As a provider of full assembly services primarily to high-tech OEM customers, SigmaPoint Technologies Inc. has woven a web of online applications giving customers and suppliers a first-hand view of real-time information that most companies would prefer to keep to themselves.
Only five years old, the Cornwall, Ont.-based firm began when affordable computers had made powerful gains and the Internet’s meteoric popularity favoured showing information online. SigmaPoint’s customers are typically in the high-tech space requiring low to medium volume, high-complexity type products such as circuit boards used in wireless communication and even on the international space station. These customers repeatedly asking, “What stage is my product at?” prompted the company’s first online application, named SigmaTrack.
“In thrashing around ways of possibly saving time, we came up with the idea of having a bar code on the boards that could be scanned to identify the boards in real time (as) to their location, and make this information available to customers over the Internet,” recalls vice-president Dan Miller.
SigmaPoint hired a software programmer to start the coding and implementation process. About six months into the company’s inception, it had version one of SigmaTrack in place with bar coded boards tracked across the production floor, primarily using Symbol Technologies bar code readers. Along with internal tracking for customers, SigmaTrack provided sequential routing to eliminate process escapes from a missed step in the assembly.
Over the years, the three-person management information system (MIS) group has further developed SigmaTrack in response to customers’ suggestions for improved functionality. Now, customers just key their order information into the online service, monitor SigmaPoint’s progress in manufacturing their products according to their order information, and take receipt of the products when SigmaPoint ships them. “What separates us from the competition is not just SigmaTrack but our culture in the company,” Miller stresses. “Nothing is being hidden from receipt of material all the way to shipping of finished product.”
The company’s motto, “Together we meet our commitments,” reflects the senior management’s belief that having the customer, SigmaPoint and the supply base all working together best ensures customers’ needs are met, he adds. He says the open book approach to pricing goes like “‘Hey, guys, here are our costs; this is the amount of margins we need; we’re sharing everything with you so we can work together to reduce the costs of your units without affecting our margins.’ That way it’s a win-win for everybody.” SigmaPoint has reached out to suppliers as well with SigmaBuy, an extension of the SigmaTrack software to work with venders in a paperless environment.
“We’re starting to use SigmaTrack with our suppliers to issue purchase orders rather than printing, faxing, UPS-ing our purchase orders and waiting for confirmation and being on the phone all day long,” reveals Steph Gibeault, systems analyst at SigmaPoint. “We’re actually pulling our requirements directly from the MRP (manufacturing resource planning), posting it to our last-time suppliers. They can log onto SigmaTrack, approve pricing, date, quantities, date modifications — there’s a whole handshake that happens without actually getting on the phone. That saves a lot of time internally in our purchasing department.”
With SigmaBuy in place for about five months now, SigmaPoint issues, reviews and approves purchase orders electronically. It also electronically tracks whether or not the supplier has opened the purchase order or confirmed each of the line items. Suppliers can use this platform to provide to SigmaPoint information such as price variances and lead-time concerns.
To encourage suppliers to come onboard with minimal training, SigmaPoint attaches visual instructions and training documents to the module. IT staff also always make themselves available to train suppliers and customers to use the software.
The selling point for using the software is that it saves everyone time. “Suppliers can download the purchase order information, extract the data from the Web site and feed it directly to their database instead of them manually typing in data, so it saves them time and is only to their advantage to use it,” says Miller. “Ultimately we want to bring that information into a production report which could then provide shortage information and lead time information to not only let us know what the status is on material flow but more importantly the customer,” he adds.
SigmaBuy in turn is also being extended to what the company calls SigmaCast. Miller explains this will make forecast information from the company’s customers visible to the purchasing agent that buys the parts and deals with the distributors. SigmaCast will also inform distributors so they can be as competitive as possible on pricing, plus use that information to drive vendor managed inventory (VMI) levels automatically. Because everyone knows information is visible from the outside, everyone within the company keeps an eye on data integrity.James Irvine>Text
But Miller doesn’t stop there. “The next step after completion of SigmaCast is to ensure all the information we have from our suppliers, such as lead time information, cost, price break, quantity of information on bond or VMI, any sort of Kanban information — all must be made available to our customers as if they were actually working here at SigmaPoint. “We want to make sure that we hide nothing from the customer,” he stresses.
To further illustrate that openness, he mentions a simulation feature on SigmaTrack that allows customers to see the impact of adding extra orders. SigmaTrack will come up with a list of stock shortages. Miller says the company wants to expand on that capability and also reveal the customer’s purchase history, current order(s), cost, price break, and probably lead time to a finished product if ordered now, to give clients an even better sense of what’s happening inside the manufacturer’s operations that could affect their business.
The MIS group is also looking at automating the quoting process so it requires minimal resources to produce a final number. “That involves collaboration between all the supply base and a system that will allow you to choose the best price and put it into some sort of final template and allow your customer to see that,” Miller says.
“I can guarantee that once we finalize that, there’s going to be four other things on our plate that we’re going to be striving towards,” he adds. “You’ve got to remain leading edge. You’ve got to be looking for the next challenge. I don’t think we’re ever going to stop.”
Like improving the information flow from the myriad inspections and tests that are vital to electronics manufacturing. In an effort to avoid re-keying inspection and test data, SigmaPoint developed a program for inspectors and technicians to gather the information via handheld devices. But the firm wants to make recording data real-time rather than batch uploading from the handhelds at the end of a day.
All these applications, beginning with SigmaTrack in 2000, were built with Macromedia’s ColdFusion. At that time, ColdFusion was all that was available to give the company the capabilities needed, although now either Java or .Net would do about the same, says James Irvine, senior architect. “Then, there was no .NET and Java was very much in its infancy,” he adds. “ColdFusion was proven technology and let you do so much so quickly. You don’t have to have object-oriented programmers to use it. When we want to build a team to do rapid application development, that’s the tool that we use. ColdFusion has evolved. We’re still using it today and are happy with what it can do for us.”
Over the years, SigmaTrack also evolved into middleware that bridges the gap an ERP system would fill. It feeds information to internal production, planning, inspection and test staff and interacts with systems for MRP, accounting, document management and quality control.
SigmaPoint uses an off-the-shelf Microsoft SQL Server 2000-based MRP II system the company declines to name. “The beauty of it is that it is very open,” says Irvine. “It is easy to tap into and is fully compatible with ColdFusion.”
Irvine says SigmaPoint did evaluate full-scale ERP systems but felt none would give the flexibility the company needs to adapt quickly and economically to customers’ needs. “With us having direct communication with our customers and with the choice of the middleware packages that we have, changes are done very, very quickly,” he explains. “Although there are some ERP systems that will allow you to take it to some level of customization, usually the cost is too steep.”
Miller says communicating end-to-end product information is a strong marketing tool that helps customer acquisition and retention. “What has made it successful is that a lot of these ideas came from senior management,” he adds.
Still, SigmaPoint’s open-book philosophy brings technical challenges on two counts: security and data integrity.
Regarding security, procedures are in place to make sure people using the system are who they say they are. Irvine reports the customer site uses SSL encryption. Data and code are in two separate tiers, thus avoiding overflow or leaks between the two. Strong password requirements are augmented with monitored account usage to ensure inactive accounts are terminated.
Data integrity is not so clear cut. “Because we show all this to the customer, it puts a lot of emphasis on employees involved in any kind of data entry to be very accurate and follow procedures,” Irvine continues. “Because everyone knows information is visible from the outside, everyone within the company keeps an eye on data integrity. The software includes business rules specifying what is or isn’t allowed but ultimately it falls on the individual to a certain degree to ensure the work is accurate.”
However, Miller admits it is still a challenge to get all 122 employees to make sure they follow the strict, regimented processes required to ensure accurate data integrity and real-time tracking. SigmaPoint focuses on training and reminding staff “every time they touch a board they are determining the quality,” he says.
“The whole point of what we’re trying to achieve…is to pull the suppliers and the customers together with us in the middle as seamlessly as possible,” he summarizes. “Now we have to think about how we can make what’s happening at the supply base visible to the customers.”
The philosopher Sir Francis Bacon declared knowledge is power. By sharing its information, this manufacturer is turning that power into a competitive weapon.
— Maclean, freelance writer/editor, covers a wide range of IT applications. She is based in Guelph, Ont., and can be reached at www.sumac.net.