levels across its three locations, with different customer and suppliers access levels.
2. Control of Financial Processes
Before: Used a paper-based system to manage expenses.
What changed? Adoption of automated approval levels based on total PO value.
After: The finance department executes a 3-way matching system on Accounts Payable before payment is issued:
3. Lessons Learned
Lexatys leveraged multiple leading practices with Oracle NetSuite’s SuiteSuccess rapid deployment model, with implementation times typically less than 100 days.
Lexatys learned three valuable lessons during the ERP implementation process, which winds down to:
- Starting at an earlier stage of business growth - six months to a year earlier, according to Gordon.
- The sooner NetSuite is adopted, the quicker historical data builds - it can be customized along the way.
- Modern ERP deployment can be achieved in well under six months with could-based ERP - provided the SuiteSuccess methodology is followed.
Planning For The Future
NetSuite is now an integral part of Lexatys' business operations, streamlining and automating many processes and allowing the enterprise to expand and plan for the future.
The ERP allows management to count on reliable data for the decision-making process, as it now has full visibility with an up-to-date inventory, which includes what is currently held by third-party suppliers.
With this critical information, Lexatys is capable of making inventory projections for future businesses, making the ERP crucial to the company growth strategy, to the point that Lexatys “can't’ live without it,” in Walter Gordon’s words.
4 Key Takeaways From This Case Study
Lexatys’ rapid growth put its inventory management and procurement processes under pressure.
The management system used at the time was quickly over exceeded and resources were disorganized.
The company used NetSuite to take control of its back-office operations through its SuiteSuccess rapid deployment model.
Lexatys now has reliable integrated data to continue expanding its operations.