Our Members >> Success Stories >> Plex Systems, Inc.
Auburn Hills-based Plex Systems, Inc., developer of cloud-based software for the manufacturing enterprise, is a Southeast Michigan success story.
"Automation Alley membership helped us diversify our customer base and expand into foreign markets."
Plex Systems, Inc. is the developer of Plex Online, a cloud-based SaaS (software as a service) enterprise resource planning (ERP) solution for the manufacturing enterprise. Founded in 1995, we offer features for virtually every department within a manufacturer, including manufacturing execution systems (MES) and quality management systems (QMS) for the shop floor, supply chain management (SCM) for procurement, and ERP for finance and management. Plex Online's comprehensive functional coverage delivers a "shop-floor-to-top-floor" view of a manufacturer's operations, enabling management to run its business at maximum efficiency.
When we started delivering our solution over the Internet in 2001, we kept the same pricing model as other software vendors. Getting license fees up front helped fund the development of the new product. In 2007, we saw challenges and opportunities on the horizon — the manufacturing industry was slowing down at the time, and the economy was beginning to struggle, so our customers were having a difficult time parting with a lot of cash for new systems. We chose to switch to a subscription pricing method, where customers just pay a flat monthly fee rather than paying a ton of money up front. With this pricing model, we became a recurring revenue business, rather than relying on big-ticket sales.
Prospective customers loved the move to subscription pricing, especially during the recession, since they could improve their business and hold on to their cash. For Plex Systems, though, it meant that revenue decreased 20 percent in 2007, and profitability and cash evaporated. Fortunately, we were able to refinance our debt before the crash and began growing the top line again in 2008. Since then, we have been growing at an average annual rate of about 28 percent.
Through 2007 and 2008, our team never lost focus on the customer and their success. That focus allowed us to totally change our business model and not only survive, but to thrive. In 2010, our company experienced record growth with 37 new customers, including our largest to date. We hired 54 new employees and launched international operations in Germany. Because of the increasing number of staff, we expanded to new office space in Auburn Hills.
Automation Alley has been vital in providing information and networking opportunities for our business. It has helped us in diversifying our customer base by making us aware of other local businesses and growing sectors in our region, such as aerospace and defense. Discussions with other Automation Alley members and staff have helped us in our expansion to foreign markets.
Plex Systems has also received several awards at the annual Automation Alley Awards Gala, which helped to raise our visibility in the community. Plex Systems was named Emerging Technology Company of the Year in 2006 and Technology Company of the Year in 2007. In 2009, I was named one of three finalists for CEO of the Year.
In 2010, we diversified our customer base significantly. We utilized the strengths of our product, Plex Online, Cloud ERP for manufacturers, to expand into the food and beverage, aerospace and defense and electronics industries. Plex Online supports detailed product traceability, meaning it shows you exactly what raw materials or intermediate products were consumed in the making of an end product. It allows you to really narrow a recall if there’s a problem. In that way it saves companies a lot of money. While our business remains strong in the automotive and general manufacturing areas, our growth in these additional markets has been significant and allowed us to maintain momentum, even during the temporary downturn in the automotive market.
For me personally, something I love about working for Plex is when our customers tell me stories about “wowing” their customers with the capabilities that our product enables. For instance, one of the Big Three OEMs visited a small supplier of stamped assemblies that uses our product and couldn’t believe the level of control the company had over the manufacturing, quality and inventory control processes. They won more business as a result. Another example is when an Asian automotive OEM asked one of our customers for a broad recall due to a defect they found in one part. Our customer was able to isolate the problem and narrow the recall to two containers of parts. That saved everyone lots of money.
Throughout the history of Plex Systems, our employees have consistently been very active in supporting our local community. Supporting community organizations across Michigan is a vital element of the Plex Systems corporate culture. Each year, the company’s staff selects one or two “Focus Charities.” We then create a variety of fundraising events and other opportunities for employees to get involved. This year, our staff chose to support the Make-a-Wish Foundation.
The 2011 charities were Gleaners Community Food Bank and the St. Clair Butterfly Foundation. In 2011, our company raised more than $46,000 in various fundraisers such as wine tasting, beer tasting, silent auctions, breakfasts and bake sales. That eclipses our previous year’s efforts by more than $19,000. This also includes the money raised to provide 11,282 days of food for the Gleaners’ 2011 Food Fight to Tackle Childhood Hunger. The amount was the highest among participating companies with 100-250 employees as well as the largest amount of all 30 participating companies. Also, in 2011, we received the inaugural Corporate Achievement award from St. Clair Butterfly Foundation for our work with them.
Looking to the future, we want to really step up our growth rate. We’re having a great first quarter so far — it’s been a fast start. We want to get out there and be acknowledged as the leader in cloud ERP for manufacturers.
That’s our story. What’s yours?
Plex Systems, Inc.