Flextronics (now Flex) is a Global Fortune 500 company with over $30 billion in sales, 220,000+ employees and tens of thousands of manufacturing ERP software users. They are one of the largest contract manufacturers in the world. Chances are you can find Flextronics parts in just about any type of electronic device for commercial or personal use. Some examples are mobile phones, tablets, computers – just about anything electronic you would find on Amazon or at Best Buy.
The new Flex is a leading supply chain solutions company that delivers innovative design, engineering, manufacturing and logistics services to a range of industries and markets. Flex customers are in data networking, telecom, enterprise computing and storage, industrial, capital equipment, appliances, automation, medical, automotive, aerospace and defense, energy, mobile, computing and other electronic product categories.
Flex helps customers design, build, ship, and service their products through an unparalleled network of facilities and innovation centers in approximately 30 countries and across four continents. Their service offerings and vertically integrated component technologies optimize customer supply chains by lowering costs, reducing supply chain risk, increasing flexibility, and reducing time-to-market. They can be found on the web at www.flextronics.com and on Twitter @flextronics.
Because of the highly competitive market for electronics and relatively low margins, Flex is constantly searching for technology to help them streamline manufacturing operations and cut costs.
Starting in the 1990’s, Flextronics began a global initiative to implement an ERP system called Baan. At that time, Baan was #2 in the ERP software market along with SAP. Flextronics implemented and continues to roll out facilities with a customized version of Baan that has all the bells and whistles for the electronics manufacturing industries they compete in.
In the 2000s, Flextronics began to grow rapidly through acquisitions to become the second largest contract manufacturer in the world. With their global supply chain operating in 100’s of countries, they were faced with a dilemma that every manufacturing company faces as their ERP software ages: how to grow with an outdated ERP system.
As leading enterprise software analyst Vinnie Marchandani (aka, the Deal Architect) says in his book SAP Nation,
“Flextronics is an extremely complex operation. Differing from competitor Foxconn, which manufactures mostly in China, Flextronics offers its customers plenty of regional choices. That requires an astonishing level of logistical planning.”
In June 2007, Flextronics acquired Solectron and started to implement SAP's manufacturing ERP software. After several SAP implementation projects with a heavily customized version of SAP, they found that SAP was costing more to implement - primarily because of consulting costs from a Big 4 consulting firm (who will remain nameless).
It’s not that the SAP ERP software wasn’t working, just that the SAP implementation projects were at the mercy of a large systems integrator who struggled to implement cost effectively. Never happens, right?
The ERP projects were to be accompanied by a major global project to consolidate 80 different HR systems around the world. Flextronics had spent months in 2007 evaluating options from ERP vendors, systems integrators, budgets and business cases. Then in 2008, the potential cost prompted Flextronics to reconsider.
As Marchandani writes, Flextronics had a “You did what?” moment. Then Flextronics CIO David Smoley said in an interview with Marchandani:
“I thanked them for approving such a large project, and then I surprised them. I told them I may come back to them with a “better, faster, cheaper” option. We have a “fail faster” culture here at Flextronics, so they were more intrigued with what I may come back with than surprised.”
That solution was Workday, then just a startup. Flextronics forward-looking CEO Mike McNamara quickly warmed to the new technology.
“Workday was fresh. With using the ERP vendor for HR functionality, I was afraid we would get something average and at a high cost with one of its large services partners. We used zero external consultants on the Workday implementation. It was just us and them working hand in hand.”
Deciding on Workday running in the cloud instead of the ERP vendor's HRM option was a classic example of using a “best of breed” solution where it makes sense. Flex was able to use Marchandani’s strategy of “cloud fencing” to dramatically reduce costs and get out of the software development business for HR. Flex let Workday update the software for them! Smart.
On the ERP software side, McNamara said this about needing his ERP system to react quickly to changing market conditions and to improve customer service:
"Due to the regional support that differentiates Flex, we need to get rapid analysis on logistics [because] we are pretty dynamic. Having innovative systems is necessary if you want to keep your hands on the IT wheel”.
“The Flextronics decision in 2008 was the harbinger of change at many enterprises. A few years prior, it would have been considered suicidal for a global company like Flextronics to not go with safe choices like SAP and its partners. Not anymore. Now, McNamara is not a typical CEO. Few CEOs personally underwrite sponsorship of an IT project. And, not every company has a “fail faster” culture.”
In other words, Mike McNamara and Flex don’t just want to keep up with the herd. They are using IT and ERP as a competitive advantage to be better than their competition.
Consequently, in 2014 they decided to implement a combination of Infor LN (the latest version of what used to be Baan), SAP and ERPs from multiple ERP software vendors for plants in the U.S. and Europe. They continued to use SAP ERP in some manufacturing plants and SAP BusinessObjects (Outlook Soft) for corporate financial reporting.
For new acquisitions and at the manufacturing plants, however, they starting implementing the ERP system that made sense for each operation on a case by case basis. In other words, they used a "two tier", incremental approach rather than a Big Bang.
Flex is a pretty typical case for mid-market to enterprise-class manufacturers when it comes to the their ERP software footprint. They have ERP systems from multiple ERP vendors including SAP, Infor and Microsoft.
The scenario of SAP at corporate and a manufacturing ERP software like LN or Dynamics AX at the manufacturing plants is common for global manufacturers; particularly those like Flex who are growing fast by acquisition. In Flex's case, their IT organization and the business have simply decided that they can make a great ROI case for implementing something other than SAP or Oracle even though they are one of the largest manufacturers in the world.
As Flextronics CEO McNamara says,
“In Silicon Valley, we got comfortable with cloud computing much earlier than in other regions. Cloud computing has given us plenty of flexibility including rapid transition to mobile and later waves of computing.”
Going forward Flextronics has a great plan to eliminate a large proportion of their expensive ERP software customizations, particularly in the ERP Finance and reporting areas. They also plan to take advantage of new workflow technology, use manufacturing execution systems (MES), track and enter time with tablets, access reports on smartphones and lots more.
Most importantly, they will have lots of sexy new toys for the executives!
How We Helped
On the first Infor LN project, Performa Apps LN Finance consultant Dan Aldridge worked with a great consulting team from Infor Consulting Services (aka, ICS) to help the Flextronics Finance group in California and the Global Shared Services team in India on the LN implementation. Together we did an entire full life cycle ERP project with 5 LN consultants in just over 5 months.
We loved the California sunshine in Morgan Hill and got a chance to visit gorgeous places throughout San Francisco and up the California coast. We also had an opportunity to see the amazing plants in Milpitas and the Flex headquarters in San Jose. Man, was that swanky!
Performa Apps also provided Baan to LN differences training for a large team of key users at Flextronics.
- Full life cycle LN implementation in just over 5 months using only 5 LN consultants
- Built a global business process model for the Flextronics Finance Shared Services group
- Designed and built over 300 business process flows using the LN Dynamic Enterprise Modeler (DEM) process modeling software
- Built over 100 global standard data templates to speed future LN implementations
- Trained 20+ Finance key and end users in less than a month
- Eliminated over 100 expensive Baan customizations by using standard LN functionality
- Doubled sales at the Morgan Hill, CA facility less than 6 months after go-live
- Hung out in Santa Cruz, Half Moon Bay and so many other hotspots in the San Francisco Bay area
- Saw NFL games at the 49ers beautiful new Levi’s Stadium in Santa Clara and the (not new, but really fun) Oakland Coliseum for “Da Raiders”
ERP Consulting Services We Provided
- Infor LN Consulting
- Business Process Modeling
- ERP Financial Reporting
- LN Multisite Workshops
- Infor LN Finance Training
- Infor LN Dynamic Enterprise Modeler (DEM) Training
- Baan to LN Differences Training
- Infor Ming.le Consulting
- Baan and Infor LN Remote Help Desk Support
- ERP Software SOX Compliance
How Can We Help You?
For more information about how Performa Apps can help you with your manufacturing ERP software selection, ERP implementation project, ERP consulting or system upgrade, visit us at www.performaapps.com.
Performa Apps is active on all major social networks includingLinkedIn, Twitter, Facebook, Google+, YouTube and Scoop.it. We are very active on social media and share tons of free content about manufacturing ERP software, business intelligence software (BI), ERP consulting, MES Software and many other enterprise software technologies. Come visit us!
For more information about Infor LN, Infor software like the new Infor Cloudsuites and ION, manufacturing or ERP consulting in general, visit us atinforln.com. You can sign up for free monthly content updates or get your free Infor ERP LN Users Guide here.
You can also contact Performa Apps CEO Dan Aldridge firstname.lastname@example.org or on LinkedIn.
Dan Aldridge is the CEO of Performa Apps, an enterprise software and ERP software consulting firm specializing in Infor LN, Baan , Microsoft Dynamics AX 7 and Microsoft CRM Online. Dan has 20 years of ERP software implementation experiencestarting with Baan in 1996. He has helped dozens of companies with their ERP software implementations and training including Flextronics (now Flex), Progress Rail (Caterpillar), Mercedes Benz, Snap-on Tools, Blue Bird and a host of other manufacturing companies.
Dan is a serial entrepreneur and blogger with his new site inforln.com. You can reach him on e-mail at dan(dot)aldridge(at)performaapps.com or on his social networks: LinkedIn, Twitter and Facebook.
Here are the links to contact Dan Aldridge's company Performa Apps. Performa Apps is on LinkedIn, Twitter, Facebook, Google+, YouTube and Scoop.it.Come connect with us!