Arcam’s agile growth strategy demands agile enterprise resource planning

A research project launched in the mid-90s led to the establishment of Arcam AB in Mölndal in 1997. The company manufactures equipment to produce components from metal powder directly from three-dimensional digital models, in a process known as additive manufacturing. Arcam’s 3D printer technology is called Electron Beam Melting (EBM). Interest in this technology – which has been called ‘the next industrial revolution’ – is increasing rapidly around the world and Arcam is now a listed company with a fast-growing global export market. 

In 2007, Arcam decided to invest in Jeeves as its new enterprise resource planning (ERP) system. At that time, the company’s turnover was just over SEK 75 million, with around 10 systems delivered. Since then, both turnover and the number of systems delivered has increased many times over. In parallel with this exponential growth, over recent years new premises and service offices have been established overseas, the number of employees has increased and two companies have been acquired. The acquisition of the Canadian metal powder manufacturer AP&C and US full-service contract manufacturer DiSanto Technology has both developed and changed Arcam. Today, the company’s EBM systems are the hub of the business, while the acquired companies’ products and services provide an important addition that broadens the market offer.

The pace of Arcam’s development has been impressive; by 2012, annual turnover had increased to approximately SEK 140 million, by 2014 to SEK 339 million and, during the first quarter of 2015, SEK 111 million – a growth rate of over 70%.  So, the company’s rate of growth is high and shows no sign of slowing down.

Vital support in a growing aftermarket

When Jeeves was implemented in 2007/08, there was a need to take control of and streamline the production system, as well as to meet the demands of intensive product development and an accelerating pace of change. The continuous technological development of machinery also required that full control down to item level be given the highest priority. An ERP system that provides good support for complex, change-intensive production processes is still important to Arcam; however, expansion has also placed new demands on the system. As Arcam changes and grows as a company, Jeeves must also adapt – something that in itself is a continuously ongoing process.

“Our work is based on an agile growth strategy that requires us to take advantage of new business opportunities; for example, our expansive aftermarket business, which demands that we effectively manage increasing flows of goods and a well-functioning global supply chain. This demands an agile and scalable ERP system that can provide long-term support for the change work we conduct to develop both our organisation and processes. When Arcam initialy chose Jeeves, it was in order to gain access to certain basic functionality without incurring excessive costs; since then, the company has passed through various phases and Jeeves has always been able to adapt to the changing demands placed on it,” says Fredrik Bäckström, senior vice president for production and logistics at Arcam in Mölndal.  

Interest in Arcam’s technology in various industrial sectors is growing apace; however, the company’s market focus remains on the aerospace and implant industries, where EBM technology creates great added value. The printers’ electron guns and metal powder have made it possible for these industries to manufacture products in an entirely new way. Industrial 3D printing in metal makes it possible to cost-effectively manufacture complex products with advanced designs and functions. The benefits to the industry are great; compared to traditional processing, such as milling metal components, it is faster, less wasteful and allows customers to produce components that were previously impossible using traditional engineering techniques.

An efficient workflow that links warehouses and provides full control

The work of about 30 of Arcam’s 220 or so employees is supported by Jeeves, in areas such as finance, order and delivery management, spare-parts administration, logistics, purchasing and production.  Given Arcam’s status as a listed company on Nasdaq Stockholm, Jeeves also plays an important role in the preparation of financial reports. 

Although the ERP system provides broad business and operational support, Fredrik Bäckström is particularly keen to highlight the importance of Jeeves to the company’s aftermarket business, as the number of installations and system orders increases rapidly.

“We took approximately 40 new system orders during 2014, which is an increase of over 50% year over year. As we grow, it becomes increasingly important to adapt Jeeves to the new demands being placed on us. Globally, we have increased the number of warehouses over recent years. We are seeing a constant increase in the amounts of spare parts and consumables and our supply chain is much more complex than it was in 2007. Efficient work flows are key to developing business with our customers and here, Jeeves is an important tool. The system helps us to maintain full control over where components and materials are, which makes life easier when deciding which warehouses to use so that our customers receive the best possible after-sales service.

Arcam constantly works to develop warehouse, logistics and inventory management in order to provide customers with exceptional service. The section of Jeeves that deals with manufacturing processes is seamlessly integrated with the ERP system’s finance and logistics modules. Jeeves’ Supply Chain module provides an overview along the full length of the supply chain. Even if the complexity of Arcam’s supply chain has increased, with more warehouses and customers in more places and countries, collaboration and communication must continue to be seamless.  A project is therefore underway designed to further develop and fully integrate Jeeves with all units worldwide that form part of Arcam’s supply chain for 3D printers.  

Arcam’s rapid growth, global expansion and increasing volume of systems deliveries and customers are driving the work to develop Jeeves. Fredrik Bäckström explains that this also involves the refinement of the company’s overall IT strategy and the expansion of its IT function.

“Adapting Jeeves to these new demands is an important part of the IT strategy. At the same time, there is a need to view IT support and data flows from a broader perspective. As the amount of data grows rapidly, it is important to make the right decision about where all the data should be made available. It may be Jeeves, but it might also be in one of our other core systems. The most appropriate location for the data is governed by how we can best connect all of the data. One of Jeeves’ great strengths is its flexibility and the ease with which it can integrated with other systems. This provides us with the desired ability to customise our data flow,” concludes Fredrik Bäckström.