From Tribal Knowledge to Global Success

In 2009, Hagler Systems had about thirty employees, including four administrative staff. Today, it employs nearly ninety and plans to expand its 60,000-square-foot manufacturing facility by 50 percent to accommodate larger machines and increased business in the oil sands, dredging, mining and nuclear industries. Yet, it still has only five administrative staff. During the last few years, Hagler transformed itself from a small, family-owned company to a midsized company with multinational customers. The company’s core values remain the same, but its commitment to universal and efficient business processes rivals that of global corporations with billions in revenue.

Hagler employee working at the company’s manufacturing facility in Augusta, Ga.
How did Hagler triple its engineering and production employees without adding administrative overhead in such a short time? The answer lies in Hagler’s innovative work with a customized business management software system combined with the expertise of several technology consultants who specialized in industrial equipment manufacturing.
A FAMILY AFFAIR
As teenagers, the three Hagler brothers—Bob, David and Ben—worked in the foundry at Georgia Iron Works (GIW), a company run by their grandfather and later their father. After college, they returned to GIW and learned about the slurry pump business both domestically and abroad. In 1996, the brothers founded Hagler Systems, Inc. as a pump and hose reseller. While business started briskly, the brothers soon saw that they’d need to find a way to enhance product value to succeed in the long term. They began to expand their capabilities and product offering. Today, Hagler is a full-service mining and dredging equipment company that designs, manufactures and sells engineered-to-order slurry pump systems for use in oil sands, phosphate fields, on dredging barges, in potash mines and in quarries, and it serves customers such as Suncor Energy, PotashCorp and Great Lakes Dredge & Dock.

Ben Hagler (left), Vice President of Hagler Systems, Inc., and Prakash Viswanathan (right), an industrial engineer at Hagler Systems, Inc.
RAPID GROWTH LEADS TO ADDITIONAL OVERHEAD, MANUAL PROCESSES
But as the company began to grow rapidly, the Haglers found themselves adding overhead and manual processes. This created significant problems and layers of administrative frustration. Employees relied on mountains of paperwork, operated without using part numbers or a systemized parts labeling system, had no uniform way to track labor hours or deadlines, couldn’t efficiently and effectively manage inventory, and had no idea about how to accurately anticipate demand.
In 2009, the Haglers decided to invest in Microsoft Dynamics AX, an enterprise resource planning (ERP) system that helps large businesses manage inventory, accounting, revenue streams, workflow plans and more. But they quickly realized that this ERP system required much more than a routine installation to maximize its capabilities. It needed a team to customize the solution to the business, train employees on how to use it and continually implement system updates. From 2009-2012, sales grew by 30 percent, further highlighting the need for streamlined business processes that would help the company manage its rapid growth.
To successfully implement the AX solution, the Haglers hired several IT specialists, including Prakash Viswanathan, an industrial engineer. Beginning in 2012, he worked with Hagler’s IT team and outside consultants from Sikich LLP, a professional services firm headquartered in Naperville, Ill. that specializes in accounting, technology, investment banking and advisory services, to customize AX to fit Hagler’s unique business model.

SCALABLE PROCESSES, FASTER DELIVERY
“Sikich has deep expertise in AX for industrial equipment manufacturing and configured the Microsoft product just for Hagler. Consultants there helped us master the system and maximize its capabilities. Equally important, they worked at our pace and within our budget,” says Viswanathan. “They didn’t try to push us when we needed to take a step back. They stressed that there isn’t a standard AX procedure, so we had to identify what made the most sense given our specific business, industry and diverse needs of our customers.”
Viswanathan says that, prior to the AX implementation, Hagler’s employees relied almost exclusively on ‘tribal knowledge’ without universal or documented business processes. He now runs AX training sessions with each new employee and ensures that select employees at every level—from the shop floor to the executive suite—have a high-level understanding of what the software does and how to use basic functions.
“Before Sikich designed a configured solution, we had all of our business insights and data points on pieces of paper,” says Viswanathan. “With AX, we don’t have to worry about losing or keeping track of that. We can make reliable production estimates, track every detail and design change, effectively manage our inventory, anticipate demand and compete with larger competitors.”
Ben Hagler agrees. “AX helped us develop scalable processes and deliver products to our customers much faster. It also ensures that employees spend more time doing what they do best—designing and manufacturing,” he says. “Sikich immediately understood our vision and taught us what we needed to know so that we could run with the system moving forward. That’s invaluable.”

REDUCE INVENTORY BY ONE-THIRD
John Leibach, Hagler’s controller, says that AX allowed the company to break expenses into dimensions, identify the source and cut strategically. He also emphasized the system’s impact on inventory. Prior to AX, the company had a lot of old and unused inventory on the shelves but no way to track it. As a result of everyone’s collaborative efforts, the company went from zero part item numbers to more than 10,000 in less than a year, which enabled better tracking. Since the implementation, Hagler has reduced its inventory by one-third and can use the extra money to grow the business.
“Sikich showed us that AX creates a culture of transparency since every employee can see what we’re spending and how much we’re bringing in,” says Viswanathan. “That’s moving away from the traditional top-down culture that creates friction for a lot of family-owned businesses.”
Sikich’s consultants also had extensive conversations with Hagler about AX best practices for the company’s business processes.
“We train people on the process before we train them on the software and stress the importance of planning—across every aspect of a project,” says Viswanathan, before adding, “We’ve seen a remarkable degree of acceptance from everyone here. There’s a huge appreciation for eliminating roadblocks and being open to new processes and ways of managing workflows.”
Leibach said it’s crucial to “include everyone in the process since the best improvements and ideas often come from guys on the shop floor. You can’t rely solely on the insights of executives—you’ll miss the big picture. Successful implementation of AX relies on setting realistic goals and breaking the process into small steps so that everyone feels a sense of accomplishment.”

A Hagler pump systems.
COMMITMENT TO CULTIVATING HOMEGROWN TALENT
The Haglers pride themselves on hiring local—but often inexperienced—talent right out of college and helping them expand their initial skillset. The company’s mission is to reach beyond good and inspire greatness,’ and it’s clear that the Haglers practice what they preach.
“We have employees who now perform tasks they never realized they were capable of performing when they first walked through our doors,” says Ben Hagler. “We encourage them to study the business and never apologize for asking questions. Then we empower them to take risks, find their niche and ultimately flourish.”
With sales on the rise and customer demand increasing, Hagler shows no sign of slowing down. Starting in the near future, the company plans to implement advanced asset tracking technology into its pump systems that will alert employees when a system is down, when it needs maintenance, etc. Then the company can continue to provide value long after the initial product sale.

Item numbers now label every piece of inventory so that the company can track product and reduce wasted inventory.
Viswanathan points to the company’s nondescript manufacturing facility on Georgia’s Sand Bar Ferry Road and says, “Most people would have written us off and never thought our tiny business could make such a successful product. But like many things in life, it’s important not to be deceived by external appearances. It was a bold move for a company of our size to invest in AX—but the risk definitely paid off.”
He paused before adding, “Hagler is unique. It has the values, passion and unmatched work ethic of a family-owned company but now features the precision and mindset of a well-oiled corporation. It’s an unstoppable combination.” ■
For More Information
Georgia Tech graduates Bob, David and Ben Hagler founded Hagler Systems, Inc. in 1996. Together, they have over 100 years of experience in providing solutions for dredging, mining and municipal pumping requirements around the world. For more information, call 803.278.2728 or visit www.haglersystems.com.