“The Infor Portal allows us to easily create personalized views of our enterprise information and incorporate other aspects of our business. With the Portal, our channel partners can quickly subscribe to specific product information and receive automatic alerts whenever that information is updated.” Michael Drake, Manager of Finance

Company Overview
First in quality. That’s the driving force behind every activity at Powerex, Inc. It’s also the reason the $90 million company is the number-one provider of discrete and modular high-power semiconductors in a very competitive marketplace.

This focus on quality permeates the organization from top to bottom. “Our future in the industry will be driven by our ability to provide leading-edge technology and quality service,” says Stan Hunt, president and chief executive officer.

The Pennsylvania -based manufacturer backs this commitment to technology and service with a robust enterprise resource planning solution (ERP) from MAPICS (now Infor).

A Fast Ramp-Up
Rolling out the new Internet functionality was mercifully easy. “We were able to install it in about half an hour,” says Todd Conrad, manager of information technology. “Then, we spent two weeks training our in house staff on the new system before we were ready to start working with one of our major distributors. We were impressed with the new Internet capabilities right out of the box. System training for the first two off-site users took about an hour.”

Acceptance has been very good, thanks to the system’s ease of use and information accuracy. Today, most of the really active distributors and manufacturer’s reps rely on the system to check inventory levels, track order status, and a host of other functions.

“As a result, we’ve seen the where’s-my-stuff calls drop by 70 to 75 percent” says Conrad. “So, now our reps have more time to work with customers, understand their unique requirements and deliver the engineered product that meets their needs. In turn, that leads to a higher level of customer satisfaction.”

Focus on Collaboration
Customer satisfaction was also the driving force behind another Powerex initiative. “The end-user doesn’t care where the inventory resides, they just want to get what they need, when they need it,” he says. “That’s why we provide our reps with a complete picture of all the available inventory. We may not have what they need on the shelf here, but the distributor might. Bottom line, we’re helping the reps win more business and supplying end users with product.”

Make no mistake, Powerex puts a high priority on such “soft” benefits as improved access to information and improved customer service. But, the big payback from the new solution came in such “hard” areas as improved inventory turns, reduced material cost, and a smoother flow of materials across the supply chain.

Key to that was enhancing collaboration with strategic suppliers. “We want our suppliers to be a virtual business center of Powerex,” Drake says. “They can see our schedules, our forecasts, and our customers’ forecasts. That will help them provide us with the right product at the right time.”

An integral part of that tighter relationship is online access to information such as inventory levels and production rates. Once Powerex implemented the Collaborative Commerce offering, the company approached its key suppliers and negotiated new inventory consignment agreements. Generally, these agreements call for suppliers to maintain a two-week supply of inventory at the Powerex facility and a two-week supply of inventory at their own facility.

Powerex benefits from this Mutually Managed Inventory (MMI) program because the assurance of a four-week supply of inventory has virtually eliminated overtime and expedited charges. Plus, and this is important, the company has significantly reduced inventory levels and associated carrying costs. “We have easily cut our costs by 25 percent,” says Drake. “Right now, consignment agreements cover a big part of our total business, perhaps as high as 50 percent of all material coming into our plants. Thanks to these agreements, we have taken that dollar value out of our inventory.” The smoother flow of materials and the improved responsiveness of the supply chain has also helped Powerex improve annual inventory turns from seven to eight.

Suppliers also benefit from the new MMI program because they have real-time access to changes in demand. In turn, this allows them to manage their production processes more efficiently. “We don’t care how they load their shops, as long as they hit the agreed-upon stocking levels,” says Conrad. “Our suppliers like this because it takes some surprises out of the equation and helps them level their standard production for us.”

Another benefit most suppliers enjoy is freedom from the flood of purchase orders and invoices that typically accompany such a dynamic, high-volume operation. In most cases, Powerex signs a blanket purchase order for up to a year’s worth of production. “

On a weekly basis, we may have 20 or 30 parts in production times 40 purchase order updates–those are now gone,” says Drake. “In fact, we don’t exchange any paperwork with a lot of our suppliers, other than the consignment agreements. We take actual usage reports as our invoice, so there’s savings of time and paperwork for both parties.”

Visibility Across the Enterprise
The big picture view of the MAPICS (now Infor) implementation is impressive–with process improvements in manufacturing, finance and customer service. But none of that would have been possible without a system designed to quickly and easily meet the needs of end users. This may seem like a small point, but it’s not.

Even the world’s most comprehensive high-tech manufacturing solution has no value if end users don’t use it. At Powerex, users don’t have the luxury of weeks of system training, and there’s no large IT department to call for help. That’s why they quickly embraced the MAPICS (now Infor) solution–a solution designed by people who understand the requirements of both the middle-market, high-tech manufacturer and the person using the solution.

At the user level, there’s a lot to like. “The Infor XA Portal allows us to easily create personalized views of our enterprise information and incorporate other aspects of our business,” Drake says. “With the Portal, our channel partners can quickly subscribe to specific product information and receive automatic alerts whenever that information is updated.”

This is the kind of tight ‘virtual integration’ with all parts of the enterprise, and with key trading partners, that helps the company take a bite out of inventory levels, cut costs, smooth production, improve cash flow, and improve service to Powerex customers around the world.

As the leading manufacturer in its industry, Powerex will always have competitors attempting to match and even better its quality, price, and high level of customer service. But with the MAPICS (now Infor) solution, the company has created an agile enterprise that is quick to anticipate and respond to changes in customer requirements and the semiconductor market itself. And it is with this flexibility that Powerex can ensure its position as the first in quality, now and well into the future.

Real Results
Since implementing the Infor XA ERP solution, Powerex has:

• Reduced inventory carrying costs by more than $500,000
• Boosted annual inventory turns from seven to eight
• Improved inventory accuracy to within 1/10th of one percent on $18 million in inventory
• Cut delivery time from two weeks to not-more-than 32 hours
• Reduced overdue orders to virtually nothing
• Slashed the time to perform financial closes by 50 percent
• Reduced days outstanding on receivables by 20 to 25 percent