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Firm makes logical move

Factory Logic adds two clients for software; deals may mean $500,000 boost in revenue

Austin Business Journal - August 17, 2001
by Stacey Higginbotham
Austin Business Journal Staff

They're a lean, mean software-developing machine.

The two founders of Factory Logic Inc. have added two customers that stand to generate $500,000 over the next year, accounting for about 10 percent of total revenue, its CEO says.

Founders Richard Lebovitz, the company's president and CEO, and Henry Perez, chief technology officer, signed contracts with Maxwell-based Maxwell Molding Corp. and Chicago-based Bison Gear and Engineering Corp.

Factory Logic makes Web-based software that helps manufactures switch to "lean manufacturing." Lean manufacturing essentially is done on demand, reducing inventory and speeding turnaround time for orders. Dell Computer Corp. is a prime example of a lean manufacturer.

A customer can buy Factory Logic's software to start and manage the lean manufacturing process. Because the software is Web-based, the company can charge a subscription fee or can license the software to users.

The dual revenue model works well, Lebovitz says. That flexibility deserves credit for gaining several large customers that might have balked at running the software over Internet, he says.

The company began in 1998 with a focus on developing this software. To make ends meet, Factory Logic also consulted for companies that were interested in switching to lean manufacturing.

"We consulted enough to keep us fed," Lebovitz says.

The first customer was Unilever NV's Elizabeth Arden brand. From there, Factory Logic went on to secure Philadelphia-based Boathouse Sports Inc., an Internet clothing company, among other customers.

Case studies from Elizabeth Arden show the company was able to reduce its inventory by 40 percent after switching to lean manufacturing and Factory Logic's software.




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