Keystone Automotive Inc.: Knowing Which Products Are in Demand

Computerworld - Managers of Keystone Automotive Industries Inc.'s 35 manufacturing facilities arrive at work on Monday mornings to find a three-page multicolor report on their printers, thanks to the Pomona, Calif.-based company's business intelligence application. The report provides details on which car bumpers are in demand so managers know which ones to manufacture.

"It's great information to make us more efficient and have a better fill ratio," says Jim Pundt, director of the Northeast division. Pundt says he hasn't calculated the actual effect on sales but is sure it helps. "I do believe there is an impact on sales growth whenever you can say, 'Yes, we have it.' "

So late last year, Pundt worked with Jeffrey Singleton, who oversees the BI application as director of software engineering, to develop a report that combines sales history data with statistics on available raw material at the facilities, providing a guide for which bumpers to manufacture.

Bottom line: The reports help eliminate overstock as well as increase sales.

Understanding what merchandise your customers are buying, and when and where they're doing it, "can be a huge competitive advantage," says John Hagerty, an analyst at AMR Research Inc. in Boston.

In fact, Hagerty says using BI for such operational decisions is where the application can add real value. "The more operational the BI is, the more competitive the company will be," he says.

Keystone rolled out BI a few years ago, tying it in with an ERP and data warehouse implementation. Officials chose a system from Cognos Inc. in Ottawa, Singleton says, because Keystone already had the software; it came as part of an old package. But Singleton adds that the IT team looked at Cognos at the time of implementation and was impressed by its strong growth and investment in research and development.

Workers use the Cognos software to, among other things, get a graphical view of monthly sales figures that can then be compared against other months or limited to specific regional markets. They also use it to examine inventory trends, which helps with forecasting purchases, and to get a daily snapshot of national accounts and how they compare with budget forecasts and/or the prior year.

"Now we're starting to venture into building more intelligence into dashboards, so our managers can report even more by exception," says vice president and CIO Jesus V. Arriaga.Managers can ask, "How's my day going?" or "How's my operation doing?" and get answers immediately, he says.

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