Such was the case with AmesburyTruth and their multi-year plan for consistently meeting a 95% on-time delivery (OTD) rate — with orders shipped in full. The challenge was real: the OTD rate for its Owatonna, MN plant in 2023, for example, was 62%.

“Our first steps,” says CEO Bob Burns, “were to simply improve Owatonna’s inefficiencies so that we could stay competitive and improve our environmental footprint. The manufacturing process, for example, used too much water, which we reduced by 70%. We also needed to modernize and reduce labor pressure by adding automation.”

When COVID hit, the company’s inefficiencies became clearly visible. The local labor pool tightened and costs quickly rose. The plant’s machines were dated, and due to lack of space, people were shuttling parts between two manufacturing facilities in Owatonna.

Change, the management team realized, was much more than simply improving processes or removing redundancies. It required strategic vision and a plan focused on the company’s long-term viability.

The resulting multi-year plan included several transformational objectives: Improve worker environmental health and safety; consolidate Owatonna’s two plants down to one; and implement an ERP platform across the entire company in order to completely transform the company’s sales and distribution process.

Objective #1: Replace the outdated machines; improve safety

With a population of approximately 26,400 in 2020, Owatonna’s labor market is tight, which puts a lot of pressure on the plant’s workforce. In addition to their antiquated machines that required two skilled workers per machine to operate, workers were also using a laborious open pit zinc die casting process.

To resolve these challenges, the company began purchasing new Techmire T88 machines during the pandemic. The new machines eliminate the old die cast pits, vastly improve employee safety, and provide a much cleaner working environment.

Objective #2: Consolidate to one facility versus two (in progress)

Because manufacturing is split between two facilities in Owatonna, 40 truck trips per day are made to transfer parts back and forth. A two-year plan includes consolidating inventory distribution to Sioux Falls, SD while reconfiguring the Owatonna Bridge Street facility to accommodate new paint lines, the new die casting machines, and raw material storage.

A $6M capital investment in a new paint line will effectively eliminate transfer of parts between the two facilities. The new equipment, which consists of two conveyor lines, three paint booths, and two cure ovens, will also improve working conditions and employee safety. And, because the new system requires far less energy and chemicals, it will improve the company’s environmental footprint as well.

By consolidating upper and mid-west U.S. distribution to Sioux Falls, AmesburyTruth will be able to free up space for manufacturing at the Bridge Street facility.

“These changes have already helped reduce the pressure on our Owatonna workforce,” says Burns. “And because we’re implementing these changes over a couple of years, we have the time to install our new equipment and debug it while still running the old equipment. We want to ensure everyone is set up for success long-term.”

The plant consolidation, process improvements, and product line transfers are underway and on track to be completed in 2025.

Objective #3: Employ SAP company-wide

The company’s strategic initiative to streamline ordering and logistics processes for customers across North America includes moving inventory to regional distribution centers in order to be closer to customers.

“We’re digitally transforming the company to enable us to compete in the new era of manufacturing,” says Phillip Cooke, AmesburyTruth’s new VP of Sales. “We’re currently in the third year of a five year plan to implement SAP’s ERP system across all AmesburyTruth manufacturing and distribution facilities.”

Being on one platform gives AmesburyTruth customers a seamless purchasing transaction from ordering to shipping to billing.

“The SAP system helps us better manage inventory,” says Cooke, “while at the same time we’re locating it in distribution centers more local to our customers.”

The SAP rollout began in 2021 with the Dallas and Monterray facilities, then went live in Owatonna in 2023. Implementation for Sioux Falls is now complete in 2024 – with all manufacturing and distribution facilities using SAP 100% by Q1 2025.

All hardware manufacturing locations are now fully implemented. Only the two seals plants remain for 2025.

In addition to SAP, the company is also using Integrated Business Planning (IBP), a state-of-the-art demand forecasting tool that works in parallel with SAP and uses AI to predict what future demand will be.

Early results: Owatonna OTD now at 89.25% and trending up

According to Cooke, the digital transformation is all about shipping products faster and more accurately. “In fact, Owatonna is our case study in terms of where we were when we rolled it out and where we are now.”

When IBP was rolled out in August 2023, Owatonna had a $6M backlog. With the new digital tools and the enriched data provided to the team, that backlog was cut by 90%.

The on-time delivery rate has seen significant improvement – from 62% OTD at initial rollout to 89.25% on time at the end of June 2024.

Creating EVO – a Cloud-based distribution platform

Before being promoted to VP of Sales for AmesburyTruth, Phillip Cooke spent close to five years as the company’s Channel Manager. Additionally, Cooke was a key partner in the creation and launch of EVO Systems, a cloud-based distributor.

“EVO’s objective was to create the nation’s leading Cloud platform to deliver sophisticated supply chain and e-commerce capabilities for a portfolio of AmesburyTruth’s customers,” said Bob Hornung, President of EVO Systems. “The strategy focused on increasing service levels, providing a level of integration with customers, and leveraging the technology platform to provide advanced services.”

“Our goal,” says Cooke “was to service customers more efficiently through distribution. We needed a sophisticated solution, which EVO Systems delivered. With EVO Systems, manufacturers ordering AmesburyTruth products can enjoy high levels of service – and compile products made from several of our factories into one shipment.”

“What EVO has created is impressive,” he adds. “They’ve become a technology leader in our field by reaching a much broader network of customers than we were previously able to service efficiently. It’s changed the game.”

Sums up Bob Burns, “The marketplace is looking for AmesburyTruth to be more efficient and competitive. They want shorter lead times to match the great quality and design of our products. To deliver, we need to ensure long-term stability and resiliency through a stable work-force, inventory management, and improved sustainability.

“We also need our great strategic partners, such as EVO and ISC, to be successful as well. As AmesburyTruth matures into a new level of manufacturing, we’re very excited to see EVO deliver digital leadership by integrating a modern ERP, e-commerce, and EDI platform with their already exceptional sales force.

“What all this change means is continued growth for our customers, AmesburyTruth, and EVO/ISC – with products flowing and arriving to market on-time as promised.”