Helping Purchasing Managers

By Bob Violino  |  Posted 2006-11-06 Email Print this article Print

A new wave of workers—from sales reps to logistics staffers—use business intelligence tools on the job.

Helping Purchasing Managers

Quaker Chemical Corp. is using business intelligence to better monitor global financial information, including the cost of supplies. The Conshohocken, Pa.-based manufacturer of specialty chemical products built Quaker Warehouse Information Systems—which includes 123 data warehouses tailored to individual business process and more than 700 "data marts" or subsets of a data warehouse often intended for use by a single department or function—to meet the needs of different employees.

Quaker uses SAS Business Intelligence software to collect data on orders, invoices, customers, suppliers and associated costs. An objective: evaluate Quaker's profitability across regions, customers, products and services to determine where to focus company resources, says Brad Manning, chief information officer.

About 820 employees, mostly managers in purchasing, finance and sales, have access to the Web-based business intelligence application, says Manning. Prior to this tool, Quaker couldn't get a global view of its operations.

In one example, Quaker saw savings by better tracking pricing trends worldwide, Manning says. If a buyer in one location receives a discounted price from a supplier, the information is available to buyers in other locations, enabling them to negotiate lower prices for supplies and save money. He declined to disclose the amount.

Manning says Quaker expects to see other benefits as its use of business intelligence matures. One trend will be to feed data such as order, sales and shipment information into the system more immediately to learn about trends faster.

The key to a successful business intelligence deployment: "Sponsorship should be at the highest levels in the organization," Manning says. "The design should be driven from all of the primary decisions that are made across the company, and the data required to make those decisions."

Logistics workers at the Hillman Group, a Cincinnati company that distributes hardware, keys and other products, are using Information Builders' WebFocus software, and are testing its use with geographic information systems (GIS) software from ESRI to improve shipping processes.

Hillman ships products from 10 U.S. distribution centers to retailers such as Home Depot. One business intelligence-GIS application enables Hillman to determine the most efficient shipping routes to reduce freight costs. "If we're shipping out of one distribution center when we should be shipping out of another, we're losing money," says Jim Honerkamp, Hillman CIO.

Using its system, the company can call up a U.S. map that plots its distribution centers, then add a layer that shows UPS shipping zones and costs, and another layer that indicates the products to be shipped and to where. Hillman uses this data to determine which distribution center to use to ship a particular product.

By optimizing routing, the company expects to cut time for shipments and reduce fuel costs, slashing shipping expenses by as much as 25%. Hillman spent $35,000 on the business intelligence and GIS software, and expects to save triple that amount the first year, Honerkamp says.

Looking ahead, Ventana Research's Everett says the emergence of open source business intelligence tools will accelerate adoption in coming years. Why? Lower costs for sure, he says. "But the number one driver was a developer or architect [within the company] ... Someone in the organization says we can use this," then launches a project, has success and the company rolls out the software more broadly.


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