Owens Corning in Toledo, Ohio, knows a thing or two about building materials.
And more than two months into a business intelligence (BI) project, the company now knows a few things about building data warehouses as well.
As it emerges from bankruptcy proceedings, Owens Corning needed a way to improve its gross margin. The company undertook what it called the Information Access Project (IAP).
"Before [the IAP], Owens Corning had the ability to look at a project in some detail on day five or six of the month," said Klaus Mikkelsen, global development leader, information systems. "We were not, however, able to answer the question [of] how did we do yesterday. We can now answer that question every day."
An SAP shop running on about a dozen other systems, Owens Corning had the usual problems of data consolidation. Customers and products were known by different names on various systems, Mikkelsen said.
Owens Corning has used the IAP to improve sales planning. Now, all sales reps in the field are measured against the data warehouse. Next week, the company is doubling the number of users accessing the warehouse by adding 400 manufacturing and sales employees. For example, sales reporting tools will enable business managers to run "what-if" scenarios against new territories based on historical data, so they can allocate resources.
Owens Corning implemented the application suite from London-based Kalido Ltd. Before the project, the company was
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only able to aggregate customer data from its global $5 billion business.
"There's nothing actionable about aggregate data," Mikkelsen said. "You can see what it is and that's wonderful and I'm happy for you but there's not much you can do about it. Getting actionable information was a big deal."
Owens Corning predicts more than $20 million in added profits, thanks to the IAP this year. It has already reaped benefits by identifying products sold at a loss or a low margin. The company had a poor understanding of how large internal shipping costs were, Mikkelsen said. With the IAP, Owens Corning was able to correct the pricing for products that were being sold at a loss.
Owens Corning started the project by forming a 10-member team that consisted of people from information systems and from the business process side, Mikkelsen said. For the project to succeed, it was important that the company president sponsored the team, he added.
In fact, the team's ability to bring the entire company into the project by aligning the proper business processes helped ensure success, Mikkelsen said. IS and business went through an iterative show-and-tell process for five weeks, with IS running scenarios through the data warehouse. The technical problems became less of an issue as the weeks went on, and by week three they were basically solved, Mikkelsen said.
"That means IS was able to keep up with the business," he said. "In fact we were often sitting back and waiting for business to make the definition of a rule. I don't think you have heard that in a data warehouse before."
Along with the alignment, the project depended on agility and adaptability, Mikkelsen said. Owens Corning was able to ensure a return on its investment by moving quickly, making opportunistic decisions and correcting course efficiently and across multiple systems.
In selecting the Kalido software, Owens Corning was swayed most by the speed of implementation, Mikkelsen said. The project was up and running in 60 days.