Making price adjustments on the fly

Home and car keys have become more expensive to duplicate because of the soaring costs of metals. After business intelligence data gleaned from a new Web-based system showed that this added expense had reduced annual revenue tied to key-cutting equipment sales by a full 1 percent, executives at hardware wholesaler The Hillman Group scrambled to adjust prices.

The quick changes helped to pull revenue derived from key manufacturing sales closer to previous levels. In the past, such a move couldn't have been made so quickly, because it would have required executives to wait for reports that were only generated once every few weeks.

U.S.-based Hillman distributes bolts, screws, nails and other products to home improvement giants, such as Home Depot and Lowe's, and to mom-and-pop hardware stores. Since the need for an extra set of keys tends to draw many people into local hardware stores, Hillman leans heavily on its lines of key-cutting equipment to retain a strong customer base.

In addition to seeking a means of monitoring key-cutting sales, Hillman executives were looking for a more effective way to react quickly to sudden changes in any of the company's many product lines. Dogging those efforts, however, was a reliance on four separate systems used to generate trending data. Information on major product categories had to be pulled from these different transactional systems.

To streamline revenue reporting and bolster the level of BI data available to decision-makers, Hillman adopted a new product management application.

"Since our systems were not consolidated, we had no bird's-eye view of our revenue, sales and other financial data," says CIO Jim Honerkamp. "Now executives, including sales representatives, can view revenue in a way that shows plan vs. actual and the percentage of variation at that very moment in time."

Hillman settled on New York-based Information Builders's WebFocus BI platform, primarily because the application would easily overlay the company's existing reporting systems. Already in place, for example, was Oracle's J.D. Edwards World application, which houses information about a specific Hillman product line -- the letters, numbers and signage used to mark home and commercial addresses. A homegrown application churned out reports on the sales of bolts and other fasteners.

Now, WebFocus quickly plucks BI data from all four systems, cleanses the information and serves it up to executives poised to make strategic decisions. "We have enabled our product managers to quickly analyze product classes, subclasses and items to identify where the bleeding is at its worst and implement immediate changes to correct performance," notes Pete Hebauf, Hillman's manager of executive information services.

Product managers aren't the only consumer packaged goods executives who stand to benefit from the use of BI, says Dan Everett, an analyst at Ventana Research. Everett points out that market profiling and segmentation is crucial to corporate-level initiatives. "BI can be beneficial in a number of business processes," including point-of-sale monitoring, shelf replenishment and merchandise planning, he says.

Hillman's next step toward increased responsiveness involves tying geographic information system technology to BI data. With that technology, says Kirk Townsley, Hillman's WebSphere portal administrator and analyst, "we will be able to expose product sales patterns geographically, allowing our account managers to work closely with our customers to maximize our sales potential."

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