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by Beth Stackpole, Contributing Editor   | Abstract: | With a real-time snapshot of business performance, manufacturers can take corrective action to not only boost efficiencies, but also create revenue opportunities and drive growth. |
Deep in the recession of the early 2000s, HallStar Co., a $125 million specialty chemical manufacturer, was doing what most mid-size manufacturers were doing: pursuing every avenue to cut costs and making do with systems already in place. Then, in 2003, after the market had eased up a bit, HallStar brought in Cognos Inc. business intelligence (BI) tools to try to leverage the information in its new Lawson enterprise resource planning system to make better business decisions. The first initiative was to reduce inventory, which, at the time, was on the high side at 18% of revenue. After knocking that figure back to 7.5% of sales while increasing its on-time delivery rate in a short year and a half, HallStar plunged deeper into BI. It began to leverage Cognos not just for rear-view mirror insights into its quarterly performance, but also to garner real-time information about how the company was doing in all aspects of its business. Salespeople used the tool to evaluate how well they were meeting sales goals in new markets, such as Asia. The director of marketing orchestrated a BI initiative to pinpoint problems with margin erosion, allowing HallStar to fine-tune its prices to regain margin points. Today, 75 of HallStar's 120 employees use Cognos 8.0 on a regular basis to monitor all aspects of the company's performance, and HallStar CEO John Paro issues a monthly voice message that serves as a corporate scorecard, highlighting key Cognos metrics. In the past year, the company grew its gross profit by three percentage points, and earnings before interest and tax (EBIT), its key metric, rose 55% from April 2006 levels. [Click to continue] |