Manufacturer Newell Rubbermaid is using business intelligence (BI) technology to allow more accurate forward planning, and cut inventory levels and warehouse costs.
The company which makes and markets brand-name houseware, hardware, tools, home furnishings and office products, including well-known brands such as Parker pens and Little Tikes, has been using Cognos BI products since 1999.
The initial reason for introducing the software was for reports from the firm’s Movex enterprise resource planning (ERP) system, but it later introduced further tools for analysing data in its European business.
‘With 1,000 users we did not want a desktop solution demanding multiple versions of the software,’ says John Calvey, business intelligence manager for European information services at Newell Rubbermaid.
‘The software allows us to summarise and highlight business problems rather than throwing a huge amount of transactional detail at someone.
‘Traditionally we did a lot of reporting in the manufacturing area, but not as much analysis.
‘Sales, customer services and financials got the most focus, but as knowledge of what the product could do improved, we have applied it to manufacturing.’
Instead of having multiple copies of Excel spreadsheets, copies of inventory are frozen and time stamped every month using Cognos technology. In this way, inventory can be accurately tracked against sales and used to create a forecasting system.
Results are fed back into the Movex software to facilitate purchasing plans, and Calvey says the company is now in a position to forward plan inventory over a 12-month period.
‘Every item we have in stock is valued and we can put a valuation on the inventory 12 months ahead,’ he says.
‘We are coming at it from the bottom up rather than thinking how much stock should we have. The treasury department is able to ask what value of stock we have for budgeting purposes.’
The result is reduced inventory costs. ‘If we make stock too early which is worth millions of pounds, it is literally money sat on shelves,’ he says.
‘By taking a historical and a forward view we have been able to reduce stock levels as we can forward-calculate. Previously it was done through number crunching using Excel for specific warehouse divisions for a summary. It was manually intensive and led to decisions being made on inaccurate data.’
Another area of the business benefiting from improved use of BI is the sales division, with daily emailed updates providing a high-level picture of sales and current order books.
‘It enables us to see how much ahead or behind budget we are across all divisions within Europe, Australia and New Zealand,’ says Calvey.
In customer service, the reporting tools have been refined to make key performance indicators closer aligned to what the business wants.
And the BI system has becomes so important that it is now on the critical list of the firm’s disaster recovery policy.
‘If it is not recovered, the business cannot operate,’ says Calvey.
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