Manufacturing Industry Case Study
/ Firm UsesBI Tools to Realize $10 Million in Incremental Revenue inThree Months
Overview
Country or Region:United States
Industry:Manufacturing—Consumer products
Customer Profile
Based in Dallas, Texas, Kimberly-Clark manufactures consumer personal-care products. It employs nearly 56,000 people. In June 2009, Kimberly-Clark posted sales of U.S.$19.1 billion.
Business Situation
Kimberly-Clark did not have a corporatewide business intelligence solution. It wanted to make data in disparate systems available to employees using familiar tools.
Solution
The company chose a business intelligence solution from Microsoft that offers a suite of interoperable technologies that employees can use to access information on demand.
Benefits
- Rapid return on investment
- Improved manufacturing efficiency
- Increased business agility
- More extensible platform
- Greater competitive advantage
Ramón Baez, Chief Information Officer, Kimberly-Clark
Kimberly-Clark Corporation produces consumer personal-care products that make a difference in the quality of customers’ lives. To help meet today’s challenging economic environment, Kimberly-Clark needed to increase production efficiency and optimize product distribution to retail customers. To achieve these goals, business analysts needed access to the right information. Kimberly-Clark deployed a business intelligence solution from Microsoft using technologies the company already owned. For less than U.S.$25,000 of internal developer time, it delivered a business intelligence solution that analysts used to increase revenue by $10 million in three months. With self-serve access to plant asset production information, Kimberly-Clark has addressed several million dollars in waste and capital avoidance through process improvements and better asset utilization.
Situation
Based in Dallas, Texas, Kimberly-Clark is a multibillion dollar corporation and produces well-known brands such as Kleenex®, HUGGIES®, and Scott® paper towels. The company operates through four global businesses: personal care, consumer tissue, K-C Professional, and K-C Health Care.
“Kimberly-Clark is a company that personally touches more than 1.3 billion consumers on a daily basis with essentials for their everyday lives,” says Ramón Baez, Chief Information Officer at Kimberly-Clark. “Our company wrapped up revenue at $19.1 billion and we operate in 80 countries where we are either number one or number two in the markets where we compete.”
As a manufacturer of personal consumer products, Kimberly-Clark strives to increase production efficiency and optimize product distribution to its retail customers. Maintaining plant output at maximum levels and ensuring product is on the shelf at the right time and the right price to meet local demand are two important goals for the company. The recent economic downturn and rising costs of fuel, pulp, and paper, as well as an increasingly price-conscious consumer have put pressure on the company to reach these objectives.
“The challenges that we’re going through with this whole economic downturn—where things are very competitive in the markets—meant we absolutely needed to use our information as a competitive advantage,” says Baez. “And what’s becoming very clear for us to really drive the value is that we at IT need to provide the teams, whether it’s manufacturing, supply chain, finance, or human resources, with the tool sets to be able to measure our successes. So that’s where business intelligence tools are extremely important to make sure we stay on track.”
Manufacturing Inefficiencies
On the manufacturing side of the business, management at Kimberly-Clark examined how the company’s business analysts used information to gain insight into how well each of the 13 plants (where implemented) in the United States performed. “At Kimberly-Clark, we started a lean initiative, and the whole goal behind that is to be as efficient as possible,” says Chuck Markham, Information Technology Services Business Partner at Kimberly-Clark. “In order to do that, we need to have visibility over our facility assets.” While everyone acknowledged that information was key to optimizing manufacturing capacity, it became clear that the company’s business analysts did not have easy access to data from the plants.
“The challenge is that we have disparate reporting solutions across our manufacturing facilities,” says Jamie Mork, Enterprise Business Intelligence Solutions Engineer at Kimberly-Clark. “We had many facility-level reporting systems but no way to consolidate those reports into a central repository for everyone to access.”
With information repositories spread out across all the plants, analysts had difficulty consolidating data to compare performance and gain an understanding of why some plants were working better than others. And if analysts wanted further information, they had to rely on IT staff. “Upon request, the IT person would set up a project and we would allocate funds to it,” says Thomas Kelly, Operations Consultant at Kimberly-Clark. “I’d say 50 percent of the time the information arrived at the analyst’s desk too late to be relevant. Without up-to-date information about what was really happening out there in the plants, we ended up purchasing machinery to produce more product.”
Inventory Challenges
Similar business intelligence problems existed for the business analysts and lead sales individuals working on the customer-facing teams that manage relationships with Kimberly-Clark’s large retail customers. “We pride ourselves on collaborating with customers to optimize supply chain savings and efficiency,” says Bud Kane, Supply Chain Development Manager at Kimberly-Clark. “Within the supply chain, our goal is to get the right product to the right places at the right time for lowest cost. This ultimately drives sales and profit.”
At Kimberly-Clark, the customer-facing team includes customer replenishment analysts (CRA) who are responsible for optimizing the amount of inventory on stores’ shelves. However, these supply chain analysts did not have ready access to point-of-sales data at the level of detail required to quickly move inventory where and when they wanted, product by product, store by store. Instead, CRA’s had to search for information through the external web-based systems provided by the customer.
“You could only view this data one screen at a time for an estimated 1.5–2 million store-item combinations,” says Kane. “It was impossible to get a quick overview of major replenishment settings that impact ordering. If product is not on the shelf, consumers cannot make purchases.This leads to lost sales and potentially customer loyalty. We would prefer to monitor key indicators along the supply chain to prevent those out-of-stocks rather than reacting to a situation once it has already occurred. The goal is to optimize inventory to hit targets and ensure customer satisfaction.”
Kimberly-Clark IT staff wanted to consolidate disparate data silos into a centralized data warehouse and reporting system and make it easier for business users to consume, manipulate, and share that information by using familiar tools. Such a solution would require extensible and flexible data management software with powerful integration and analysis capabilities that integrate with the everyday desktop productivity applications that the organization already uses.
Solution
The fact that Kimberly-Clark chose a business intelligence (BI) solution from Microsoft reflected the high priority the company placed on flexibility and ease of use. The company briefly evaluated its SAP solution and a number of manufacturing systems but turned them down. “To be honest, none of them delivered the kind of flexibility that we really wanted to see,” says Kelly. “The whole point of the entire project was to empower our business users and analysts to do their own data manipulation.”
Extending the Value of Existing Technology
Kimberly-Clark had other reasons for choosing a Microsoft BI solution. The company had entered into a Microsoft Enterprise Agreement and already licensed much of the software that it needed. This includes Microsoft Office SharePoint Server 2007, Microsoft Office 2007, and Microsoft Office PerformancePoint Server 2007, which is built on Microsoft SQL Server 2005 data management software. Office PerformancePoint Server 2007 functions as the application layer behind the scenes, providing the tools and connections to make Microsoft Office the interface for decision makers and Office SharePoint Server 2007 the way to broadcast and collaborate on that information. The range of products—from database to desktop—underlies the value of interoperable Microsoft technologies that combine to deliver an enterprisewide business intelligence solution for Kimberly-Clark—all from a single vendor.
“A lot of people don’t know this about Kimberly-Clark, but we’re a very large Microsoft house and we have a phenomenal relationship with them,” says Baez. “Microsoft leaders took all our business intelligence people over to the Microsoft Technology Center in Chicago, and we looked at different ‘what if’ scenarios and saw how the solution would work in our environment. Our team that supports manufacturing fell in love with the Microsoft business intelligence tool set. They liked that it was easy to deploy and easy for our folks in manufacturing to use.”
Interoperable BI Technologies
Kimberly-Clark began work on the manufacturing side of the BI project in early 2009. Markham coordinated with the BI team members to help them understand what information the manufacturing business analysts needed to improve their decision making. The BI team used SQL Server Integration Services to consolidate data from the 13 facilities in the United States and built a central SQL Server 2005 datamart in Neenah, Wisconsin.
“By extending the use of SQL Server, we were able to effectively transfer the data from the facilities using Integration Services,” explains Mork. “It’s almost like a programming platform and, leveraging that platform, we can make the necessary configurations to run specific commands or processes across every one of the facilities.”
Using the newly consolidated data, the BI team turned to SQL Server Analysis Services to build an online analytical processing (OLAP) cube to provide data mining and ‘what if’ scenarios for the business analysts using familiar Microsoft Office Excel spreadsheet software. “SQL Server Analysis Services provides end users the capability to connect to that data source directly through Office Excel in a PivotTable format and through dashboards in Office PerformancePoint Server 2007,” says Mork.
Kimberly-Clark IT staff took advantage of Office SharePoint Server 2007 to use as a communication and collaboration platform for analysts to share and collaborate on their spreadsheets, scorecards, reports, dashboards, and key performance indicators across the enterprise. Employees can publish their Excel PivotTable reports to a SharePoint site using Excel Services, a server technology included in Office SharePoint Server 2007. “We have other capabilities built into our SharePoint environment, such as Microsoft SQL Server Reporting Services and Office PerformancePoint Server, that can consume data directly from Analysis Services,” adds Mork.
Partnership Between IT and the Business
As progress continued with the manufacturing BI initiative, Kimberly-Clark turned its attention to its supply chain, where Kane had identified similar pain points, calling for more daily, consolidated data on a timely basis and delivered within a simple user interface.
“In November 2009, we brought our supply chain analysts together with our developers to start working on what information they would like to see and in what format,” says Dorothy Stephenson, Information Technology Services Senior Manager, Enterprise Collaboration and Information Access, at Kimberly-Clark. “We used the same process as we did with the manufacturing BI solution. Our developers worked side-by-side with the business to ensure we were giving them what they needed. In less than two and a half months, we had a BI solution for them to use. We started seeing benefits three weeks later.”
The IT team built OLAP cubes with inventory replenishment data that the RCA’s can use for at-a-glance visibility into inventory, or to perform drill-down data analysis using conditional formatting. “With Microsoft BI technologies, we built several tools with little time or money invested to pull and aggregate data such as corporate forecast variance (uniting forecasts), in-stock tools, and DC-out tools,” says Kane. “Analysts use Microsoft Office Excel and PivotTable functionality. They are very comfortable with this environment, so virtually no training was needed.The team also uses Office SharePoint Server 2007 to store reports as well as standardize work across multiple resources.”
Rapid Adoption
Analysts at Kimberly-Clark quickly adopted the BI tools—on both the supply chain and manufacturing sides of the business. Kelly credits the swift uptake to the ease of use and familiarity of Microsoft desktop applications, which almost instantly ratified the company’s decision to go with Microsoft in the first place. “It’s almost contagious,” he says. “We have gone from a few people analyzing data to seeing more and more people becoming aware of what the tools can do and doing their own analysis in a matter of hours. We are seeing people that never touched data before manipulating their own data on a regular basis.”
Benefits
Kimberly-Clark paid very little for a powerful business intelligence solution from Microsoft that’s already delivered millions of dollars in increased revenue. The company’s user-friendly and extensible BI solution means that employees can take advantage of familiar desktop applications to realize the value of data that used to be locked in different systems and put it to work to support better business decisions. Kimberly-Clark uses the solution to improve supply chain and manufacturing efficiencies and drive business agility to compete more effectively in a challenging global market.
Rapid Return on Investment
Because Kimberly-Clark had acquired most of the BI technologies it used in the solution, the company paid minimal upfront costs. It saved money in developer costs because its IT staff already possessed the skill set required to work with the technologies, and they didn’t waste time ramping up on new technologies. According to Stephenson, it only took 300 hours for the developers on her team to complete the BI solution for the supply chain analysts at a cost of U.S.$25,000. As soon as her team delivered the solution to the customer-facing team, analysts gained self-serve access to detailed inventory data to optimize product placement on the shelf.
“We never had that level of detail for each product, and the data was not manipulative,” says Stephenson. “Using Excel PivotTables, it was easy for the business analysts to say, for example, ‘I need to see these three stores and I need to see what their return levels are.’ With this level of insight, they can move inventory from store to store to make sure that those shelves are never bare and we don’t lose any sales to a competitor’s product.”
“When we launched the solution for our customer-facing team and supply chain analysts, we thought we would get about a million dollars out of our investment,” addsBaez. “After three months, we got over $10 million of increased revenue, or revenue we would have lost if we didn’t have that tool set. That’s the kind of thing I like. Our customers are happy and we are happy.”
Improved Manufacturing Efficiency
Now that business analysts can manipulate the data and ask ‘what if’ questions to get better information about manufacturing plants, drilling down to individual operators at a shift level and analyzing specific assets to start asking questions about performance and output, they can identify best practices to apply across the enterprise.
Through the use of Office Excel, PerformancePoint, and analytical and reporting services within SharePoint Server, Kimberly-Clark quickly brought first-of-a-kind production visibility across a large consumer sector, displaying key performance indicators from consolidating multiple sources.These metrics have provided a near real-time view of quality and operational efficiency, allowing staff and plants to address several million dollars in waste and capital avoidance through process improvements and better asset utilization.
“Within the manufacturing sector right now, we can look across a broad spectrum of assets in our facilities and identify which assets are not performing at peak and which have additional benefit,” says Kelly. “The opportunity here is to actually improve asset performance through business intelligence, versus the old way of spending another $50 million and get another machine.”
Increased Business Agility
With self-serve access to key business data, analysts no longer wait weeks to get stale information back from the IT department. Now they can make better business decisions more quickly to deal with situations as they arise, such as re-allocating inventory or pulling out a piece of machinery for a service to increase output. As a result, Kimberly-Clark is a more agile company.
“The Microsoft business intelligence solution has started to transform the way we do business at Kimberly-Clark,” says Kelly. “We’ve gone from a model of IT people doing data manipulation at the request of the business, to the business having the ability to go in and do their own manipulation. It’s cutting the lead time of how long it takes to get the information in front of leadership to make better decisions.”
According to Kane, employees are using the BI solution to make faster decisions, thanks to the easy integration of data from different systems that are incorporated in the OLAP cubes. Within manufacturing, employees no longer perform multiple queries to extract data, nor do they have to take the time to compile it for analysis. “The cubes have enabled faster decision making and easier integration of information yielding more time for analysis,” says Kane. “We have been able to cut roughly four to six hours across multiple analysts’ desks each week.”