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Cogistix LLC Named to Inc. Magazine’s Top 5,000
BOARDMAN, Ohio -- A company housed in the South Bridge Executive Park whose growth over the last five years has slipped under the radar is now tracked by one of the nation's top business watchers.
Cogistix LLC, a company that resells and codes management software for manufacturers, was recently named to the Inc. magazine's Inc. 5000, placing it among the 5,000 fastest-growing private companies in the nation.
"We're one of the fastest growing companies in America, and this is a great base for that," remarks President Kevin Miller, who started the company five years ago. "The last year or two, we've really seen explosive growth."
Since it was founded in 2009, Cogistix has grown to 32 employees and expects to end the year just shy of $5 million in annual revenues. On average, the company has seen its revenues increase more than $1 million per year, Miller reports.
Inc. ranked Cogistix the 1,522nd fastest-growing company in the United States, and rated it the 38th fastest-growing company in Ohio out of the 170 businesses statewide that made the list.
"This year, we'll add at least between $1 million and $1.5 million in revenues," Miller says.
Cogistix distributes enterprise resource planning, or ERP, software for Syspro. "It includes capabilities for production, inventory control, financials, scheduling, purchasing -- all of the main aspects or functions that a manufacturing company would need to run their business," its president says.
A second aspect of the business is writing specific applications to work in conjunction with the software of the client's business, Miller notes. "We have a mix of our own software products as well as the one we resell," he says.
As an example, Miller says his company could write a support program that would provide an early alert should a piece of equipment need repair or preventive maintenance. The alert would prompt a repair or fix before the machinery or equipment broke down, costing the company even more money.
Cogistix sells software that helps these manufacturers run their everyday business. "It helps with costing their products. It helps them purchase or make things based on their customer's requirement dates," Miller says.
Such efficiency is especially important to larger, complex companies that must purchase materials or the proper equipment. One wrong move could cost a company thousands of dollars, Miller says.
However, the president of Cogistix says manufacturers take a big risk when it comes to installing new software such as his. On average, a company can expect to pay between $100,000 and $500,000 for ERP software.
"The lifespan for this software is about 10 years," Miller relates. During the Great Recession, companies pushed their existing software programs to the limit, postponing upgrades. Now that the economy has improved substantially, many manufacturers are willing to move forward on these improvements, creating opportunities for Cogistix, he says.
On average, it takes about 10 months to install and launch the software, Miller reports. Throughout that period, the client's employees are trained both on-site or at offsite locations, including its Boardman office.
The company has a broad spectrum of customers across the manufacturing sector -- such as metals, plastics, food, chemicals, automotive, aerospace and defense, he says.
Typically, most customers of Cogistix are small to medium-sized manufacturers with revenues of between $10 million and $200 million. "We're in 13 states now,” Miller relates. “Some customers are larger well-known names and smaller family-owned companies."
The latest expansion is a new office in Charlotte, N.C. -- the company's first bricks-and-mortar site outside of Boardman.
Cogistix also has sales representatives in seven states, in regions where some of its manufacturers are.
The Boardman office is staffed mostly with tech support employees able to both diagnose customers’ software problems and help the client solve any issues that may arise via a software connection.
"It makes it so much faster to address their issues," says Julia Spence, tech support lead at Cogistix. "We can look into the machine and see what the problem is and fix it. They can get a hold of us, day or night."
What sets Cogistix apart from other software companies, as Spence sees it, is that all of its tech support is based in the United States while its sales force is positioned regionally to assist with any concerns a client manufacturer might have.
"Every month, we have two to three 'go lives,'" Miller says, referring to when a company makes the transition from its old software and launches the new program Cogistix provides.
"Sometimes, companies want to install the program in phases, but we discourage that," Miller says, because it becomes a more convoluted process that could cause more problems once the system is fully activated.
Miller says Cogistix is now looking to solve a welcome problem: business is so good that the company is searching for a new corporate headquarters with the space needed to accommodate IT services and training.
"We tend to create three to four positions a year," Miller says, for either internal promotions or opportunities for new employees.
However, the one obstacle thwarting any expansion is the lack of qualified job prospects who understand and implement the software, Miller adds.
"We literally have to taper our sales force at this point only to bring in deals that we're confident we can get implemented at the right time," he says. "These tend to be complex products. There's a lot of risk when a manufacturer decides to implement new software. It touches every aspect of the business."
Miller relates that sales and support personnel are often on the shop floor with the clients and should have a deep understanding of the manufacturing process, not to mention the financial and engineering concepts the customer want to make real.
"We need consultants that can be on the shop floor one day, and then be able to communicate with the rest of the company how this product's going to improve things for them," Miller says.
Pictured: Kevin Miller, founder and president of Cogistix LLC.
Copyright 2014 The Business Journal, Youngstown, Ohio.
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